Fresh Limited wants to extend a loan of ₹ 2 crore to High Private Limited. Harihar, a director of Fresh Limited is also a director in High Private Limited. Is it feasible ?

Section 185(2) of the Companies Act, 2013 provides that a company may advance any loan to any person in whom any of the directors of the company is interested subject to - a. passing of a special resolution by the company in general meeting and the explanatory statement in the notice for the relevant general meeting shall indicate the full details of the loan and the purpose for which the loan is to be utilized by the recipient of the loan and b. The loan is utilized by the borrowing company for its principal business activities. For the purpose of these provisions the term, "Any person in whom any of the directors of the company is interested" includes any private company of which any such director is a director or member. Accordingly, Fresh Ltd can extend loan of ₹ 2.00 crores to High Private Ltd., in which Harihar is a common director, subject to the fulfilment of the above referred conditions of Section 185(2).