Manoj was appointed as Managing Director of Silver Ltd. for 5 years. He resigns from his office after completing 2 years with Silver Ltd., for joining as Managing Director of another company and demands compensation from

The provisions of Section 202 of the Companies Act, 2013 provide for payment of compensation for loss of office to managing director or whole-time director or manager. The provisions are discussed below. (1) As per Section 202(1) of the Companies Act, 2013, a company can make payment of compensation for loss of office to managing director or whole-time director or manager but not to any other director, by way of compensation for loss of office or as consideration for retirement from office or in connection with such loss or retirement. (2) As per Section 202(2) of the Companies Act, 2013, no payment of compensation for loss of office can be made in the following cases. where a director resigns from his office as a result of the reconstitution of the company or of its amalgamation with other body corporate or bodies corporate and is appointed as managing or whole time director or manager or other officer in the reconstituted company or of the body corporate resulting from the amalgamation; where a director resigns from his office otherwise than on reconstruction or amalgamation of the company as aforesaid; where the office of the director is vacated under Section 167 (1) of the Companies Act, 2013; where the company is being wound up by the order of NCLT or voluntarily due to negligence or default of the director; where a director has been guilty of fraud or breach of trust or gross negligence or mismanagement of the affairs of the company or any subsidiary company or holding company thereof; and where a director has instigated or has taken part directly or indirectly in bringing about, the termination of his office. In view of the above provisions of Section 202(2) of the Companies Act, 2013 above, Mr. Manoj will not be entitled for any compensation from Silver Ltd.