Business Development, Employee Relations,
Sovik Bhattachaerjee
Md- S.s Enterprise
Software Engineer
+3 Others

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Hi All,

I was working with a software development company since 5 years. I was not getting good growth during the employment and hence decided to resign. Before my resignation I had floated a company(current state - just memorandum subscriber) and planning to leave the company but it was a hard decision to leave and start my own. Before I resign my employer come to know about it and asked me to handover all the projects running under me and sign an agreement which will restrict me to do any similar work for 2 years after leaving the company. I denied to sign the same and now he is threatening me that he will take legal action. He is saying that since I had opened a company with same objective, it proves the conflict of interest and hence I\'m faulty.

My own company in not yet started the work. since the employer was giving me threats I had decided to leave the company and given my resignation over email. I had also handed over all my project and given the confirmation over email. He had not given any reply yet on that resignation email and suddenly after 5-6 days he sent a notice of show cause regarding the same incidence and stated that during the course of action he had kept me on leave. He had also sent a copy of notice via registed post with ad in my mailing address but since I was not available at home that day the registry goes back to him. but I had replied the notice over email. I told that the said allegation are all wrong and my said company is not yet started any function. I also added that since you had kept me on leave, please consider my these days in respect to notice period.

Please suggest if anywhere I did anything wrong and if so what actions can be taken against me.

He is not paid the last working month salary and also today I have completed one month after the date of resignation.

I know that I\'ll not get any release letter.

Please suggest what should I do.

Hi ankit, Don’t waste time , Contact a Legal Solicitor to assist you. Good Luck. Ukmitra
Hello Ankit,
As per my opinion NDA Consists not to disclose project material or assignment for Limited period, it does not cover that you will not work for 2 years in similar work.
Please read your NDA agreement carefully and will advice to take a help of good labour lawyer.



Your case is interesting, I know about laws a bit, so a few questions are there, so that we can understand your case:

Q1. Please provide details of NDA mentioned in your appointment letter?

Q2. You want to open your own company, right so have you already opened it? Means got registered under Companies Act 1956 (Including amendments made during 2013)? Or you are planning to open company under OPC -One Person Company, recently passed?

FYI, e-mails /Comments made in facebook/LinkedIn are not accepted in Court. There is a specific reason behind it, first it is possible that any XYZ can access your e-mails/facebook/LinkedIn account. For e-mails it may or may not be accepted in court. Eg: Most of the time for private companies, e-mails are not accepted but sometimes it is accepted for public companies. Depends on situation, but most of the time it does not get authorized in Court.

Q3. What is the nature of company in which you were working? Firms/LLC/PVT LTD/Public (40% of total capital is either held by Central Government/state Government- under certain special scenario /its wings or RBI)?

What your company did is correct legally. I believe you have not sent resignation via registered post. And acceptance of resignation has not taken place. So, company have right not to relieve you from your job. If they have mentioned that they are keeping you in Leave, means they are not relieving you. Under any circumstances it cant be considered that you are serving notice period in this manner.

Even if your leave bucket gets over, then also you cant claim you have been relieved from service, until & unless company issue a relieving letter. I would suggest contact a Civil Lawyer, as early as possible.

If you don't want to do so, immediately then write a simple letter, stating 'Sir, I want to resign from my job for so & so reason. I have submitted all project documents on so & so date. Provide your employment id, DOJ.For any clarification, please get in touch with me at email id/ph/ address.I would be highly obliged if you, Kindly accept the same. Regards Your Name.'

Don't write any thing else, in the letter like wrong allegation , this that etc. If you wish you can attach a copy of your appointment letter. I hope your lawyer will advice the same in the early stage. Wait for their reply, try to get reply over letters. If Company wish to take legal action, they can do so only court will decide the 'award', decree or order. If they accept your resignation well & good. Else no option dear, you have to consult a lawyer.

Thanks & Regards

Thanks to all of you for giving your opinion.

Hi Sovik,

Today I got a registry from my company. He had given me a termination letter. I'm really sad to get such a letter after serving for 4 yrs. to my company. I really don't know whether I had done wrong. I dreamed about my own company and floated the same. But I had not taken any assignment in that company. The trade license is also not yet applied.

Since I had already decided to start that company the release letter is of no use for me but still I want a clean release. Also salary for the month of March is due.

Below is the replay to your queries:

Yes, the company is registered last December. But it is not yet functional.As I stated above the trade license is also not yet applied. My role in that company is shown as Non- Executive director. I was not able to decide whether I should take risk and start my own. Also the project load was there so I was thinking of continuing for next 2-3 month to concrete my plan.

My company was a private limited company dealing with software development. Since my profession is software development, I also opened the same company.

The funny thing is that he had written in the termination letter that "you had not been attending office since 28th March." whereas in show cause notice he had added that "the company immediately asked you to handover your responsibilities and proceed on leave till such time the company determines actions required to be taken.".

I'm attaching the Show-cause notice, reply of the notice, part of my appointment letter and Termination letter.

Looking forward to your valuable suggestions.

Attached Files
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File Type: zip Show cause (393.7 KB, 589 views)



There are a few things I would like to highlight. It would have two parts- from management perspective & Legal perspective.

Management Perspective:

1. If you have registered a company & wish to go for business, I would suggest go for it.

2. If you want go, for business, just forget what happened. In business we try to avid Court /Trial as much as possible. Time consuming, money consuming.

3. If you go for business, then this termination is useless. As termination itself has became illegal. Later if you wish to go for service, there you have to carry all these documents & need to explain HR about it in details. Need to clarify it in such a manner so that there don't exist any misunderstanding.

I would suggest, no need is there to think you wont be successful in business. Go for it, be positive & all the best. Now being a MBA in HR & Finance, as well as a student of CS, possessing experience of end to end business management, I would only say, you are lucky. The Seniors of the company, where you were working made some stupid's errors. If I was there in the position of HR HEAD, of your ex-company, I might have tackled the situation differently, little maturely & without keeping so many legal loops on company's end.

Errors Made by your ex-company (Maximum on legal grounds):

1. This 'termination of service' is invalid since official show cause letter was issued by them on April 3,2014. It was send by registry, so for delivery at least 1day would be required. Issuance of show cause letter means, company is asking employee to provide legitimate cause & explanation against the charges brought on employee. So, certain time period is associated. By any means 'Termination of Service' is legally not acceptable when 'Show cause letter' has been issued on date, from which company is claiming Termination of service has become effective. How can a company ask for explanation from an employee whose service has already been terminated?

2. Second, as per NDA of appointment letter, employee shall obey NDA clause. Opening of a private company never certify or prove under any circumstances, that violation of NDA has taken place, yes I agree that interest of ex-company & its confidentiality/trade secrets may be hampered. Preventive measure can be taken, but not actions. It like, threatening some one of committing a murder. By no means police can arrest that person on ground of murder. Yes police can take preventative measure or investigate.

Hope you now understand, why show cause is important, from companies end. As per law the procedure is 1st Issue show cause ? Then if employee's reply is not satisfactory, then Termination process may be initiated. Always official date will be after the date of receiving r

Now, understand something clearly, by suggesting the solution, I know I ll make many HR's as my No1 enemy. Still, we have to go what ever is legally correct & not morally. (PLEASE DO THIS IF YOU ARE WILLING TO CHALLANGE THE COMPANY & MAY REQUIRE A LEGAL FIGHT IF COMPANY IS ADAMENT- I AM NEUTRAL)

1. Send a resignation letter via registered post. Write:

Respected Sir,

I received termination letter on so & so date. Anyway, I have received your Show Cause letter too, stating I have violated so & so. Sir, opening a company & becoming a director, by no means signify that I have violated NDA clause of my appointment letter. But still, with due request, if possible kindly show a genuine cause & explain, how I violated NDA policy with any specific attempt from my end (I.e Violation of Copy Right Act, Information Technology Act etc which you are claiming)?

Secondly, please clarify how can you /company ask for a legitimate cause against the charges on me when you all are declaring that my service has been terminated from April 3,2014 onwards & letter of Show Cause was issued by you all on April 3,2014? This is confusing & contradictory, as per law I understand, as it means decision of termination was taken before listening any explanation from my end.

Please clarify with sufficient reason why my salary of march is pending? And by when (ETA)it will be credited in my account? As per Show cause letter, I was on leave provided by company.

I agree, that opening a company or working as a Director, may be against the interest of Company & so I have resigned already on April 29,2014 via e-mail. Still I am confirming that, in order to safeguard mutual interest, of both ' I HAVE RESIGNED FROM THE SERVICES'. I do respect, right of company to terminate me, but ground of termination is not clear, as company which is not in operation, how can it be considered as a competitor of your business . Reason being, I have resigned earlier before this Termination letter was issued. Acceptance of resignation is in your hand.

Please reply as early as possible- maximum 7 business days. Else, I would consider the letter of termination, null & void, as per law & you all have accepted my resignation.


Your name.

Wait for reply, then as per reply you need to work. May need to consult a lawyer. Choice is yours. You have to decide whether you wish to fight or not. But yes, if I was in your place, I might have taken legal action if company provide a -ve reply post this e-mail, that's because to save my new baby(a new business). But since I am unaware of your financial position, your priorities & needs, so I have suggested no to go for legal battle if you are looking to move for business because you need money & time there- new baby.

Thanks & Regards

Sovik B

Plz take this matter to the Labour Court as an employer cannot terminate you for such silly reasons
Mr Ansari & Ankit,

Matter is not silliy or the reasons. HR department or the legal team has made some technical errors. Earlier when show cause notice was issued by management, they were on right track.

But still there also three important question arise:

1. Breach of law in question: Copyright Act, Information technology act etc. As possessing information/ materials does not mean misuse of them has occurred. There by opening of a company under Company's Act 1956, including amendments taken place during 2013 never signify that breach of above laws has occurred.

2. Question of bad faith & conflict between ex-employer's interest & employees interest(as employee) has opened a company: Here also question arise, because a company registered does not mean its operating until & unless entire process of registration & acquiring trade license, other legal formalities are met. And there by can be treated as a competitor. In simple words, Ankit is a software professional. Let us assume that he is a software engineer for sake of understanding. He may design CRM software in previous company, while the company which he formed may work in field of developing antivirus protecting software or designing SAP software- which include formation of blue print , T-codes etc.

Under any circumstances, Ankit's company cant be called a competitor of ex-employer, if ex-employer deal only with CRM software's. It like both are butcher , ex-employer sell mutton & employee is forming a company who will sell only chicken.

3. Many things can happen, but we cant imagine what will happen in future . Law takes decision on basis of evidence which depends on what has happened. And not on evidence which will form due to events in future. Eg: A Robber cant be punished today assuming that tomorrow he will do a robbery. Advance punishment.

What I feel, when HR & legal team of previous company realized all these facts, then they have taken hasty decision termination, on basis of absence & to protect their business as per law. Here they committed mistake.

Correct Method of ex-employer should be:

1. Issuance of show-cause letter. DONE.

2. Wait of reply, VIA registered post. NOT DONE- ACCEPTED E-MAIL, which during trial can be proved useless.

3. Follow Separation procedure- acceptance of resignation.


Follow process of termination. Seeking alternate course of profession (Service/business) is not offence as per law. Here, dual employment cant be considered, as Ankit has not joined service under another employer. At the same time, entire process of opening a company is not completed too. Its on process. Eg: What if Ankit failed to achieve trade license, or other legal problem arise? His company might be registered, he may be non-executive director, but cant be considered as Self Employed under the said company until & unless all disputes gets fixed & company start's operating.

Termination ,should have been done, showing reason that its a preventive measure taken by company, to protect its interest & safeguard business interest, information & technology, as Ankit is in a verge of opening his new company. And date of termination should have been effective from date of receiving Ankit's reply. Still, certain technical question arise- which I cant disclose publicly.

-------NOT DONE.

Ankit's ex-employer, made mistakes in dates from which termination should have been effective. 2nd showed absence as a cause, and a little touch in 'preventive nature'.

Its not termination cant be done. But course selected & language used, for termination is creating the problem. Here, instead of labor court, doors of High Court should be knocked. As certain section might be applicable where jurisdiction of High Court will be superior during trial.


From business perspective, or management perspective, I would suggest Ankit:

1. To forget everything.

2. To take final decision, whether he wish to go for business or not.

3. If he wish to go for business, then try to get all license & permission from various authorities ASAP.

4. I am sure that, since Ankit selected Software business, high chances will be there to deal with foreigners & Foreign exchange will be there. And these days FEMA ACT is implemented strictly. So, get clearance from various departments, RBI ,ED etc if required.

5. Try to get a 'Payment Gateway' too.

Trust me Ankit, if you go for business you will need all these. And you need to work hard at this phase, it require a lot of hard work, guidance , investment. Once business will become stable, all will be fine. I am sure, that day, Ankit will lough at himself because there was a time when he was terminated & he was stubborn to fight.

Ankit, in business sometimes you have to be aggressive & sometime defensive, consider my suggestion & play defensive. Invest your maximum time in business. That baby will give you return for sure. If you need any help you can call me at 9051547598.


Sovik B

Under any circumstances, this 'TERMINATION' cant be proved legally correct- many loops are there on company's end. Any lawyer will say the same. Even if company claim that they did so for their business safety, still then , this termination cant be proved correct in court or during trial.
Anyway, I have replied your personal e-mail. You are most welcome to call me anytime you wish.
Sovik B

Hi Ankit,
I completely agree with Ukmitra that you should stop wasting your time and go legally
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