• Employment contract breach


I was working with a design and marketing agency for over 6+ years (Since 2012). I thought I should do my own business and so got my company registered in June 2018, while I was working in my regular company. I also reached out to a couple of their clients offering my services. My regular company got to know about this and filed a complaint against me in the police station. 

My own companny don't have any bank account
We did not do any business or transactions under the new business

One of the clients I reached out to told my regular company about this, and I was fired immediately. They didn't give me any notice. They also told me that they will not give me any salary dues, and no gratuity. 

What should be my next steps? Looking for proper legal advise.
Asked 5 years ago in Criminal Law
Religion: Hindu

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13 Answers

See since no notice was given, you were terminated on same point of time, ans further.your full and final settlement has not done for dues you can give a legal notice to company for recovery of same and further stating the termination was illegal.

Now other side of story since you have registered a company further was still working with them and reached out there client that is breach of agreement if your employment contract or offer letter has clause of non compete. 

So if company has got proof that you reached.client and was trying to take the client and also working for own company they can further claim damages from you.

So in my advise if company has proof then just leave the issue and go ahead with your work if there.is no such proof or clause then you can give a legal notice for recovery of the amount and reinstatement on ground that termination was illegal.

If on notice company refuse then a complaint before the labour court can be preferred.

Shubham Jhajharia
Advocate, Ahmedabad
25514 Answers
179 Consultations

5.0 on 5.0

What you did was wrong and the company can take disciplinary action on you,but cannot withhold your salary as well as gratuity amount under any circumstances.

So, you should be legal notice to employer asking him to repay the entire dues within 15 days of receipt of the legal notice, if they fail to do so, you can file a suit for recovery against them.



Siddharth Jain
Advocate, New Delhi
6303 Answers
102 Consultations

5.0 on 5.0

during  course of your employment you cannot carry on any business 


2) your company can terminate your services 


3) what is nature of complaint filed against you in police station 


4) you have not mentioned what are  salary dues payable to you 

Ajay Sethi
Advocate, Mumbai
95168 Answers
7604 Consultations

5.0 on 5.0

For this act of over reaching to the client of your employer is not a crime and hence on the basis of this complaint the police can not register any case.

If it is not clear whether there was any agreement whereby you were debarred from approaching the clients after termination.

If that is so then your gratuity or salary can be withheld as well.

To recover these amonut you can file a case of cheating also against your employer along with a case before the Labour Commissioner.


Devajyoti Barman
Advocate, Kolkata
22917 Answers
497 Consultations

5.0 on 5.0

To advise you on this, one needs to go through your employment agreement to check whether or not includes a non compete clause. Having said this, no Police or criminal complaint is maintenable in this matter since this is purely a contractual dispute .


Vibhanshu Srivastava
Advocate, Lucknow
9631 Answers
303 Consultations

5.0 on 5.0

They need not give you any notice to fire in this situation as you are the one who has breached the employment contract.

Having said that, there are two mistakes that your employer has committed.

1. He should have given an opportunity of being heard. He should have as such asked as to the news that he got from the client was true or not? Since they have not done this, you can approach the court.

2. Your employer has no right whatsoever to with hold your salary and gratuity. He is has give it to you unconditionally. Once again you can approach the court.


As next step, send across a legal notice to your employer demanding your salary dues, compensation for illegal termination without being heard, and  for your gratuity.


With respect to the Police Complaint, approach the local advocate and apply for Anticipatory Bail. If it's already closed, then furnish the same to the court while filing the case.

Sandeep Prakash
Advocate, Bangalore
308 Answers
2 Consultations

5.0 on 5.0

Dear sir,

As per section 27 of Contract Act no action can be taken by the employer.  You may challenge such FIR in High Court and get stay order.  You may get issue a legal notice for arrears of dues and file recovery suit.

Non compete clause, it is prohibited under the Law of Contracts.Section 27 of the Indian Contract Act-1872 provides that ”Every agreement by which anyone is restrained from exercising a lawful profession or trade or business of any kind, is to that extent void”.                                                                                                            Exception : One who sells goodwill of a business with a buyer to refrain from carrying on a similar business within specified local limits so long as the buyer, or any person derivingtitle to the goodwill from him, carries on a like business therein provided that such limits appear to the court reasonable, regard being had to the nature of business. Indian law is therefore very clear and strict on this point, any such non compete agreement shall not be binding on the parties and the same shall be null and void. By using the term void ab initio, for such type of agreements it has shown that it has kept such non compete clause in the agreements beyond consideration. Indian courts have also consistently refused to enforce post termination non compete clauses in employment contracts as “restraint of trade” is impermissible under section 27 of the Indian Contract Act-1872, and have held them as void and against the public policy because of their potential to deprive an individual of his or her fundamental right to earn a living.


Netravathi Kalaskar
Advocate, Bengaluru
4952 Answers
27 Consultations

4.8 on 5.0


as per the circumstances, you should read the contract for any clause in this regard. 

as far as gratuity is concerned, it will be your right .

Abhishek Sharma
Advocate, Chandigarh
128 Answers
2 Consultations

5.0 on 5.0

No police case is made out so you dont haveto worry they are just threatening.

Prashant Nayak
Advocate, Mumbai
32146 Answers
184 Consultations

4.1 on 5.0

Dear Client,

Opening company with same business and approaching there client while is job was is against service rules but since no actual transaction happened neither any business, NO criminal case made out.

And for whatever reason except financial misappropriation, Gratuity, Salary, dues cannot be withheld, Send legal notice. Still not paid, complain to labor commissioner.

Yogendra Singh Rajawat
Advocate, Jaipur
22704 Answers
31 Consultations

4.4 on 5.0

You should not have started a new company while you are still employed with your employer.

In any case if you have been found to have violated the company rules and the employment offer letter the action taken by company should be by initiating disciplinary committee and inquire into the alleged commission of offence and then terminate your services, any act done by the company without following the due process of law is illegal, you can fight against the company either through labour court or by filing a writ petition before high court seeking reinstatement and back wages.

T Kalaiselvan
Advocate, Vellore
85369 Answers
2231 Consultations

5.0 on 5.0

your startup is the way another thing... 


  • you have done something which might be against their personal by-laws and rules. 
  • but, you deserve to get the salary you worked for (it is your fundamental right)
  • gratuity is also something you deserve and can be claimed at any period. 

As per your salary and gratuity are concerned, you will have to move legally against them. 


  1. you can send a legal notice and grant them 30 days time period and then file a civil suit against the company for recovery of salary. 

Approach Labour Commissioner,

can file a suit under Section 33(c) of Industrial Dispute Act, 1947 recovery of money due from an employer,

or file a Company Fraud Case (this creates a criminal liability and employer can be jailed up to 10 years as per Companies Act.)

       2.    You can also mention about the gratuity in the same legal notice (As as per section 4 of Gratuity Act you are eligible for your Gratuity).


you have both ends are open and it is your money and company is bound to give your part of the money to you. Send a written notice regarding this and whatever response you get from that then jump into it with a good legal notice as companies themselves tend to save their legal expenses. 



Amol Chitravanshi
Advocate, Delhi
279 Answers
1 Consultation

4.0 on 5.0

1. WHAT you did (while still in existing service) is classified as Criminal Breach of Trust and Breach of Confidentiality & Privacy, which every employee is bound to adhere to.

2. Settle the issue amicably, since the above is a criminal offence.  Do not fall into legal trouble and spoil your future.

Keep Smiling .... Hemant Agarwal

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

5.0 on 5.0

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