• Company Bond

I have made a bond with the company and I want to leave the company as the project I'm allocated was not according to my profile. The bond was of 3 years and of 3 lac amount. I have read in many websites that company can't take bond account as per Indian rule. Please help me in this situation as I'm feeling depressed. I have just worked for 31 days in that company and the reason I wanted to leave the company is that I wanted to became an IAS and with the company's salary I can pay fees of coaching institute. But after working for 20 days I got salary and I believe that it is less than my expectations as many reductions are done in salary like pf and professional tax. So, if I didn't leave company now, then in three years, my passion of IAS will be very less as I will be busy with deadlines of projects completion. I would heartily request you to give appropriate views that what should I do next. I'm feeling depressed right now. Please help me.
Asked 6 years ago in Civil Law

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17 Answers

Dear Client,

Bond are enforceable and valid. non solicitation clause are not valid. Find some other reason to leave the job like abusive management, unhealthy work place etc.

Yogendra Singh Rajawat
Advocate, Jaipur
23084 Answers
31 Consultations

If they haven't invested in your training and honing your specialised skills, this service bond cannot be defended by them in Court. 

Thus, if there was no training etc. provided to you, you may put your papers and resign from this company without being worried of the legal implications.

Vibhanshu Srivastava
Advocate, Lucknow
9763 Answers
323 Consultations

Service bond is not enforceable if training etc was not provided to you. Hence, they cannot drag you to Court/ 

Vibhanshu Srivastava
Advocate, Lucknow
9763 Answers
323 Consultations

company is bound to deduct PF and profession tax 

 

2) if you leave organisation now company would not give you relieving letter unless you pay the bond amount 

 

4) in case company sues you to recover bond amount of Rs 3 lakhs your defense should be company has not spent Rs 3 lakhs on your training 

 

5) M/s. Sicpa India Ltd. Vs. Sh. Manas Pratim Deb, RFA No.596/2002 decided by the Hon'ble High Court of Delhi on 17.11.2011 and Toshniwal Brothers (P) Ltd. Vs. Eswarprasad, E. decided by the Hon'ble High Court of Madras on 18.01.1996 wherein it was held that in the absence of any special or privileged training or favour of concession having been shown to the employee there can be no presumption of any legal injury automatically resulting from the breach of the commitment to serve for a minimum period by such employee.

Ajay Sethi
Advocate, Mumbai
99870 Answers
8149 Consultations

Don`t resign and stop going to office on medical grounds.

Yogendra Singh Rajawat
Advocate, Jaipur
23084 Answers
31 Consultations

In the worst case scenario, as long as you are ready to refund the expenses incurred by the company in providing specialised training to you, there is no legal trouble for you. 

Vibhanshu Srivastava
Advocate, Lucknow
9763 Answers
323 Consultations

Offer to pay to company costs of training 

 

serve the notice  period  specified in contract 

 

 

Ajay Sethi
Advocate, Mumbai
99870 Answers
8149 Consultations

It would not affect your career prospects 

Ajay Sethi
Advocate, Mumbai
99870 Answers
8149 Consultations

You can simply resign after serving notice period.

Bond cannot be enforced as it is violative of section 27 of the Indian contract Act.

Siddharth Jain
Advocate, New Delhi
6619 Answers
102 Consultations

Even if it goes to court, it will not affect your future employment as IAS officer and the matter can go away after payment of some fine.

Siddharth Jain
Advocate, New Delhi
6619 Answers
102 Consultations

If you want to simply resign, then you'll have to pay them the salary in lieu of the notice period not served and the training amount spent on you. Nothing else.

Siddharth Jain
Advocate, New Delhi
6619 Answers
102 Consultations

You can resign from the company. Generally in India the employer don't take action on employees about bond breach if they didn't suffer major losses

Prashant Nayak
Advocate, Mumbai
34584 Answers
249 Consultations

Ideally one should respect the bond agreement but there are lot many examples out there. In most of the cases, these clauses are created just to discourage the employees from leaving the organization. If the employee doesn't fulfil that, companies usually do not prefer taking the legal route, chase the employee and fetch the money mentioned under the bond agreement. Thats just too much for any company. Usually companies are professional, they don't take these things to heart, they just move on. Most of  such companies have been seeing blacklisting that employee though so a second time entry might not be welcomed.  

Mohammed Mujeeb
Advocate, Hyderabad
19341 Answers
32 Consultations

All they can recover from you are reasonable training expenses. This does not include your salary.

A contract of this nature is typically hit by Section 27 of the Indian Contract Act and is considered an agreement in restraint of trade and therefore void.

More than a legal impact, this may have a professional impact with companies often blacklisting people who break bonds and thereafter sharing such lists with each other.

Mohammed Mujeeb
Advocate, Hyderabad
19341 Answers
32 Consultations

If you want to resign the job, you just go through the offer letter for the conditions therein and comply with the conditions therein.

Employment bond is generally a contract between the employer and employees, and hence subject to the provision of The Indian Contract Act, 1872. It is an employment bond with a negative covenant. ... Also, the agreement must be reasonable and legally enforceable.

The employment bond is considered to protect the interest of the employer. But it also looks after the situation of the employee also. In this regard, many Courts found that this agreement must be reasonable in nature to safeguard both sides at the same time without causing any injustice to any party. And in the case of a breach of the agreement, the compensation needs to be reasonable and proportionate to the damage caused to the employer.

As per Section 27 of the Contracts Act, Agreement in restraint of trade are void.However, a contract is valid even if it imposes restrictions on a person’s trade or profession, as long as such restrictions are reasonable. Whether a particular condition is reasonable would depend upon the facts and conditions of each case. 

 

T Kalaiselvan
Advocate, Vellore
90072 Answers
2500 Consultations

This will be aq civil case hence it wont affect your aspiration for becoming an IAS officer in any way

T Kalaiselvan
Advocate, Vellore
90072 Answers
2500 Consultations

The company will inform you about the bond amount and the compensation to be paid by you once you tender the resignation letter.

You can decide further course on receiving intimation from the company on this 

T Kalaiselvan
Advocate, Vellore
90072 Answers
2500 Consultations

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