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I want legal advice about a service bond.

At present, I am working in a PSU bank for 3 months. At the time of joining, I had executed a service bond for 3 years worth Rs. 1,50,000. Now, I have a good opportunity, and I need to break the bond. I want to know the legal consequences of breaking the bond.

I have not received any training from the bank. I do not want to pay any amount to the bank, and I do not require any relieving or experience letter since I have not disclosed my employment in a bank. Please advise me.

Dear Destructive Balendu,

Your name itself is somewhat peculiar. Always maintain a constructive attitude. Why do you want to break the service bond? If you are planning to leave the service within the 3-month period, why did you accept that position? By withdrawing yourself from the selection process, you are depriving another truly capable and needy person of the opportunity.

You are required to pay the amount of Rs. 150,000 to the bank. Failure to do so may result in the bank legally claiming the sum, along with penalties and other charges incurred during the process of recovery through the court of law.

Respected sir,

Actually, sir, the real problem is the bank had given me a posting in a very interior location with a population of less than ten thousand, and the majority of them are uneducated. We merely have 20-25 vouchers. The bank has refused to relocate me for 2 years. There is a scope of learning here, which is why I had to take this step. Otherwise, I am a very constructive person with past experience of working in a C.A. for 3 years.

Please guide me, sir.

Dear Balendu,

If you are really interested in learning new things from the banking sector, please do not quit the job now. No one can learn everything about an organization and the work being carried out by them within a 3-month period.

Have patience and learn the work first. You will only have the chance to learn all aspects of the work in small branches. If you move to a bigger branch, you will not have the opportunity to move away from your desk and learn the complete banking job.

If you are still unable to convince yourself, you can pay Rs. 150,000/- and quit the job, if you have any other options available to you.

Thank you.

Dear Balendu ji,

You need to hire a good advocate and seek his opinion to make an informed decision. In my opinion, the service bond you have entered into with the bank may be invalid in law as it contravenes the fundamental rights granted to you by the Constitution of India.

I believe the bank is only entitled to recover expenses incurred for your travel, accommodation, food, training, etc., if applicable. I am attaching a case of Nazir Maricar vs. Marshalls Sons for your reference and study purposes. The key points in the case are underlined and highlighted.

The outcome of your case will heavily rely on the expertise of the advocate you choose to engage. If I were in your position, I would definitely contest the bond.

Wishing you all the best.

Thanks and regards,
Keshav Korgaonkar

[Shantadurgaent.com](http://www.shantadurgaent.com) - Insurance Advisors, Corporate Advisors, Legal Advice, Wage and Salary, Labour Compliance Audit, SSI Registration, NOC from

Dear Mr. Keshav,

Even though the bond is illegal in some sectors, it is legal in others. For example, in defense, if some employees (Uniformed personnel) are sent on deputation to foreign countries, upon return, the employee is required to serve for a specific number of years during which they will not be relieved under any circumstances. It cannot be said that all employment bonds are illegal.

The bond was executed by the Nationalized Bank, and without proper authority or proof, they would not execute such bonds. If private companies are issuing such bonds, it may be illegal. However, in the case of Nationalized Banks, they cannot execute such agreements without the consent of top management.

That's the reason I advised Mr. Balendu to approach his management about the buyback option.

[QUOTE=boss2966;1980752]Dear Mr. Keshav,

Even though the bond is illegal, in some sectors, it is legal. Even in defense, if some employees (Uniformed personnel) are sent on deputation to any foreign countries, then on return from the country, the employee has to serve for some specific years. In that period, he will not be relieved at any cost. We cannot say that all employment bonds are illegal.

Dear Shri. Bhaskar Ji,

With due respect to you, sir, I am giving my view as follows: Whether the bond is legal or illegal, void or voidable, invalid ab initio or otherwise, it totally depends on its contents, wordings, and drafting, etc. It completely depends on how you interpret it. It also depends on the nature of employment.

Thanks and regards,
Keshav Korgaonkar
Shantadurgaent.com, Insurance Advisors, Corporate Advisors, Legal Advice, Wage and Salary, Labour Compliance Audit, SSI Registration, NOC from[/url]

Dear All,

Incidentally, I came across an article by Shri. M. Sivaraman on "Restraint clauses in the contract of employment and their enforceability," which I found to be worth reading. I am sharing it for the information of you all.

Thanks and regards.

Hi All,

If any government PSU doesn't provide any training, assigns a job immediately after joining the company, and the employee breaks the bond, can the company claim for liquidated damages?

Regards,
Prathap.

Dear All,

Incidentally, I came across an article by Mr. M. Sivaraman on "Restraint Clauses in the Contract of Employment and Their Enforceability" which I found worth reading. I am sharing it for the information of all of you.

Thank you, Mr. Keshav, for sharing such useful material on restraint clauses in employment agreements with our members. I am sure our HR members will adhere to the instructions given by Mr. M. Sivaraman while drafting such clauses in the Offer Letter and Appointment Letter.

Please accept my apologies for replying late (I only got time to read the article today).

Thanks and regards.