in Contracts Law
Asked May 04, 2016

Left job during contract period

  • 1 Answer

I have left company within the time of my contract period and have received a notice(not a legal notice) from my previous firm. I need some advise on how to proceed. It is mentioned that criminal and civil proceedings will be taken if I dont pay the amount. I had to leave as I had some safety concerns during floods.

Answer 1

Answer framed by Ayushi Singhal, Lawfarm researcher:   The legal position appears to be that such employment bonds (like the one in your contract which restricts you to leave before 2 years), if carrying unreasonable penalties, can be challenged under Section 74 of the Indian Contract Act. Further only civil proceedings can be launched for the enforcement of such bonds (and not criminal proceedings). 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 the employer are actually extremely high. Therefore, you should not be intimidated by the notices and you should reply to them saying that the contract was unconscionable and 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 over 5 years ago

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