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Can company take me to court for collection of bond amount?


23-Jun-2023 (In Labour & Service Law)

I work in an MNC in India. I signed a bond (on company letterhead paper not on stamp paper) of 5 Lakh, Due to some unavoidable circumstances i have to leave the company. But i don't have 5 lakh to pay the company. Can the company take me to Court or force me for this collection of bond amount? Need the advice on very urgent basis.

Answers (2)

Answer #1
231 votes

As per the recent judgments by SC and various High Courts nowadays bonds are not valid in India.
In India Bond is illegal w.r.t employment since as per the Indian Statute, bonded labor system was long abolished and no bond can force any person to work against the employees wishes.

Article 19 of Indian Constitution talks of fundamental rights, as per the Article 19 the Constitution the write work is a fundamental right, and under no circumstance does the Fundamental rights under Article 19 be waived by any person nor can any person be forced to do something that amounting to the violation of the rights mentioned under Article 19.

As per the Indian Contract Act contracts entered between two parties if is one sided then such contract would be null and void. Most of the Bonds are one sided.

Again as per the Indian Contract Act no contract can be enforced on any person if the contract which is being so enforced causes any harm to the person on whom it is enforced and if performed would violate principles of natural justices.

But however if the company has spent money on your training then you are liable to pay the money. However if no training was imparted by organisation then the bond is illegal.


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Answer #2
238 votes
While upholding the validity, the Court clarified that an employer could claim compensation for a'reasonable amount' and not the excessive amount specified in the contract agreement which cannot be proven.
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