Company is Asking for termination amount and threaten to terminate me.

650 votes

First I need to go through the offer/appointment letter . Also i need to know that on what grounds or facts they have threatened you that they will file a lawsuit for breaching the contract and how much money they are demanding.

Advocate Nitanshu Sharma LawRato

529 votes

This needs to be handled quickly, but do not assume that the company can automatically recover whatever amount it is threatening to demand. Since you joined only on 28 August and the threat came on the second day, the exact wording of the appointment letter, bond/service agreement, and the circumstances in which you signed it are extremely important. Indian law does recognise certain employment/service-bond obligations, and the Supreme Court’s 2025 decision in Vijaya Bank v. Narnaware makes it clear that a minimum-service/liquidated-damages clause is not automatically void merely because it restricts early resignation. At the same time, enforceability depends on the actual terms, reasonableness, and circumstances of the contract. Your situation may be particularly worth examining because the company raised the issue almost immediately after joining. We would need to determine whether the amount demanded is genuinely connected with training/onboarding expenditure, whether the clause was properly disclosed before joining, and whether the company is attempting to impose a disproportionate penalty. Courts have distinguished genuine contractual compensation from punitive demands. Most importantly, do not admit liability or agree to pay the demanded amount merely because HR has threatened a lawsuit. Preserve the offer letter, employment agreement/bond, emails, WhatsApp messages, joining documents and the exact communication threatening legal action. A properly drafted response at this stage can put the company to proof of the contractual basis and amount of its demand while protecting your position. If the company actually issues a legal notice, the response should be prepared after examining the complete contract rather than sending a casual reply. Sangam & Sagar Law Office LLP handles employment-contract, service-bond, forced-exit and recovery disputes. Since this has arisen within days of joining, getting the agreement reviewed now can be far more useful than waiting until the company actually initiates proceedings. If you share the appointment letter/bond and the message or email threatening the lawsuit, the precise legal position and appropriate response can be assessed.

Advocate Vaibhav Sangam Mishra LawRato

824 votes

Since you have joined only recently and the employer is threatening legal action for an alleged breach of contract, do not panic or make any payment merely because of a verbal threat. First, carefully review the appointment/employment agreement, particularly clauses relating to notice period, probation, termination, training costs, confidentiality, intellectual property, and any stipulated damages or bond. Ask the company to communicate its allegation and the basis for the proposed claim in writing. Preserve your appointment letter, employment agreement, emails, WhatsApp messages, salary records, and any other relevant communication. Avoid signing any undertaking, resignation letter, settlement, or admission of liability without taking independent legal advice. Under Indian contract law, an employer cannot automatically recover whatever amount it demands simply because a contract contains a monetary clause. The enforceability of such clauses depends on the wording, circumstances, and applicable law; courts may examine whether the amount claimed represents legally recoverable compensation. Employment-related restrictions can also be subject to statutory and judicial limitations. If you wish to leave the company, communicate your resignation professionally and follow any valid contractual notice requirements, unless there is a legally justified reason not to. If they send you a legal notice or threaten proceedings, have an advocate review the agreement and respond formally. Do not ignore a genuine legal notice or court summons.

Advocate Pawan Verma LawRato