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Non payment of salaries, income tax & pf

(Querist) 16 September 2014 This query is : Resolved 
I was earlier employed in a Delhi based telecom company from 11th Aug 2011 to 14th May 2013 till my superannuation. My employer has not paid the following
1. Salary - Rs. 11.17 Lacs (for 6.5 Months)
2. Income Tax - Rs. 3.18 Lacs (Deducted but not deposited with IT Dept)
3. Employer Provident Fund - Rs. 1.02 Lacs (Deducted but not deposited).
4. Form 16 - Not issued because they have not deposited the Income Tax deducted.

My several letters sent by registered post & speed post have gone unreplied. My telephonic calls have not been answered. Now my only option seems to take a legal recourse.

My only worry since I am resident of Navi Mumbai and want to file a case against the employer in either at Thane or Mumbai court will be admissible or not.

The appointment letter clause 21 states.

Arbitration :

All the dispute/differences arising out of or relating to this appointment shall be referred to Indian Chamber of Commercial Arbitration/ Committee, Delhi at 1/112-113, Loha Mandi Naraina, New Delhi-28 for arbitration and the award given by the arbitrator shall be final and binding upon both the parties.

I want advise as to whether this case can be filed in some other court outside Delhi convenient for me as it will not be possible for me to travel to New Delhi every now and then.

Further I would like to know whether Indian Chamber of Commercial Arbitration has the power or jurisdiction to deal with employee employer relation. Here it is a simple case of non payment of salaries and taxes deducted but not deposited with IT Department.

Kindly advise as to what best can be done.
ajay sethi (Expert) 16 September 2014
issue winding up notice for failure to pay your dues . if company fails to pay file winding up petition in delhi court for non payment of dues . there is no dispute between parties . simple case of non payment of dues
Kumar Doab (Expert) 17 September 2014


Your post shows that you have already done some home work.

It is good that…………………………if you have done some good home work.

1. Has your employer ever made any statement on non payment of earned wages, declined to issue TDS/Form16, EPF etc………………e.g. that it does not owe you the wages claimed by you Rs.11.17 Lacs, hence the TDS/EPF shall not accrue?


2. Has it ever claimed any loss caused by you………………….. thus it does not owe you the wages claimed by you Rs.11.17 Lacs, hence the TDS/EPF shall not accrue?


3. Has it claimed any liquidated damages from you…………………………..thus it does not owe you the wages claimed by you Rs.11.17 Lacs, hence the TDS/EPF shall not accrue?

4. Has it superannuated/retired you in writing?


5. What was your designation and nature of duties? You were at which level in hierarchy: Frontline/second line/middle/higher or senior management?


6. You were at which location: Delhi/Navi Mumbai?


7. If you want to circumvent the arbitration agreement then the route is thru the state/lawful authority………………………………………..e.g

(A): For Non issuance of Form16

(i) agitate and claim before ITO-TDS where you were filing/have to file now, your ITR……………………………… citing that you have demanded Form16 from deductor (Emplyer) so as to file your ITR however the arbitration agreement has been flaunted at you……………………….which is irrelevant.

(ii) agitate and claim before Jurisdictional CIT-TDS where company files ITR and demand to penalize the company, to get you Form16, and/or refund…………

(B) For PF: Submit a complaint thru RPFC in nearest PF office and claim that you have been representing but the company has never acceded to its lawful obligation and should be penalized. Mark copies to Addl. CPFC in state, and CPFC. Pursue thru RTI.

(C) Salary: You may not be covered by
Payment of Wages Act (applicable to all employees drawing wages upto Rs.18000/pm as per def. of wages in this Act)

You may be covered/eligible to approach:
Inspector under (name of the state) Shops and Commercial Establishments Act
Or to file a complaint u/s 406,420

Winding UP petition


However let your able Labor Law Consultant/Service Lawyer opine on it, after examining the job advt.job application, interview call letter, selection letter, offer letter, appointment letter/contract of employment, HR policy/service rules and regulations mentioned in appointment letter/contract of employment, standing orders (certified/model) applicable to the establishment/you, service agreement/BOND if any signed by you, salary slips, all communications/docs on record etc…………………………………..


8. Some businesses/employer do try to insert and apply ADR clauses to increase their bargaining power in the event of a future dispute. Such attempts can run afoul of the law.

9. All arbitration clauses may not necessarily be legal!
The arbitration clauses in employment matters may not necessarily be legal.

10. As long as the arbitration agreement does not deprive you of your rights, it can be considered legal.
If contract of employment and arbitration clause in it…………………… be unfair enough to be illegal.
It is felt that that is precisely what you are aiming at:::::to point that is so unfair that it is illegal.
Agreements that bind only the employee and not the employer may not survive. The agreements that state that your employer can sue you, but you can't sue your employer………………..can be easily be termed arbitrary, unfair.

Agreements that give only the employer the right to choose the arbiter……………………………..may be unfair and invalid.


Agreements that require employee to travel a great distance to pursue arbitration may be unconscionable………………………e.g. it is probably not legal to force you to arbitrate at company headquarters in South Africa……………………………..or for that matter even Navi Mumbai!
Agreements that force you to forfeit your rights to certain remedies like punitive damages or emotional distress……………………………………….may be illegal.
11. An able Labor Law Consultant/Service Lawyer/law firm can advice you if the appointment letter/contract of employment and clauses inserted in it…………………………in your hands is enforceable or not.
Assuming that for some stupid and strange reason you have to go for arbitration…………………..on matters posted by you…………………. An able Labor Law Consultant/Service Lawyer/law firm well versed with such matters can help you in the arbitration and to protect your rights.


12. It is believed that you have shared everything in your post and have not concealed anything.



13. Is this company heading for Bankruptcy, liquidation? If yes Hurry!
As per the preferential treatment decided by Supreme Court of India::::: Your turn shall come in the last.

14. It is without any doubt that any private agreement drafted and signed by employer with employee can not overrule, supersede the Instrument of Law, statue…………………

Unpaid wages is debt on employer…………………..and NO ARBITRATION CLAUSE/AGREEMENT CAN TAKE AWAY THE OBLIGATION ON EMPLOYER TO PAY WAGES ON DUE DATE………………………AND IMPLICATIONS IN CASE OF DEFAULT………………….AND RIGHT OF EMPLOYEE TO GET EARNED WAGES ON DUE DATE.


MOREOVER THE STATE AND LAWFUL AUTHORITIES ARE NOT BOUND BY ANY AGREEMENT/CLAUSE THAT EMPLOYER HAS DRAFTED AND SIGNED WITH EMPLOYEE. IT CAN PROCEED TO RECOVER TAXES, PF, WAGES.....................


15. Your lawyer can also explain to you:

Locus Poenitentiae ,………………… Doctrine of When not applicable.

Locus Poenitentiae , applicability---No perpetual rights could be gained on basis of an illegal order---Principle of Locus
YOU MAY APPROACH YOUR LAWYER WITH CONFIDENCE.
Upendra P Sinha (Querist) 17 September 2014
Thanks for your valuable guidance.

I have written 5 letter to the CMD & 1 copy to Sr VP-HR and sent all of them by registered post & obtained their proof of delivery by the post office through RTI.

An executive of HR department after lot of pursuance sent me an excel sheet statement for Full & Final Settlement on email. I tried getting a hard copy of the same but could not succeed.

I believe the CMD of the company has one of his relative at Indian Chamber of Commercial Arbitration/committee at New Delhi who just keeps postponing the date of hearing and complainant abandons of gives up after several attempts.

Therefore I was exploring whether it can be filed in some other state.

I was working as National Manager- Govt Projects at New Delhi (later transfered to Jaipur for one year till superannuation) and my gross salary was Rs. 1.73Lacs per month. I have superannuated and also received my relieving letter also. As a formality the resignation on account of superannuation was posted on the company portal and I have a copy of the same downloaded. Similarly I have downloaded all the salary slips also from the company portal before leaving.

Now to sum up the following things are to be done
1. I need to consult a labour law consultant/service lawyer for getting my dues. He will advise further.
2. Pursue IT department for non issuance of form 16 & penalise the company for the same.
3. Lodge a complain with PF Commissioner with copies to all suggested.

Any other thing I have missed please let me know.
Kumar Doab (Expert) 17 September 2014
You are welcome.


>>> You have posted that:

---“ also received my relieving letter also. “

Relieving letter signifies that employee has been properly relieved and nothing is pending at the end of employee.


--“An executive of HR department after lot of pursuance sent me an excel sheet statement for Full & Final Settlement on email. I tried getting a hard copy of the same but could not succeed. “

The FnF statement should suffice as admission of debt.
Should not matter,………………. if hard copy is not sent.

Such matter may not necessarily be put to arbitration as there is no dispute to the amount stated in FnF statement, as it is admitted by company on its own.

You have not created any dispute………………………..it is the employer and his cronies that are not even replying to gentle representations………………………….and you have been clamoring to get payment of your dues.

The right of employee to payment of earned wages can not be overruled by any private agreement………….


--“I believe the CMD of the company has one of his relative at Indian Chamber of Commercial Arbitration/committee at New Delhi who just keeps postponing the date of hearing and complainant abandons of gives up after several attempts.“

This should go against the company.

If required you can quote precedence’s.


>>> Jurisdiction of Courts: can be last location of employee, or Redg. Office of the company, or jurisdiction as stated in appointment letter/contract of employment or a location where company has an office.

Your lawyer may opine that if company has an office at Mumbai/Navi Mumbai you can represent there under proper acknowledgment (hope you can manage) and agitate there……………….

In case of issues HC can set the jurisdiction.

There are different judgments on jurisdiction and your lawyer can update you.

The matter shall have to be properly contested.

Decision by court of law is pleasure of court of law.


>>> You may very well be covered by:


Rajasthan Shops and Commercial Establishments Act, 1958
(Act No. 31 of 1958)

2. Definitions:

(5) "employee" means a person wholly or principally employed in, or in connection with any establishment and includes an apprentice but does not include a member of the employer's family; it also includes any clerical or other staff of a factory or industrial establishment who falls outside the purview of the Factories Act, 1948 (Central Act LXIII of 1948);


(6) "employer" means a person having charge of or owning or having ultimate control over the affairs of an establishment and includes the manager, agent or other person acting in the general management or control of an establishment;


The Inspector/Chief Inspector under this Act is not bound by any private agreement that employer has drafted and signed with employee and can’t agree by any clause/agreement that violates Labor Laws and rights of an employee.


Your lawyer may ask you a set of structured questions and can opine on it.

Your lawyer may even opine that you may be covered as ‘Workman’ as in ID Act!


>>> Deductor (Employer) can be penalized:

--- if Form16 is not issued and supplied


---If TDS is not deposited.


>>> You can access lawyers par excellence at all locations.


Certainly you should spend quality time with an able Labor Law Consultant/Service Lawyer/Law firm. Your lawyer can advice you the merits and remedies.


Wish you all the very best.



Valuable advice of learned experts/members is sought.


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