Can a Company Cash a Security Cheque if I Back Out Before Joining? Seeking Advice on Ethics and Legalities

Please suggest a solution for my problem:

I received an offer from a small software firm. I signed the offer letter with them, and they requested two cheques as security. One cheque was for INR 100 to verify the active bank account, which they cashed the next day. The other cheque was for INR 1 lakh as a security deposit against a one-year bond. The offer letter I signed included a clause stating that I would serve the one-year bond. It was mentioned on an A4-sized paper with no stamp paper.

However, due to personal reasons, I was unable to join the firm. I informed HR about this 7-8 days before the joining date. Now, the company's HR and Director are insisting that I join, or they will deposit the security cheque of INR 1 lakh. I had clearly communicated my inability to join before the start date and have not worked a single day.

Please advise if their actions are ethical or if the company can take any legal action.

Unethical and Illegal Actions

It's absolutely unethical and illegal.

You mentioned, "informed the same to HR 7-8 days before the joining date"—was it verbally or through mail?

Was the second cheque undated? If yes, first issue a stop payment advice to your bank, even though you may not have a balance in the account. If the company deposits the cheque and it bounces, that will become a criminal offense, and you will be stuck in another more worrying situation. Hope you got the point.

Handling the Company

Send them an email referring to your earlier communication about your inability to join. If the earlier interaction was only verbal, then mention that you communicated this over the telephone on a specific date. Inform them that you have been advised by your legal advisor/lawyer that what they are proposing to do is illegal. You don't need to talk about 'ethics' with these guys, since they only understand the legal language. If they go ahead with their threats, you won't and can't be held responsible for any consequences, including, but not limited to, costs of the case.

Suggest talking to any lawyer you know to get this email drafted in legal language, so that you have clarity right from the first step.

All the best.

Regards,
TS

Request for Advice on Security Cheque and Bond Issue

Hello Cite HR members,

Please suggest a solution for my problem: I received an offer from a small software firm. I signed the offer letter with them, and they requested two cheques as security. One cheque was for INR 100 to verify if the bank account is active, which they cashed the next day. The other cheque was for INR 1 lakh as a security deposit against a one-year bond. The offer letter I signed included a clause stating that I would serve the one-year bond. It was mentioned on an A4-sized paper with no stamp paper.

However, due to some personal reasons, I was unable to join the firm. I informed HR about this 7-8 days before the joining date. Now, the company's HR and Director are insisting that I join, or they will deposit the security cheque of INR 1 lakh. I had clearly communicated my inability to join before the start date and have not worked a single day.

Please let me know if this is ethical or if the company can take any legal action.

Thank you.

Regards,
Raj

[QUOTE=lokrajesh;2060050]

[QUOTE=lokrajesh;2059961]
Hello Cite HR members, please suggest me for my problem: I got an offer from a small software firm. I have signed the offer letter with them, and they have asked me for two checks as security. One of rupees 100 to check whether the bank account is active, and they encashed the same the next day. The other check was for Rs. 1 lac as a security check against the bond for 1 year. The offer letter I signed had a clause stating that I will serve the bond of 1 year. It was just mentioned on an A4-sized paper with no other stamp paper in it.

Due to some personal reasons, I was unable to join the firm. I informed HR 7-8 days before the joining date. Now the company's HR and Director are asking me to join, or they will use the security deposit check of Rs. 1 lac. I informed them before joining that I would be unable to join and have not joined even for a single day.

Please let me know if this is ethical or if the company can take any legal action.

Thank you,
Regards,
Raj

Advice Needed on Offer and Security Cheque Issue

I have received an offer from a small software firm. I signed the offer letter with them, and they requested two cheques as security. One was for one hundred rupees to verify the active bank account, which they cashed the next day. The other cheque was for Rs. 1 lakh as a security deposit against a one-year bond. The offer letter I signed had a clause stating that I would serve the one-year bond. It was simply mentioned on an A4-sized paper with no stamp paper attached.

Due to personal reasons, I was unable to join the firm. I informed HR seven to eight days before the scheduled joining date. Now, the company's HR and Director are insisting that I join, or they will deposit the security cheque of Rs. 1 lakh into the bank. I had already notified them that I would not be able to join and have not worked a single day.

Please advise if this is ethical or if the company can take any legal action.

Thank you.

Regards,
Raj

Thank you very much for your valuable comments and views. They are very helpful to me. I have already sent them an email mentioning that I will be unable to join the firm. The date on the cheque was not mentioned, and I have now placed a stop payment on the cheque. As of now, after the final discussion with the director of the company, they have not sent me any mail or legal notice.

Handling Legal Notices

Do I need to accept the notice if they send it to me, or can I simply ignore it? Do I have to email them again stating that I had informed them prior to joining, as I had already sent the same message before? Please let me know.

Thank you for your time.

Regards,
Raj

I second TS; you need to make a STOP CHEQUE REQUEST immediately. Secondly, you need to inform your employer that you are not willing to join them due to your valid reasons by sending a letter via registered mail. Moreover, you need to enclose your appointment letter, all conversations (by email or phone) held with them till now, and define in a letter the clause about the deposited cheques, which were undated and one of them was encashed by them. This will help you a lot in the future if they take any action against you or in any legal complications.

Secondly, if there was no clause and written agreement regarding encashing the said cheque (regardless of whether your bank account is active or not), your case becomes strong because the employer has no right to do so.

Thirdly, if you feel comfortable, could you please share the required clause regarding the agreement of employment and deposited cheques?

Lastly, I want to say something to you and all the members: please be wise and aware in these kinds of cases and do not agree to employment conditions of depositing undated cheques as security. You have every right to object and deny conditions that do not meet your social and professional security. An appointment/employment letter is an agreement between two parties where both parties have to agree to follow all applicable conditions. Please read and understand before signing it.

Mr. Raj, you mentioned that you gave them two undated cheques as security that you will join and work with them and agreed to the terms by duly signing. But have you been offered the same favor by them (the employer)?

I seriously cannot accept this, and I hope you will understand and take wise actions in the future, as this concerns your professional, social, and personal security.