An employee resigns with sixty days' notice and serves twenty. Forty days are recoverable. The only question left is: forty days of what?
On a ₹30,000 monthly amount the recovery is ₹40,000. If "monthly amount" means gross and the contract said basic, it might be ₹18,000. The gap is not marginal, and the contract decides it.
Why the employer usually loses this one
Because the contract is the document that governs the relationship, and it was drafted by the employer. Where it is ambiguous, that ambiguity is not generally resolved in favour of the party who wrote it.
So an employer recovering on gross against a clause that says basic is in a poor position — and one recovering against a clause that says nothing specific at all is in a worse one.
Read the clause before you compute
This takes two minutes and it is skipped constantly, because the settlement is prepared by whoever runs payroll and the contract is filed somewhere else.
If your standard contract is ambiguous, fix the template. That is a single afternoon's work and it removes the argument for every future employee, which is considerably cheaper than having it once.
Show the working
Whatever you recover should appear on the settlement statement as a calculation — notice days, days served, shortfall, rate, basis. Not as a net figure.
A number with no derivation invites a dispute even when it is entirely correct, because the employee has no way to check it and their only option is to challenge it.
Waiver is a decision, so make it deliberately
Many employers waive the shortfall where the departure is amicable and the handover complete. That is perfectly reasonable. What is difficult to defend is waiving for one employee and recovering from another in comparable circumstances, with no recorded basis for the difference.
Decide the rule, apply it, and record the exceptions with a reason.
And do not withhold everything
Recovering the shortfall from the settlement is ordinary and provided for. Withholding the entire settlement indefinitely as leverage is a different thing, and it is the version that turns a routine exit into a complaint.