View Poll Results: Should Bond agreement be banned
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Hi All,

I am Chartered Accountant, I have joined in an Pvt Ltd. IT company as Finance exec, at the time of joining they have signed a aggreement mentioning that " employee will be liable to pay Rs.50k, incurred on training, in case he leaves the org. within 1 year" the same agreement was signed on Company's Letter head.

My question is, whether such agreement is valid as per Indian Stamp Act? Should n't it be on Judicial or non judicial Stamp paper?
Can company recover from me such amount, as I haven't been imparted any kind of training?

Further, at the time of joining i wasn't inform the scope of duties exactly, after my joining i came to know I have to clear the back log for 4 months. and now i am feeling immense pressure as cannot handle backlog as well as routine daily work.

So if i put resignation can i fight on a ground that, u can adjust Rs.50k and 2months notice pay, against extra work done ( outside my scope/ not informed to me).
Can i revoke agreement saying its not legally valid as it is not on Stamp paper.

I would appreciate if any one can guide me in this issue.

Thanks to all in advance.
Awaited of some kind of positive response from you all.


From India, Gandhinagar
Ash Mathew
Recruitments, Training`
Hrm & Legal
Recruitment/talent Acquisition, Career Counselling
Anurag Jain
Hr Manager
Business Analyst
Associate Software Developerq
+9 Others

Hello Firends, I would like to know that, company’s letter head is with compnay’s seal is valid for aggreement?? Best Regards Jayana
From India, Ahmadabad
An agreement without Stamp Duty is not an invalid agreement. As per Indian Stamp Act if an agreement is not duly stamped it is liable to be impounded by the govt. authority and cannot be admissible as evidence before the court of law. However the agreement can still be valid and binding if executed without any pressure or force.

Regarding payment of 50K as expenses on training, as you said that there was no formal training provided to you and if the same can be proved you can always assert that in your notice to the Company and tell them since no training was provided I am not liable to pay 50K.

You can always mention that Job profile is different then what was agreed therefore the resignation is out of distress and not on your will and that the conditions are created which forced you to take such unwilling and drastic action.


From Hong Kong, Hong Kong

Dear Sir,Your employer cannot recover any such amount from you as such under indian laws bonded labor is not permissible.If employers shows any such contract to recover such amount he himself will be behind the bars for violating the laws of land.
From India, Rohtak
Anurag Jain


In India Bond is illegal as follws

As per the Indian Statute bonded labor system was long abolished and no bond can force any person to work against the employees wishes

Article 19 of Indian Constitution talks of fundamental rights, as per the Article 19 the Constitution the write work is a fundamental right, and under no circumstance does the Fundamental rights under Article 19 be waived by any person nor can any person be forced to do something that amounting to the violation of the rights mentioned under Article 19.

As per the Indian Contract Act contracts entered between two parties if is one sided then such contract would be null and void. Most of the Bonds are one sided.

Again as per the Indian Contract Act no contract can be enforced on any person if the contract which is being so enforced causes any harm to the person on whom its is enforced and if performed would violate principles of natural justices.

As per Sec 368 of Indian Penal Code if any person or institute holds back any document or any use any legal document or threatens any legal suits or actions and thus forces a person to perform any act against his wishes or which is illegal or wrong as per the statute of Law of the land.

Sec 368 of Indian Penal Code talks about extortion by the threatening to file a legal suit. The minimum punishment under this act is 2 two years.

The Supreme Court of India has clearly stated that no employee can be forcefully employed against his will, just because he has signed a contract with the employer.

The court also has stated that the employer can not hold back any personal document of the employees as they are earned by the employees and the company has no claim on the same.

Any complain on the company would land the Directors and Managing Directors of the company in Jail, as the company is not a actual living entity but legal entity and the management are hands and heads of the company.

Bonds are applicable only if the company has spend money on the personal grooving and enhancement of the employees, but not just a training that helps employees perform better.


From India, Jaipur
If they have not provided you training it is totally invalid and can land the directors in jail. If only the company has incurred costs in training you can they sign a bond and it has to be resonable. It is better for you to discuss with the H.R departments director and resolve the difference or simple walk away if they are not a good company. If you have not completed six months in the company no notice period is required. If you have completed more than six months one months notice period or salary in lieu thereof is valid. Yes your leaves can be adjusted for your notice period.
Cheers Pratik

From India, Delhi
I am employed for last 2 years in a engineering LTD. CO. Now is it possibile to go for study breaking the bond. have Indian Law any ground to support my higher education. My bond is done on RS. 10 stamp paper. the bond value is 5 Lakhs. Pls help me.
From India, Calcutta
Dear Guides

Plz help me also.

I went for foreign for one month by company, for making passport urgent basis, company isssued letter saying that company is sending him foriegn urgently for overseas assignment. I got passport.
But in bond on stamp paper it was written stating that for training, i signed unwillingly can say forcefully for 18 months.
I served unwillingly 15 months, after that i become absent 15 days, they started to send advisory letter with cutout date, i went company but they were not ready to rejoin me, even also told to re sign bond for three years. I totally refused.
I came back my home. Again advisory lettres are coming continue up to two months, atlast they send letter of self voluntary leaving organisation, asked to settle accounts. This is three month later.
Till now i not resigned from company.They have issued self voluntary leavinf how i can resign?
Again after four month later, stating that with reference to( i.e. fraud )resignation letter dated (from i was absent, while advisory letter came up to three months) to pay bond money that is one lakh rupee.
Now they sent notice by advocate.

Can they taken legal action? Plz guide me.

From India, Pune

Hello Canishit, Arnabchanda, Yuvraj777,
First & foremost you guys signed the bonds without serious thought while signing OR were under some pressure to join a job. So if this later turns out to be a mistake, who ought to be paying for or the company or someone else? Now don't think I am saying the company is correct. But you gave them a chance to do what they did.

Reg Arnabchanda. You joined the job on your own accord...the company didn't force you to join-right? And if it was under any other pressure-family, etc-that doesn't concern the company at all. And you knew about the bond too then-right? And now you want to be so very selfish and are looking for ways to jump the to say. Who asked you to even try for GATE, when you knew the Bond position? If you were so concerned about your M Tech, the question you are asking on this forum should have been put by you to your company BEFORE you wrote GATE. Now by putting this query for suggestions on this Forum, you want all of us to become partners in your action [didn't want to use the strong word here--something that is usually used]?
Frankly, it's because of people like you that the Bond culture came into existence.

I am sorry if this hurts, but learn to face the consequences of your actions yourself...don't put them onto others' heads. I don't think you can take a stand-either morally or legally-that you didn't know what you signed or you did a mistake by signing. None of us are kids.

Coming to Canshit's query, Bonds on the letterheads aren't valid in courts...if the issue does goes to courts. But what if the company takes a stand that they didn't get the Bond on a stamp paper because they trusted you...what would you do? Also you are missing 2 other points here:
1) what if the company manages to show that they have imparted some sort of training--doesn't matter what YOU think of it. As long as the court believes it, it's sufficient.
2) The EXACT scope of duties can NEVER be, word-for-word, be defined by any company @ the time of joining. This is subject to conjecture. That's why most companies mention--as per the superior's instructions/company policies, etc.

Going by the tone of your posting, it LOOKS as though you want to quit since you are UNABLE TO TAKE THE PRESSURE more than any other issue. You are only making attempts to ensure you aren't blamed for jumping the gun.
And also remember that when one begins to fight, it will be against A COMPANY--think before you leap. If you can afford to spend the time, money & effort-in addition to tie-up your future....fine go ahead. Else, look for other options.
This is NOT to suggest that one should ALWAYS take things lying down...but evaluate before and NOT later or midway.

And coming to Yuvraj777, I don't know what you mean by: "i signed unwillingly can say forcefully for 18 months". Did they tie up your legs & hands and take your signature forcefully? You didn't want to miss the foreign chance you signed..period. If you REALLY thought they were putting pressure, you could have FOREGONE that chance? And to top it you say: "I served unwillingly 15 months". In a line, all I can say is-you used the company for your own selfish ends and now that your work is over, you want the members of this Forum to suggest ways to jump the gun? Not fair...right?

Again I repeat....I am sorry if this hurts. But you figure out the definition of what you guys did.


From India, Hyderabad
Ash Mathew

Dear TS - that was a sure blow to people thinking that they can can advantage by pointing out that "The law does not support any such agreement"

For all employees - pls remember that you are being paid for not the ordinary work but for the extra ordinary work. It happens everywhere where your responsibilities are stretched.

In this case I see that there was a backlog of work and (that is why they hired u), and the bond from the Company - was to make sure that you dont run away from the "challenge". Whenever you are requested to sign a bond... pls understand there is a risk involved, also the risk will be beneficial to you if you are able to perform (cos they totally depend on you)

As far as the legal matters are concerned, the experts have already answered.
I would only say - If you have not received any training, or time for performing, kindly carry the records of the same to prove yourself. Also keep the company informed of the same (that u have the proof supporting ur statements)

Anyways law does not encourage bond / agreements..unless it has records of expensive training by the company...

And for others, what TS is trying to say also has a point here - why did u not think before signing the bond? I mean - if u knew it was not going to be valid... why did u sign it? Because u thought u could always fight back and prove that it was something u knew that never made sense?

From India, Madras
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