No payment shall be made to the managing director or whole time director or manager of the company by way of compensation for the loss of office or as consideration for retirement from office (other than notice pay and statutory payments in accordance with the terms of appointment of such director or manager, as applicable) or in connection with such loss or retirement if —
(a)the company is in default in repayment of public deposits or payment of interest thereon;
(b)the company is in default in redemption of debentures or payment of interest thereon;
(c)the company is in default in repayment of any liability, secured or unsecured, payable to any bank, public financial institution or any other financial institution;
(d)the company is in default in payment of any dues towards income tax, VAT, excise duty, service tax or any other tax or duty, by whatever name called, payable to the Central Government or any State Government, statutory authority or local authority (other than in cases where the company has disputed the liability to pay such dues);
(e)there are outstanding statutory dues to the employees or workmen of the company which have not been paid by the company (other than 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.
ExplanationPending notification of sub-section (1) of section 247 of the Act and finalisation of qualifications and experience of valuers, valuation of stocks, shares, debentures, securities etc. will be conducted by an independent merchant banker who is registered with the Securities and Exchange Board of India or an independent chartered accountant in practice having a minimum experience of ten years.
“ whole-time director ” includes a director in the whole-time employment of the company
