You have two options, (1) amount is small, and (2) amount is big.
If amount of F&F is small, do not sign any agreement or give any blank cheque, and be prepared for loosing this money. At the same time keep your efforts of recovering monies on by reminding them, weekly, by all means of communicaton, phones, emails, letters, and mark cc to labour inspector, factory inspector, company’s Directors etc. (Actually do not send these CCs, it should appear only on originals, cc to :…..). Do this exercise continuously, for two months, three months, and so on. At one point, your HR will get fed up, and looking at smaller amount, to avoid nuisance, they will make payment.
If amount is big, and company is insisting for agreement as well cheque, try to remember your past working days with them. You must have seen, during your tenure with them, whether they are really serious and particular for compeling this kind of documentation, and unless the same is done, they do not make F&F of employees (though this is illegal). If at all, answer is YES, you do not have any option, but to fight legally, and get your monies.
My suggestion, think proper order in which you should move ahead. Do not think to give first legal fight and then recover money. This situation will make you to pay heavy amounts from your own pocket towards legal expenses, and also tremendous tension whether you will be winning or not.
Think the otherway… Get the money first and then go for legal battle.. Sign the Agreement, Give them cheque. Get your monies cashed to your account (which we presume is a big amount… say 1 lac etc), and then you yourself send them lawyer’s notice that Agreement signed by you was not willful and also without knowing contents of the same and ofcourse which is illegal by our Constitutional rights. Make immediate stop payment of your cheque. And then relax, not totally, but to a great extent.
Here the moneys are already in your pocket, and out of the same kitty, some portion, say 10%, you keep aside for court matters, that too if company really decides to harass you. And remaining money you can enjoy as per your wish. (In the first Option above, or otherwise we had decided to forgo the F&F, if the amount is small. Now the same small amount, you are spending on your Lawyer).
Another situation, since we presumed F&F amount is big, say about a Lac, keep this money directly in Bank’s fixed deposit, and on the interest earned from the said FD (It will be about 10000/annum), you will be able to pay your lawyers fees. In a worst scenario, if you loose the case, you may have to pay some penalties to your company, and your Bank FD will take care of it.