Sanchayita Lahkar

The Kerala High Court Single Bench of Justice N. Nagaresh, deciding two writ petitions by an employee serving as company secretary in a State public sector undertaking, directed the employer to accept the employee’s resignation and relieve him from service within two months. The dispute arose after the employer declined to process the resignation, citing financial distress and the absence of a substitute, and issued memos requiring the employee to resume duty and respond to allegations. The Court held that financial constraint cannot justify refusing a resignation, and forcing continued service against the employee’s will would amount to bonded labour barred by Article 23.

The petitioner, a Company Secretary stated that the company defaulted in payment of salary from October 2022 onwards, and after prolonged non-payment, he tendered his resignation on 18.03.2024 seeking to be relieved from service. The Board of Directors rejected the resignation citing the company’s critical financial position and absence of a substitute. Thereafter, show-cause notices and memos were issued directing him to resume duty and explain why disciplinary action should not be initiated. During pendency of the first writ petition, a further memo alleged unauthorised retention of the company laptop.

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The respondents contended that the company was under severe financial stress with liabilities of ₹257 Crores and that the petitioner’s role was indispensable. They alleged misconduct, including failure to surrender company property. The petitioner relied on his statutory position under the Companies Act and asserted that non-acceptance of resignation prevented him from securing alternative employment.

The Court observed that “The petitioner is working as Company Secretary of the 1st respondent-Company since 07.05.2012.” It recorded that “From October, 2022 onwards, there was default in payment of salary to the petitioner.”

Regarding the petitioner’s circumstances, the Court stated that “The petitioner's father died on 06.06.2020 and his mother has suffered a stroke and is undergoing treatment for neuro and psychiatric treatment for the past many years.” It noted that “Company Secretaryship is a statutory position under the Companies Act. They are responsible for ensuring compliance with the Companies Act, 2013 by the Companies.”

On the legal position concerning resignation, the Court observed: “When an employee submits his resignation, the employer has a duty to accept the same and relieve the employee from his duties.” It added that this duty is “subject only to any conditions that may be stipulated in the contract of employment, including any stipulation as regards notice period.”

The Court further stated, “In the absence of violation of any notice conditions or conditions in the contract of employment, an employer cannot desist from accepting a resignation.” It recorded that refusal may be justified only when “disciplinary proceedings are contemplated against the employee for grave misconduct or for causing monetary loss to the establishment.”

Significantly, the Court observed: “In any other event, if the employer refuses to accept resignation of an employee, it would amount to bonded labour prohibited under Article 23 of the Constitution of India.”

Addressing the company’s justification, the Court stated, “Financial issues or financial emergency cannot be a reason to force a Company Secretary to work for an incorporated Company against his will and without his consent.” It further recorded that “The disciplinary proceedings contemplated against the petitioner in the circumstances can only be seen as an attempt by the respondents to violate the right of the petitioner to resign from service.”

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The Court directed that “The writ petitions are therefore allowed. Exts.P4, P5 and P7 in W.P.(C) No.5132/2025 are therefore set aside. Ext.P9 memo in W.P.(C) No.33223/2025 is also set aside.”

“Respondents 1 and 2 are directed to accept Ext.P2 resignation letter submitted by the petitioner and relieve him from his services as expeditiously as possible and at any rate within a period of two months. The petitioner shall also be paid arrears of salary, leave surrender benefits and terminal benefits, to which he is legally entitled to as expeditiously as possible subject to the financial position of the Company.”

Advocates Representing the Parties

For the Petitioners: Sri. D. Sreekanth, Sri. Aswin Kumar M J, Sri. Albin George, Sri. Jeevadas H., Shri. James Jose

For the Respondents: Sri. Abel Tom Benny, Standing Counsel; Sri. D. Prem Kamath; Sri. Tom Thomas (Kakkuzhiyil); Sri. Aaron Zacharias Benny; Sri. Alan J Yogyaveedu; Sri. Clint Jude Lewis; Sri. Mathew Angelo Davis; Smt. Jyothika Krishna; Smt. Ananditha Rajeev; Smt. Tessa Rose; Smt. Princy Xavier, Senior Government Pleader

Case Title: Greevas Job Panakkal v. Traco Cable Company Limited & Ors.
Neutral Citation: 2026: KER:12335
Case Number: W.P.(C) Nos. 5132 of 2025 & 33223 of 2025
Bench: Justice N. Nagaresh