Dear Shikha,
If the employee is unable to attend duties because of medical reasons then you may keep the employee on rolls. Since he does not attend duties, you may will have to show him absent. Do not pay him anything for his absence. When he becomes fit to attend his duties, let him join duties. Since his absence is caused owing to medical reasons it is not a matter of indiscipline and you do not have to take disciplinary action against him. Labour authorities do not question for keeping employee on the rolls in spite of long absence.
Since the employee remains absent, he she forfeits his wages. However, as a welfare measure, you may provide him ex gratia. Ex gratia is defined as done from a sense of moral obligation rather than because of any legal requirement. How much to pay him ex gratia is a call that your management has to take.
Practically you may show him that he is on sabbatical but theoretically this is incorrect. "Sabbatical leave" is defined as a leave usually taken every seventh year. Another definition of sabbatical is a period of paid leave granted to a university teacher for study or travel, traditionally one year for every seven years worked.
As far as labour laws are concerned, there is no mention of sabbatical leave in any of the law. Therefore, this provision is on and above the regular laws.
Thanks,
Dinesh Divekar