• Service agreement bond

Sir, 
I joined in Telangana State Generation Corporation (TSGENCO) as Assistant Enginner. it is a state government PSU. There is a point in the appointment letter that if an employee leaves without serving probation period (2 years) he has to pay back total emoluments received. They took a bond and my original certificates while joining. After 1year 6months I got selected as Scientist (group A officer) in DRDO, government of India. I applied for resignation through proper channel and they accepted my resignation. Since the exigency of joining the service, I did not take any action about service bond and joined in DRDO. Now I got a letter from TSGENCO to pay the total salary receive which is 1300000/- (Yes, thirteen lakhs). I went to headquarters and said that I have joined in central services. Since it is government to government, I thought I need not to pay the money. They called me over phone and threatening that they will file criminal case against me. 
Now my question is : 
1) Is it legal to file case if I don't pay the money? I was not given any kind of training. I served from day 1 and they paid me salary.
2) Why shoul a person pay the total salary after serving for 1.5years ? Does their agreement rule valid?? 
3) I have resigned through proper channel and joined in central government. I mentioned the reason also in my resignation letter. Do I need to pay the bond? Even they collected 50000/- from me to give my certificates back. 

If they proceed legally, what action should I take?
Asked 5 years ago in Labour

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12 Answers

Dear querist, 

1. You are not entitled to pay the money. If they initiate any legal action against you, an effective defence is the only remedy. You were not trained, they accepted your resignation, they must have provided you the full and final settlement letter. All is in your favour.

 

2.since they are disputing the fact after your resignation and after full and final settlement. Their averment on the basis of the agreement will be waived considering their acceptance as their admission/acceptance of the terms.

 

3. no, you are not required to pay the bond. As you have resigned from a proper channel without any departmental violation of the procedure and their acceptance thereof.

 

4. You can send the legal notice to them as the response to their averments or a mail. A proper drafted reply with all the legal information alongwith a legal opinion is highly recommended.

 

you can contact me for consultation or on linkedin, in case you need my assistance in the matter.

http://linkedin.com/in/yuganshu-sharma-655091183

 

regards,

YUGANSHU SHARMA

ADVOCATE

Yuganshu Sharma
Advocate, Delhi
962 Answers
2 Consultations

If you have not given any training or the company had not made any extra expenditure on you to develop your skill and knowledge pertaining to you field of job,  the claim of refund of entire salary is totally bad in law and voidable.  They can not sustain their claims in court. 

Such clause in appointment letter is not valid in law because it would defeat the provisions of other law. 

So you do not need to refund your salary .

Further this is civil matter .No criminal case shall be brought against you. 

Wait till they file suit for recovery and then defend it. 

You may inform the legal stand as mentioned above to your employer for information .

Kallol Majumdar
Advocate, Kolkata
2837 Answers
14 Consultations

If they file also you can contest it on merits and get it dismissed. Case can only be filed if the terms of contract are actually violated. 

The validity can only be challenged in court. 

It's illegal to collect money to collect your certificates back. They can't legally do it. If they proceed further you contest the case and also file criminal complaint for taking money for returning the certificates

Prashant Nayak
Advocate, Mumbai
34514 Answers
249 Consultations

You have served for one year six months . At most they can recover bond amount for the shortfall of 6 months 

2) if you have not been provided any training company has not incurred any expenses towards your training . Claim is unsustainable 

 

3) if they proceed legally you should contest case filed by the ex employer 

 

 

Ajay Sethi
Advocate, Mumbai
99776 Answers
8145 Consultations

1. They have the remedy of filing a suit for recovery of money against you in the competent civil court. A criminal case for criminal breach of trust under Section 406 IPC can also be filed against you.

2. Simply because you have switched from one govt organisation to another govt organisation the service contract does not become unenforceable.

3. A person should pay the total salary because he is liable to pay it according to the contract. Contractual obligations cannot be avoided at whims and fancies.

4. If they file a suit for recovery of money then court may pass a decree against you. Acceptance of resignation, unless acceptance is coupled with a waiver of the right to claim all emoluments/liquidated damages, does not preclude the employer from recovering the same.

5. Better seek an amicable settlement.

Ashish Davessar
Advocate, Jaipur
30840 Answers
981 Consultations

Let them go for the file suit against you.

 

1) If they have not provided you any proper training than they can't ask you any bond amount from you. Still you have signed  Service Bond.

 

2) Salary  is given for what services you have provided to company so you are not entitled to repay salary back. here need to check service bond.

 

3) No need to repay the bond amount.

 

If you want citations case similar like your case, which are won by the same respondent like you.  Do let me know.

 

If they proceed legally you can respondent to them in the labour court or in the Labour commissioner office. Or you can ask for your fifty thousand back which was taken to return your educational documents if you have receipt of it, than file compliant to labour commissioner against them.

Ganesh Kadam
Advocate, Pune
13008 Answers
267 Consultations

1. The said clause is contrary to the labor law and the agreement is one sided which may not be enforceable. 

The company may not sue you if you break the bond as it will not be successful in recovering any money from you through court order. 

The company may send you a legal notice as part of their pressure tactics. 

 If they do not give certificate despite the notice You should approach the court.

2. It is an illegal bond the company has got signed by you. 

It is only on those cases where the company spends huge money to upgrade your skills or for having imparted training involving huge amount that the bond shall be maintainable that too proportionately only and not in entirety.

3. Why did they collect Rs. 50,000/- for returning the certificates, do yo have the receipt for this amount or an evidence, then you can issue a legal notice and demand return of the same or else you can file a money recovery suit to recover the amount with interest because it is an illegal act. 

T Kalaiselvan
Advocate, Vellore
89978 Answers
2492 Consultations

- As per Specific Relief Act, if any employee quits before the notice period, the Employer can only recover the Notice pay, and the Company cannot force to serve the entire notice period.

- Further, the resignation decision is the employee’s decision, and the employer cannot sue for breach of contract, if the employee leaves without serving contractual notice. 

- Further, the employment bond with the negative covenant is valid and legally enforceable, if the parties agree with their free consent i.e. without force, coercion, undue influence, misrepresentation and mistake, but it is not enforceable, if it is either one sided, unconscionable or unreasonable.

- Further, section 27 of the Indian Contract Act prohibits any agreement in restraint of trade and profession.

No employer can refused to return the original certificates taken at the time of joining of the job. If they are doing so, their act is illegal, unjustified and against the fundamental rights of the employee.

1. As per law, you are having legal right to resign from your position ,during the probation period, without serving notice period , and the employer/TSGENCO cannot claim any compensation from you. 

- No , they cannot file any case against you , however you should reply the said letter issued by your last employer. 

2.  Not valid , read as i have mentioned above 

3. You can claim refund the amount deposited by you in the garb of the return of your certificate       

- As per Madras High Court, Retaining Original Certificates Is Illegal and Improper. 

 

Good luck and dont forget to rating Positively. 

Mohammed Shahzad
Advocate, Delhi
15814 Answers
242 Consultations

1. Need all the rules of service of that psu to tell this. Filing case against you seems illegal at first.

2. If it is signed and registered than ofcourse. 

3. Not really. 

You can take temporary injunction against their legal action

Rahul Jatain
Advocate, Rohtak
5365 Answers
4 Consultations

Dear first have a look on your appointment letter of termination/resignation clause during probation, if the clause indicate on probation period then u may act accordingly other wise you need to pay as per your clause. 

Mohammed Mujeeb
Advocate, Hyderabad
19325 Answers
32 Consultations

No criminal case made out. Just tel in writing them you have served technical resignation and bond may also transfer to central govt.

Further, payment made towards work done cannot be recovered. Bond language wrongly drafted, good for you.

They must have given you receipt of payment made. To release certificate charging penalty amounts to extortion. You can claim refund of paid amount.

Yogendra Singh Rajawat
Advocate, Jaipur
23079 Answers
31 Consultations

Dear Sir,

It is not clear at to whether there is any receipt of Rs. 50000/- given to that organisation/employees for collection of certificate. Under present circumstances, you have a point that you have paid back the money by way of their work and you may challenge the policy of asking the total emoluments.   

Ganesh Singh
Advocate, New Delhi
7169 Answers
16 Consultations

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