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Rohith Radhakrishnan   18 January 2017

Need help with cheque bond for employment

Hello Sir, I am in need of legal advice. It's based on the article https://tilakmarg.com/answers/dishonour-of-cheque-given-as-security-whether-offence-under-section-138-n-i-act-made-out/ I was previously employed with a company and I had a bond / service agreement there. And they also had bought cheques from me as a security for compensation. I was not happy there, so I quit my job and joined a product startup. So I didn't join any competitors in the IT service industry. Now they have filed a NI 138 case in which they have mentioned the agreement but they say I am legally obliged to pay them as per the agreement. As I remember, They are asking as a compensation for their efforts such as training and loss of human resource to competitive companies. They haven't provided me a copy of the bond even on asking. But I was not given any specific training apart from being told that.. these are the technologies we use here so research about it yourself. I was a fresher at the time of joining but I was familiar with the kind of work through my projects and small freelance works. So I started working on projects during my probation/training period. So I feel that I don't owe them anything and they are yet to pay me my last salary, security deposit and relieving documents. Please guide me whether I can prove myself at the court of law. Me and my family has been stressed out for almost an year now. The case is at a JFCM court and I had to take bail as the case is criminal. This is a constant reason for tension for us. They also have affected my credit rating by producing the cheque which I believe I don't owe to them. I would like to take them to court for causing such mental and fiscal tortures. And also they have collected 8 post dated cheques for 2 years time equals to 5 x times a predicted salary. Also by the agreement I have to pay 70000(5x my salary not CTC). They have withold a month's salary and security deposit of totalling around 16000 to this. So the amount should be 54000 right? They have produced a cheque of 65000. For which they have mentioned the reason as contractual liability but have not produced the contract itself. Sorry for such a long thread.. I am troubled and in need of advice. Should I go to the labour commissioner? Thank you.


 12 Replies

Ritesh Maity (Labour Law Advocate)     19 January 2017

Bond/ agreements to withhold an employee is illegal. Through this bond the company can only recover the cost of any additional trainning provided to you.

The Supreme Court has stated that an employee is free to join a competitor company for his better future and none can stop that.

Taking money/ cheque from employees in order to bind them is purely unethical and may be illegal too (depending on circumstances of each case)

Since the company has already filed a case against you u/s 138, please defend the case with the assistance of a lawyer. Please note that since your primary concern is related to employment bond, make sure you hire a laywer who has knowledge in labour matters and not only u/s 138 cases.

If you build your case (employment issue) properly, then such bond can become void and cheques taken against such agreement will have no value in the eye of law.  

Rohith Radhakrishnan   19 January 2017

Hello Sir, Thank you for your reply. I have hired a local lawyer, he usually attends criminal cases as well as property disputes etc or so I have heard. how do I know if he can present the labour side of things perfectly? should I take any other action like going to the labour commissioner?

Kumar Doab (FIN)     19 January 2017

The Indian Courts have consistently been declining to enforce Non Compete Clauses/agreements.

You have signed the Bond/agreement and handed over th cheques by your own sweet will.

Now since the matter is on court you need a very able  counsel's support to get out of the mess on merits.

Labor service matters are altogether field of law and in each city there are few counsels that specialize in it.

Your own lawyer can also guide to you to one.

Or you may visit Labor court/CGIT/CAT/Civil Courts/HC and check for the counsel appearing there.


Your emplopyee's/trade unions can also guide you.


Ritesh Maity (Labour Law Advocate)     19 January 2017

Originally posted by : Rohith Radhakrishnan
Hello Sir, Thank you for your reply.

I have hired a local lawyer, he usually attends criminal cases as well as property disputes etc or so I have heard. how do I know if he can present the labour side of things perfectly? should I take any other action like going to the labour commissioner?

As already mentioned by Mr. Kumar, labour law practice needs specialization and different from criminal law and vice-versa. An honest lawyer (like me :D) will admit his incompetancy in other fields.

Since the matter u/s 138 already subjudiced, let the criminal lawyer handle it. If required consult another labour lawyer and then you may approach the Labour commissioner if required at all (at this stage when a matter is already pending).

Visit the labour courts in the area and try to find out about labour law advocates.

Rohith Radhakrishnan   19 January 2017

Ok Sir. Thank you both for your time and advices. Really appreciate it.
1 Like

Kumar Doab (FIN)     20 January 2017

You are welcome.

Kumar Doab (FIN)     20 January 2017

I also appreciate the honesty expressed by Mr. Ritesh Maity.

Usually counsels specializing in Labor/service matters restrict themselves to Labor/service matters.

So much so that many counsels even do not appear in civil courts and restrict their practise to labor Courts/CGIT.




1 Like

Kumar Doab (FIN)     20 January 2017

While you choose a very able counsel avoid posers and abusers loitering at many websites like LCI to fleece unsuspecting querists/authors................and posing  as 'Jackaal of All Trades'

Rohith Radhakrishnan   25 January 2017

Ok sir thanks. Will be careful. I got this reply from someone else but am not clear about this. Can you kindly explain this statement? "I am not sure but its not the legal debt it comes under the purview of damages and covered under civil dispute (sec. 80 civil procedure code). I advise you to approach under section 482 of criminal procedure code to quash the proceedings."

Rohith Radhakrishnan   17 January 2019

Thought I would update the progress. I have fought this case and won at the JMFC level. To anyone checking and are in the same situation, with the help of a good lawyer you can prove your side and the court will be kind towards you. 

But to my bad luck, the employer has filed for appeal in the High Court. Anyway, I have decided to fight this one also. Thanks for everyone's advice and for anyone worried about the same.. Please stay strong. It's just a phase of your life, don't get stressed about it. Good luck.

1 Like

crp in   07 November 2020

What happen next I am also same sittuation

Vishi Chaurasia   07 October 2022

Originally posted by : crp in

What happen next I am also same sittuation

Hello Sir, what happened to your situation... Please reply I am also on this situation 

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