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Sumeet (Sales and Marketing)     18 January 2014

Employment bond & pdc

Dear Sir/madam,

One of the companies asked me submit post dated cheque equivalent to the amount of CTC drawn by me as a gurantee that i would not leave the company before a year.

Is it legal for a company to do so.

Is employment bond legal.

Thank you for advise.


 12 Replies

Kumar Doab (FIN)     18 January 2014

Whether it is legal or not Don’t accept the offer letter of this company making offer of appointment and don’t join this company.

Don’t transact in writing and show all communications sent by this company to elders in the family, competent and experienced well wishers, lawyer/law firm and submit if required a fitting reply by redg. post.

Hope you have not provided a cheque to them.

Have you? 


In the meantime you may go thru the attachments.

Attached File : 280316652 417759075 validity of employment bonds.pdf downloaded: 110 times
1 Like

Sumeet (Sales and Marketing)     19 January 2014

Thank you for your suggestion.  I have refused their offer. It was a verbal communication so i do not have any proof. But i lost a job due to this condition. 

Kumar Doab (FIN)     19 January 2014

On the day the cheque was demanded you did not owe any money to the company. Hence no such demand can be made. Did it demand undated cheque and without any amounts? Did you record any such demand and do you have any evidence? If the company has not offered to incur any expenses on your training that would add to your qualification, extra ordinary skill then how can it demand to sign a BOND? Did the company mention in the job advt., interview call letter, selection letter, offer letter, that BOND has to be signed, cheque has to be deposited? Did it pay any expense for attending interview(s)? If you have suffered any loss you may try by demanding refund/compensation and show whatever evidence you have to your lawyer and proceed further if there is any worth in it.
1 Like

T. Kalaiselvan, Advocate (Advocate)     19 January 2014

Demanding post dated cheque equivalent to the amount of CTC is nothing but a blackmail and illegal.  A company cannot impose such condition.  If somebody is submitting to the pressures of the company, they will be trapped very badly even for no fault on their side, so it is better decline such offers. In the event anything untoward happening against you, this cheque may be misused against you for which you may not find any defence in the absence of evidence in your possession.  So bear it in mind to not to accept such offers in the future with any company.

2 Like

Sumeet (Sales and Marketing)     20 January 2014

But the company gets the bond and PDC signed by all its employees.

They are approaching me to accept the offer and sign the Bond.

If you are out of job you get tempted to accept offers.

Kumar Doab (FIN)     20 January 2014

You must have heard the proverb:

"From the frying pan into the fire"

You may find the publication “Give cheque, take job” useful.


There are publications to suggest that there are employers that obtain Lien on FDR before giving employment.

You must have gone thru the attachments in this thread.

The Bond is in lieu of what extra Ordinary Favor by employer to employee?

If you have signed the bond by your free will, even if company has not granted any extra ordinary favor and incurred some expenses on you the company may not proceed to pull you to court and if it does it would be civil court.................claiming it has suffered legal injury by breach of Bond.

However in case of cheque bounce it would be a criminal action.........................the Bond with deposit of cheque is a very harsh condition.

The practice of the employer is unethical, unfair and employees can lodge a complaint with o/o Labor commissioner, Trade Unions.........................

It is reiterated that avoid such temptations.

Try hard for suitable venture.


Rest is up to you.

Attached File : 707904444 give cheque take job.doc downloaded: 62 times
1 Like

Sumeet (Sales and Marketing)     21 January 2014

Can i just sign the bond and not give the PDC's

Sumeet (Sales and Marketing)     22 January 2014

It's very easy to say no to a job. Getting one is difficult.


Saying a no is not the solution to the issue. I had got this job after 6 months of search.


Shouldn't the Labour Department and the Labour commissioner act on these companies.


Isn't their any law which can prevent such companies from exploiting employees.

Kumar Doab (FIN)     22 January 2014

It is your call.

Let us assume that you join and do not give PDC and after 1 month when your wages are due to be paid these are not paid.


You shall have again an issue at your hands.

Such employers are known to square off the dues against amounts in Bond and claim balance.


Such unscrupulous employers are known to put harsh conditions to employees that have been out of employment.



>> BOND that you have to sign may not necessarily be ‘Service Agreement’ only it may contain clauses on ‘Non Solicitation’, ‘Non Compete’ ‘Data Protection’ etc..................


If company has not incurred expenses say on: training it may not succeed to claim expenses/liquidated damages......................The Indian Courts have consistently been declining to enforce ‘Non Compete’ clauses/agreements as it hits right to earn livelihood and hits clauses of Indian Contract Act.............


However   clauses/agreements on ‘Data Protection’ ‘Non Solicitation’ may be declared as operational.............................and damages may be claimed.


If you have gone thru the attachment then you must be aware of the details.



You may also carefully go thru the judgment:


--Madras High Court

Polaris Software Lab. Limited ... vs Suren Khiwadkar



Joseph Vilangadan. v. Phenomenal Health Care Services Ltd. & Anr.


If the cheque given is a Security Cheque it may not attract NI Act.



It shall be appropriate to get the Bond examined ‘verbatim’ from your lawyer.


Pls do not jump to any conclusions after going thru these judgments and let your lawyer opine finally to you.



>> The Labor Commissioner and lawful authorities can even take suo motu notice of such matters.

A phone call, anonymous email should be sufficient.


The complainant can cite that they are deciding on calling a press conference and escalating to Chief Justice of High Court, Supreme Court, State Minister of Labor, Central Minister of Labor, Media, Police, Trade Unions and pursue the matter thru RTI and this may set them to work at Super fast Speed.



>> The employee should become member of Trade Unions and form internal Unions, IC’s, Work Committee’s and this shall protect from unfair practices...........................

At Mumbai Trade unions are very active and effective.

Such matters affecting class of employees are effectively handled thru unions.


You may discuss with local leaders of Trade Unions like AITUC, CITU, INTUC.....................and its affiliated unions in your sector/trade.....................or unions for your sector/trade may be formed.


The unions can pursue for standing orders, internal Unions, IC’s, Works Committee’s.....................


If you have gone thru ID Act you shall find that Works Committee’ is an authority. The Chairman of the committee is on rotation from Employer and Employees.


Even supervisors, Officers, Executives can form their associations, Guild........................and be very effective in protecting their rights.


If employees are not united, the individual employee is easy target for exploitation and in case of dispute the forum for him is civil court, labor court and then has to face the delays..............................etc.


Employee should justify every penny of salary paid but must e properly informed to defend his interest.



>> Employee should also keep access to a good labor consultant/service lawyer.


Designation alone does not decide employee shall be covered as ‘Workman’ as in ID Act and ‘Employee’ as in (Name of state) Shops and Commercial Establishments Act.


Your lawyer may opine that you shall be covered.


Bombay Shops and Commercial Establishments Act is so employee friendly and as per it any commercial establishment employing 50 employees would be covered by Industrial Employment Standing Orders Act.........................If standing orders are not certified, Model Standing Orders shall apply.


Standing Orders provide protection to employees and employer is personally held responsible for faithful coverage of standing orders.


>> IN case of Issues employee can approach:


Lawyer/Law firm


Trade Unions, Employee’s Union, Works Committee


Inspector under Shops and Commercial Establishments Act


Inspector under Payment of wages Act


Labor Inspector and ALC/DLC in O/o Labor Commissioner




ESIC Inspector


Court Of Law; Civil, Criminal


High Court


Supreme Court


You may find the following threads relevant;



1 Like

Sumeet (Sales and Marketing)     05 February 2014

Dear Mr. Kumar,


Thank you for for your valuable advise and suggestions. I still have query. Sorry if i am bothering you too much.

The above article states that "If the cheque given is a Security Cheque it may not attract NI Act."

Therefore will my cheque given to the employer attract NI Act.

What is the difference between a security cheque and a Normal cheque.


Thank You 


Kumar Doab (FIN)     05 February 2014

The judgments by courts of law is a dynamic process.

NO one knows what shall be a judgement tomorrow that may again redefine the approach to a matter.

 We do not see any thing worth taking even a calculated risk in the matter being discussed by you.

We reiterate:


avoid such temptations.

It shall be appropriate to get the Bond examined ‘verbatim’ from your lawyer.


Pls do not jump to any conclusions after going thru these judgments and let your lawyer opine finally to you.



Hence without elaborating further we suggest that you may engage a lawyer well versed with such matters at your location and spend quality time with your lawyer, in person.

On line discussions have its own limitations.


Rest is up to you. You may proceed further as deemed fit at your end.


Consent and medical treatment: The legal paradigm in India



Consent and medical treatment: The legal paradigm in India



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