Section 184. Disclosure of interest by director
(1) Every director shall at the first meeting of the Board in which he participates as a director and thereafter at the first meeting of the Board in every financial year or whenever there is any change in the disclosures already made, then at the first Board meeting held after such change, disclose his concern or interest in any company or companies or bodies corporate, firms, or other association of individuals, which shall include the shareholding, in such manner as may be prescribed.
(2) Every director who is in any way, whether directly or indirectly, concerned or interested in a contract or arrangement or proposed contract or arrangement entered into or to be entered into with a body corporate in which such director or such director in association with any other director holds more than two per cent. shareholding, or is a promoter, manager or Chief Executive Officer of that body corporate, or with a firm or other entity in which such director is a partner, owner or member, shall disclose the nature of his concern or interest at the meeting of the Board in which the contract or arrangement is discussed and shall not participate in such meeting.
(3) A contract or arrangement entered into by the company without disclosure or with participation in contravention of sub-section (2) shall be voidable at the option of the company.
(4) Every director who fails to disclose his interest or participates in a meeting in contravention of sub-section (2) shall be liable to a penalty of one lakh rupees.
(5) Nothing in this section shall be taken to affect the operation of any law requiring disclosure of interest by directors.
