I am afraid that the issue has been sidelined. What law states is that there shall not be restraint of trade, business etc, under S.27 of Contract Act, 1872. However, it is with regard to doing business, trade etc. but not with regard to agreement for recovery of bond amount. Further, there are also many judgements which state that reasonable restrictions/conditions on the employees in terms of their employment is valid. Even government service also contain such service conditions and if a probationer or trainee leaves the orgainsation within a stipulated time (say one year to five years), expenditure incurred and salary paid to him would be recovered.