Hello All,

I have accepted the offer from the company and submitted the security deposit check. All the documents I sign and send in email only.

Then for some reasons I am not able to join the company. Which I informed them days prior to my tentative date of joining. Then also the company send me the legal notice for section 138. Now they want me to pay the check amount + 12% of interest rate + 10,000 for the legal proceedings they take on me.

Is these things are legal? Can a company send the legal notice without joining the company and even notifying them in advance.

What should I suppose to do now?

From India, Ahmedabad
Dinesh Divekar

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.


Dinesh Divekar

From India, Bangalore

True, it is a wrong practice not to join an organisation after accepting the offer. BUT at the same time, joining or not joining, remaining or leaving are exclusively an employees right. For that 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.
From India, Kannur


You had 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?).

What so ever it may be the terms and conditions of the Agreement or bond or Appointment order what ever it might be it will bind you only after joining there only. You are not supposed to submit security cheques before joining..

You can defend through a Labour Advocate that there is no question of loss to the employer as you haven't joined them and absconded.

But the above is general opinion we can comment more only after knowing the terms and conditions of the Agreement signed.

One thing you need to exercise more caution is that if the cheque is deposited by the employer and bounced back employer can take legal action ( cheque bounce is a criminal offence covered under Section 138 of the Negotiable Instruments Act of 1881). So handle it with a professional Advocate.

From India, Madras

The main issue is that the employer is not expected to deposit the cheque given as a security. There should be some monetary dues so that a cheque 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 transaction.
From India, Kannur

Now that Notice under Section 138 of the NI Act have 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.
From India, Kochi
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