One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.
Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.
TL;DR: An employer can file a criminal complaint for criminal breach of trust or theft if an ex-employee refuses to return a company laptop. Holding salary is risky — it can invite a labour complaint. The safer route is to lodge an FIR and send a legal notice for recovery of the laptop's value.
The client was a growing tech startup in Pune. They hired a software developer named Kunal Mehta for a six-month probation. Kunal was issued a high-end company laptop, an HP Pavilion worth about ₹65,000, to work from home. Within two months, his performance lagged. The company terminated him on 15 March 2025. Here's where things unravelled. Their HRMS system — a Paytm-powered payroll module — released his final salary of ₹1.2 lakh on 10 March, five days before his last working day. It was a glitch. The company asked him to return the laptop. Kunal stopped answering calls. Panicked, the company asked HDFC Bank to freeze the salary credit. It worked. Then Kunal's lawyer sent a notice: release the hold, or face a lawsuit. The laptop? He'd return it only after the hold was lifted. The company then approached the Chamber of Advocate Sudhir Rao. Earlier efforts — sending emails, calling his references — had failed. Advocate Sudhir Rao's office assessed the situation. It wasn't just about a laptop. It was a breach of trust, plain and simple. The specialised handling — filing a criminal complaint under the BNS, alongside a civil recovery suit — changed the game. Within weeks, the police registered an FIR. Kunal reached out for a settlement. The laptop was returned.Key Facts of the Case
- Kunal Mehta was issued a company laptop (HP Pavilion, valued ₹65,000) for work-from-home purposes.
- Employment was terminated on 15 March 2025, during probation.
- Final salary of ₹1.2 lakh was released prematurely on 10 March due to an HRMS glitch.
- The company froze the salary by requesting HDFC Bank to place a hold on the transaction.
- Kunal refused to return the laptop and made return conditional on the release of the salary hold.
- No employment contract clause explicitly stated that salary was conditional on returning company property.
- A criminal FIR was filed under Section 316 BNS (Criminal Breach of Trust) and Section 305 BNS (Theft).
- The laptop was returned after police intervention and a negotiated settlement.
The Direct Legal Answer
Can the employer hold the ex-employee's salary until the laptop is returned?
It's risky. The Payment of Wages Act, 1936 (and similar state-specific laws) require that wages earned must be paid unless there's a specific contractual provision or a court order allowing a deduction. A unilateral freeze, without the employee's consent or a court order, can be challenged as an illegal deduction. The employer could face a labour complaint or a criminal case for withholding wages.
What criminal case can be filed against the employee?
Two main options. First, criminal breach of trust under Section 316 of the Bharatiya Nyaya Sanhita (BNS), 2023. The employee was entrusted with the laptop for work, not for personal gain. Refusing to return it — and demanding a condition — is a clear breach. Second, theft under Section 305 BNS. Once the employee decided not to return it, the possession became dishonest.
Can the employer sue for the laptop's value?
Absolutely. A civil suit for recovery of the laptop's value (or the laptop itself) is straightforward. File a suit for return of property or damages in the civil court of competent jurisdiction. The limitation period is three years from the date the employee refused to return it.
Advice in Such Cases
Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation to come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.
Second, issue a formal legal notice immediately. This creates a paper trail and shows you acted in good faith. Third, lodge an FIR at the police station with jurisdiction over the employee's current address — that's where the laptop is located. And here's the thing, don't wait. Delay weakens your claim. A lawyer with experience in employer-employee property disputes knows exactly which sections to invoke and how to handle the salary-hold question strategically.
Applicable Sections of Law
- Section 316 BNS (Criminal Breach of Trust): Whoever, being entrusted with property, dishonestly misappropriates or converts it to their own use, or dishonestly uses it in violation of the trust, commits criminal breach of trust. Punishable with imprisonment up to 5 years and fine.
- Section 305 BNS (Theft): Whoever, intending to take dishonestly any movable property out of the possession of any person without that person's consent, commits theft. The laptop is movable property. Once the employee decided not to return it, the possession became dishonest.
- Section 73 of the Indian Contract Act, 1872: Compensation for loss or damage caused by breach of contract. The failure to return the laptop is a breach of the employment agreement's implied or explicit term regarding company property.
- Order 39 Rule 1 and 2 CPC (Temporary Injunctions): In a civil suit, the employer can seek an interim order restraining the employee from disposing of or damaging the laptop pending trial.
Punishment and Penalties
- Section 316 BNS (Criminal Breach of Trust): Imprisonment up to 5 years, or fine, or both. Cognizable and non-bailable.
- Section 305 BNS (Theft): Imprisonment up to 3 years, or fine, or both. Cognizable and non-bailable.
- Both offences are compoundable with the permission of the court. If the employee returns the laptop and settles, the case can be withdrawn.
Jurisdiction — Where to File the Case
For the criminal complaint (FIR), the police station with jurisdiction over the place where the laptop is currently located — typically the employee's residential address — has territorial jurisdiction. So file the complaint at that police station. For the civil suit, the court having jurisdiction over the area where the employee resides or where the laptop is located will handle the recovery suit. Pecuniary jurisdiction — if the laptop's value is under ₹3 lakh, it goes to the Civil Judge (Junior Division). Above that, it's the Senior Division. Jurisdiction matters because filing in the wrong forum wastes time and money.
What if Police Refuse to File FIR?
Police sometimes resist registering FIRs in property disputes between employers and employees. Here's what to do:
- Approach the Superintendent of Police (SP) under Section 173(4) of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023. The SP can direct the SHO to register the FIR.
- If the SP refuses, file a private complaint before the Judicial Magistrate under Section 175(3) BNSS. The magistrate can order the police to investigate.
- As a last resort, file a writ petition in the High Court under Article 226 of the Constitution, seeking a direction to the police to register the FIR.
- Keep a written complaint (with acknowledgement) as proof of your approach.
Rights of the Accused
The accused employee has certain rights even in a criminal case:
- Right against self-incrimination (Article 20(3)): The employee cannot be compelled to be a witness against themselves.
- Right to legal representation (Article 22): The employee has the right to consult and be defended by a lawyer of their choice.
- Right to be produced before a Magistrate within 24 hours: If arrested, the employee must be produced before a magistrate within 24 hours of arrest, excluding travel time.
- Right to a copy of the FIR: The employee is entitled to a free copy of the FIR immediately after registration.
- Right to bail: Depending on the offence's bailable or non-bailable nature, the employee can seek bail.
Bail Provisions
Theft (Section 305 BNS) and Criminal Breach of Trust (Section 316 BNS) are both non-bailable. This means bail is not a matter of right. The accused must apply for regular bail under Section 483 BNSS. Anticipatory bail under Section 482 BNSS may also be sought if the accused fears arrest. In practice, courts often grant bail in such cases, but with conditions — like surrendering the laptop or depositing its value. The employer's lawyer should oppose bail if the laptop remains unreturned, arguing that the accused might destroy evidence or abscond.
Quashing of FIR / Case
The employee can approach the High Court under Section 528 BNSS (inherent powers) to quash the FIR. Grounds include: no prima facie offence, the matter is purely civil in nature, or the parties have settled. A common argument in laptop cases: "It's a civil dispute, not criminal." But if the employee had no intention of returning it — especially after the termination and demand — the criminal element is alive. Courts generally don't quash FIRs where there is clear evidence of dishonest misappropriation. Settlement is the safer route for both sides.
If You Are the Victim
- Document everything — the laptop's serial number, value, invoice, and the employee's acknowledgment of receiving it.
- Send a formal legal notice demanding return of the laptop within 7 days, with a copy to the police.
- Lodge an FIR at the police station having jurisdiction over the employee's residence.
- Freeze the salary only on legal advice — without a court order, it can backfire.
- File a civil suit for recovery of the laptop or its value, seeking interim relief (injunction) under Order 39 CPC.
Documents You Must Keep Ready
- Employment agreement or offer letter (containing terms about company property)
- Laptop issuance acknowledgment (signed by employee, with serial number and date)
- Termination letter (showing last working date and demand for return of laptop)
- Email and WhatsApp communications demanding return
- HRMS records showing the premature salary release
- Bank statement showing the salary credit and subsequent freeze
- Legal notice exchange between lawyers
- Laptop's invoice/proof of purchase
What Evidence Is Required?
- Primary Evidence: The signed laptop receipt/acknowledgment form — this proves entrustment.
- Secondary Evidence: Emails, WhatsApp chats, or call logs showing the employee's refusal and the condition (salary hold release) — this proves dishonest intention.
- Documentary Evidence: The employment contract, termination letter, and HRMS records.
- Witness Evidence: The HR manager who sent the demand and the IT manager who issued the laptop can be witnesses.
- Bank Records: Salary credit proof and the bank's confirmation of the freeze.
- Circumstantial Evidence: The employee's change of address or failure to respond after demanding a condition — this supports dishonest intent.
How the Police Behave in Such Cases
Police often treat laptop refusal as a "civil dispute" and resist registering an FIR. They'll ask, "Why don't you just sue him?" You need to insist that it's criminal breach of trust — the employee was trusted with company property and is now dishonestly keeping it. Carry the legal notice, laptop acknowledgment, and termination letter. If the station officer refuses, go up the chain — SP, then Magistrate. Be persistent. Police are more responsive when a lawyer accompanies the complainant and cites specific BNS sections.
Timeline of Legal Process
- FIR Registration: Same day (if police cooperate) or 1-3 weeks if you have to approach SP/Magistrate.
- Police Investigation: 30-60 days for chargesheet. Police will record statements, seize emails, and call the employee.
- Chargesheet Filing: Within 90 days for cognizable offences.
- Cognizance and Summons: 2-4 months after chargesheet.
- Trial (if not settled): 6-12 months for a summary trial.
- Civil Suit: Notice stage (1-2 months), written statement (1-3 months), evidence (4-8 months), final arguments (1-2 months). Total civil suit: 12-24 months.
- Settlement: If the employee returns the laptop, the case can be wrapped up in 2-4 hearings.
How Long Will the Investigation Take?
Police typically complete investigation within 60 days from FIR registration. They must file a chargesheet within 90 days if the accused is in custody, or 180 days if the offence carries more than 10 years of imprisonment. For laptop theft, it's within 90 days. If no chargesheet is filed within that period, the accused can seek default bail. Make sure your lawyer follows up with the investigating officer regularly.
Understanding the Costs
The total cost of a matter like this varies significantly from one case to the next — it depends on the complexity of the dispute, the forum involved, the number of hearings, and the specific facts of your situation. There is no single fixed figure that applies to everyone.
A professional advocate can give you an accurate estimate only after reviewing all your facts and documents in a consultation.
Can the Matter Be Settled Out of Court?
Absolutely. In fact, it's the most practical outcome. Once the FIR is registered, the employee often becomes willing to settle. The offence under Section 305 BNS (theft) is compoundable with the permission of the court, and Section 316 BNS (criminal breach of trust) is also compoundable. A settlement deed can be executed: the employee returns the laptop (or pays its value), and the employer agrees to withdraw the FIR and the civil suit. Mediation before a Lok Adalat or a private mediator is another option, especially for civil recovery suits. Settlement saves time, money, and reputational damage for both sides.
Common Mistakes People Make
- Freezing salary without legal basis: This invites a separate legal action from the employee, making your case weaker.
- Not documenting the property issue: Without a signed laptop receipt, proving entrustment is tough.
- Delaying legal action: Waiting weeks or months signals to the employee that you're not serious about recovery.
- Hiring a lawyer without domain experience: General practitioners may file a simple recovery suit or miss the criminal angle entirely. An advocate who regularly handles employer-employee property disputes knows how to layer a criminal FIR with a civil suit, how to handle the police's reluctance, and how to negotiate a settlement that includes the salary-hold issue. That domain-specific experience often means the case resolves in weeks, not months.
- Threatening the employee publicly: Social media posts or office-wide emails can backfire, giving the employee a defamation claim.
- Ignoring the salary-hold risk: The employee's counter-claim for wrongful withholding can complicate your case.
FAQs People Normally Have
Q: Can I deduct the laptop's cost from the final settlement?
A: Only if the employment contract explicitly allows deductions for unreturned company property. Otherwise, it's an illegal deduction under the Payment of Wages Act. Better to sue for recovery separately.
Q: Will the police file an FIR if the laptop is worth only ₹30,000?
A: Value isn't the only factor. The offence of criminal breach of trust or theft doesn't have a monetary threshold. But police may treat it as "petty" and try to divert you to civil court. Insist on the FIR. If they resist, go to the SP or Magistrate.
Q: What if the employee returns the laptop after the FIR but before trial?
A: The case can be compounded with court permission. The employer can withdraw the FIR, and the matter ends. No conviction on record for the employee.
Q: Can I file a case if the employee lives in another city?
A: Yes. The FIR should be filed at the police station where the laptop is located — the employee's city. For a civil suit, the court at the employee's residence has jurisdiction. You may need a local lawyer in that city.
This article is general legal information, not legal advice. Consult a qualified advocate about your specific situation.
Advocate Sudhir Rao, Supreme Court of India