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Indian Law/Validity of Employment Bond

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Question
Hi Sir,
I m currently working in a media company and while joining, I signed a employment bond of 18 months which was not on stamp paper nor on letter head.
I want to resign before the bond gets over.

Is the employment bond valid in this scenario if its not on stamp paper or company letter head ?

Can I be asked to pay the compensation amount ??

Looking forward for the help.

Thanks in Advance

Answer
If an instrument which is required to be executed on a Stamp Paper and remains un-stamped,it will not be acceptable in evidence.However, it can be legalised by paying the penalty as well as the apprpriate stamp duty.
Employment Bond in India is generally treated as a one sided contract and hence not enforecable through court of law unless it was executed to recover any reasonable actual losses suffered by the employer.Such contract subject to certain exceptions is treated as void under section 27 of the Contract Act.It is also violative of Article 19 of our Constitution,which guarantees freedom of practising any profession or to do any trade,business or profession to every citizen of India.
In view of the above,Bond executed on a non-stamp paper has no legal validity and further, even if it was valid,your employer could not recover anything more than the actual reasonable loss suffered by them.Therefore, they have no right to claim any compensation from you for pre-mature termination of contract.If they creat any problem in releaseing you or settling your dues, please serve a legal notice upon them.However, please take all actions in the matter in consultation with a service lawyer to protect your interest.

Indian Law

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Arun Kumar Maitra

Expertise

Contract Law,Companies Act,Sale of Goods Act,Partnership Act,Negotiable Instument Acts,Constitution of India,Arbitration Act,Consumer Protection Act,Maternity Act,Payment of Gratuity Act,Payment of Bonus Act,Shops & Establishment Act etc.The answer to the grievance of the particular online query depends on the facts of the particular case and law applicable to it.However,my comments relating to the various queries raised through the "All Experts" should not be treated as legal advices and should not at all be relied upon.I do not accept any responsibility for them.They will only give you some ideas about the probable merits of your cases.Ultimate actions/decisions in the matter may please be taken in consultation with the Legal Experts in the relevant fields.My purpose of giving the comments is to increase my own knowledge on the subjects and share it with others.It is purely of academic interest to me. I strongly feel the more knowledge we share,the more we shall be able to learn because there is neither any age nor any end to learning.

Experience

I have experience of dealing with matters relating to holdings of board/general meetings,maintenance of statutory registers,filing of necessary returns with the RoC,obtaining licenses for import,replies to Parliament Questions,dealing with the Parliamentary Committees,appearing before various courts to defend my employers,filing affidavits/counter -affidavits,preparing written statements/re-joinder,giving advice to management on complicated legal issues,preparation,drafting and vetting of contracts etc. I have more than 35 years of experiences to deal with the Company Law and Other Commercial Laws of leading Organisations in the country both in Public as well as Private Sectors.

Organizations
Member,Inst. of Chartered Accountants of India Member,Inst. of Company Secretaries of India; Member,Bar Council of India Member,All India Management Association Member,Delhi Management Association Ex. Vice-Chairman,Durgapore Chapter of the I.C.A.I. Expert ,CA Club India Expert ,Lawyers Club India Expert,AllExperts Ex. Faculty ,I.C.S.I as well as I.C.W.A of India Retd. Co. Secy. & G.M.(Law)/NFL(A Mini-Ratna A Schedule Central P.S.U.),New Delhi Ex.V.P.(Secretarial Dept.),Jaiprakash Associates Ltd. Ex. Co. Secy.,MAMC(A Govt. of India Enterprise),Durgapore

Publications
Nil.

Education/Credentials
M.Com;LL.B;A.C.A;A.C.S.

Awards and Honors
Obtained ''A'' Grade Certificate in the Parliamentary Procedure from the Secy. General of Parliament in 1994-95.It was in connection with a training course conducted by the BPE for PSU Executives.

Past/Present Clients
I am presently working as a Company Secretary in Old World Hospitality Pvt. Ltd.located in Delhi.It is engaged in Hospitality Industry.It has Units in India and abroad.It has been given the responsibility to look after operation & Management of ''India Habetat Centre'' located at Lodhi Road,New Delhi.

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