Execution of bond by an employee
Ajita Menon
(Querist) 23 December 2011
This query is : Resolved
Plz. cite judgments if any supporting the validity of execution of bond by an employee. And also judgments against it.
Legally whether a bond executed by an employee is valid? Can it be challenged in a court of law to come out of the clutches of bond?
Deepak Nair
(Expert) 23 December 2011
A bond executed by an employee in favour of the employer is valid, only if the employer spends a substantial amount of money towards any training etc provided to the employee for enhancement of quality, qualification, efficiency etc of the employee. The said bond period may vary on the basis of the amount spent. If the amount so spent is nominal and the expenses incurred are routine expenses for appointment, welcome kit etc., then the employer is not entitled to execute bond with employee.
Judgment in support of bonds:
1.Nazir Maricar Vs. M/s Marshalls Sons & Co. Citation:- [(2005) 1 MLJ 659 Mad] [2005 LLR 1007 (Mad. HC)]
2. Niranjan Shankar Golikari Vs. Century Shipping & Manufacturing Co. Ltd.
Citation:- (1967 AIR 1098)
There are a number of judgments against the bond systems available on internet.
I request you to take some time to search online.
prabhakar singh
(Expert) 24 December 2011
1.first read section 27 contract Act.
2.Madhub Chunder v.
Rajcoomar Doss, (1874) 14 Beng LR 76 at pp. 85-86
3.Niranjan Shankar Golikari v. Century Spg. and Mfg. Co.
Ltd., AIR 1967 SC 1098
4.Superintendence Co. of India Pvt. Ltd. v. Krishan
Murgai, AIR 1980 SC 1717
5.(Taprogge
Gesellschaft MBH v. IAEC India Ltd., AIR 1988 Bom 157
6.(M/s. Sociedade de Fomento Indl. Ltd. v. Ravindranath Subraya Kamath,
AIR 1995 Bom 158
7.Gujarat Bottling Company Ltd. vCoca Cola Company, AIR 1995 SC 2372
8.Parasulla Mallick v.
Chandra Kanta Dass, AIR 1918 Cal 546
9.Percept D'Markr (India) Pvt. Ltd vs Zaheer Khan & Anr on 22 March, 2006
10.Pepsi Foods Ltd. And Others vs Bharat Coca-Cola Holdings Pvt. ... on 30 July, 1999
11.American Express Bank Ltd. vs Ms. Priya Puri on 24 May, 2006
Equivalent citations: (2006) IIILLJ 540 Del
12.Wipro Limited vs Beckman Coulter International ... on 11 July, 2006
Equivalent citations: 2006 (3) ARBLR 118 Delhi, 2006 (2) CTLJ 57 Del
13.Godrej Industries Ltd vs 7 Conrad Anthony Rebello on 6 October, 2009
Bench: Anoop V.Mohta
14.Hemal vs State on 27 December, 2010
Author: Harsha Devani,&Nbsp;
15.Suresh Dhanuka vs Sunita Mohapatra on 2 December, 2011
Author: A Kabir
prabhakar singh
(Expert) 24 December 2011
After going through all you shall find the law as Sir Richard Couch,C.J. observed in Madhub chunder vs.Raj coomar Doss,to say in his own words"the words 'restraint from exercising a lawful profession,trade or business' do not mean an absolute restriction and are intended to apply to a partial restriction,a restriction limited to some particular place,otherwise the first exception would have been unnecessary.'Moreover,in the following section(section 28) the legislative authiority when it intends to speak of an absolute restraint and not a partial one, has introduced the word 'absolutely'....the use of this word in section 28 supports the view that in section 27 it was intended to prevent not merely a total restraint from carrying on trade or business but a partial one.We have nothing to do with policy of such a law.All we have to do is to take the words of the Contract Act, and put upon them the meaning which they appear plainly to bear."
Advocate. Arunagiri
(Expert) 24 December 2011
Bond executed by employee is legally valid, even PSUs and Govt are now insisting for employee bond.
Shailesh Kr. Shah
(Expert) 24 December 2011
Bond executed by employee is legally valid unless terms of bond against law.
M V Gupta
(Expert) 24 December 2011
An employer takes bond from his newly recruited employee or even an existing employee if he is being sent for training to improve his skills in the job or to enable him to shoulder higher responsibilities, for which the employer meets all the expenses towards training fee, boarding and lodging expensses, conveyance etc. Such bonds generally require the employee to serve the organisation for a specifeid period failing which the employee is required to to pay a specified amount. Such bonds are perfectly legal and valid and enforceable.
Devajyoti Barman
(Expert) 29 December 2011
Yes it is very much valid if executed within the parameters of law.
