A bank took over the management of a Company in terms of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) and appointed 5 directors consequently removing Sur

Section 16(1) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) disentitles any director, manager or Managing Director from claiming any compensation for loss of office. According to Section 16(2) of the Act, the aforesaid provision does not affect the rights of such person to recover from the business of borrower, moneys recoverable otherwise than by way of compensation. In the given case, Suresh, the removed executive director, can claim his unpaid salary for the last 2 months, as this is a money recoverable otherwise than by way of compensation. However, he will not be entitled to any compensation for loss of office due to the provisions of Section 16(1) of SARFAESI Act.