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Irfan Mulla (Legal consultant )     10 March 2026

Company force to singn offer letter with condition

Hi everyone, I am looking for some guidance on my current employment situation. I joined my company with a joining bonus of INR 1,324,602, but the contract says if I leave within 3 years, I have to pay back the full amount plus the taxes the company paid (grossed-up).

 

Additionally, in December 2025, I was given a performance and exceptional bonus totaling INR 927,221. Now there is a condition that if I leave before September 30, 2026, I have to refund 50% of this amount (around INR 4.63 Lakhs) as well.

 

I want to resign now and serve my full 3-month notice period as per the contract. However, I have seen that for other colleagues who left recently, the company did not pay them any salary for their 3-month notice period. The company told them that since the bonus recovery amount they owe is more than their 3 months' salary, the company will just keep the salary to adjust the debt.

 

I am very worried about the following:

 

Salary Withholding: Can the company legally stop my monthly salary during my notice period to recover these bonus amounts? I need my salary to pay my monthly bills.

Bonus Recovery: Is it legal for them to ask for the full joining bonus back, including the tax portion, even if I have worked there for a significant time?

Relieving Letter: If I cannot pay the huge balance amount immediately after they deduct my salary, can they refuse to give me my relieving letter and experience certificate? I need these documents to join my next job.

Non-Compete: My contract also mentions a 12-month non-compete clause. Can they actually stop me from working in the same industry after I leave?

I just want to leave the company properly by serving my notice, but I cannot afford to work for 3 months for free or pay back such huge amounts. Please advise what my rights are under labor law.



Quick Summary
This discussion addresses concerns about resigning from a company that demands repayment of joining and performance bonuses, including taxes, if leaving before a specified period. The original poster is worried about salary being withheld during their notice period and the legality of bonus recovery. Advice suggests that while employers can adjust recoverable amounts in the final settlement, they generally cannot stop salary for work done. Non-compete clauses are typically unenforceable under Indian law, and employers should issue employment documents, though they may delay final settlement until dues are cleared.

 3 Replies

Dr. J C Vashista (Advocate )     11 March 2026

Show your appointment letter to a local prudent lawyer for proper appreciationn of facts and professional advise.

Dr. MPS RAMANI Ph.D.[Tech.] (Scientist/Engineer)     11 March 2026

If the company has given cash bonus in the beginning or at any time later for the purpose of your accepting or continuing in the employment and you had accepted it, you are bound by the terms of the contract. 

T. Kalaiselvan, Advocate (Advocate)     11 March 2026

Under Indian law, salary is governed mainly by the Payment of Wages Act, 1936 and general contract law principles under the Indian Contract Act, 1872

An employer cannot simply stop paying salary for work done.

Companies generally adjust bonuses or recoverable dues against final settlement (F&F), deduct recoverable amounts only in the final settlement, not by stopping salary entirely.

If the contract  states that a minimum service period (e.g., 3 years), and repayment if leaving early, then recovery of the joining bonus is usually enforceable. 

But the company cannot impose arbitrary penalties beyond the contract.

Conditional bonus is enforceable, i.e., you do not have to return if you serve the full period but if you leave early then you may have to return proportionately.

Please note that the Companies generally must issue employment records, and refusing documents to force payment may be considered unfair labour practice in disputes.

The company may delay full-and-final settlement, delay relieving letter until dues are cleared, but they cannot blacklist you or stop you from joining another company.

Under the proviksions of section 27 of the Indian Contract Act, 1872 Section 27, which says agreements restraining trade are void, i.e., post-employment non-compete clauses are usually NOT enforceable.

You may Negotiate before resigning because many companies reduce recovery amount if you join a non-competitor or if you complete partial notice of if the new employer buys out the bonus. This is the most common outcome

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