This matter was discussed many times in this forum itself. Please find the related issue using the search option in the site. Well, an indemnity bond (as is in the instant case) signifies a contract between the employee and the employer wherein the former agrees to indemnify any loss caused to the latter due to the conduct of himself or by any other person. If it is so (then only the contract becomes an indemnity contract/ bond) what is the amount of loss sustained by the employer due to the conduct of (leaving the organisation) employee? Is it Rs 2 lakh? Is it certain amount fixed at the time of entering the contract? Can the employer prove that he has suffered a loss to the tune of Rs 2 lakh due to the act of employee leaving the establishment before completion of the stipulated period? It is upto the employer to find answers to the above questions. If he has no proof to say that he suffered a loss to the tune of Rs 2 Lakh, he can not require the employee to indemnify it. It is implied that if the employer has incurred an expenditure of Rs 2 lakh by way of parting training which is certainly an asset or value addition for the concerned employee, the employer can insist an employee to remain with him till the amount spent by way of traing is recovered in full in the form of service/ labour from the employee. In such cases, the employer is justified in saying that he has incurred a loss by spending amount on traning an employee. Moreover, compelleing an employee to work for him is not acceptable and any suit seeking direction in this regard will not be maintainable as it will be deemed as 'bonded labour'. In the above circumstances there is no legality for such notices and the employer will not file a suit against any such employee but the proceedings will end with a notice only. You can either ignore the notice or reply refusing to pay the amount saying that there is no ground for demanding such amount. Regards, Madhu.T.K