Dual Employment - Can we hold his full and final settlement & take legal action?

If any employee resign from organization & after last working day at the time of Full and final settlement HR come to know that employee was working for other organization for last 2 months . Can we hold his full and final settlement & take legal action on him.if we get valid proofs that he was working for other organization.

Dear Nilesh,
What will you do if his dual employment comes to light after his full & final settlement? He had resigned and his resignation had been validly accepted by the employer. The F&FS is based only on the service already rendered by him consequent on the acceptance of his resignation. Therefore, my view is that you can't with hold his service benefits once he is no more in your service; at the most you can make a note of it in his BGV, if any, in future you have to authenticate