Civil Procedure Code (CPC)

What is maximum time for full n final settlement

Dear All,


What is maximum time for full n final settlement other than workman .Can u suggest me some court judgements regarding time frame for full n final settlement.



Subodh Kumar Shukla


This is an interesting discussion. Valuable advice of learned experts/members is sought. 

Normally the salary day is the last day for it.

Some companies may have expressed time frame for it in its published and circulated HR policy e.g Exit Policy.

“8. A full and final payment will be made to the employee by the Accounts

Department within fifteen days of the individual being relieved on submission of the

clearance from all.”

Some companies might have extended standing orders to employees other than workman.

Some companies believe that NOC from various dept’s has to be obtained e.g. loan etc and it may take time, and assign 30days, 45days, 60 days time.

However reasonable time should be assigned.

If company has a policy which is expressed and published on time frame or sets a time frame  within which it expects an employee to tender the payment of FNF dues to company after separation, it should be looked into.

Rule 21 of Minimum Wages Act:

Wage period of employees not to exceed one month

Ø Employees to be paid wages before expiry of

Ø The seventh day, in case of establishments employing less than thousand persons

Ø The tenth day in case the establishments employing more than thousand persons

The FNF entails payments under various heads e.g.:

 EL: as per Factory Act should be done on or before next pay day nd in case of termination by employer under rule 79{11} encashment of EL before second working day after termination. If establishment is covered under SE Act, the act of respective state may be referred to.

Gratuity: within 30 days

Bonus: within 8 months

All payouts must be looked into.


Bombay High Court

Balaram Abaji Patil vs Ragojiwalla (M.C.) on 22 March, 1960

Equivalent citations: (1960) IILLJ 491 Bom, (1960) IILLJ 491 Bom

Author: Tarkunde

Bench: V Tarkunde, V Datar


Tarkunde, J.



“In the case before us, once the employee has performed his part of the contract, the minimum wages due to him are, in our opinion, a debt due from the employer.”



HIGH COURT OF PUNJAB & HARYANA, In The case of: Priyaraj Electronics Ltd. v.Motorola India (P.) Ltd., Appeal No. :C.A. No. 124-127 of 2006 and C.P. No. 17 of 2006, Decided on: April 17, 2009

 The terms “debt” itself has not been defined under the Companies Act and if we must make reference to the P Ramanatha Aiyar’s Concise Law Dictionary, 2004 Edition Law Lexicon it is defined as “a sum of money due under an express or implied agreement (as) a bond of bill or note; amount due or payable from one person to another in return for money, services, goods, or other obligation.”

Valuable advice of learned experts/members is sought.




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