Breaking a Service Bond in a PSU Bank: What Are the Legal Consequences?

Legal Advice on Breaking a Service Bond

At present, I am working in a PSU bank and have been for 3 months. At the time of joining, I executed a service bond for 3 years worth Rs. 1,50,000. Now, I have a good opportunity, and I need to break the bond. I want to know the legal consequences of breaking the bond.

I have not received any training from the bank. I do not want to pay any amount to the bank, and I do not require any relieving or experience letter since I have not disclosed my employment in the bank. Please advise me.

Regards,

Your name itself is somewhat peculiar. Always maintain a constructive attitude. Why do you want to break the service bond? If you are planning to leave the service within the 3-month period, why did you accept that position? By withdrawing yourself from the selection process, you are depriving another truly capable and needy person of the opportunity.

You are required to pay the amount of Rs. 150,000 to the bank. Failure to do so may result in the bank legally claiming the sum, along with penalties and other charges incurred during the process of recovery through the court of law.

If you are really interested in learning new things from the banking sector, please do not quit the job now. No one can learn everything about an organization and the work being carried out by them within a 3-month period. Have patience and learn the work first. You will only have the chance to learn all aspects of the work in small branches. If you move to a bigger branch, you will not have the opportunity to move away from your desk and learn the complete banking job.

If you are still unable to convince yourself, you can pay Rs. 150,000/- and quit the job if you have any other options available to you.

Thank you.

Even though the bond is illegal in some sectors, it is legal in others. For example, in defense, if some employees (uniformed personnel) are sent on deputation to foreign countries, upon return, the employee is required to serve for a specific number of years during which they will not be relieved under any circumstances. It cannot be said that all employment bonds are illegal.

The bond was executed by the Nationalized Bank, and without proper authority or proof, they would not execute such bonds. If private companies are issuing such bonds, it may be illegal. However, in the case of Nationalized Banks, they cannot execute such agreements without the consent of top management.

That's the reason I advised Mr. Balendu to approach his management about the buyback option.

[QUOTE=boss2966;1980752]Dear Mr. Keshav,

Even though the bond is illegal, in some sectors, it is legal. Even in defense, if some employees (Uniformed personnel) are 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 say that all employment bonds are illegal.

Legal Interpretation of Employment Bonds

Dear Shri. Bhaskar Ji,

With due respect to you, sir, I am giving my view as follows: Whether the bond is legal or illegal, void or voidable, invalid ab initio or otherwise, it totally depends on its contents, wordings, and drafting, etc. It completely depends on how you interpret it. It also depends on the nature of employment.

Thanks and regards,

Keshav Korgaonkar
Shantadurgaent.com, Insurance Advisors, Corporate Advisors, Legal Advice, Wage and Salary, Labour Compliance Audit, SSI Registration, NOC from[/url]

If any government PSU doesn't provide any training, assigns a job immediately after joining the company, and the employee breaks the bond, can the company claim liquidated damages?

Regards,
Prathap.