I was associated with a company for a short period of 4 months. The company made me sign the Indemnity Bond with the minimum association period as 2yrs. I resigned within 4 months from the date of joining without serving the notice period. Now after two years the company has filed a law suit under Order XXXVII of the Code of Civil Procedure,1908 against me claiming somehere around 2 lacs for not completing the agreed 24 months period.
I have done some study from my side and would like to highlight the same below along with the facts of the case:
Fact:
As per Letter of Appointment :"Termination of services as specified in points mentioned above, you are liable to repay the gross salary for 3 months to the company" whereas as per Para 5 - Indemnity Bond states "he/she shall pay an amount equivalent to four (4) months of salaries & wages as paid to the employee"
There was discrepency in the Letter of Appointment & Indemnity Bond. It was also mentioned in the Indemnity Bond that the terms & conditions of the Letter of Appointment will be applicable.
According to the Indian Contract Act, 1872:
Enforceability of Contract: Employment agreement is valid and legally enforceable if the parties agree with their free consent i.e. without force, coercion, undue influence, fraud, misrepresentation and mistake.
Voidable Contract: Section 2(i) defines that an agreement which is enforceable by law at the option of one or more parties but not at the option of the other or others is a voidable contract.
This means where one of the parties to the agreement is in a position or is legally entitled or authorized to avoid performing his part, then the agreement is treated and becomes voidable. Such a right might arise from the fact that the contract may have been brought about by one of the parties by coercion, undue influence, fraud, misrepresentation or mistake and hence the other party has a right to treat it as a voidable contract.This renders agreement void and neither party can enforce the contract against each other.
It seems to me that I have a case of misrepresentation & mistake which renders the contract void, therefore it cannot be enforced.
Request valueable legal advice of the lawyers for the above mentioned point of non-enforcibility of the contract.
