Can a Company Legally Demand Payment After I Declined Their Job Offer? What Should I Do?

Hello All, I have accepted the offer from the company and submitted the security deposit check. All the documents I signed and sent via email only. Then, for some reasons, I was not able to join the company, which I informed them about days prior to my tentative date of joining. Despite this, the company sent me a legal notice for Section 138. Now they want me to pay the check amount plus a 12% interest rate and an additional 10,000 for the legal proceedings they have initiated against me.

Are these actions legal?
Can a company send a legal notice without me joining the company or even notifying them in advance?

What should I do now?

Dear Shiva, While accepting the offer letter, you handed the future employer a cheque. What terms were mentioned for joining or not joining the company? Was there any agreement over and above the offer letter? Please confirm to us the terms of the agreement. Unless you confirm that, we will not be able to give advice of any kind.

Thanks,

Dinesh Divekar

True, it is a wrong practice not to join an organization after accepting the offer. However, at the same time, joining or not joining, remaining or leaving are exclusively an employee's right. If the company has initiated legal action, you should defend it. The company cannot deposit the cheque (why a security cheque is given, I don't understand) and recover money because there is NO CONSIDERATION for this transaction. A cheque drawn without consideration itself is just a piece of paper. Therefore, you should take action against the company.

Hi, You have just accepted the offer, signed all documents (there is no mention of documents signed), and submitted the security deposit cheque as well (whether undated cheque or post-dated, no information?). Whatever the terms and conditions of the Agreement or bond or Appointment order, it will bind you only after joining. You are not supposed to submit security cheques before joining. You can defend through a Labor Advocate that there is no question of loss to the employer as you haven't joined them and absconded. But the above is a general opinion; we can comment more only after knowing the terms and conditions of the Agreement signed. One thing you need to exercise caution about is that if the cheque is deposited by the employer and bounces back, the employer can take legal action (cheque bounce is a criminal offense covered under Section 138 of the Negotiable Instruments Act of 1881). So handle it with a professional Advocate.

The main issue is that the employer is not expected to deposit the check given as security. There should be some monetary dues so that a check can be presented for payment. In this case, the monetary element is not present, and the case will not be maintainable because there is no consideration for the transaction.

Now that the notice under Section 138 of the NI Act has been served, you may furnish the reply that the cheque (was it a signed but blank and undated cheque?) was given as security and not against any subsisting and legally enforceable debt.