What is the nature of your industry? What is your finished product? In what state of India you belong to?
On completion of the month, wages and salary of each employee has to be disbursed by 7th or 10th of the next month depending on the total employee count. These are the provisions of the Shops and Establishment Act or Factory Act. Therefore, submission of the letter of resignation is no excuse for non-payment of wages.
While organisations are free to make any policy to run their business establishment, the policy should not contravene the law of the land. Against this backdrop, you may bring to the notice of your HR the violation of either shops and establishment act or factories act, as applicable. Put up application to HR to release the salary. Tell them that non-payment of wages is causing hardship to you. There are certain financial obligations that need to be met every month.
If HR does not reconcile then you may escalate the matter and bring it to the notice of the MD. If MD also remains intransigent, then you have option of approaching the Labour Officer under whose jurisdiction your company falls. Explain to him the problem. Take along with you evidence of your employment with the company, correspondence of the subject etc. Hopefully LO is expected to solve the matter.
In approaching the LO lies the catch too. As LOs are government-appointed authorities, defying them may not be possible to you employer but then he may get incensed and may create some or other problem to terminate your services. If not termination, then he may create a problem in background verification. Therefore, deliberate duly on how to solve this problem.
General Comments: - As long as employee does not resigns, everything is fine but sooner he/she puts up letter of resignation, then employer starts looking at this person suspiciously. The suspicious could be arising out of the fear that the resigning employee could create some trouble may inflict damage to the company property. As a collateral, employer withholds the salary. This is the height of the mistrustfulness. There could be 1-2 bad instances wherein employees might have taken the employer for the ride however, creating blanket rule on non-payment of wages if certainly ridiculous. On the one had these very employers, who now a days we call "entrepreneurs", nurse ambition to become another Ambani, at the ground level, they behave as if they are running some shop at the obscure village. We expect our Prime Minister to grow our country but what to expect from the local businessmen like this who mostly belong to the tribe that claims that business runs in their DNA!
From India, Bangalore
You have given clarification in your second post, however, I have given sufficiently long reply in my previous post. Therefore, it is up to you whether to approach LO. I have enumerated benefits and risks of approaching LO. Therefore, use your discretion in deciding what to do.
From India, Bangalore