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Indian Law/Validity of Bond in India & limitation of amount to be paid.


Dear Sir,

I have been working with a PSU as Administrative Officer since June 2014. There is a 4-year bond. Recently i got selected in SSC-CGL 2013. I wish to resign now. As per bond, it is written as follows:

"3) WHEREAS said (Name of the candidate) agrees that in the event of his/her
resigning from the services of the Company before the expiry of the Bond period, he/she
will be liable to pay liquidated damages equivalent to one year’s gross salary paid to
him/her during the year of probation which could be proportionately reduced depending
on the length of service rendered. However, in the event of probationer resigning from the
Company during the probationary period, he/she shall be liable to pay the salary received
by him/her during entire service in the Company in addition to an amount of Rs. 25,000/-
(Rupees Twenty five thousand) towards partial cost of training."

 I am still under probationery period. So, they are demanding 37,000/- X 12 (months) = Rs. 4,44,000/- as bond amount.

I feel this as unethical. After working one full year, demanding full gross salary to give them back is disgusting. Many a time i heard of bonds (in pvt companies like TCS,Infosys etc) recovering only expenses incurred during training. So, please clarify:
1. Is service bond valid in India as per constitution?
2. Is it constitutional to demand entire salary earned to return?
3. If it is against constitution, to whom i can complain? (like grievance cell/court/labor dept/ human rights).

Thanks in advance.

Your employer could recover only the actual loss suffered by it and not remote loss.Further,it has to prove that the bond was executed with your free-consent.Bond restraining employment in other organisation is certainly unconstitutional.However,as long as you are in service with the employer,it can be implemented.

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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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