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Indian Law/Penalty For Less notice served and F&F settlement


Hi ,

I used to work for a private ltd. Company which I left more than six and half months back. They have not yet cleared my F&F settlement though NOC and Relieving letter has been given to me.There was clause in my offer letter which stated " In case you wish to resign from the company , you are expected to serve three months notice periods or three month salary in lieu of notice period".The salary used to be combination of Basic , Special allowance , Fuel allowance , LTA , Medical etc. My questions are
1. Is the deduction of salary will be on Basic or gross ?
2. I have served 1 month notice , so will they penalize for 2 months salary?

They have also hold my more than 3 months salary. Please advice how to proceed.


If as per your terms of your engagement,the contract could be terminated by either party by serving three months notice or pay in lieu thereof,your employer can recover shortfall in the notice period against your outstanding dues.Pay for the purpose of notice-pay varies from organisation to organisation but normally it is calculated on basic-pay only. Therefore,it will depend upon your service rules.
They are legally bound to make full and final settlement of your dues.Since they are delaying it,you may serve a legal notice threatening to take legal action,if they are not settled immediately.You can also lodge a compliant to the State Labour Secy.

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Arun Kumar Maitra


Contract Law,Companies Act,Sale of Goods Act,Partnership Act,Negotiable Instument Acts,Constitution of India,Arbitration Act,Consumer Protection Act,Maternity Act,Payment of Gratuity Act,Payment of Bonus Act,Shops & Establishment Act etc.The answer to the grievance of the particular online query depends on the facts of the particular case and law applicable to it.However,my comments relating to the various queries raised through the "All Experts" should not be treated as legal advices and should not at all be relied upon.I do not accept any responsibility for them.They will only give you some ideas about the probable merits of your cases.Ultimate actions/decisions in the matter may please be taken in consultation with the Legal Experts in the relevant fields.My purpose of giving the comments is to increase my own knowledge on the subjects and share it with others.It is purely of academic interest to me. I strongly feel the more knowledge we share,the more we shall be able to learn because there is neither any age nor any end to learning.


I have experience of dealing with matters relating to holdings of board/general meetings,maintenance of statutory registers,filing of necessary returns with the RoC,obtaining licenses for import,replies to Parliament Questions,dealing with the Parliamentary Committees,appearing before various courts to defend my employers,filing affidavits/counter -affidavits,preparing written statements/re-joinder,giving advice to management on complicated legal issues,preparation,drafting and vetting of contracts etc. I have more than 35 years of experiences to deal with the Company Law and Other Commercial Laws of leading Organisations in the country both in Public as well as Private Sectors.

Member,Inst. of Chartered Accountants of India Member,Inst. of Company Secretaries of India; Member,Bar Council of India Member,All India Management Association Member,Delhi Management Association Ex. Vice-Chairman,Durgapore Chapter of the I.C.A.I. Expert ,CA Club India Expert ,Lawyers Club India Expert,AllExperts Ex. Faculty ,I.C.S.I as well as I.C.W.A of India Retd. Co. Secy. & G.M.(Law)/NFL(A Mini-Ratna A Schedule Central P.S.U.),New Delhi Ex.V.P.(Secretarial Dept.),Jaiprakash Associates Ltd. Ex. Co. Secy.,MAMC(A Govt. of India Enterprise),Durgapore



Awards and Honors
Obtained ''A'' Grade Certificate in the Parliamentary Procedure from the Secy. General of Parliament in 1994-95.It was in connection with a training course conducted by the BPE for PSU Executives.

Past/Present Clients
I am presently working as a Company Secretary in Old World Hospitality Pvt. Ltd.located in Delhi.It is engaged in Hospitality Industry.It has Units in India and abroad.It has been given the responsibility to look after operation & Management of ''India Habetat Centre'' located at Lodhi Road,New Delhi.

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