Directors' disclosure duty under the Companies Act extends beyond meeting-made contracts and covers transactions entered into on the company's behalf.

Section 91-A(2) of the Companies Act, 1913 was construed broadly to cover contracts entered into by or on behalf of the company, even if they were not made at a directors' meeting. The disclosure obligation was not confined to transactions concluded in meeting form, because the reference to disclosure at the next meeting after the contract was made showed a wider statutory reach. The purchases in question were treated as contracts within the section, and the proviso indicated that even small transactions were not excluded. As the alleged disclosure was not proved, the disclosure requirement was held to apply and the convictions and fines remained undisturbed.

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Issues: Whether the disclosure obligation under section 91-A(2) of the Companies Act, 1913 was confined to contracts entered into at a meeting of directors, and whether the impugned transactions were contracts or arrangements requiring disclosure.

Analysis: The section contained no limitation confining its operation to contracts made only at a meeting of the directors. Its language extended to contracts entered into by or on behalf of the company, and the words requiring disclosure at the directors' meeting were read consistently with that wider opening part of the provision. The reference to disclosure at the next meeting after the making of the contract showed that the obligation could arise even where the contract was not itself made at a meeting. The purchases in question were contracts within the meaning of the section, and the proviso indicated that even small transactions were not outside its scope. The alleged disclosure was not proved to have been made at a meeting of directors.

Conclusion: The disclosure requirement applied to the transactions in question, and the convictions were upheld.

Final Conclusion: The rules were discharged and the convictions and fines remained undisturbed.

Ratio Decidendi: Section 91-A(2) of the Companies Act, 1913 applies to contracts entered into on behalf of the company even when they are not made at a meeting of directors, and the director must disclose his interest in the manner prescribed by the section.

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