Subhash Bhaskar

In my view option (ii) shall prevail. This condition has to be seen at the time of giving loans, guarantee or security. At the time of giving loan etc. no money of any other body corporate should be invested in the lending company.If company law legislature would have the intention similar to mentioned as in option (i) above then he would have used the language as " in whose share capital no other body corporate HAD invested any money previously " i.e the word had should have been used there instead of has. If (ii) option prevails then there shall be no sense of providing exemption to private companies.