law: Companies Act, 2013 
  188  . Related party
  
  transactions
  1.      Except with the
  
  consent of the Board of Directors given by a resolution at a meeting of the
  
  Board and subject to such conditions as may be prescribed, no company shall
  
  enter into any contract or arrangement with a related party with respect toŚ
  a.     
  
    sale,
  
  purchase or supply of any goods or materials;
  b.    
  
    selling
  
  or otherwise disposing of, or buying, property of any kind;
  c.     
  
    leasing
  
  of property of any kind;
  d.    
  
    availing
  
  or rendering of any services;
  e.     
  
    appointment
  
  of any agent for purchase or sale of goods, materials, services or property;
  f.     
  
    such
  
  related party's appointment to any office or place of profit in the company,
  
  its subsidiary company or associate company; and Related party transactions.
  g.    
  
    underwriting
  
  the subscription of any securities or derivatives thereof, of the company:
  Provided
  
  that no contract or arrangement, in the case of a company having a paid-up
  
  share capital of not less than such amount, or transactions not exceeding such
  
  sums, as may be prescribed, shall be entered into except with the prior
  
  approval of the company by a special resolution:
  Provided
  
  further that no member of the company shall vote on such special resolution, to
  
  approve any contract or arrangement which may be entered into by the company,
  
  if such member is a related party:
  Provided
  
  also that nothing in this sub-section shall apply to any transactions entered
  
  into by the company in its ordinary course of business other than transactions
  
  which are not on an armÆs length basis.
  Explanation.Ś
  
    In
  
  this sub-section,Ś
  a.     
  
    the
  
  expression ōoffice or place of profitö means any office or placeŚ
                       
  
   i.        
  
    where
  
  such office or place is held by a director, if the director holding it receives
  
  from the company anything by way of remuneration over and above the
  
  remuneration to which he is entitled as director, by way of salary, fee,
  
  commission, perquisites, any rent-free accommodation, or otherwise;
                      
  
   ii.        
  
    where
  
  such office or place is held by an individual other than a director or by any
  
  firm, private company or other body corporate, if the individual, firm, private
  
  company or body corporate holding it receives from the company anything by way
  
  of remuneration, salary, fee, commission, perquisites, any rent-free
  
  accommodation, or otherwise;
  b.    
  
    the
  
  expression ōarmÆs length transactionö means a transaction between two related
  
  parties that is conducted as if they were unrelated, so that there is no
  
  conflict of interest.
  1.     
  2.      Every contract or
  
  arrangement entered into under sub-section (1 ) shall be referred to in
  
  the BoardÆs report to the shareholders along with the justification for
  
  entering into such contract or arrangement.
  3.      Where any contract or
  
  arrangement is entered into by a director or any other employee, without
  
  obtaining the consent of the Board or approval by a special resolution in the
  
  general meeting under sub-section (1 ) and if it is not ratified by the
  
  Board or, as the case may be, by the shareholders at a meeting within three
  
  months from the date on which such contract or arrangement was entered into,
  
  such contract or arrangement shall be voidable at the option of the Board and
  
  if the contract or arrangement is with a related party to any director, or is
  
  authorised by any other director, the directors concerned shall indemnify the
  
  company against any loss incurred by it.
  4.      Without prejudice to
  
  anything contained in sub-section (3 ), it shall be open to the company
  
  to proceed against a director or any other employee who had entered into such
  
  contract or arrangement in contravention of the provisions of this section for
  
  recovery of any loss sustained by it as a result of such contract or
  
  arrangement.
  5.      Any director or any
  
  other employee of a company, who had entered into or authorized the contract or
  
  arrangement in violation of the provisions of this section shall,Ś
               
  
   i.        
  
    in
  
  case of listed company, be punishable with imprisonment for a term which may
  
  extend to one year or with fine which shall not be less than twenty-five
  
  thousand rupees but which may extend to five lakh rupees, or with both; and
              
  
   ii.        
  
    in
  
  case of any other company, be punishable with fine which shall not be less than
  
  twenty-five thousand rupees but which may extend to five lakh rupees.