Asked August 28, 2016

Employment bond and bond money

  • 1 Answer

Hi sir, I joined a private company and i also signed a contract period of 1.5 yr in case of breach i had to pay 280000. But now i got the letter from one of the government department that i have cleared the exam and might be joining there in September. But the thing is i can not pay 280000 of my bond so what should i do could there be any legal action against me which could affect my joining in government department. Looking forward for your advice please help.

Answer 1

Default avatar
Ayushi Singhal

The legal position appears to be that such employment bonds (like the one in your contract which restricts you to leave before 1.5 years), if carrying unreasonable penalties, can be challenged under Section 74 of the Indian Contract Act. However, reasonable expenses incurred by the employer on the employee during the period of the employment can be recovered  by the employer after deducting an amount proportionate to the benefits the employer might have received for the period the employee has worked in the company. Therefore, it is most likely that the entire amount of penalty being imposed on you is not recoverable, unless expenses incurred by your employer are actually extremely high. Therefore, you should not be intimidated by the notices and you should reply to them saying that you can only be legitimately required to pay the amount of expenses actually incurred by the employer and not anything more (See: M/S . Sicpa India Limited v. Shri Manas Pratim Deb, RFA No.596/2002, Decided On: 17.11.2011, High Court of Delhi).

Agree Comment 0 Agrees almost 6 years ago

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