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 cannot arbitrarily withhold your salary or full-and-final settlement beyond a reasonable period, typically 30 to 45 days. If they give false information about your working days or delay payment, you can send a legal notice, file a complaint with the labour department, or approach the civil court. A 90-day withholding clause in an offer letter may not hold up against statutory labour laws.
Rohan Gupta, a software engineer in Indore, resigned from his job at a prominent IT services company in late February 2025. His last working day was 28 February 2025. Despite fulfilling the notice period and handing over all company property, his employer simply stopped responding. Emails went unanswered. Calls were rejected. And when they did reply, the HR team claimed his last working day was earlier than it actually was — a clear misrepresentation.
Weeks passed. His salary and full-and-final settlement were nowhere in sight. The company's answer? "You'll be paid after 90 days as per the offer letter." That contradicted everything Rohan knew about the Payment of Wages Act. He was earning under ₹30,000 a month — hiring a lawyer seemed out of reach. But he didn't have to look far.
That's when Rohan approached the Chamber of Advocate Sudhir Rao. The office reviewed his offer letter, email trails, attendance records, and the company's shifting statements. Advocate Sudhir Rao and his office identified a clear breach — the 90-day clause was vague and potentially unenforceable. A sharply worded legal notice was sent to the company's registered office. Within 10 days, the full amount was credited. Here's how you can do the same.
Key Facts of the Case
- The employee resigned on proper notice; last working day was 28 February 2025.
- The employer delayed salary and gave false information about working days after resignation.
- The employer cited a "90-day" clause in the offer letter for withholding full-and-final settlement.
- Clear documentary evidence existed — emails, attendance records, and offer letter.
- The employee earned under ₹30,000 per month, making formal litigation seem unaffordable.
- A legal notice under the Payment of Wages Act, 1936, and Indian Contract Act, 1872 was served.
- The full settlement was paid within 10 days of receiving the legal notice.
The Direct Legal Answer
Can an employer withhold salary for 90 days after resignation?
No — not as a blanket rule. While an offer letter might mention a 90-day period, such clauses are generally unenforceable if they are unreasonable or violate statutory protections under the Payment of Wages Act, 1936. The Act mandates that wages (including full-and-final settlement) be paid on time — usually within 30 to 45 days of the last working day. A 90-day delay without a valid reason (like pending investigation or financial audit) is likely to be struck down as arbitrary.
What if the employer gives false information about working days?
That's a serious issue. Falsifying records to reduce your salary can amount to a breach of trust and even fraud under Section 318 of the Bharatiya Nyaya Sanhita (BNS), 2023. You can send a legal notice pointing out the misrepresentation and demand corrected records. If they don't comply, a complaint to the labour commissioner is the next logical step.
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.
Your first action should be to send a formal legal notice. It doesn't require a full-blown lawsuit — just a well-drafted notice from an advocate can shake up the employer's legal team. And here's the thing: domain-specific experience matters. An advocate who regularly handles employment disputes knows exactly which buttons to push — whether it's threatening a complaint under the Payment of Wages Act or a civil suit for recovery. General practitioners may not be as familiar with these procedural shortcuts.
Applicable Sections of Law
This is a civil matter primarily governed by labour and contract law. Key provisions include:
- Section 3 of the Payment of Wages Act, 1936 — Requires timely payment of wages and prohibits unauthorised deductions.
- Section 73 of the Indian Contract Act, 1872 — Entitles the employee to claim damages for breach of contract if salary is withheld without justification.
- Section 318 of the Bharatiya Nyaya Sanhita (BNS), 2023 — Covers criminal breach of trust if the employer intentionally misappropriates salary funds.
- Order 37 of the Code of Civil Procedure, 1908 — Allows for summary recovery of liquidated amounts (like unpaid salary) if the employer has no valid defence.
Jurisdiction — Where to File the Case
For civil recovery, you can file a suit in the civil court (Junior Division or City Civil Court) where the employer's registered office is located or where the work was performed. Pecuniary jurisdiction is key — courts up to ₹10 lakh generally fall under the Civil Judge (Junior Division). For a complaint under the Payment of Wages Act, approach the labour commissioner or authority appointed under the Act in the district where the company is situated. Territorial jurisdiction lies where the contract of employment was executed or breached.
Limitation Period
Under the Limitation Act, 1963, a suit for recovery of money (including unpaid salary) must be filed within three years from the date the salary became due. The clock starts ticking from the last working day or from the date the employer first defaulted on payment. Missing this deadline can be fatal — courts rarely condone delay unless there's a very strong reason, such as fraud or illness.
Interim Reliefs Available
In a civil suit for salary recovery, you can seek an order of attachment before judgment under Order 38 of the CPC if you can show the employer is likely to dispose of assets or leave the jurisdiction. You can also seek a temporary injunction to restrain the employer from misusing your records or withholding documents. Getting interim relief early can pressure the employer to settle quickly. The court may also order the employer to deposit the disputed amount in court pending final hearing.
If You Are the Victim
- Document everything — emails, WhatsApp messages, attendance records, offer letter, payslips.
- Send a polite but firm reminder via email, then escalate to a formal legal notice.
- File a complaint with the labour department in your state — most have online portals.
- Approach the civil court for recovery if the amount is above the threshold for small causes.
- Consider a consumer complaint if the employer is a service provider and the salary dispute affects your livelihood.
Documents You Must Keep Ready
- Offer letter and appointment letter
- Resignation email and acceptance (if any)
- Attendance records or login/logout logs
- Emails showing salary delay or false information
- Bank statements showing last salary credited
- Identity proof (Aadhaar, PAN)
- Any legal notices already sent
What Evidence Is Required?
- Primary evidence: employment contract, salary slips, bank statements
- Secondary evidence: email trails showing employer's false claims about working days
- Witness evidence: colleagues who can confirm your last working day
- Oral evidence: your own testimony on the timeline of events
- Documentary evidence: company policies or offer letter clauses on settlement timeline
How Courts Typically Approach Such Cases
Civil courts in India take a straightforward view in salary recovery matters. The employee has a clear contractual right to unpaid wages. The employer's defence — like a 90-day clause — is scrutinised for reasonableness. Courts often hold that such clauses are unconscionable if they are one-sided and cause undue hardship. The judge will look at whether the employer acted in good faith. If the delay is unexplained or the employer gave false information, the court is likely to award interest at 12-18% per annum on the delayed amount.
Timeline of Legal Process
- Day 1-7: Send legal notice to employer
- Day 8-30: Employer responds or ignores; if ignored, file civil suit
- Day 31-60: Summons issued to employer; written statement filed
- Day 61-90: Court may pass interim orders (like attachment or deposit)
- Day 91-180: Evidence stage — your affidavit and cross-examination
- Day 181-270: Final arguments and judgment
- Day 271-365: Execution of decree if employer doesn't pay voluntarily
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. Most salary disputes are settled before a full trial. Mediation is encouraged under Section 89 of the CPC — courts often refer such matters for mediation at the first hearing. Lok Adalat can also settle pre-litigation disputes. If you and your employer agree on a payment schedule, a compromise deed can be signed. This avoids litigation costs and saves time. However, be cautious — ensure the settlement is reduced to writing and explicitly states that no further claims remain. Do not agree to a closed-door settlement without a lawyer's review.
Common Mistakes People Make
- Delaying action — waiting for months before sending a legal notice reduces leverage.
- Deleting emails or failing to preserve digital evidence — courts rely on these.
- Signing a settlement without reading — you may waive legitimate claims unknowingly.
- Posting grievances on social media — this can prejudice your case and invite counter-allegations.
- Engaging a lawyer without domain-specific experience — a general practitioner may not know the procedural nuances of labour law, like the summary nature of Order 37 suits or the fast-track complaint route under the Payment of Wages Act. This can delay resolution significantly.
FAQs People Normally Have
Can my previous employer mark me as "absconding" if I resigned properly?
No, not if you served notice and handed over assets. If they do so falsely, you can sue for defamation and also file a complaint with the labour department.
Is a 90-day payment clause in an offer letter legally binding?
Not if it violates the Payment of Wages Act, which mandates timely payment. A court can strike it down as an unfair contract term.
What if I cannot afford a lawyer?
Labour department complaints are free. You can also file a civil suit on your own (pro se) for small claims under small causes courts, but a lawyer's legal notice often resolves matters faster.
Can I claim interest on delayed salary?
Yes. Courts routinely award interest at 12% to 18% per annum from the date the salary became due until payment.
This article is general legal information, not legal advice. Consult a qualified advocate about your specific situation.
Advocate Sudhir Rao, Supreme Court of India