Limit of Rs 5,00,000 is for each person, relative , partner but indebtedness of all companies (Company / Holding Co/ Subsidiary / Co-Subsidiary / Associate) all inclusive.
Sir a similar question was asked on this section in law paper in Nov 2017 exam question number 1(c).As you said the limit of Rs 5,00,000 is for each person, relative , partner, but as per the suggested answer of institute they have taken total indebtedness of person and relative as Rs 5,00,000.
Sir kindly help.
Sec 141 (3) (d) (ii)
A person who, or his relative or partner
is indebted to the company, or its subsidiary, or its holding or associate company or a subsidiary of such holding company, in excess of such amount as may be prescribed (Rs 5,00,000);
From above 2 interpretations are possible
Person indebted more than 5,00,000 or His relative indebted more than 5,00,000 or Partner indebted for more that 5,00,000 will get disqualified.
If we say OR includes AND
then person or / and relative or / and partner is indebted more that 5,00,000 then disqualified
as correctly mentioned in law answer they have supported second interpretation , so i will also support the second interpretation, now e have better clarity on the issue. as we go ahead in company act more such issues will be resolved. so follow second one only
Accordingly shareholding / guarantee also should be seen on combined basis