Dear Aravind,
If few employees have reported late for their duties then you may give them warning letter. After three warning letters, you may deduct their half day's salary. These provisions are mentioned in Payment of Wages Act. However, withholding the month's salary is too harsh punishment.
Gentleman, your concern for maintaining workplace discipline is appreciable but then withholding salary for late coming is like using sledgehammer to kill a fly. Moreover, may I remind you that few more days and India will complete 68 years of independence. India has rule of law. The phrase "rule of law" is not just restricted to the Government authorities or persons associated with judiciary but common citizens as well. Therefore, your every action or decision has to fall within purview of relevant law. Flightiness has no room in running an administration. Though foreigners, even British also had imposed rule of law. Therefore, your action of withholding salary is reminiscent of pre-British era! It is high time for you to update yourself about stipulations of various labour laws. It is in interest of your career!
Thanks,
Dinesh Divekar