Legal Question in Employment Law in India

I work for a reputed MNC in Bangalore, India. Lately my HR department has accused me of code of conduct related issues for which I believe I'm completely innocent. Their accusations are based upon complaints made by a peer of mine - he instigated another employee to make a complaint and put things in the wrong context.
Nothing has been backed with evidence till date. I have been accused of passing loose comments on the production floor and bad mouthing my peers. Again, I dont think that can be proven in a court of law.
I have also been accused of creating a hostile environment at work - there is no quantifiable evidence that would prove the same. It is all hearsay and office gossip / rumors.
I feel humiliated by all the unsubstantiated allegations. The company has placed me on 'observation'. They have not fired me and dont have plans to do so.
But I feel they should not be allowed to confront employees without proper evidence.
What are my options here ? Can I sue them for defamation ? If so, will I risk termination/ retaliation ? How do I safeguard myself ?
If I sue them, will my wages be put on hold for the time period ? If I lose the case, will they ask me to leave ?
Please advise.

Asked on 4/15/11, 6:26 pm

KarVai Legal Solutions Rajiv Gupta 9811284735 Ch.No: 359, Western Wing, Tis Hazari, Delhi www.karvai.in

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you may sue them and even if your wages are put them on hold, you may release them through court orders.

Answered on 5/15/11, 10:56 pm

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