(1) The Board of directors of a public company, or of a private company which is a subsidiary of a public company, shall not, except with the consent of such public company or subsidiary in general meeting,-
sell, lease or otherwise dispose of the whole, or substantially the whole, of the undertaking of the company, or where the company owns more than one undertaking, of the whole, or substantially the whole, of any such undertaking;
remit, or give time for the re- payment of, any debt due by a director 2[ except in the case of renewal or continuance of an advance made by a banking company to its director in the ordinary course of business];
invest, otherwise than in trust securities, 3[ the amount of compensation received by the company in respect of the compulsory acquisition, after the commencement of this Act], of any such undertaking as is referred to in clause (a), or of any premises or properties used for any such
undertaking and without which it cannot be carried on or can be carried on only with difficulty or only after a considerable time;
borrow moneys after the commencement of this Act, where the moneys to be borrowed, together with the moneys already borrowed by the company (apart from temporary loans obtained from the company' s bankers in the ordinary course of business), will exceed the aggregate of the paid- up capital of the company and its free reserves, that is to say, reserves not set apart for any specific purpose; or
contribute, after the commencement of this Act, to charitable and other funds not directly relating to the business of the company or the welfare of its employees, any amounts the aggregate of which will, in any financial year, exceed 1[ fifty thousand rupees] or five per cent. of its average net profits as determined in accordance with the provisions of sections 349 and 350 during the three financial years immediately preceding, whichever is greater. 2[ Explanation I. Every resolution passed by the company in general meeting in relation to the exercise of the power referred to in clause (d) or in clause (e) shall specify the total amount up to which moneys may be borrowed by the Board of directors under clause (d) or as the case may be, the total amount which may be contributed to charitable and other funds in any financial year under clause (e). Explanation II.- The expression" temporary loans" in clause (d) means loans repayable on demand or within six months from the date of the loan such as short term, cash credit arrangements, the discounting of bills and the issue of other short term loans of a seasonal character, but does not include loans raised for the purpose of financing expenditure of a capital nature.] Explanation 3[ III].- Where a portion of a financial year of, he company falls before the commencement of this Act, and a portion falls after such commencement, the latter portion shall be deemed to
be financial year within the meaning, and for the purposes, of clause (e).