Any employee is expected to serve the notice period as per the terms mentioned in the appointment letter. In case the employee has abandoned their duties, it is considered unauthorized absence. For this misconduct, you may order a domestic inquiry. Whether the employee appears for the inquiry or not, you may award punishment, which could be "termination of employment."
Your query is on legal issues arising from withholding the issuance of an experience letter. However, my question is, what will your company achieve by withholding the experience letter? Whether the separation occurs under normal circumstances or otherwise, it is better to issue the experience certificate.
For an employee who abandons their duties, you may terminate their services by following the due course of law and issue a relieving letter with the remarks "services terminated on the abandonment of employment." If you follow the normal procedure for handling discipline, you don't have to worry about any type of legal action. However, issuing a certificate with negative remarks without following due process could land you in trouble.
It is understood that the new labor codes mandate the issuance of an experience letter. Therefore, it is better not to withhold it.
Thanks,
Dinesh Divekar