Industrial Relations And Labour Laws
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Dear Friends,

I need your sincere help and advice for breaking training agreement I left my former company in May 2010 with proper resignation but company didn’t accept my resignation because I have executed training bond. I have to work 3 years after finishing my onsite period.

I have gave up all my gratuity, leaves and last month salary to company for compensation 6,00,000/- but they are asking huge amount of 32,00,000.

After one month company has sent me legal notice from lawyer and I have also replied to their notice through my lawyer.

After seven months in Feb 2011 I have received one summons from court, saything that I have to come to court to attend this case.

Now I am not in India and my parents little worried about this Summons.

Please advise me how to proceed with this case, Should I discuss with company again?

I look forward for your valuable replies. I am attaching my training agreement for more information

Thanking you in advance.

1) The company hereby deputes the employee for training from 08.07.2007 to 08.07.2010 at Germany with the object of enabling the employee to get training in project management, process technology and the employee hereby agrees to undergo training.

2) The employee shall faithfully, diligently and punctually take the fullest advantage of training and shall assimilate the various aspects/ knowledge imparted to him during the period of train and shall thereafter, on return make best use of the knowledge so gained for the benefit of the company.

3) In consideration of the company sending the employee for training abroad at the cost of the company, and in consideration of the additional knowledge and experience that the employee would be gaining on account of the training, the employee shall work for the company for a minimum period of 3 years after returning from training. The employee shall not, under any circumstances work for any competitor of the company during a period of 3 years after training.

4) In the event of the employee leaving the services of the company, either during the period of training or thereafter before completing 3 years of service after completion of training period and or the aforesaid period of 3years after completion of training, the employee shall be liable to pay to the company as damages a sum of Rs.32,00,000/- which the company would spend on deputing the employee for training. The break up of Rs.32,00,000/- is as under

a. Airfare to Germany and from Germany to Bangalore - Rs. 1,00,000/-
b. Expenses towards obtaining visa - Rs 5,000/-
c. Accommodation Boarding, travelling and incidental expenses at - Rs 12,00,000/-
d. Special allowances paid during stay abroad for training - Rs 16,00,000/-
e. Medical insurance - Rs 2,95,000/-

Total : Rs 32,00,000/-

5) In the event of the employee indulging in any act of indiscipline or misconduct, or abandoning training and or employment or giving health reasons for not coming to duty, the said acts or any of such acts leading to termination of services of the employee by the company shall be deemed to be violation of terms of this agreement by the employee, and the employee shall become liable to pay liquidated damages as stipulated in clause (4) above.

6) The employee shall keep the company’s trade secrets confidential and shall not disclose or disseminate any company’s information to any third party

7) The employee undertakes not to disclose any information and or knowledge gained by him during his training and employment in the company to any person, firm or company and or to any individual or to any other body or entity. So also, any procedure, process, system or other improvements developed by the employee during the period of his service shall become the property of the company.

8) The employee shall not, at any time either directly or indirectly disclose or disseminate to any person, firm or company any information of any kind concerning any matters affecting or relating to the products of the company, the company stocks, shares, stock options of the employees, company services, etc.

9) Without being exhaustive, disclosure or passing of information of any of the following nature shall be deemed to be violation of this agreement.

a. Parting with any information pertaining to the secrets of the company`s trade, and confidential information to any competitor, outsider, etc.

b. Handing over designs, drawings, software or any other materials connected with the company to any competitor, firm or company.

10) It is clearly agreed that in the event of the employee violating any of the stipulations and or terms contained in this agreement, the employee shall be liable to pay liquidated damages as stated in clause (4) above, in addition to becoming liable to pay any other sum or amount that the company may suffer on account of such violation including un liquidated damages that the company may claim against the employee for such violation.

11) The surety has undertaken to ensure that employee fully complies with the terms of this agreement. Further, the surety has undertaken to compensate the company for breach of any of the terms of this agreement by the employee. The surety shall be liable to pay to the company any amount that the employee may become liable to pay to the company on account of breach of any of the terms of this agreement by the employee.

12) Any difference or dispute between the parties arising out of this agreement shall be subject to jurisdiction of the courts at Bangalore only to the exclusion of any other court that may have jurisdiction in the matter.

In Witness whereof, the parties to this agreement have signed and executed this agreement on the above said date, month and year in the presence of: Signature of Company, Employee and Surety


Attached Files
File Type: pdf Agreement.pdf (13.9 KB, 1506 views)

Contents of plaint in summons :

Company has filed a cased against me with below points.

Company is asking judgment and decree

a) For a sum of Rs. 32.00.000/- against defendant as liquidated damages along with interest thereon @6% per annum from the date of filling of the suit till realization in full.

b) To restrain Defendant from joining the services of any other organization engaged in the same field as the company / Competitor and or setting up a competing business for the remaining period of the non leaving agreement till end of June 2013

c) To restrain defendant from divulging or misusing any confidential information in his possession with regard to the activities whether manufacturing or ortherwise, of the company.

d) Enquiry into unlimited damages suffered by the company and decree for the same, as found dude upon such enquiry.

e) Award costs of the suit;

f) Such other order(s) / relief(s) as this Hon`ble court may deem fit, in the interest of equity and justice and in the circumstances of the case.

Our lawyer prepared reply for this court summons. This forum can help me to come out of this situation.

Thanking you in advance


Dear Mr Raj,
After going through your employment contract, its very clear that you have to pay Rs.32,00,000/- to your ex employer.
Its a well drafted employment contract, very clearly expressed on all points and not vague to give a chance to the court to interpratate the words in other way.
I would advice you to settle the issue out of court (directly with yr ex employer). Talk to them, request them to settle the matter for some lesser amount.
If you fight the matter in court..possibility is that at the end of the day (may be after 5 years) you would lose the case and that time your ex employer may ask for interest on Rs 32,00,000/- also.

From India, Pune
A summons is not a final verdict. Let the case be heard. It is not necessary that the court will accept the agreement as it is because there are some points like restraining your from joining a competitor and recovering an amount spent on your training on which the court may disagree. I don't think that a cost estimated well in advance would be taken as real cost incurred by the company. Let the court decide what was the actual cost to the company by way of giving you training. If you have actual figure you can counter the arguments of the company. Therefore, i will suggest you to appear.

From India, Kannur
Thank you for your valuable suggestion from Kamal & Madhu

I would like to give more information about my situation.

Company has deputed to his head quarter in the name of training and promised me that after my delegation promote me a Project Manager once I come back to India.

I joined this company in 2003 after 4 years of working India Company has deputed to head quarter to execute normal work.

I have attended few in-house training programs with head quarter employees but all training thought in German not in English which I cannot understand. This is just for name sake training program.

The training expenditure is only estimated during preparation of agreement not actual cost, I have found information in this forum that the allowance will be a part of wages it will not come under training expense.

Company has put me on a real project in onsite to work below my designation so that they can receive money from head quarter. Indian company has not paid any money for my training to head quarter.

As per agreement I have to work in head quarter for 3 years but Indian company has called back to India for 8months to work for local projects.

My question is now company has not broken agreement, the court will not ask?? My lawyer told me that court will ask a strict proof of expenditure spent on training to recover damages.

Dear Mr. Raj,

If your overseas training was a full time training and not on job training then the allowances paid to you would be treated training expenses and not as wages.

Regarding training in German language and not in English will certainly not be an excuse to you as you should have pointed out this problem to the employer that time only and not after completion of training and now making it an excuse to shift the job.

The strong point in your case is the company posted you at a lower rank and cadre wile on on site project. This action of the employer will certainly go in your favor.

Your lawyer is right that the court will ask a strict proof of expenditure spent on training to recover damages.

Few years back Shipping Corporporation of India had also filed a damage case against one of its employee as per the bond signed between two parties and the court gave decision in favor of the SCI.

It would be always wise for you to go for out of court settlement with your ex employer by paying them a reasonable sum of money and certainly not what they are claiming because there is no end of judicial litigation...from lower court to high court then supreme court.....keeping you 10 to 15 years in stress.

If you calculate the lawyer fees alone from start to end (lower court to high court then supreme court) you will be shocked.



From India, Pune
Dear Kamal,

Thank you for your valuable suggestion.

Actually it is not a full time training, it’s clearly an on job training mentioned in their court summons. I also had complete period of time sheet, it clearly state on which projects I have worked during this period.

Company has received a payment for my work from Head quarter but they are hiding this information. If I am in training program then Indian company has to pay to Head quarter but here it is in a opposite way.

I have already given my final settlement approx amount of 6 laks to company but now they are threatening to recover more. Company want to trouble and show what will happen if you break agreement to

Currently HR using agreement has a tool to retain people and now want to show how they trouble if you break agreement to rest of the employees.

I have requested the company for 3 months to promote what they have promised; unfortunately I have received very bad answer from dept. head. Company taken me granted and clearly said that I have to work 3years more to get that position.

Company is not interested to discuss further with me. After gave up 6laks from hard earn money now I am paying lawyer fees,

You are right the fees are really expensive and beside company harassing from last one year but there is no other way to come out of this situation.

I was working as a Team leader but in head quarter made me to work as a Draftsman (Draftsman position I had 7years back when I joined this company)

In between they called back to India for a period of 8months and it is not mentioned in agreement.



Dear Mr. Raj,

Well i can understand your mental status.

There are few strong points which are in your favor.

If you can proof that the company has received a payment for your work from Head quarter during training, it would help you a lot in the court.

As you have mentioned that you were working as TL but back in India you were posted a Draftsman, which is a certainly demotion....this point is again in your favor.

The company didnot promote you as promised ...will go in your favor.

I would rather suggest you that your lawyer should file a written proposal before the court for a compromise by paying a reasonable amount (Rs. 5 lacs) to the company. Court will ask the company lawyer for a rejoinder.

Possibilty is that compromise formula will not workout at the lower level court as lower courts have not much guts to work this way.

Wait for company's view on this and if the refuses outright then you can file a Quashing petition before the High Court to quash the company's suit filed against you.

If your Quashing petition is admitted in High court then the proceeding at the lower court will be stayed and you will get immediate small time relief.

During the Quashing proceedings in the High court you again request for a compromise by paying a reasonable amount to the company and fair possibilty is that your compromise formula may work out here.



From India, Pune
Dear Kamal,
Thank you very much for your information. I will try once again with company to compromise with reasonable amount.
If they are ready to compromise then I would be very happy to come out of this situation.
Now my lawyer has prepared an answer to summons received last month. Once it’s done in court I will discuss with our lawyer for compromise with company.
Hope everything will go well.

Hi Everyone,
Thank you for your feed aback and our lawyer has submitted written statement to court summons received from Company.
Now they have put an objection to our written statement and taken 2 months to reply back.
What will be the next step in court?
When will argument start?
When I should present in court?
In agreement clearly stated city court but now they have filed a case in a different district civil court, does it impact anything?
Thank you in advance

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