NCLT Rejects Former CEO’s Plea for Dues After Resigning as Director
The panel clarified that the use of two phrases did not imply that the petitioner held two distinct opinions.
NCLT Rejects Former CEO’s Plea for Dues After Resigning as Director while holding dual position on same time
The National corporate Law Tribunal (NCLT) in Mumbai recently denied a Section 9 motion made by a former corporate director who claimed unpaid operational expenditures from the company while he was CEO.
The individual in question served as both a director and the company’s chief executive officer (CEO). The applicant began working for the company on 1 June 2017, but formally resigned from the post of director on 28 October 2018, which the company acknowledged.
Nonetheless, the applicant claimed that his resignation was limited to the post of director and that he had never submitted a resignation as CEO. As a result, he is entitled to the CEO-related benefits.
However, the business emphasized that the appointment terms did not clearly define the roles of an executive director and a CEO. Furthermore, the employment letter did not specify separate wages for these ostensibly independent jobs.
After careful examination, the tribunal determined that quitting from the post of director did not provide the petitioner the right to seek pay as CEO. The panel made it clear that the use of two phrases did not imply that the petitioner held two distinct opinions.
The tribunal further determined that the petitioner’s unilateral resignation from the position of executive director, rather than CEO, and the company’s acceptance of the resignation did not give the petitioner the ability to seek dues as a CEO. The petitioner’s claim was reduced further by the fact that he willingly quit within one year, and the corporation swiftly accepted his resignation. As a result, the panel dismissed the petition.
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