Maybe the company you have resigned from is facing a situation where your inputs are valuable, and perhaps you have not realized it. Maybe the lure of a good salary is tempting you to move on. In this case, where your boss's boss is unwilling to let you go, I presume it is some kind of a setup with multiple layers of supervision, as in an IT or ITES. Talk to the main guy and ask for a promotion or a better salary compatible with what you are being offered. Make it deadline-based. Also, refer to the previous input on the Tribunal front. In India, there is no such thing as "bonded labour" like in many other countries, even though many people do resort to it. So, speak professionally and legally, but do not bring in legalities initially. Tell him that you are resigning because you do not intend to work anymore with this organization. It is simple and straightforward, and no one can compel someone to work against his/her will. Get your resignation letter acknowledged and also meet the Head of HR in the company. They are more knowledgeable about legalities and would prefer to avoid them at any cost. If you play your cards right, the big boss will buckle under pressure as he is wrong, and there is no bond/bonded labour here.
While doing all this, keep the new company informed on every aspect. That will be helpful later on in case the old company publishes your photo in the newspaper. Some companies are doing this nowadays, although it is highly objectionable, questionable, and illegal unless approved by an appropriate legal authority.
Happy successful New Year.
Regards,
Saurav Das