217. Restrictions on loans to directors

give a loan to a director of the company or of a related company; or

enter into any guarantee or provide any security in connection with a loan made by any person to a director of the company or of a related company.

giving a loan to a director, where the aggregate of the amounts advanced to the director by the company does not exceed twenty-five thousand rupees or such higher sum as may be prescribed by the Minister from time to time, on the recommendation of the Advisory Commission constituted under Part XIX of this Act ;

giving a loan to a related company or entering into a guarantee or providing security in connection with a loan given by any person to a related company;

providing a director with funds to meet expenditure incurred or to be incurred by him for the purposes of the company or for the purpose of enabling him to perform his duties as an officer of the company; or

giving a loan in the ordinary course of the business of lending money, where that business is carried on by the company.

the director shall be liable to indemnify the company for any loss or damage resulting from the transaction;

the transaction shall be voidable at the option of the company, unless —

the company has been indemnified under paragraph (a) for any loss or damage suffered by it; or

any rights acquired by a person other than the director in good faith and for value, without actual notice of the circumstances giving rise to the breach of this section, would be affected by its avoidance.

the company shall be guilty of an offence and be liable on conviction to a fine not exceeding two hundred thousand rupees; and

every director of the company who authorises or permits the company to enter into the relevant transaction, shall be guilty of an offence and be liable on conviction to a fine not exceeding one hundred thousand rupees.