Dear Salu,

Generally Service-Bonds are illegal in India because they are one sided.Further,such type of Bonds contravene Article 19 of our Constituion, which provides right to every citizen to do any occupation,trade or business or practice any profession.However,such type of Bonds are enforceable, if the company has spent money on the specialised training of the employees, and not mere training that helps them to perform better or to protect intellectual property rights or for any other reasonable restrictions. The Supreme Court of India has clearly stated that no employee can be forcefully employed against his will, just because he has signed a bond with the employer.Moreover, in case of breach of the bond,the company can realise only the actual reasonable loss suffered by them and nothing more.

In India, the cases relating to Star India Pvt. Ltd. v/s Laxmiraj Seetharam Nayak (2003 (3) Bom CR 563); Gujarat Bottling Co. Ltd. v/s Coca Cola Co., and Jet Airways (I) Ltd. v/s Jan Peter Ravi Karnik 2000(4) BCR 487 are a few decisions which the Court may take into consideration while granting relief to any prayer for injunction against an employee from competing or joining any competitor. similarly in the case of Sicpa India Limited v Shri Manas Pratim Deb, the employee had signed the by way of imparting training by employer according to the bond employee have to serve three of service or to pay Rs. 2 Lacs in case of breach of bond by employee. when the employer moved to court to enforce the bond and in respect of recover the amount spent toward employee training. the court had asked the employer to produce the evidence of expenses incurred toward employee training. in that event they admit in presence of concrete evidence that the actual training cost toward the employee was 67595 since the employee have completed the 2 year of service out of 3 year therefore the court awarded the compensation to employer of 22532 by dividing the the total expenses 67595 into three year i.e 22532/-

In view of the above, apparently you have nothing to worry about and not pay a sigle paisa to them. if they move to court Let them prove before the court what damages they have suffered and let them recover their loss through the court.however in your defence you also have to prove before the court in presence of concrete evidence that training provided by employer was hypothetical Hence i was not beneficiary at all.

Thanks & Regards


HR & Labour, Corporate Laws Advisor .

From India, Agra
Dear Salu,
We understand that you have just started your career where you must have joined with great aims to fulfill dreams also to acquire knowledge , learn and grow with wonderful persons.Its not unique thing happening, a matter of bad taste take it like that. It is a situation not imagined but has come in your way. You need not worry and do not develop any complex of persecution within .Get ready to stand up boldly against injustice and immoral agreement causing bad impacts on your health and precious time as well. I doubt, such companies are weak , never dare to go to courts.The conditions mentioned in bond signed by you are simply like hanging sword to threaten the freshers like you people. Had it been with any senior position, company would have learnt a lesson from first case and it would have been the last also..
Best wishes,
RDS Yadav

From India, Delhi

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