TMI Blog2022 (6) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of compensation to the Appellant. Further it is observed that even the stipulated one month notice period has been complied with and admittedly the salary payment of Rs. 2,14,000/- has also been paid. Since, payment has been settled in accordance with law, the payment of any further interest does not arise. Appeal dismissed. - COMPANY APPEAL (AT) (INSOLVENCY) NO. 1005 OF 2021 - - - Dated:- 3-6-2022 - [Justice Ashok Bhushan] Chairperson, [Ms. Shreesha Merla] Member (Technical) And [Mr. Naresh Salecha] Member (Technical) For the Appellant : Mr. Iswar Mohapatra, Advocate For the Respondents : Ojasa Arya, Mr. Shubham Raj, Mr. Sabarni Mukherjee, Mr. Palzer Mokhtan Ms. Swati Dalmia, for R-2. JUDGEMENT [ Naresh Salecha ( T ) ] 1. The Instant Appeal has been preferred by Mr. Ranjeet Kumar Burnwal being aggrieved and dissatisfied vide Impugned Order dated 26.07.2021 passed by Adjudicating Authority (the National Company Law Tribunal, Kolkata Bench, Kolkata) in I.A. No. 41 (KB)/ 2021 in Company Petition (IB) No. 1214/KB/2018 filed by the Appellant, wherein, the Adjudicating Authority directed that leave encashment amount payable to the applicant shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est on outstanding dues. (xi) The Appellant prayed for the following :- (a) Compensation of an amount of Rs. 25,68,000/- lakhs as he has been out of employment since 30.04.2020. (b) Payment of interest on such amount at the rate of 6% per annum. 3. The Appellant also claimed that his termination of employment is arbitrary and unfair. 4. The Appellant further submits that the RP ascertained the leave encashment amount of Rs. 5,67,100/- is due and payable as per the policy of the Corporate Debtor. This was brought to the notice of CoC in the meeting held on 07.12.2020. 5. The Appellant further submitted that he is neither related to the promoters nor part of the promoters group whose presence and/ or employment in the company will affect the resolution proceedings. 6. He further stated that in terms of Section 202 of the Companies Act, 2013, the Appellant is entitled for compensation amounting to Rs. 25,68,000/- which is produced at Page-26 which is mentioned as under:- Section 202: Compensation for loss of office of a Managing Director Or Whole Time Director Or Manager (1) A company may make payment to a managing or whole-time director or manager, bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment to a managing or whole-time director, or manager, of any remuneration for services rendered by him to the company in any other capacity. 7. He further relied on the Judgement passed by this Hon ble Tribunal vide Order dated 07.05.2019 in Company Appeal (AT) No. 320/ 2018 titled as CADS Software India Pvt. Ltd. Anr. Vs. KK Jagdish Ors. Whereby, the NCLAT upheld the NCLT decision to give compensation along with the interest from the date of remuneration as Managing Director which marked from Page- 28 to 30 in Memo of Appeal . Submissions on behalf of the Respondent No. 2. 8. We have also perused the Reply Affidavit filed on behalf of the Respondent No. 2 given the following initials arguments :- (a) The CIRP of Rohit Ferro-Tech Limited (Corporate Debtor) has been initiated on 07.02.2020 .He was appointed as IRP and subsequently was confirmed as Resolution Professional. Thereafter, Respondent No. 2 has managed the company on a going concern basis. (b) Resolution Professional stated that soon after his taking over the charge of the affairs of the Corporate Debtor, several instances of mismanagement at the Jajpur plant of the Corporate Debtor had bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rector. As such being the Executive Director (Works), the appellant is named as occupier of the factory at Jaipur plant, Orissa. . (m) Respondent No. 2 mentioned that in terms of the agreement the Corporate Debtor was entitled to terminate the appointment of the Appellant after giving one month notice which was duly fulfilled and therefore the mandate complied with. (n) Respondent No. 2 also bring to the notice that at no juncture the Appellant has pleaded, relied upon or argued the provisions of Section 202 of the Companies Act, 2013 before the Adjudicating Authority and therefore the Adjudicating Authority did not consider and adjudicate upon the same since it was never the case of Appellant before the Adjudicating Authority. (o) Respondent No 2 stated that in the present appeal Section 202 is not applicable the IBC is a complete code and possesses an overriding effect (p) Respondent No. 2 also mentioned that Appellant has conveniently suppressed the provisions as contained under sub-rule (3) of Rule 17 of the Companies (Meetings of Board and its Powers) Rules, 2014 which proscribes such payment of compensation under Section 202 in certain cases. 17. Payment to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han in cases where the company has disputed the liability to pay such dues); and (f) the company has not paid dividend on preference shares or not redeemed preference shares on due date. [emphasis supplied] (q) It has been argued that Section 202 is only enabling provision and it does not mandatory necessary payment of compensation of a managing or whole time director or manager of a company under all or any circumstances. (r) It has been brought to the notice that CIRP commenced on 07.02.2020 due to default of the Corporate Debtor to pay its consortium of lenders including State Bank of India the amounting to Rs. 40,85,04,73,838/- towards financial creditors and Rs. 1,28,20,97,771/- towards statutory dues and Rs. 9,91,38,241/- towards workmen and employees. (s) Therefore, under Rule 17 precludes the Corporate Debtor from making any payments towards the alleged compensation claimed by the Appellant herein. (t) He has also denied allegations made by the Appellant that termination of Appellant was not a decision of the CoC but of RP. He stated that the CoC meeting held on 05.03.2020 expressed their intension that the senior personnel of the Corporate Debtor be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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