The Service Bond/Service Agreement Bond is indeed legal in India. It depends on the employer and employee regarding the kind of recovery amount they would incur from the employee. Certainly, a breach of the bond/agreement within the stipulated period indicates that the loss to the company by training the employee has to be recovered.
Types of Service Bonds
There are types of Service Bonds depending on the organizations: Generally, a short-term corporate bond is usually less than five years, then there is 5–10 years, and long-term can be above 10 years.
You might be wondering why the service is categorized this way. This is because corporates have higher yields, and their employees are crucial for profits. By providing them training, they are upholding business. If such an employee breaches the bond within the required period as per the agreed bond, they would pose a high risk for the company in terms of quality and manpower as well.
I hope the above information serves your purpose.
Regards