Applicability of Section 297

Our company has entered into a rent agreement with one of the Directors of the Company say Mr. A, for using his premises for the purposes of the Company. The paid up capital of the company at the time of entering into the said rent agreement was less than Rs. One crore.

Subsequently, the paid up capital of the Company was increased to Rs. 15 Crores and the rent agreement is still in existence.

 As per the provisions of Section 297 (1) (b) of the Companies Act, 1956, “In the case of the Company having a paid –up share capital of not less than rupees One Crore, no such contract shall be entered into except with the previous approval of the Central Government.”

Now my query is whether we need to apply to the Central Government for obtaining approval for the transaction as mentioned above after the increase of the paid-up capital to Rs. 15 Crores??????