Relieving an employee after his resignation from the post is very much required to meet the compliance requirements and terminating the contract with the employee.It is basically means that a person cannot have 2 jobs at the same time. So whenever people wish to  at a particular company, then that means employers will need to make sure that they have are not employed by another upon application.

The relieving letter is to ensure that employee left the company. New employer can relay that he is not working in other company.