Compensation for loss of office of managing or whole-time director or manager.

(1) A company may make payment to a managing or whole-time director or manager, but not to any other director, by way of compensation for loss of office, or as consideration for retirement from office or in connection with such loss or retirement. (2) No payment shall be made under sub-section (1) in the following cases, namely:— (a) where the director resigns from his office as a result of the reconstruction of the company, or of its amalgamation with any other body corporate or bodies corporate, and is appointed as the managing or whole-time director, manager or other officer of the reconstructed company or of the body corporate resulting from the amalgamation; (b) where the director resigns from his office otherwise than on the reconstruction of the company or its amalgamation as aforesaid; (c) where the office of the director is vacated under sub-section (1) of section 167; (d) where the company is being wound up, whether by an order of the Tribunal or voluntarily, provided the winding up was due to the negligence or default of the director;