Salary

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Sai Shankar Ram T (Querist)
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19 June 2011 Can a person use the Sales collection amount towards his salary and regular branch expenses in the followng case:

a)The company (HO) is not reimbursing legitimate expenses made foor the branch

b) The HO is due for more than 6 months

Would there any legal implications incase the employee uses the sales collection for meeting his salary and other branch expenses?

Can someone please advise me on the above case!!!

CA Suresh Jain

CA Suresh Jain (Expert)
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20 June 2011 Normally, there should be no legal implication but correct answer can be given only after study of Company policy, authorisation to you, your appointment letter. authorisation for Bank accout operation.

But, one simple question; why are you still working with such Company?

Ashok Asthana

Ashok Asthana (Expert)
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20 June 2011 You are not authorised to use the sales commission amount in lieu of salary. The Company can always take legal action against you. If the Company is not paying yoy, as Mr. Jain asked why are you working for such Company ?

Sai Shankar Ram T

Sai Shankar Ram T (Querist)
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20 June 2011 Thanks for your reply.

This is not my case. I;m asking this on behalf of my friend.

Sai Shankar Ram T

Sai Shankar Ram T (Querist)
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20 June 2011 Just to be more clear. My friend has utilised sales collection amount towards branch expenses other than his salary and remmitted the balalnce to HO bank account. He also intimated the HO regarging the utilisation of the sales money.

Now, he has left the company and the company still owes him his salary.

There are few old dealers who only pay him money which he promptly remits to HO.
Now, can he use this money toward his salary dues?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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22 July 2025 This is a tricky situation. Here’s a breakdown of the key points and possible legal/financial implications for your friend:

Situation Summary:
Your friend was running a branch collecting sales money.

He used part of the sales collection to pay branch expenses (with HO's knowledge and intimation).

He has now left the company, and the company still owes him salary.

Some old dealers pay money only to him, and he remits that money to the HO.

Now he wants to know if he can adjust those collections towards his unpaid salary.

Key Considerations:
1. Authority to Adjust Sales Collection Against Salary
Unless explicitly authorized by the company, your friend cannot unilaterally use sales collection money to offset unpaid salary.

Sales collections belong to the company, and should be deposited in company’s bank account.

Using company money for personal claims (salary) without authorization may be seen as misappropriation or breach of trust.

2. Communication & Documentation
If your friend intimated the HO about using some funds for branch expenses and the company agreed, that’s good.

But adjusting sales collection against salary requires explicit approval or written authorization from the company.

3. Legal Implications
Without formal authorization, the company can take legal action for misuse of funds.

Salary dues should be recovered through appropriate legal channels (labor courts, recovery suits).

Your friend should avoid mixing company’s cash flows with personal claims.

4. Next Steps for Your Friend
Demand the company to clear salary dues through proper legal or HR channels.

Avoid adjusting company money against his salary unless there is clear, documented permission.

Keep all records of communication with HO about expenses and collections.

Summary:
No, your friend cannot legally adjust sales collection money against unpaid salary without the company's consent.

He should pursue salary recovery separately through legal or HR procedures.

Using company money for personal dues without authorization can lead to legal trouble.

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