Dear Riya Saha,
When the authorities promote an employee to the next higher level or the managerial level, it is a recognition of the employee's competence to hold the senior position. However, as the employee resigned just two months after her promotion, the authorities considered that she belied the trust they had placed in her. They thought she used her higher designation as a bargaining chip with a future employer. To prevent her from capitalizing on her promotion, they demoted her.
Possibly, it is a signal to other employees about what could be in store for them should they resign immediately after their promotion.
The management's actions reflect their jealousy and also show their immaturity. However, the matter is outside the purview of labor laws. They have used their discretionary power. Therefore, there is no option other than reconciling with their decision and quitting the employment amicably.
Thanks,
Dinesh Divekar