Indian IT services provider, Tata Consultancy Services (TCS) has agreed to pay $30 million to settle a class action suit against the company in the US.

The suit was filed by two former employees of the service provider about seven years ago. The settle amount of $30 million or Rs. 163 crore is the largest class action suit settlement paid by any Indian company yet. Experts say that the magnitude of the settlement case is large but it does not affect the IT sector giant that generated revenues of more than $10 billion in the 2012 financial year.

The case field by Gopi Vedachalam and Kangana Beri in 2006 also named Tata International and group holding company Tata Sons as defendants. The suit accused the company of unfairly making its employees sign over their tax refund cheques to the company.

"TCS believes that it always acted appropriately notwithstanding the allegations in this case. It agreed to settle this matter to eliminate any on-going distraction to its associates and management," the Mumbai-based company said in a statement.

According to the Lieff Cabraser Heimann & Bernstein law firm, which is representing the plaintiffs, the suit argues that company forced its Indian employees to sign away their US tax refunds to the company. They also said that the company did not pay its employees the amount that they were promised before they came to the country.

The shares of the company increased 1.56 per cent to Rs. 1,494, its highest in 52 weeks on Tuesday at the Bombay Stock Exchange (BSE).