Dear Sir,

Withholding of terminal benefits (payments due at the time of full and final settlement) by the company (employer) is illegal as well as unjustified. In case of delay, an employee can legally claim an appropriate interest upon the delayed payments. It may be noted that there can be no such “policy” in terms of which the company can withhold your terminal benefits even for 2 months. In case any such “policy” exists, then that “policy” by itself is illegal and unenforceable in law. It may further be noted that pendency of clearance of payments of previous employees is no reason, much less a valid reason, to withhold your payments to which you are legally entitled too. You can, therefore, take a legal action against the company by sending a legal notice through a lawyer followed by a civil suit for recovery.

You may also like to know that Hon’ble Supreme Court of India in catena of cases has repeatedly emphasised the position that terminal benefits are no longer matters of any bounty to be distributed by an employer. Terminal benefits are valuable rights acquired by an employee and are, in fact, property in the hands of an employer. It has also been repeatedly held by the Hon’ble Courts that any delay in settlement and disbursement thereof has to be viewed seriously and dealt with severely by imposing penalty in the form of payment of interest. [For your reading - State of Kerala vs M. Padmanabhan Nair [(1985) I LLJ 530 SC]

Hope the query stands satisfied. For any further clarification / query please call / contact the undersigned.

Thanks & regards,

Anuj Aggarwal, Adv.

483, Block – II, Lawyers Chamber,

Delhi High Court, New Delhi – 110003

Mob – [deleted]

Email – [deleted]