Whether there were any restrictions for GreenWave Ltd. to sell its machinery to Mr. Arjun in exchange for a vehicle and if yes, then what legal…

(a) According to Section 192 (1) of the Companies Act, 2013, no company shall enter into an arrangement by which: (a) A director of the company or its holding, subsidiary, or associate company, or a person connected with him, acquires or is to acquire assets for consideration other than cash from the company; or (b) The company acquires or is to acquire assets for consideration other than cash from such director or person so connected. The above restriction is relaxed under certain conditions. A company may enter into an arrangement involving non-cash transactions as stated above if prior approval for such arrangement is accorded by a resolution of the company in a general meeting. Furthermore, if the director or connected person is a director of its holding company, approval must also be obtained by passing a resolution in the general meeting of the holding company. The notice for approval of the resolution in the general meeting issued by the company or holding company must include: The particulars of the arrangement.The value of the assets involved in such arrangement, duly calculated by a registered valuer. In the given instance, GreenWave Ltd. entered into a non-cash transaction with its managing director, Mr. Arjun, by selling its machinery in exchange for a vehicle. To comply with Section 192 (1) of the Companies Act, 2013, GreenWave Ltd. would have needed to: Obtain prior approval for such an arrangement through a resolution in its general meeting. Since Mr. Arjun is also a director of its holding company, EcoTech Innovations Pvt. Ltd., prior approval would also need to be obtained by passing a resolution in the general meeting of EcoTech Innovations Pvt. Ltd. By following these legal requirements, GreenWave Ltd. and EcoTech Innovations Pvt. Ltd. would ensure compliance with the Companies Act, 2013, regarding non-cash transactions involving directors and connected persons.