Industrial Relations
Korgaonkar K A
+2 Others

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I want a legal advise about service bond.
At present i am working in a psu bank since 3 the time of joining i had executed a service bond of 3yrs worth rs.1,50,000.But now i had got an good opportunity,for this i have to break the bond so i want to know the legal consequences of breaking the bond.
I had not provided any training by the bank.I dont want to pay any amount to bank and also I dont required any relieving or experience letter as i had not disclose my working in a bank.
please advise me.

From United States, Chicago

Attached Images
File Type: jpg BOND 1.jpg (289.0 KB, 145 views)
File Type: jpg BOND 2.jpg (181.1 KB, 46 views)

Dear Destructive Balendu
Your name itself somewhat peculiar. Always have the constructive attitude. Why you want to break the service bond? If you are planning to leave the service within the 3 months period, why did you join that post. If you withdraw yourself from the selection process, then some other really capable and needy person might have got the opportunity.
You have to pay the amount of Rs.150000/- to the Bank. Otherwise the bank can legally claim the same with penalty and other charges incurred on the process of recovering the same from you through the court of law.

From India, Kumbakonam
Respected sir,
Actually sir,the real problem is the banK had gave me posting in very interior location having population less than ten thousand,and majority of them are uneducated.We merely have 20-25 vouchers.And bank had refuse to dislocate for 2 yrs.
There is scope of learning here,thats why i had to take this step otherwise i am a very constructive person,i had past experience of working in a C.A. for 3 yrs.
please guide me sir.

From United States, Chicago
Dear Balendu
If you are really interested to learn new things from the Banking Sector, please do not quit the job now. No one can learn anything within 3 months time about any organisation and the work being carried out by them.
Have patience and learn the work first. Only in small branches you will have chance to learn all the work. If you go to some big branch you will not have chance to move out from your table and you will not learn the complete banking job.
Still you are unable to convince yourself then you can pay Rs.150000/- and quit the job, if you have any other option in your hand.

From India, Kumbakonam
Dear Balendu ji,
You need to hire a good advocate and take his opinion and accordingly take the decision.
According to me the service bond which you have entered in to with the bank is to be bad in law. It is against the fundamental rights given to you by the Constitution of India.
According to me the bank can only recover the amount of expense borne by it towards your travel, stay, food, training etc. if any.
I am attaching herewith a case of Nazir Maricar vs. Marshalls Sons for your reference and study purpose. Important points in the case are underlined and highlighted.
Your case will be totally depends upon the skills of an advocate to whom you hire.
If I am in your place, I will certainly challenge the bond.
Wish you all the best.
Thanks with regards.
Keshav Korgaonkar,Insurance Advisors,Corporate Advisors,Legal Advise,Wage and salary,,Labour Compliance Audit,SSI registration,NOC from

From India, Mumbai

Attached Files
File Type: pdf High Court Judgement on Breach of Bond and Quantum of Compensation.pdf (3.51 MB, 150 views)

Dear Mr. Keshav
Eventhough the Bond is illegal, in some sector it is legal. Even in defence, if some employees (Uniformed personnel) sent on deputation to any Foreign Countries, then on return from the country, the employee has to serve for some specific years. In that period he will not be relieved at any cost. We cannot tell that all the employment bonds are illegal.
The bond was executed by the Nationalised Bank and without proper authority or proof they will not execute such bonds. If some private companies are executing such bond, then it can be illegal and in case of Nationalised Banks they cannot execute the same without the consent of the top management.
That's the reason I advised Mr. Balendu to approach his management about the buyback option.

From India, Kumbakonam
Dear Shri. Bhaskar ji,
With due respect to you Sir, I am giving my view as under:
Whether the bond is legal or illegal, void or voidable, invalid ab-initio or otherwise, it is totally depends upon it contains, wordings, its drafting etc. It is totally depends upon how you interpreted it. It is also depends upon nature of employment.
Thanks and regards.
Keshav Korgaonkar,Insurance Advisors,Corporate Advisors,Legal Advise,Wage and salary,,Labour Compliance Audit,SSI registration,NOC from

From India, Mumbai
Dear All,
Incidentally I came cross one article by Shri. M. Sivaraman on "Restraint clauses in the contract of employment and their enforceability" which I found to be worth reading. I am sharing it for the information of you all.
Thanks and regards.

From India, Mumbai

Attached Files
File Type: pdf Article on validity of restraint clause (1).pdf (116.9 KB, 159 views)

Hi All,
If any government PSU didn't provide any training, assigns a job immediately after joining the company and the employee breaks the bond and can the company claim for liquidated damages.

From India, Hyderabad
Please accept my apologies for replying late (today only I got time to read the article). Thank you Mr. Keshav for sharing such useful material with our members on restraint clause on employment agreement. Of sure our HR members will adhere the instructions given in by Mr. M Sivaraman, while making such restraint Clauses in the Offer Letter & Appointment Letter.
From India, Kumbakonam
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