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vinoy (HOD)     30 January 2014

Unpaid salaries

Hi....I am working in private limited company who is engage in business of construction related speciality product contracting. I am working with them since Mar 2009 Almost 04 years and 10 months as one of the most Senior employee. So far till date no appointment letter is issued to any of the employee. There are almost 30 employee are on payroll.

Since April-2013 onward our salaries are become irregular and as of now average employees are unpaid for almost three months and Seniors are like me are not paid for five months. We ask to employer for clearing of due salaries, he said that market condition is not good, money is stuck in market, whenever i receive the money will clear. sometime he pay us few bucks in interval of month or two. I want to resign to get rid of this. As date my unpaid salaries are appx Rs. 6.87Lac + Conveyance/Impresst appx Rs.50,000/- Even since last two FY deducted TDS is also not yet deposited to Income Tax Dept. and our TDS certificates are also not issued.

What precaution i need to take prior to submission of resignation letter in order to safeguard my due?

What will be the legal procedure to recover my unpaid salaries incase employer is not paying peacefully?

Am I eligible to claim gratuity? (Date of Joining is 13th Mar 2009 to till date)

If I resign with notice of 30 days, Is This period will be consider for claiming/claculating Gratuity?

Is there any time limit to settel all dues after resigning?

What should i do to get TDS certificates from employer ? Employer has not paid deducted TDS to I-Tax Dept therefore he is avoiding to issue TDS certificates.

Pls Guide on above.




 5 Replies

Pragnesh R Patel (Sr. Executive - HR & IR)     31 January 2014

Dear ,

Don't Know The Rest But Yes You Are Tntitled For Claiming The Gratuity From Your Employer SInce You Have Completed 240 Days Of 5th Year of Your Service.

To Deduct TDS From Salary of Employees But Not Depositing The Same Through Appropriate Means Is Serious Unfair Practice And You Can Regsiter Yourself Online By Filling Up The Required Forms Under Income Tax Act And Than You Can Come To Know Wheather The Deducted TDS has been deposited or not and could take steps further.

If you have already got TDS deducted, you are entitled for getting it reimbursed subject to showing the investment or Tax Declaration from your end.

Please consult the lawyer knowing the company's liability in such cases. you should file the case before labour court. Put your resignation and file your petition before labour court.

I am not that experienced to adivce hence request you to consider this as suggestion rather advice.

1 Like

vinoy (HOD)     01 February 2014

Dear PRP

Thanks for your reply. Could you pl give me some sort of references of Law/Rule with reference to above referred gratuity eligibility criteria (i.e. completion of 04 year and 240 days). Pl revert back.

Kumar Doab (FIN)     02 February 2014


You are in which state?

The redg. Office of the compnay is in which state?

It is felt that the office where you are located is registered under Shops and Commercial Establsihments Act and the registartion certificate must have been displayed near entrance/ on notice board.

What is the proof of employment with you from DOJ till date……………………..e.g.  salary slip, PF a/c slips, Form 16, leave record, attendance rcord, Group Insurance, offcie communications etc?

You have posted that the notice period is 1 months and you are senior manager probably HOD.

If no appointment letter is issued then how the notice period is communicated and made applicable to you?

Notice period if served is counted in period of service.

There are many threads on Gratuity citing judgments too, that you may find relevant at:


>> FNF dues should be paid within last day in office or say next 3 days or max. by usual pay day i.e. 7th of next month.

If company has defaulted on payment of wages it must have defaulted on PF, Gratuity, ESIC, Bonus, TDS………….etc
The employees can approach:

--- Trade Unions e.g; CITU, AITUC, INTUC ............................
--- Inspector under (Name of your state) Shops and Commercial Establishments Act
--- Inspector under Payment of Wages Act: applicable to all employees drawing wages up to Rs.18000/pm as per def. of wages in the Act. If you are covered by this act then you and all employees can file common application for recovery of wages. You may go thru Sec; 

--- O/o Labor Commissioner

--- ESIC Inspector; at its website ESIC has mentioned wage ceiling for ESIC as Rs.25000/pm

--- RPFC in nearest PF office

--- ITO; TDS where you file your ITR

--- CIT-TDS (jurisdictional) where company files ITR

---Controlling Authority of Gratuity

---Civil Court

Prepare a list of assets of the establishment and its directors…………………..Managers that are endorsed as ‘Representatives of the employer’………………

It shall be appropriate if you don’t delay and if all employees unite hands and proceed under the expert advice of your labor consultant/service lawyer. Open as many front as you can before the creditors approach for liquidation.

Build unbearable pressure so that the employer has to cough up the payment of due wages even if he has to sell his……………………………


>> In such case employee should state the reason for resignation as’ Non Payment of Wages’ , TDS, statutory benefits like PF etc and should claim that employer has breached the trust and condition like ‘Notice period/notice pay in lieu of it’ has lost its sanctity and is void and should not be applied and should be waived off by employer on his own.






>> Unpaid wages is debt on employer.

Employees have been contemplating to file criminal complaints u/s 406, 420……………………………and to approach employer as creditors treating unpaid wages as debt on employer.


Assuming that you won’t be covered as ‘Employee’ as in Shops and Commercial Establishments Act, ‘Workman’ as in ID Act (however let your consultant/service lawyer opine finally on it)   you can approach civil court and also as Creditor’s of the company for liquidation and recovery of your dues.




“An Assistant Vice President of the company succeeded against the employer.”

You may go thru:

Delhi High Court
Argha Sen vs Interra Information ... on 12 September, 2005



27…………………….. It is not a petition for recovery of any disputed debt. The amount in question is clearly payable by the respondent-company to the petitioners which is on account of salary and allowances, etc. In spite of giving an assurance to make the payment, the dues are not paid. The defense put forth by the respondent-company is clearly sham. Therefore, I am of prima facie view that debt is payable by the company and it is unable to pay the same.

28. In view of the circumstances explained above, following directions are given:
(a) CP No. 244/2004 is admitted to hearing. Citations shall be published in 'The Statesman'(English) and 'Jansatta'(Hindi) for 8-11-2005. The Official Liquidator attached to this Court is appointed as the Provisional Liquidator, who shall take charge of the assets and records of the company.

(b) This order shall remain in abeyance for a period of six weeks to enable the company to deposit the amount involved in both the petition in this Court.
(c) In case the amount is not deposited within six weeks, the petitioners shall take steps for getting the citations published. For publication of citations both the petitioners shall share the expenses in equal proportion. The Official Liquidator, in that eventuality, shall take immediate steps as per the aforesaid directions.


>> There are various threads on similar queries that you may find relevant e.g;

Salary not paid by company (Labour & Service Law)



Discussion > Labour & Service Law > Disputes > Delay in full and final settlement payment



Discussion > Labour & Service Law > Shops Act > Resignation of an employee



Labour & Service Law > Others > Company in liquidation

















Attached File : 780786727 argha sen vs interra information.docx downloaded: 115 times
1 Like

vinoy (HOD)     03 February 2014

Dear Mr. Kumar,

Thanks a lot for detailed reply. This will really help me a lot, Pl refer following additional inputs as asked above.

1) My Place of Employment is in Noida, Uttar Pradesh.

2) Company is register with Registrar of Companies as "Pvt. Ltd". having registered address in Noida Uttar Pradesh

2a) All directors are from same family.

3) Since I join salaries are paid by bank cheques / online transfer (RTGS) through companies bank account.

4) I have F-16 issued for TDS deducted from salary for almost last 03 years since i join.

5) FY 2012-2013 TDS deducted but not yet deposited to IT Dept by employer and F-16 is also not yet issued. When asked to accounts manager he said will deposit TDS with penalty as and when in position to do so, and will issue me certified salary statement for respective year showing TDS deduction so that i can file my Income Tax Return. 

6) FY 2013-2014 TDS is also deducted by not yet deposited to Dept.

7) Hv manage to get printouts of salary and impresst ledgers as hard copies but by e-mail. 

8) No Appointment letter issued or signed by me. But being  Senior employee i thought on my own i should give at least a month notice. So i can handover ongoing activities in a proper manner. 

9) Uniting other employees to fight against employer is i feel impossible. Most of them are in junior cader less or no professionally qualified and are working with same employer more than 15~20 years.

10) I hv to fight for my dues on my own. Currently gross salary is appx Rs. 1.75L/pm. As of date i am down by almost Rs. 7.00L + End of Service benefits & Gratuity.

11)  Shall follow suggestions given above while tendering resignation letter.

 12)  Request if could refer me a competent lawyer in above stated jurisdiction. 

Further to above stated inputs, pl advise if any which may help me to strengthen my claim.


Kumar Doab (FIN)     03 February 2014




You have posted that:



---“When asked to accounts manager he said will deposit TDS with penalty as and when in position to do so, and will issue me certified salary statement for respective year showing TDS deduction so that i can file my Income Tax Return. 

From the same manager or any one else obtain a statement confirming your employment from your DOJ till date and salary slips and Form 16.

Salary Slip/Pay slip/Wage Slip should be issued before disbursement of wages and should be signed by both employer and employee.

You may refer to: Payment of Wages Act; Sec13A and 2: 3*[(i), (ia), 3*[(vi), 3, 4 ,5, 14, 15, 16, 17A, 20………….. and if the Inspector agrees to cover you may immediately submit Form’N’ for recovery of wages.

The employer has to maintain and submit requisite forms and registers according to Shops and Commercial Establishments Act also.


---“Hv manage to get printouts of salary and impresst ledgers as hard copies but by e-mail. 

Ensure that it is from DOJ.

Ensure that you are issued salary slips for the last months also even if wages are not being paid.

For Gratuity you would need proof of last drawn salary (Basic+DA).

Ensure that you get FNF statement even if FNF dues are not paid. If it is not issued you may prepare a FNF statement on your own (include PL, Bonus, Incentives, commissions etc) and submit claiming payment, under proper acknowledgment and if possible a confirmation too that the amounts shall be paid in due course of time.


>>> It is felt that you can succeed to be covered under U.P. Dookan aur Vanijya Adhisthan Adhiniyam, 1962 if your name is declared by employer under exempted employees.

There are many forms that employer has to keep for 5/6 years and submit to Inspector  under this Act.

You can obtain these even if you have to obtain from Inspectorate by your means or thru RTI.

Some extracts are being posted and you may go thru the Act and Rules in detail.

You have to find your lawyer and settle your terms on your own.

If you wish to avail the services of LCI lawyer you can conduct search at:

You can access Pro lawyers at LCI.

The list of related lawyers is being flasshed by LCI at the bottom of this web page also.

Your near and dear ones can also guide you to a competent and experienced labor consultant/service lawyer.

You can find the lawyers from local labor court/civil court.

The Office bearers of local Bar Association can also guide you. DBA of each city usually maintains its web site.

The labor/service law is specialized field and in each city there a few lawyers that practice only in it and specialize in it. They are well known labor consultant/service lawyer and usually such matters are referred to them.

You may decide with your lawyer the recourse that you will prefer civil court, summary suit, liquidation of company, criminal complaint u/s 406,420………………………..or all.


>>> Gratuity: Manage to obtain Notice of Determination of Gratuity or submit a letter (under proper acknowledgment, stating that ‘Notice of Determination of Gratuity’ has not been supplied despite representations in office and FromI is attached.

You may go thru; Payment of Gratuity Act 1972 ; 2, 2A, 3, 4, 7,8,9…………..


>>> U.P. Dookan aur Vanijya Adhisthan Adhiniyam, 1962


2. Definitions: (4) 'Commercial establishment' means……….

(6) 'employee' means a person wholly or mainly employed on wages by an employer………..

(7) 'employer' means a person who owns, or who holds charge of, or has ultimate control over the trade, business or manufacture carried on in a shop or commercial establishment, as the case may be, and includes the manager, agent or any other person acting on behalf of the employer in the management or control of such trade, business or manufacture

4[(13-A) 'owner', in relation to a shop or commercial establishment, includes a person who runs or is incharge of such shop or commercial establishment

(18)  'wages' means all remuneration (whether by way of salary, allowances or otherwise)

3. The provisions of the Act not to apply to certain persons, shops and commercial establishments.—(1) The provisions of this Act shall have no application to—

(a) employees occupying positions of confidential, managerial or supervisory character in a shop or commercial establishment, wherein more than five employees are employed:

Provided that the number of employees so exempted in a shop or commercial establishment shall not exceed ten per cent of the total number of employees thereof;

(2) A list of the employees referred to in clause (a) of sub-section (1) shall be displayed at a conspicuous place in the shop or commercial establishment and a copy thereof shall be sent to the Inspector concerned.

10.  Earned leave, sickness leave and casual leave.

13. Wage period: (b)  where the termination of his employment is by the employee, on or before the next pay day.

18.  Recovery of wages

20.  Termination of employment by an employee.—(1) No employee, other than an employee engaged for a specified period or in a leave vacancy, shall terminate his employment, except after notice of thirty days, or of such longer period, as may be required under the terms of his employment.

(2) Where an employee fails to comply with the provisions of sub-section (1), his unpaid wages for a period not exceeding fifteen days may be forfeited to his employer.

30. Powers of the Inspectors to enter,

32. Maintenance of registers and records by the employers

40. Rule-making power


The U.P. Dookan Aur Vanijya Adhishthan
Niyamavali, 1963




[Section 10]

10. (i) Earned Leave—


(e) The employer shall at the close of every year, communicate in writing to the employee, on demand made by him, the account of his earned leave including leave carried forward from the previous year, the leave earned during the year, the leave availed during the year and the leave to be carried forward to the next year.

[Section 13]

11. Payment of wages.

[Section 32]

 64[18. Maintenance of register, record, etc.(1) Every employer shall—

(c) Employing employees exceeding 25 shall be required to maintain a register of attendance and wages in Form 'G', a register of leave in Form 'H', a register of deductions from wages in Form 'D'.

(5)  The registers and notices to be kept by the employers relating to any year shall be preserved for six years after the expiry of the year to which they relate and shall be produced before an Inspector.]


{{{You may obtain copy of FormG, Form "H"
. The specimen is available in the attachment.}}}


19. Manner of entry into premises and examination of records and registers, etc.












Attached File : 994650278 up se act.doc, 994650278 payment of wages act 1936.pdf, 994650278 paymentofgratuityact(1).doc downloaded: 200 times

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