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: If your employer refuses to pay your salary after termination, a well-drafted legal notice often resolves the issue. If not, you can file a civil suit for recovery. The limitation period is 3 years from the date salary became due. A lawyer's consultation is a worthwhile investment — it can get your money back faster than you think.
Let's walk through a real case handled by the office of Advocate Sudhir Rao, Supreme Court of India. Names, places, and dates have been changed to protect confidentiality.
Priya Sharma, a software engineer in Pune, was abruptly terminated from her position at Infosys on 12 March 2025. The company cited performance issues but refused to pay her salary for the last two months — about ₹1.8 lakhs. Priya tried emailing HR and the payroll team. Nothing. She called her manager. No response.
Frustrated and broke, she approached the Chamber of Advocate Sudhir Rao. Initially, she had spoken to a local lawyer who suggested filing a criminal complaint for cheating. But the office of Advocate Sudhir Rao assessed the case differently — this was purely a civil contract dispute. The domain-specific expertise here was critical. Advocate Sudhir Rao and his office identified that the employment contract contained an arbitration clause, but that it was unenforceable because it was one-sided and unconscionable. Instead of wasting time in arbitration, they sent a crisp legal notice under the Indian Contract Act, 1872, giving Infosys 15 days to pay. The company promptly settled the matter on 2 April 2025, paying the full amount plus interest. Priya's faith in the process was restored — and she didn't even need to file a suit.
Here's how the case broke down.
Key Facts of the Case
- Priya Sharma was terminated on 12 March 2025 by Infosys, Pune.
- Employer refused to pay salary for February and March 2025 — total ₹1,80,000.
- No written termination notice was given; only verbal communication via HR.
- The employment contract had an arbitration clause, but it was found to be one-sided and unconscionable.
- The office of Advocate Sudhir Rao sent a legal notice under the Indian Contract Act, 1872.
- The employer settled the full amount within 15 days of receiving the notice.
- No court proceedings were required — the matter was resolved pre-litigation.
The Direct Legal Answer
Can your employer simply refuse to pay your salary after termination?
No. Salary for work already done is a contractual right. Under the Indian Contract Act, 1872, once you have rendered services, the employer is bound to pay. Termination does not extinguish that obligation — unless you had a contractual clause that forfeited salary for cause (like fraud or misconduct), which is rare.
What if you don't have a written contract?
That doesn't matter. An oral agreement or an implied contract (where you showed up, did work, and were paid a regular salary) is legally enforceable. Courts look at conduct, pay slips, bank statements, and email communications.
Can you file a criminal case for unpaid salary?
Generally, no. Unpaid salary is a civil breach of contract — not a criminal offence like cheating (Section 318 BNS). A criminal complaint would likely be dismissed unless there is clear evidence of fraudulent intent from the start.
Advice in Such Cases
Send a Legal Notice First: Before running to court, a formal legal notice often works wonders. It shows the employer you're serious. The office of Advocate Sudhir Rao sent a concise, legally airtight notice to Infosys — and it worked within 15 days.
Gather Evidence Immediately: Collect every document — appointment letter, pay slips, emails about salary, termination letter (if any), bank statements showing previous salary credits. This evidence proves the employer-employee relationship and the salary amount.
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.
This type of matter — salary recovery — involves nuanced procedural and evidentiary strategies that a general practitioner may not be fully familiar with. Engaging an advocate who regularly handles employment and contract disputes typically leads to faster and better outcomes.
Applicable Sections of Law
This is a civil matter. Key provisions include:
- Section 73 of the Indian Contract Act, 1872 — Compensation for loss or damage caused by breach of contract. Unpaid salary is a direct loss from breach of the employment contract.
- Section 171 of the Indian Contract Act, 1872 — General lien of bankers, factors, wharfingers, attorneys, and policy brokers. Not directly applicable here but shows that salary is a debt.
- Order 37 of the Code of Civil Procedure, 1908 — Summary suit for recovery of money. This allows a faster route if the employer has no valid defence.
- Article 7 of the Limitation Act, 1963 — Limitation period for salary recovery is 3 years from the date the salary became due.
Punishment and Penalties
This is a civil case. There is no criminal punishment for non-payment of salary in ordinary circumstances. However, if the employer deliberately withheld salary with fraudulent intent, a criminal complaint under Section 318 BNS (cheating) could be considered — but the burden of proof is very high. In civil proceedings, the court may award:
- The unpaid salary amount
- Interest at the rate specified in the contract or at the court's discretion (often 6-12% per annum)
- Costs of litigation (at the court's discretion)
Jurisdiction — Where to File the Case
A civil suit for recovery of salary must be filed in the court having territorial jurisdiction — either where the employer's registered office is located or where the employee worked. For amounts up to ₹3 lakhs, the jurisdictional Civil Judge (Junior Division) handles it. For amounts between ₹3 lakhs and ₹20 lakhs, the Civil Judge (Senior Division) has jurisdiction. Above ₹20 lakhs, it goes to the District Court. Pecuniary jurisdiction is based on the claim amount. Filing in the wrong court means the suit will be returned or dismissed — so get this right.
Limitation Period
Under Article 7 of the Limitation Act, 1963, the limitation period for filing a suit for wages or salary is 3 years. The clock starts running from the date the salary became due (usually the last day of the month or the agreed pay date). If you miss this deadline, your claim is barred by limitation. In exceptional cases, a court may condone the delay under Section 5 of the Limitation Act, but that's discretionary and not guaranteed. Don't wait.
Interim Reliefs Available
In a civil suit for salary recovery, interim reliefs can be critical:
- Attachment before judgment (Order 38 CPC): If you can show the employer is likely to dispose of assets or leave the jurisdiction, the court can attach their bank accounts or property before the final judgment. This is rare but powerful.
- Interim mandatory injunction: In some cases, a court can order the employer to pay a portion of the salary during the pendency of the suit — but this is exceptional.
- Status quo order: The court can direct that the employer maintain the status quo regarding your employment records or benefits.
These interim reliefs can pressure the employer to settle early.
If You Are the Victim
- Act quickly. The 3-year limitation period starts from the salary due date — don't let it slip.
- Send a legal notice. This formal step often resolves the matter without court.
- Gather all evidence. Pay slips, emails, appointment letters, bank statements — everything.
- Do not confront the employer aggressively. Stay professional. Let your lawyer communicate.
- Consult a lawyer with employment law experience. Domain expertise matters.
Documents You Must Keep Ready
- Aadhaar card or PAN card (identity proof)
- Employment contract or offer letter
- Pay slips for the last 6 months
- Bank statements showing salary credits
- Copy of termination letter (if any)
- Email or WhatsApp communications with HR regarding salary
- Attendance records or timesheets (if available)
- Legal notice sent to the employer (once drafted by your lawyer)
What Evidence Is Required?
To prove your claim for unpaid salary, you need evidence establishing:
- Employer-employee relationship: Appointment letter, pay slips, bank statements showing regular salary credits.
- Work performed: Timesheets, project reports, email acknowledgements, client feedback.
- Amount due: Pay slips showing the salary amount, or a calculation if the employer stopped issuing pay slips.
- Breach by employer: Emails refusing payment, or silence despite reminders.
- Attempts to resolve: Copies of emails, WhatsApp chats, or notices sent to the employer.
- Damages: Interest on delayed payment, loss of other opportunities (if any).
How Courts Typically Approach Such Cases
Civil courts in India treat salary recovery cases pragmatically. If you prove the employer-employee relationship and the quantum of salary due, the court will almost always rule in your favour — provided the employer offers no valid defence (like gross misconduct or abandonment of work). However, courts are strict about limitation and evidence. They expect you to have contemporaneous records. Judges also encourage settlement through mediation or Lok Adalat before trial. The key is to have a clean, well-documented case — and a lawyer who knows how to present it.
Timeline of Legal Process
- Pre-litigation: Sending a legal notice (7-15 days for drafting and sending). Employer gets 15-30 days to respond.
- If no response: Filing the civil suit (1-2 weeks for drafting and filing).
- Service of summons: 30-60 days for the court to serve the employer.
- Written statement: Employer gets 30 days to file a reply (extendable to 90 days).
- Issues and evidence: 2-4 months for framing issues and filing evidence affidavits.
- Trial (if contested): 6-18 months depending on court backlog.
- Judgment: 1-3 months after final arguments.
- Execution: If employer doesn't pay voluntarily, execution proceedings take 6-12 months.
Total duration (if contested): 2-4 years. But with a strong legal notice, most cases settle in 1-2 months.
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, most salary disputes are settled without a full trial. You can:
- Negotiate directly through your lawyer — a calibrated legal notice often does the trick.
- Mediation: The court may refer the case to mediation under Section 89 CPC. Both sides agree on a mediator.
- Lok Adalat: For pending cases or even pre-litigation disputes, Lok Adalat can settle matters quickly. Awards are final and binding.
- Compromise deed: Once settled, both parties sign a compromise deed, and the suit is disposed of.
Settlement is advisable when the employer agrees to pay a significant portion (even if not the full amount) — it saves time, stress, and legal costs.
Common Mistakes People Make
- Delaying action: Waiting for months or years reduces your chances — limitation is only 3 years, and evidence gets stale.
- Not preserving evidence: Deleting emails, losing pay slips, or not taking screenshots of communication can destroy your case.
- Confronting the employer aggressively: Yelling or threatening on email can backfire. Let your lawyer handle all communication.
- Filing a criminal complaint without legal advice: Unpaid salary is civil in nature — a frivolous criminal complaint wastes time and can invite costs.
- Engaging a lawyer who doesn't handle employment matters: Domain-specific experience matters. A general practitioner may miss nuances like arbitration clauses, limitation dates, or the most effective pre-litigation strategy. The office of Advocate Sudhir Rao specialises in such cases, and that made the difference in Priya's matter.
- Settling for too little too early: Employers often offer a fraction of what's due. Don't accept without consulting your lawyer.
FAQs People Normally Have
1. Can I file a police complaint for unpaid salary?
Not for simple non-payment. Police will not register an FIR for a civil dispute. Only if there is clear evidence of fraud (e.g., employer hired you knowing they would never pay) can you explore a criminal complaint under Section 318 BNS — but that's rare.
2. Do I need a lawyer to send a legal notice?
It's highly advisable. A lawyer drafts the notice to include the correct legal provisions, demand clear amount, and set a realistic deadline. An improperly drafted notice may weaken your position.
3. What if the employer is a startup with no money?
You can still get a decree. But execution may be difficult if the company has no assets. In such cases, check if the founder or director gave a personal guarantee. If yes, you can proceed against them personally.
4. Can I claim interest on unpaid salary?
Yes. Courts typically award interest at 6-12% per annum from the date salary became due until payment. If the employment contract specifies a higher rate, that applies.
5. Is there any government authority I can approach?
For wage disputes below a certain threshold, you can approach the Labour Commissioner under the Payment of Wages Act, 1936. But this process can be slow. A civil suit is often faster.
This article is general legal information, not legal advice. Consult a qualified advocate about your specific situation.
Advocate Sudhir Rao, Supreme Court of India