Hi, I have received a Lawyer's letter (on behalf of my ex-employer) after I have been RELIEVED with a Relieving Letter.

There are 2 allegations:

1) 'Another company has paid approx Rs. 8000 to my salary account'. This is for the travel made on the interview date and I have all the bills. The interview date was an approved leave. The ex-employer's allegation is that I have shared information for money. They came to know of this transaction either from bank OR by checking my private email account. Is it Legal for anybody to scrutinize the transactions of my salary account?

2) 'I have joined a competitor company within 1 year of relieving'. I have NOT signed any BOND for this. This clause is as per APPOINTMENT LETTER on the company letterhead.

Based on these two aspects they have asked me to pay compensation of 6 month's gross salary. Are these allegations enforceable by Indian Law? What is the outcome of such proceedings?

Moreover, I have mentioned in my resignation letter, that I will serve 45 days notice period. But they relieved me in 1 day. So, can I claim for 45 days payment of notice?

Additionally, they have also held up my normal payments like a few day's salary, earned leaves, customer's dinner bill etc. Is there any hope to get this money?

Seasoned Ir Professional
Freelancer In Hr &indirect Taxes For
Labour Law Advocate
Director Hr
+2 Others


Forget about the notice, no legal action can be initiated against you for joining a competitor because clauses an agreement extended beyond termination of employment is void. No employee can be prevented from taking up an employment similar to the one he was doing with his previous employer. In Sandhya Organic Chemicals v. United Phosphorous the Gujarat High Court had held that, an employee cannot be prevented from utilizing the knowledge and experience that he has gained while being in employment. In Ambiance India Pvt Ltd vs Naveen Jain, an agreement between the parties prohibiting an employee for two years from taking employment with present, past or prospective customer of plaintiff was held to be void and contrary to section 27 of the Indian Contract Act.

Though such post termination restraint agreements are void, confidentiality and non-disclosure agreements are valid and effective when it is exercised during the time when the employee is in service. However, if you have the proof that the amount you had received was just a reimbursement of travel expenses paid by the present company, the suit will not be maintainable.

Now regarding notice pay payable to you, you can very well demand the amount since you had opted for serving the entire notice period but it was the company who relieved you earlier. You can also demand the bills etc which are reimbursements. But having sent a legal notice, the actual HR culture of the company could be assessed and they are not going to pay it but will hold it until a settlement is made. Anyway, you will have to spend time in it and I would suggest that it would be good if you present the matter through another person not necessarily an advocate who can speak to the company people and convince them. The company should know that they are in the wrong path and they are not going to get the demanded money by going legal. For this a proper conciliation is always proper. And even after this conciliation, they are very adamant, then let them go to court.


From India, Kannur

Mr. Madhu has mentioned very rightly. How ever I feel that the letter is not sent by the HR Head, the company is consulted with an advocate hence they may try to harass you they have taken the pain to find out from where the money has come to your a/c too. I suggest that without quoting or responding to this letter you can send a nice request letter to the company requesting them to settle your F&F where in you can ask your notice period ( what ever in your appointment letter), your balance salary, other dues etc.etc by which they will understand that you also have some demand. (Being an HR person initially avoid quarrels with management and try to settle amicably ) Though the management can not stop your move or decision, After sometime you may get a second legal notice and it is better to consult an advocate and respond back to that quoting all the points including how did they collect your details.

From India, Chennai
Thanks Mr. Madhu and Mr. Ramdas. I have sent a lawyer’s letter asking my money and telling them to reveal, how they accessed my account. Thank you so much for your suggestions.


Very well advised by Mr. Madhu. Certainly you do not need to worry about the point #1 and 2. However, it is absolutely necessary to give a reply (either by yourself or lawyer) to the legal notice at the earliest.
From India, Kolkata

Dear Learned members,
With regard to the above discussion, shouldn't the Advocate be taken to task? My bank account and transactions therein are Privileged information and anyone being able to access my Account with or without bank's connivance is a huge security risk which needs to be addressed immediately.


Useful article about negative covenants in contract of employment. Mentions a number of judgements of SC

Some more judgements. You can get many more by searching.

In a nutshell, nobody can enforce such a contract.

The company has to pay the notice period salary to the employee if they want to relieve early

The supreme court has dealt with Notice Period extensively in the case Punjab National Bank vs P.K. Mittal on 13 February, 1989: 1989 AIR 1083, 1989 SCR (1) 612 holding

“We are of the opinion that clause (2) of the regulation and its proviso are intended not only for the protection of the bank but also for the benefit of the employee. It is common knowledge that a person proposing to resign often wavers in his decision and even in a case where he has taken a firm decision to resign, he may not be ready to go out immediately. In most cases he would need a period of adjustment and hence like to defer the actual date of relief from duties for a few months for various personal reasons. Equally an employer may like to have time to make some alternative arrangement before relieving the resigning employee. Clause (2) is carefully worded keeping both these requirements in mind. It gives the employee a period of adjustment and rethinking. It also enables the bank to have some time to arrange its affairs, with the liberty, in an appropriate case, to accept the resignation of an employee even without the requisite notice if he so desires it. The proviso in our opinion should not be interpreted as enabling a bank to thrust a resignation on an employee with effect from a date different from the one on which he can make his resignation effective under the terms of the regulation”.

From India, Salem

It is worth appreciating that our learned and honourable members on this forum are prompt and very helping.This type of situations need to be addressed sincerely and erring employer be taught lessons.I appreciate.
From India, Vadodara
Dear Mr. Madhu,
Congrats you have explained the situation very well.
However what would be the situation if employee leaves the company without completing the required mandatory notice period and without handing over charge formally. Does the company has an inherent right to insist that the employee must serve the entire notice period and not settle for monitory compensation for balance days.

From India, Thana

Hi Abhaydamle
In this case company goes for initial offer letter and NDA signed with the employee and can be legal as well to make sure employee serve the notice period. few companies deduct the last month salary and penalty from the PF if applicable.
Best Regards,
Nauman Ahmad
Founder & CEO @ PeopleQlik
Cloud HR | Payroll | HRMS | HCM Software in Saudi Arabia

From Pakistan, Lahore

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