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.

Mr.X was a final-year student who completed a six-month internship with XYZ Pvt Ltd in City A. The company had agreed to pay him a monthly stipend, which was crucial for his living expenses and accommodation costs. When his internship ended on DD/MM/YYYY, the company refused to release his final month’s salary, citing alleged delays in his project submissions. Mr.X was in severe financial distress as this money was essential for paying his rent and supporting his family during his father’s illness. The company kept making excuses and delaying payment, leaving Mr.X stranded without resources. He had no choice but to seek legal intervention to recover his rightfully earned wages. This situation is unfortunately common where companies exploit interns by withholding their stipends or salaries without valid justification.

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.

Document all communications with the company including emails, messages, and any written agreements about salary payments. Maintain records of your work completion and attendance during the internship period. Contact the company’s HR department formally in writing demanding payment with a reasonable deadline. If the amount is substantial, consider approaching the labor commissioner’s office for immediate relief.

Applicable Sections of Law

Under the Bharatiya Nyaya Sanhita (BNS), Section 316 deals with breach of contract and wrongful withholding of payments. Section 318 covers criminal breach of trust when an organization unlawfully retains money belonging to another person. The Bharatiya Nagarik Suraksha Sanhita (BNSS) provides procedural framework for filing complaints. Additionally, the Payment of Wages Act and various labor laws apply to ensure timely payment of wages and stipends. These cases can also be pursued under civil remedies for recovery of dues and damages for mental harassment caused by non-payment.

If You Are the Complainant

• File a formal complaint with the local labor commissioner’s office providing all documentation of the internship agreement and payment terms
• Send a legal notice to the company through an advocate demanding immediate payment with interest for the delayed amount
• Approach the police station to file an FIR under relevant sections of BNS if the company is deliberately avoiding payment
• Consider filing a civil suit for recovery of wages along with compensation for mental harassment and financial losses
• Contact other interns or employees who may have faced similar issues to build a stronger case against the company

If You Are the Victim

• Immediately gather all evidence including internship agreement, email communications, work completion certificates, and attendance records
• Write a formal demand letter to the company stating the exact amount due and setting a deadline for payment
• Contact the company’s senior management or board of directors if HR is not responsive to your complaints
• Approach the nearest legal aid clinic or labor court for guidance on filing a complaint for wage recovery
• Document all financial hardships caused by the non-payment including rent dues, loan defaults, or family expenses affected

How the Police Behave in Such Cases

Police generally treat wage withholding cases seriously, especially when there’s clear documentation of the agreement and non-payment. They usually first advise the complainant to send a legal notice before registering an FIR. Once a complaint is filed, police typically call both parties for mediation. If the company fails to respond or pay, police proceed with investigation under relevant sections. However, they may initially suggest pursuing civil remedies before criminal action, depending on the amount and circumstances involved.

FAQs People Normally Have

Can I file a case for unpaid internship stipend? Yes, if there was an agreement for payment, withholding stipends is legally actionable under contract and labor laws.

How long does it take to recover withheld wages? Through legal notice, companies often pay within 15-30 days. Court proceedings may take 6-12 months depending on case complexity.

What if the company claims my work was unsatisfactory? Unless there’s clear evidence of gross misconduct, companies cannot withhold agreed payments for subjective performance issues.

Can I claim interest on delayed payments? Yes, you can claim interest and compensation for mental harassment caused by financial distress due to non-payment.

What Evidence Is Required?

• Original internship agreement or offer letter mentioning payment terms and amount
• Email communications regarding work assignments, completion, and payment discussions
• Bank statements showing previous payments received from the company
• Work completion certificates, project submissions, and attendance records
• WhatsApp messages or phone call recordings with HR or management about payment
• Witness statements from colleagues or other interns who can verify the payment agreement
• Financial documents showing hardship caused by non-payment like rent notices or loan defaults

How Long Will the Investigation Take?

Police investigation typically takes 60-90 days for wage withholding cases. However, most cases get resolved much faster through mediation once legal pressure is applied. Companies usually prefer settling out of court to avoid legal complications and reputation damage. Civil court proceedings for wage recovery generally conclude within 6-12 months if the case is straightforward with proper documentation.

Advocate Sudhir Rao, Supreme Court of India