Specific consent required for director contracts under section 86F; general authorisation cannot waive the statutory conflict safeguard.

Section 86F was construed as a remedial safeguard against conflicts between a director's duty and personal interest, so consent under the provision must relate to the particular contract or proposed contracts and be given with knowledge of the material facts. A general authorisation allowing a director to contract with the company was treated as insufficient because it would effectively waive the statutory disability and defeat the provision's purpose. The analysis also states that the section operates independently of the disclosure regime under section 91A, and practical difficulty cannot justify a construction inconsistent with the legislative object.

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Issues: Whether the consent contemplated by section 86F of the Indian Companies Act must be a specific consent referable to a particular contract, or whether a general consent authorising a director to enter into contracts with the company is sufficient.

Analysis: Section 86F was treated as a remedial provision enacted to prevent a director from being placed in a position of conflict between duty and personal interest. On that construction, the consent contemplated by the section could not operate as a general waiver of the statutory disability. Consent had to be given with knowledge of the material facts and in relation to the particular contract or contracts proposed, so that the board could apply its mind both to the nature of the transaction and to the position of the director concerned. A general resolution would in substance permit the board to remove the statutory disability itself, which would defeat the object of the provision. The court also held that the provision operated independently of the disclosure regime under section 91A and that practical difficulties could not justify a construction contrary to the legislative purpose.

Conclusion: The consent under section 86F must be specific to the contract or contracts in question, and a general consent is not sufficient. The appeal therefore succeeded and the declaration granted by the court below was reversed.

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