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Shivraj (Manager)     31 May 2013

What is validity of bond if no training has said in bond ?


I am working with one of the reputed company in India.

Here I signed bond of Rs. 2 Lakh for two years. After two years of Manufacturing experience I joind this company in IT field.

For this new field and as per BOND, company supposed to give me training for new skills.

Company doesnot provided any kind of training to me Infact I learn by self study.

After one and half year I am looking for change but company is asking 2 Lakhs for BOND.

Here as per BOND company doesn't have any kind of Training records.

Kindly help..

Thanks in advance....


 6 Replies

Kumar Doab (FIN)     31 May 2013

Apparently company offered training in new skills (only you would know what these new skills were) at its expense and in lieu of it wanted a bond/service agreement to serve for 2 years or make good by making a payment of Rs.2lacs if service period of Full 2 years is not served.


As per you no training is provided.


Thus it should be claimed as breach by company.

The company might have stated verbally that it has no record of training provided by it.

If company has spent some amounts and adjusted these in expenses (salary is also adjusted against expenses) company should keep the record safely for 3 years.


If the amount is mentioned as liquidated expenses then the amount may be claimed as amount deemed good as compensation by both parties without having the need to prove.


However the lawyer who has seen all of these documents, bond etc, would be the best source to advice you.

Compnay might have inserted clauses on non compete, non solicitation, Non Disclosure, Clauses on Protection of Confidential information under IPR Laws, Protection for confidentiality etc…………

You may show all of your docs to your lawyer, give inputs in person, spend quality time with your lawyer and proceed under expert advice of your lawyer.





Shivraj (Manager)     31 May 2013

Thanks !! Can you please explain in brif of following..

"If the amount is mentioned as liquidated expenses then the amount may be claimed as amount deemed good as compensation by both parties without having the need to prove."

sachin agarwal (lawyer)     31 May 2013

Hallo Sir, in respect of your query in respect of the bond which you is signed before joining the company, it is very much important to any employee who is joining a company and training is required for some work which is a specialised in nature and due to this reason the company will give the training to the person who is joining the company and not aware about the procedure in the company.  Thereafter before the joining of the company the company will sign to that employee some documents only under the law which was applicable at the time.  The bond is basically agreement for a period which is mentioned in the bond paper and after reading that paper the employee will sign the same.however the training is required if the company policy is demanding the same and employee should complete the sameas per policy of the company. Dear Sir in your case you have not completed your training because of the company has not given you the chance for the same and the company has not given any document, any certificate for the completion of the training.  It is very clear That in that period in which you were employing in the company and you are treating as the training and working as an employee.  And you can put the appropriate detail of your employment like that how much salery you have got in that period, but is the the status of your provident fund dues and other compliances which were required to the company to deposit in appropriate authority in which the compliance is required not only for the welfare of the employee but also to comply the provisions made by law for the Social Security purpose.  It is made clear to look after the records that if the companies violating the rules of the agreement than the agreement is null and void and no need to follow it and you're right to go before the appropriate authority as per court of law and can take the relief.  God bless you who bless himself.  If any quietly contact me on 9210625938 Sachin Agarwal advocate

1 Like

Adv k . mahesh (advocate)     31 May 2013

in your case some more doubts

1. signed the bond worked for 1.5 years now you want to leave why

2. do you have any probation period and after completion the company gave any permanent position or what was your position at the time of appointment and right now what is the position 

i am asking you because company can claim that you are traning and yet now also your a tranine and after two years your traning will be completed and for that this bond is and the liquidated damages 

try to convince the hr department if you have really a good oppurnitity right away and settle the matter 

if not if you leave the company can file a case under liquidated damages and only to harass you this may become mental tension to you but the result is company may loose the case but what will be your career spending time in court or thinking what is will be your next step 

1 Like

Shivraj (Manager)     31 May 2013

Hello...Thanks for fast reply...

1) After 1.5 years I am leaving because company has not assigning any work to me and no good opportunity to work in future. I have opportunity in same field in another MNC company.

2) I joined as a Associate Manager and Now also working as a same. My Probation period was 6 months but company issued me conformation after one year.

Now I have Permenant Position but my growth here is Zero and I have grievence that here everybody expect everything without role specific training.

Even Company has trained few of my colleague from Professional Institute but I did'nt get that Opportunity.

I already resigned and asking HR to waive of  my bond because of there is no meaning of Bond without Training, Salary Hike .

Company only invested on me is monthly salary.

I am going to follow all rules but trying my best to get out of situation with fever losses.

But after few days my situation will be stronger then I will take revenge of it.

Thanks for your suggession...

Kumar Doab (FIN)     31 May 2013



Under Common Law a genuine pre-estimate of damages by mutual agreement was regarded as a stipulation for liquidated damages………………………………………….. the essence of liquidated damages is a genuine covenanted pre-estimate of damages…………………….

Liquidated damages must be the result of a genuine pre-estimate of damages and they do not include a sum fixed in terrorem……………………………………….


If liquidated damages were stated/arrived at for expenses to be incurred by company for training, but if no training was provided the liquidated damages should cease to be payable…………….



The language stated in the bond should be carefully studied by a trained legal eye and merits be examined by a trained legal mind.

Company shall claim that you had signed by your free will.

If bond was created due to some training to be provided (training that shall provide some exceptional skills, or shall add to qualification of the employee) for which employer was to incur heavy expenses, and if it is stated in the language of the bond, but no such training was provided, the bond should be declared void.


The training about products, processes, policies,, strategies of the company so that employee can perform the task for which he has been selected, should be provided by employer without any cost to employee.


HR is not your employer. It is another employee in company.


Your representation should be preferably addressed to the appointing authority, MD, Chairman, Company Secretary, and the designated official of the company who has signed on the bond on behalf of the company.

In such matters the representations should be carefully structured and drafted to become a written record in times to come and should be submitted in writing under proper acknowledgment preferably by redg. post. Speed post/courier may be avoided.


What action shall be taken by your company is not possible top forecast e.g; It may take a stand that it has suffered legal injury…………


However you can build your defense and favorable written record.


a stipulation in contract in ierrorem is a penalty and the Court refuses to enforce it, awarding to the aggrieved party only reasonable compensation…………………. 


Section 74 of the Indian Contract Act, 1872 does not dispense with the basic condition of the breach resulting in any loss or damage which can be called "legal injury".


The party complaining of breach of contract and claiming compensation is entitled to succeed only on proof of "legal injury" having been sustained on account of such breach.


…reasonable compensation can be granted even in a case where extent of actual loss or damage is incapable of proof or not proved. Thus, Section 74 deliberately states that what is to be awarded is a reasonable compensation. In a case where the party complaining has not suftered legal injury in the sense of sustaining loss or damage, there is nothing to compensate him, for there is nothing to recompensate, satisfy or make amends. Therefore, he will not be entitled to compensation.(23) 


The question whether the employer can recover the amount specified in the contract by way of iquidated damages without proving that there had been "legal injury" has been answered in some decided case. In Fateh Chand Vs Balkishan Das (22), the Supreme Court of India has held that Section 74 of the Indian Contract Act undoubtedly says that the aggrieved party is entitled to receive compensation from the party who has broken the contract, whether or not actual damage or loss is proved to have been caused by the breach. Thereby it merely dispenses with proof of "actual loss or damage". however it does not justify the award of compensation when in consequence of the breach no legal injury at all has resulted, because compensation for breach of contract can be awarded to make good loss or damage which naturally arose in the usual course of things. or which the parties knew when they made the contract, to be likely to result from the breach. 



Hence, along with elders in the family,  show the docs to a competent and experienced labor consultant/service lawyer, give inputs in person, spend quality time with your lawyer and let your representations be structured by your lawyer, and matter be put up on “Shut Up Mode” Now.

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