Court judgement on Service bond for liquidated damages
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Court judgement on Service bond for liquidated damages

goyalvimal Started The Discussion:

I have searched this forum and noted views that foreign "service bond" requiring employee to serve for a minimum no. of years after coming back to India without any expenses on training are not valid.
It seems TCS had filed some cases in court as per information given below by TCS in prospectus for public issue.

Can anyone cite a court judgement on any decided case on this issue please.
I read an article referring to six judgement as follows but could not find the judgements by search on google : Can someone provide a link to these judgement please.

Fateh Chand v. Balkishan Das, AIR 1963 SC 1405
George Pictures Ltd. v. Neelakandaru Gopalakrishna, AIR 1971 Ker 271;
Narasimha Rao v. Supdt. of Excise, AIR 1974 AP. 157, 167
P. Nagarajan v. Southern Structurals Ltd., 1996 (2) LLN 810
Fertiliser and Chemical Travancore Ltd. v. Ajay Kumar and others, 1990 LLR 711
Toshnial Brothers (Pvt.) Ltd. v. E. Eswarprasad & Ors., 1997 LLR 500

It has been stated in the article that bond is valid contrary to views being expressed by the moderator and many other experts.
In Toshnial Brothers (Pvt.) Ltd. v. E. Eswarprasad & Ors., 1997 LLR 500 decided by the Madras High Court. In this case, an employee who was engaged as Sale Engineer committed a breach of the undertaking when he left the services of the plaintiff after serving for 14 months only as against the contracted period of three years. When the case reached the High Court, the High Court of Madras held that in such a case, it becomes unnecessary for the employer to prove separately any post-breach damages. On the other hand, it would suffice to substantiate the fact that the concerned employee was the beneficiary of special favour or concession or training at the cost and expense wholly or in part of the employer and there had been a beach of the undertaking by the beneficiary of the same. In such cases, the breach would per se constitute the required legal injury resulting to the employer, out of the breach or violation by the employees. The High Court, also clarified that while awarding damages as stipulated, the statutory exception for mitigating the quantum of damages will have no bearing.

B. Attrition Suits
: The TCS Division enters into Service Agreements with its
employees at the time they join the TCS Division. In the event that the employee
leaves before serving the minimum period specified in the Service Agreement, the
TCS Division proceeds against the surety mentioned in such agreement for payment
of liquidated damages. Additionally, in instances where the employee has been sent
out of India to work on a project, the employee has to enter into an Overseas
Deputation Agreement with the TCS Division. In terms of this agreement, the
employee has to return to India after the completion of the overseas deputation,
provided the deputation was in excess of 30 days, and work with the TCS Division
in India for a minimum period of six months.
The table below summarizes the position in relation to the number of ex-employees
against whom the TCS Division has initiated action in a court of law.

S. No. Centre Number of cases where the matter Amount of claim
is pending with the court
1. Bombay 09 450,000
2. Kolkata 28 1,400,000
3. Chennai 24 1,200,000
4. Bangalore 200 10,000,000
5. Hyderabad 14 700,000
Total 275 13,750,000


White Eagle - Member Since: May 2009
Dear goyalvimal,
As you already searched the Google. So it will be little difficult to find out soft copy of these cases.There is article on Indlaw which put some light on your concern area, i hope you had only done with it but for my and other frnds satisfaction i am putting link: A brief note on breach of service agreements

Friends if anybody have access of manupatra or any other legal search engine then pls do needful. Goyal if you site from where you got TCS figure, it will be very helpful.



For more HR related information: White Eagle

goyalvimal - Member Since: Aug 2009
Thanks for your observations. I have read the said article. Cases cited above are from this link / article only.

For TCS, I got the details from google search, it was contained in a Public / Right issue prospectus. Link is given below:
http://www.sebi.gov.in/dp/tcspa.pdf

There is one Miss Tavlin Kaur on Ibibo where she said there is a supreme court ruling that no one can be forcefully employed against his will (ibibo Sawaal Expert Answers:what is the legality of service bonds) but she did not cite the said ruling to find out applicability to individual cases.

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