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anonymous11 (stud)     04 October 2011

Bondbreakage in it company

i have joined an MNC in june 2011,i signed a bond for 1 year.If i leave the company before 1 year I have to pay 100000(1 lakh).rupees as penalty.I am willing to go for civil services(IAS) (UPSC).I don't want any experience letter from this company .So if I leave the company now without paying the bond amount 1 lakh what are the consequences..pls    reply



Learning

 9 Replies

manish dubey (manager legal)     04 October 2011

dear without going through terms of your bond, no one can comment.

N.J. MISHRA (Legal Manager)     04 October 2011

Dear Mr.  Venu,

Bonds are applicable only if the company has spend money on the personal grooving and enhancement of the employees.  The Supreme Court of India held that no employee can be forcefully employed against his will, just because he has signed contract with the employer.

anonymous11 (stud)     04 October 2011

Hi sir thanx for your reply,

i am venu,i have joined as a fresher ,i am a 2011 may passout b.tech cse.they have given my 1 and half month training ,the company  spent only for that training.I want to know what r the consequences if i don't pay the bond amount.

Kumar Doab (FIN)     04 October 2011

The learned members/experts have given valuable suggestion. Kindly follow the advice and post the copy of bond. You can remove the names etc.

You have posted, clause in bond states “If i leave the company before 1 year I have to pay 100000(1 lakh).rupees as penalty” only. In case you resign without submitting notice of resignation and serving notice period, you are liable to pay penalty max for the shortfall in notice period.

However it shall be appropriate for you:

-To tender adequate notice period to current employer, as a professional gesture and help them to find your replacement, train your replacement, hand over the charge to reporting authority/designated employee, submit company property, and complete the tasks on hand. You should obtain acknowledgment of each and every item and record the minutes of each and every activity performed by you.

-Separate with a happy note. Build and maintain the rapport. World is small and one may come across each other.

- Consult the elders in the family, competent and experienced well wishers, lawyer/law firm before blindly signing on the dotted line.

One year is a reasonable good time an employer can expect an employee to stay.

Just because company had obtained internet connection and provided a computer to the employee and explained the systems and processes to handle the work of the company, and some sessions are conducted, does not imply that training is imparted which shall add to the qualification of the employee and hence employee is liable to pay back.

Moreover in case company has an education policy and employee is reimbursed the education expenses do not imply employee has to refund necessarily. Employee can mention he is applying for the approval and fee is not refundable by him to the company.

These sops e.g. cafeteria, canteen, gym, education allowance, are offered by the companies for its business interest to retain the workforce.

In case of unscrupulous employers, arm chair managers, employee can also attach a clause to each and every presentation submitted by him that it is conceived, developed by ………..(Name and address) and this can not be used, modified, altered, presented without the written approval from him.

Be Smart.

Democratic Indian (n/a)     04 October 2011

Originally posted by :ANONYMOUS.
" The Supreme Court of India held that no employee can be forcefully employed against his will, just because he has signed contract with the employer. "

If anyone could post the details of this judgment. I would like to read it in full.

Kumar Doab (FIN)     04 October 2011

The supreme court judgment cited in this topic shall be indeed useful.Kindly provide it.

N.J. MISHRA (Legal Manager)     05 October 2011

ARTICLE 19(1)(G) OF THE CONSTITUTION OF INDIA CONFERS FUNDAMENTAL RIGHTS ON THE CITIZENS OF INDIA THE RIGHT TO PRACTICE ANY PROFESSION OR CARRY ON ANY OCCUPATION, TRADE OR BUSINESS SUBJECT TO REASONABLE RESTRICTIONS IN PUBLIC INTEREST. YET THE EMPLOYERS VIOLATES THIS FUNDAMENTAL RIGHTS OF THE CITIZENS AND THROUGH ARM - TWISTING TACTICS AND FINE TUNING THE CONTRACT OF EMPLOYMENTCREATES IMPEDIMENTS IN THE ENJOYMENT OF THIS FUNDAMENTAL RIGHT BY THE CITIZEN.

THE MOST IMPORTANT PROVISION WHICH SAFEGUARDS THE RIGHTS OF THE EMPLOYEES IS CONTAINED IN SECTION 27 OF THE INDIAN CONTRACT ACT, 1872 WHICH FOLLOWS: -

SEC. 27. AGREEMENT IN RESTRAINT OF TRADE VOID. - EVERY AGREEMENT BY WHICH ANY ONE IS RESTRAINED FROM EXERCISING A LAWFUL PROFESSION, TRADE OR BUSINESS OF ANY KIND, IS TO THAT EXTENT VOID.

CITATIONS ARE AS FOLLOWS-

1. SUPERINTENDENCE COMPANY OF INDIA PVT. LTD. Vs. SHRI KISHAN MURGAI (1981-2SCC 246)

2. PEPSI FOODS LIMITED AND OTHERS Vs. BHARAT COCA HOLDINGS PVT. LTD. AND OTHERS (1981-1985 DLT-122)

3. ELECTROSTEEL CASTINGS LIMITED Vs. SAW Pipes LIMITED AND OTHERS (2005) 1 CHN 612

APART FROM ABOVE MENTIONED LEGAL PROVISIONS, THE PROVISION OF SECTION 368 OF THE INDIAN PENAL CODE CAN BE INVOKED BY THE VICTIMIZED EMPLOYEE ON THE GROUND OF FORCEFUL AND WRONG CONFINEMENT AGAINST THE FREE WILL OF THE EMPLOYEE.

1 Like

Sanjay Khandelwal (Manager Legal)     05 October 2011

Also see Coco Cola case under Section 27 of Indian Contract Act

1 Like

Kumar Doab (FIN)     05 October 2011

Dear ANONYMOUS, Mr.Sanjay Khandelwal,

Please accept sincere thanks for sharing the valuable information in the forum.

Regards

Kumar


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