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Indian Law/Breaching the company contract to serve 2 years


Dear Sir,

I work in a CRO in Hyderabad. I signed a bond at the time of joining the organisation. They also took all my original marksheets. According to the bond, I have to serve 2 years in the company and then 2 months extra as notice period in order to get released.

Now, I have got an opportunity in Mumbai with a very good organisation. I have already completed 1.5 years and I have resigned from the company almost a month back. However, due to recent high attrition rate, they are not willing to give me release. I am ready to pay 1 lac Rs as the bond breaking amount but they don't listen to me. The new employer is not ready to allow me to join the company without exp letter.

I have checked the bond agreement, it is no where written that they can keep my documents. Moreover, they can terminate me at any time without giving any reason and prior notice. On the other hand, I can terminate the agreement after paying 1 lac Rs if I am not assigned on any project. I have completed all assigned tasks on time but they are saying that they have some future plans for me.

I am not filling well here, my parents want me to come back and I really do not wish to loose this opportunity. Please advise me what should I do?

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,normally Bond has no legal validity and  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.In case they file a suit to enforce it,their possibilty of success is very remote on the grounds stated above.So, you need not least worry about that.Moreover, please do not pay any amount from your own pocket.That will be great blunder on your part.Even if any amount is recoverable from you, let them prove it before the court the actual loss suffered by them.Merely bringing a prosecution does not mean your employer is right.It depends upon facts and circumstances of the case,evidences placed before the court and arguments of the advocates.After hearing both the parties, judges always tries to give a reasonable decision.However, please take all actions in the matter in consultation with a service lawyer to protect your interest.

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Arun Kumar Maitra


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.


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.

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



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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