Section 11b – COMPANIES (CENTRAL GOVERNMENT’S) GENERAL RULES & FORMS

[Rules 11. and 11A.]

11B. Section 370

(1) For the purposes of the first proviso to sub-section (1) of section 370, no special resolution shall be necessary in the case of loans made to other bodies corporate not under the same management as the lending company, where the aggregate of such loans do not exceed 32[thirty] per cent of the aggregate of the subscribed capital of the lending company and its free reserves.

(2) The aggregate of the loans made by the lending company to all other bodies corporate shall not, except with the prior approval of the Central Government, exceed –

(a) thirty per cent of the aggregate of the subscribed capital of the lending company and its free reserves, where all such other bodies corporate are not under the same management as the lending company;

(b) 32[thirty] percent of the aggregate of the subscribed capital of the lending company and its free reserves, where all such other bodies corporate are under the same management as the lending company.

33[(3) Where a company has defaulted in repayment of any deposit referred to in section 58A or any part thereof or interest thereupon in accordance with the terms and conditions of such deposit, it shall not make any loan or give any guarantee under section 370 till the default is made good.]

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