Hello Ranjan,
Further to what other members have mentioned/suggested, I find your last line a bit amusing--'Is there any legal step possible to be taken? Signing on a bond paper is legal or illegal!'.
Let's assume for the sake of argument that Bond is legal in India [which it isn't, UNLESS it's related/linked to some specialized Training].
Now what? You get the employees sign Bonds and ensure they stay [pl note that there will always be those who will find ways to beat this Rule too, which CAN include dragging the Company to Court] for 12 months or any other period.
But as HR [which I presume you are], is your job done IF they stay for a period of time OR is it done IF they are productive during their stay in the Company? The choice is YOUR'S.
And how does Productivity come about....surely not by getting Bonds signed. Suggest focus, like Nathrao & others have mentioned, on making this an interesting place to work @. Pl note that there are ways to balance low salaries too, IF this has been a stumbling issue [as it is in most small Companies].
Right now, you aren't even sure of the reason(s) for this situation [all you mentioned is that this situation exists....which frankly is surely an important step--that of recognizing that there's an issue] and you seem to be looking for solution(s).
Put your efforts in FIRST identifying the root cause(s) & THEN think of the most apt solutions. Actionable solutions are bound to come once you get to know the causes.
And the BEST people who can give you accurate & realistic insights into the causes would be those who have left OR are leaving--BUT....and this is a BIG but......you have to be seen to be transparent & fair when you are enquiring from them. The moment they 'feel' you are 'using' them, you know what they tell you.
In a nutshell, so far you have been viewing such employees as a 'part of the problem'. Now begin to view them as 'part of the solution'.
All the Best.
Rgds,
TS