Hello Anoop,
I am not sure Bhaskar's suggestion would work in this case, for the simple reason that all this guy needs to do is to checkout with his friends [he does have them within your company since he seems to have shared about his plans] & realize that you aren't telling him the facts. And in the process, you aren't handling the main issue @ hand.
The best way would be to confront him--straight & F2F [NOT over the phone]--as Samvedan suggested. However, I wouldn't suggest you to focus on the Notice Period rules. Rather focus to confront him about what you heard about his plans. Obviously, he will deny it. Then switchover to his continued absence & the reasons--again he will most likely stick to his 'personal problem' angle. Pin him down saying that you have info that his personal problem isn't true & if he wants the Company to take his word, then he needs to substantiate with concrete evidence. Else, the company is free to take it in the way it deems fit.
And in case, he refuses to come for a F2F, give him an ultimatum that your boss [or whoever is a very senior official] wants to meet him.
I hope you got what I am driving to--you will be creating the ground for disciplinary action--if you decide to move in that direction--and keep the salary aspect totally OUT-OF-FOCUS AND DISCUSSION. You would, thus, also have handled the issue of whether to pay his salary or not, without even broaching the topic--until you are satisfied with his responses.
All the Best.
Rgds,
TS