Kerala High Court: In a case dealing with whether an employer can refuse to accept the resignation of a Company Secretary and compel continued service, particularly when there has been default in payment of salary, a Single Judge Bench of N. Nagaresh, J., held that in absence of violation of any notice or contractual conditions or contemplated disciplinary proceedings, an employer cannot desist from accepting a resignation. The Court observed that not accepting resignation and forcing continued service amounts to bonded labour prohibited under Article 23 of the Constitution. Accordingly, while allowing the writ petitions, the Court set aside the impugned memos and directed the respondents to accept the resignation and relieve the petitioner within two months.
Background
The petitioner joined on 7-5-2012 as the Company Secretary of Respondent 1 (‘Company‘) which was a State Public Sector Undertaking. There was default in payment of salary from October 2022 and for a long period salary was not paid. Because of his father’s death on 6-6-2020 and the aged mother’s stroke in 2018 with neuro and psychiatric issues under treatment, the petitioner submitted resignation on 18-3-2024 and requested to be relieved. However, the Managing Director issued a note stating that the Board rejected the resignation, terming it unfair to leave the Company in its present critical financial position without proper substitute, and directed resumption of duty. Subsequent memos required explanation as to why disciplinary action should not be taken and directed reporting for duty.
The petitioner then filed a writ petition for quashing the memos and directing the Company and the Managing Director to accept his resignation. During pendency, the Company issued another memo alleging unauthorised retention of the Company’s laptop, which the petitioner contended was an afterthought, vague, and an attempt to interfere with the due course of justice. The petitioner filed another writ petition seeking quashment of this memo.
In their statement, the respondents admitted financial struggles since October 2022 and a comprehensive revival plan. They stated that the petitioner played a pivotal role as key advisor to the Managing Director and his presence was deemed essential as no other qualified Company Secretary was available. They further alleged that the petitioner emptied data in the laptop rendering its contents inaccessible and thereby misconducted himself. The Company’s liabilities were stated to be approximately Rs 257 crore and delay in salary disbursal was due to financial issues. The respondents contended that the writ petitions were without merit and were liable to be dismissed.
Analysis and Decision
The Court highlighted that Company Secretaryship is a statutory position and they are responsible for ensuring compliance with the Companies Act, 2013. The Court opined that as Key Managerial Personnel, they play a crucial role in corporate governance and are liable for any non-compliance or defaults. The Court noted that the petitioner would not be able to join another organisation as his Company Secretaryship was tied up with the Company, and unless the Company forwarded the necessary form, his membership would remain linked, causing difficulty in seeking appointment elsewhere.
The Court opined that when an employee submits resignation, the employer has a duty to accept and relieve him, subject only to any contractual conditions, including notice period. A resignation can be rejected if it does not follow stipulated procedure, and in cases of ‘Heat of the moment’ resignations, the employer may delay acceptance to give a chance to rescind. The Court further opined that an employer can also refuse acceptance when disciplinary proceedings are contemplated for grave misconduct or causing monetary loss to the establishment.
The Court observed that apart from such limited circumstances, refusal to accept resignation would amount to bonded labour prohibited under Article 23 of the Constitution. The Court highlighted that the financial position or financial emergency of the Company cannot be a reason to force a Company Secretary to work against his will and without his consent. The Court noted that more than 20 months had lapsed since submission of resignation, the respondents had been defaulting in payment of salary since October 2022, and the disciplinary proceedings contemplated could only be seen as an attempt to violate the right to resign from service.
Consequently, the Court allowed the writ petitions and set aside the impugned note and memos. The Court directed the acceptance of the resignation and to relieve the petitioner from service as expeditiously as possible within two months and further directed the payment of arrears of salary, leave surrender benefits and terminal benefits to which he is legally entitled, subject to the financial position of the Company.
[Greevas Job Panakkal v. Traco Cable Co. Ltd., WP(C) No. 5132 of 2025, decided on 13-2-2026]
Advocates who appeared in this case:
For the Petitioner: D. Sreekanth, Aswin Kumar M J, Albin George, Jeevadas H., James Jose, Advocates.
For the Respondents: Abel Tom Benny, Standing Counsel, D. Prem Kamath, Tom Thomas (Kakkuzhiyil), Aaron Zacharias Benny, Alan J Yogyaveedu, Clint Jude Lewis, Mathew Angelo Davis, Jyothika Krishna, Princy Xavier, Sr. Government Pleader.
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