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Indian Law/employment bond enforceability


Respected sir

1. My son joined a pharma company in Hyderabad and executed a bond for serving two years and incase of not serving the company two laks bond amount.

2. My son was B.Tech, MBA and has around six years of experience in supply chain management prior to joining this company.   

3. From the day he joined, his boss behaving arrogantly, humiliating and used to abuse with filthy language.  My son restricted him not to speak and no change with his boss and also my son developed some sort of fear and like that and started absenting to the office.  He has also brought to this to the higher authorities and there is no support.  They have given a notice and he has replied narrating all the incidents he has undergone.

4. Employer has give a legal notice and we also replied to the notice.  Finally they filed civil case in the court for claiming the bond amount of two lakhs claiming that training has been given to him.   

5.  My son's nature of job is administrative and there no such training has given and also for this type of supply chain management assignments, there is no need for training and he has already put up considerable experience.

6. Now the case is with the civil court and we have appointed a lawer.

In this regard,  my request to your goodself that:

I have studied in various articles that Employment bond is not valid and there are supreme court or other courts judgements in this reference.

Can you please help me with some references of the judgements on this employment bonds and decisions that employment bond is not valid.

In case of particulars bonds,  the method of calculating the compensation.

These are required to submit to the court in our case.  Please forward me some important cases and High court/SC or any other court decisions on the employment bond is not valid.

with best regards

R.Sukhendra Rao

Even if your son has executed a service-bond,he should not agree to pay any amount.Such type of bond is one sided contract executed under compulsion and it has no validity in the eye of law.As per section 27 of the Contract Act,all agreements in restraint of any trade,profession or business are void.It also violates Article 19 of our Constitution,which guarantees freedom of professions to all individuals.The courts in India have held in its various judgments that in the event of breach of contract by the employee, the employer shall be entitled to recover only the actual loss suffered by it.Damages are calculated as per the provisions of section 73 and 74 of the Indian Contract Act. Even if the bond stipulates payment of any penalty amount in the event of breach, it does not mean that the employer shall be entitled to receive the stipulated amount in full; the courts shall determine the reasonable amount of compensation to be paid based on the period of service rendered,terms and conditions of service etc.
References of leading case laws on the relevant matter are given below:
1 Central Inland Water Transport Corporation v Brojonath Ganguly, (1986)IILLJ171SC

2 Niranjan Shankar Golikari v The Century Spinning and Manufacturing Company Ltd, AIR 1967 SC 1098

3 Nandganj Sihori Sugar Company Ltd v Badrinath Dixit, & Ors, AIR1991 SC 1525

4.Sicpa India Limited v. Shri Manas Pratim Deb

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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.

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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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