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Rahul Kumar Soni (MT)     29 December 2012

Execution of service bond on a non-judicial stamp paper

I am  an IIT 2012 batch graduate and right after completing my graduation I joined Coal India Limited (a PSU in Mining sector). As per the service agreement I signed a 5 year service bond with CIL on a 50 Rs. non-judicial stamp. This bond states that I have to pay INR 3,00,000 while failing to continue the service for 5 years. I just want to know that if i leave this companywithin 5 years (i.e. failing to comply with this bond) then what  would be the possible consequences. Whats measures will CIL have to forfeit this amount? can they prosecute a legal case or take help from court? Please dwell info on all relevant legal aspect. 

A copy of pdf file that hold the contents of bond is attached.

P.S.: It is requested for the reader/responders to have in mind that I am not having any background of study of law.



Learning

 11 Replies

Kumar Doab (FIN)     29 December 2012

The PDF file mentioned as attached by you is not found as attached.

Probably Coal India has advertised the position and has declared in job advertisement that a bond shall have to be signed.

https://www.coalindia.in/Career/%28S%28zz532e45rdoc3m30huwfpiao%29%29/AdvertisementMTs.aspx

6.0. OTHER DETAILS:
6.1 Compensation / Pay - Selected candidates will be placed as Management Trainee in E2 grade in the scale of pay of Rs. 20,600 - 46,500 at the initial Basic of Rs.20,600/- during the first year (Training period). On successful Completion of Training and passing the test conducted for the purpose, regularization will be in E3 grade in the scale of pay of Rs. 24,900 - 50,500 at the initial Basic of Rs.24,900/- with probation for 1 year. Besides basic pay, candidates will also be entitled to other pay and perks including Dearness Allowance, HRA, perquisites and allowances under cafeteria approach and other allowances as applicable for the post. Benefits such as leave, medical treatment, CMPF, pension, gratuity etc. will be admissible as per company rules in force during training and after absorption.

6.2 Posting: Candidates may be posted anywhere in Coal India Limited / Subsidiary companies especially in coalfield areas.

6.3 Service Agreement Bond: Finally selected candidate is required to serve the company for a minimum period of 60 months. An amount of Rs.5000/- per month will be deducted from the salary for a period of 60 months. Failure on the part of candidate to serve the Company for a minimum period of 60(sixty) months would result in forfeiture of the said deposit. The amount so deducted will be refunded in full with simple interest on completion of 60 months of service. The candidate will be required to execute a bond of Rs 3 Lakhs (Rupees three lakhs) for the same.

 

Looking into the content of job advertisement it becomes clear the candidates applied for job as per advertisement read by them, appeared for interview, got appraised of conditions attached with job offer and signed the Service Agreement Bond by their free will.

The bond is not attached.

If company has deducted Rs.5000/pm it shall forfeit the same as advertised and the company can proceed as per the terms and clauses expressed in bond.

If the matter is initiated by company to recover the amounts expressed in bond-notice pay etc or contested by you and it leads to litigation the decision is to be taken by court of law. Company can decline to issue acceptance of resignation, reliving letter, FNF settlement………

Company may have to justify the grounds of creation of bond e.g. training, cost of training and may need to justify the cost.

You may find the attachments useful.

You may not act in haste and before you submit resignation approach a competent and experienced labor consultant/service lawyer with copies of job advertisement, job application submitted by you, offer letter, appointment letter, standing orders of the company, service rule book, HR-exit-severance policy etc, bond and give inputs in person. Your lawyer may opine that bond is in violation of standing orders of the company. Standing orders should be displayed on notice period. Employer should provide certified copy of the standing orders to employee against nominal charge of say Rs.10/. If you are applying for it apply in writing under proper acknowledgment. Transact with company in writing under proper acknowledgment with a copy to you.

Has the company absorbed you as an apprentice or trainee under standing orders of the company and has it written about the scheme and its provisions in appointment letter issued to you.

You may proceed under the expert advice of your lawyer.

Valuable advice of learned experts/members is sought.

 


Attached File : 813853156 417759075 validity of employment bonds.pdf, 813853156 background paper.pdf downloaded: 680 times

Rahul Kumar Soni (MT)     29 December 2012

 

Dear Doab 

 

Thanks for the valuable info and esp. about the attached files. But what i want to know that what right  CIL will have to execute the bond and what manner it can follow? Whether they can take help of court to take help? Can a case be prosecuted?

And if I join any other govt. firm afterwards then what are the possibilities of damages?

 

Contents of bond are attached with this reply.


Attached File : 813915027 cil bond.pdf downloaded: 352 times

Rahul Kumar Soni (MT)     30 December 2012

Also, I have been appointed under Apprentice Act, 1961 for 1 year. It has been only 5 months since joining.

Kumar Doab (FIN)     30 December 2012

You may not act in haste. You should understand the applicable rules, laws and documents signed by you, your rights and rights of the company as well.

Consult elders in the family, competent and experienced well wishers, trained legal mind amongst acquaintances, lawyer/law fir, before you firm up your decision.

You can seek guidance from good, senior, known union leaders also who are well versed with the nuances of the practices and systems in your company.

 

---“Provided further that this bond shall in all respects be governed by the laws of India.”

The company may file civil suite for recovery, claiming the compliance to the terms of bond are contractual obligation. Company may decline {on record in writing, or verbally} to accept resignation, to issue experience certificate, reliving letter etc….A vindictive and zealous employer may write to next employer. Company may claim that you are absconding/

 

you are not relieved. Next employer may ask to furnish proper reliving document from past employer.

The employee is such a situation should obtain all communications by past employer and keep copies in his personal file at home for use at appropriate time in appropriate forum.

--“Or the amounts received by Management Trainee as pay, allowances, traveling expense and cost of equipment  etc, during the period of training and service in the company together with interests ‘

You may offer to pay 5 months pay received by you. Probably first six months shall be counted as period of probation and apprentice can make an application

Why and how the cost of equipment is mentioned is to be understood??

Have you signed the receipt and issuance of any equipment to you?

If yes;

-Has the company described details of the equipment/instrument and its vintage, cost etc in the document issued to you?

-You may submit all company property under proper acknowledgment from company personnel properly authorized by company to receive company property from you.

It shall be pertinent to place on record by you if you were actually provided any training or you were put to work as performed by regular employees?

Company may lay a claim trainees/apprentices were working under supervision and guidance.

The Apprenticeship act is attached.

For your association, separation you may go thru Act and guiding rules laid out by Central Apprenticeship Council, Board of Apprenticeship Training……

 

 

--The guidelines on Apprenticeship Experience certificate are attached.

--FAQ are attached:

“A'Certificate of Proficiency' is issued to the apprentice on his/ her successful completionj of apprenticeship training. Period of apprenticeship training is treated as work experience.”

 “13.

Cananapprentice leave apprenticeship training in between?

~ Yes.he can leave Apprenticeship Training before completion, if he gets employment;' gets admissionorigherstudies.or he is medically unfit. " .

He can request the employer to terminate the Contract,stating the justified reason(s) andsubstaQ~itiating withdocuments. The employer willrecommend to BOAT (WR) for termination of contract whh/ withoutrecovery training expenses. Maximumrecovery from apprentice is limited to 03monthsstipend atminimumprescribedrate. Norecovery is effected onapprentice securing employment, orif he/ she is suffering from ill health in the case of whichan original MedicalCertificate from CivilSurgeon shouldbesubmitted”

{ To circumvent this provision company has added clauses on medical sickness in bond which may be termed unfair, impractical, unfair…… }

Apprenticeship Rules, 1992 { Attached}

 

 

 

Compensation for termination of apprenticeship:

8. Where the contract of apprenticeship is terminated through failure on the part of any employer in carrying out the terms and conditions thereof, such employer shall be liable to pay the apprentice compensation of an amount equivalent to his three months last drawn stipend.

{Company has not mentioned any compensation to be paid by it if it terminates the bond}.

 

 

 

12

Hours of work:

12

Hours of work:

12. Hours of work;

{ Is your company also following the rules as per the act}

 

10

Maintenance of record of work by apprentices:

Every Graduate or Technician or Technician (Vocational) Apprentice shall maintain a daily record of the work done by him relating to the apprenticeship training in the form of a workshop or laboratory note book.

14. Records and Returns;

 [9} Apprentice can approach :

The Central Apprenticeship Adviser:

 

The Central Apprenticeship Adviser:

(ii)

The Director, Regional Board of Apprenticeship Training concerned

Obligations of Trade Apprentice (both in case of Major and Minor Trade Apprentices)

                             (Under Section 12 of Apprentices Act. 1961).

5.

In the event of premature termination of contract of apprenticeship for failure on the part of the apprentice to carry out the terms and conditions of contract, the surety or the guardian may be bound to pay the employer such amount as may be determined by the Central/State Apprenticeship Adviser as and towards the cost of training in accordance with rates as specified under rule 8 of the Apprenticeship rules,1991.

 

9. The first six months of the period of apprenticeship training shall be treated as period on probation. Either party may make as application to the Central/State Apprenticeship Adviser for the earlier termination of contract and when such an application is made the party making the application shall send by post a copy thereof to the other party to the contract. The Central/State Apprenticeship Adviser after considering the contents of the application and objectives, if any, filed by the other party, may terminate the contract, if he is satisfied that the parties to the contract, if any, of them have or has failed to carry out the terms and conditions of the contract and that it is desirable in the interests of the parties or any of them to terminate the same. Provided that the amount as stated in paras 1(6) and 11(5) of this schedule shall become payable by one party to the other accordingly as the failure is on the part of the employer or the apprentice:

 

Various files of Coal India Ltd are also enclosed.

Valuable advice of learned experts/members is sought.


Attached File : 1027652292 apprentice exp certificate.pdf, 1027652292 faq apprenticeship fre ask ques 2011.pdf, 1027652292 apprenticeship rules1991.doc downloaded: 215 times

Kumar Doab (FIN)     30 December 2012

"Various files of Coal India Ltd are also enclosed."

These  files  due to some technical glitch are not getting attached. If you feel it appropriate you may send email id by PM.

Kumar Doab (FIN)     30 December 2012

Attached Coal India1,2.


Attached File : 1027747871 coal india 1.zip, 1027747871 coal india 2.zip downloaded: 290 times

Kumar Doab (FIN)     30 December 2012

Attached Coal India3,4.


Attached File : 1027747871 coal india 3.zip, 1027747871 coal india 4.zip downloaded: 272 times

Kumar Doab (FIN)     30 December 2012

Attached Coal India5,6.


Attached File : 1027747871 coal india 5.zip downloaded: 154 times

Kumar Doab (FIN)     30 December 2012

Attached Coal India 7.


Attached File : 1027747871 coal india 7.zip, 1027747871 coal india 7.zip, 1027747871 coal india 7.zip downloaded: 281 times

Kumar Doab (FIN)     30 December 2012

File --common 'Coal Cadre'--{Coal India 6} could not be attached.

You may obtain it from web site of the company or it can be sent to you by emnail if reqd.

Andy (Student)     06 December 2014

Hi,

My case is quite similar to Rahul's. I joined Coal India as MT and reported at the site area (where I was posted) only for 2 days and I left without giving any information to area office, I executed the 5 year bond before this during the 7-days induction program. Since I reported only for 2 days, I haven't taken any salary niether I claimed for any travelling reimbursement. The reason I left was that I got phd offer from abroad.

My question too remains the same as to:

1.shall I be asked to pay the bond money?

2. can Coal India affect my doctorate studies by any means? 


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