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Employment Bond

(Querist) 14 October 2008 This query is : Resolved 
Dear All,

I have joined Indian Oil Corporation Ltd. (IOCL) as an officer in Grade A (as a CA). I need to execute a bond of Rs. 1 lac if I leave the service of IOCL before the expiry of 3 years. I have left IOCL after working for 65 days.

The Co. has sent me a legal notice asking me to pay bond money otherwise, the will go for criminal/civil proceedings against me.

Please help me out whether employment bond are valid. (with supportive case laws, if any) Further, what should I do to avoid harrassment and unnecessary tention.

I would be very thankful if anyone from this community can help me out.

Regards,

Sachin D jain.
Guest (Expert) 14 October 2008
It is very difficult to overide this bond as you have signed it voluntarily agreeing to all the conditions. If you have specific reason for leaving IOC you can tell them to the IOC and if they consider it appropriate, they will give a good bye to the Bond.
SACHIN DHARMENDRAKUMAR JAIN (Querist) 14 October 2008
Is the employment bond valid as per constitution?

I have worked for only 65 days. In the period of service, the company has not incurred any expenses or provided any training to me. Further, I have been appointed through campus interview of ICAI, where in the pre-placement talk, the co has promised pay package of Rs. 6.4 Lacs. but after joining I came to know as per salary slip, the gross salary is only around Rs. 3.5 Lacs. Further, the company, till date, has not provided me any break up of how the pay package of Rs. 6.4 Lacs has been arrived at.

Can these be the grounds for success of mine against the company.
Manish Singh (Expert) 14 October 2008
dont worry, they can not force you to pay the bond indemnity. But whether you are bound by the bond or not depends upon several other things like facts and circumstances of the case.

I will try to provide that judgent to you soon.
Shyam Ji Srivastava (Expert) 14 October 2008
Dear Sachin,
As per your own statement you have signed the contract which is admissible on both side if any one denied it after signed there will be a BREACH OF CONTRACT and on this point employer can file suit. Hence in my view it is better to compromise it, otherwise you can not work sincerily in other department.
wish you best of luck.
Shyam Ji Srivastava
Advocate
098390 28040
H. S. Thukral (Expert) 15 October 2008
In my opinion, going by the facts and circumstances of the case, the company can not recover from you the Total amount on the bond. Such cases are covered by section 74 of the Contract Act. When challenged in law, the adjudicator has to see what has been provided is by way of liquidated damages or a penalty and what is payable is reasonable compensation. The Court, therefore is conferred the jurisdiction in adjudicating any such claim whether the amount claimed really represents the reasonable compensation or not and whether the party claiming such amount has suffered any damage or not to sustain such a claim. The Court is to decide this on consideration of all the facts and circumstances proved including the agreements itself.
In your case as you have mentioned, the employer has not suffered any thing on training. They have incurred some expenses on recruitment process. They have also broken their part of contract and if there is anything in writing thereof you can rather claim compensation. Fight your case. Donot pay up. Give a counter notice to them claiming short payments and breach of contract.
ARVIND JAIN (Expert) 18 October 2008
IT ALL DEPENDS ON CONTRACT BETWEEN THE PARIES.IF IT IS ONE SIDED AND ARBITRARY IT CAN BE CHALLENGED IN COURT AND NO RECOVERY CAN BE MADE FROM YOU.
SACHIN DHARMENDRAKUMAR JAIN (Querist) 18 October 2008
Is anyone there who can help me:

1) by quoting section 74 of the contract and and its interpretation,

and

2) by providing me with the case laws on employment related bond.

My e-mail ID is: sachindjain@gmail.com
SACHIN DHARMENDRAKUMAR JAIN (Querist) 18 October 2008
Dear Shyam ji Shrivastava,

First of all, thank you very much for ur reply.

Secondly, for your kind information, I have already left IOCL. So, there is no question of working in other department.
ANAND SUMAN (Expert) 27 October 2008
Dear Mr. Sachin,

This has become a general practise in modern globalized world. By this, company had started to harass its employees.

Legally speaking, company can file a suit in civil court or if there is any arbitration clause in that bond, before the arbitrator. I am also contesting a similar case against HCL company and therefore being an advocate, what i can suggest you is:

1. If any legal notice comes, receive that notice and make a reply to the same advocate through an advocate. The simple reason is that if you will not receive the notice, the company appoints an arbitrator or file a suit in civil court as the case may be and an ex-parte decree would be passed against you.

2. Contest the case on the ground that the bond (agreement) is void as per the express law of indian contract act, 1872 because the company had sent you abroad on the pretext of training while there was no training and the company used you to make money. The company had commited fraud and cheated you and thus the agreement is void.

Rest I will suggest after viewing the case history and other documents.

If you need my assistance in replying the legal notice or contesting the case, feel free to contact at any time.

Best Regards,

ANAND SUMAN
Advocate
(Founder Director)
ANAND LEGAL SOLUTION
E- 42 B, Third Floor,
Jawahar Park, Khanpur
New Delhi- 110 062
Mob. 9958330546 (Delhi)
E-mail: anandlegalsolution@hotmail.com
advocateanandsuman@hotmail.com


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