Bond related
Prempal singh
(Querist) 29 February 2020
This query is : Resolved
I join the autonomous institute who come under University grant commission(UGC) central govt institution at the time of joining they demand to sign an stump paper for 5 lack bond when left the institute within 3year.Now i want to left institute than what i do. The institute can’t give me any training related to my services.and I qualified by written examination
Plz tell me process what i do.
Raj Kumar Makkad
(Expert) 01 March 2020
Deposit the amount of Rs. 5 lakh as per your undertaking and leave the institution.
P. Venu
(Expert) 02 March 2020
The institution cannot unilaterally enforce the Bond.
T. Kalaiselvan, Advocate
(Expert) 20 March 2020
Under the Indian Law, the employment agreements with negative covenants is valid and legally enforceable if the parties agree with their free consent i.e. without fraud, coercion, undue influence, mistake and misrepresentation.
Indian law mandates the employment bonds to be “reasonable” in order to be valid.
It is legal in India to work with bonds that prescribe a reasonable penalty as compensation in case of breach. Bonds that are prima facie unconscionable are illegal.
The university can ask you to sign a bond for a certain period of time, general practice is of 2 years. The obvious reason is that any organisation spends lots of money directly or indirectly on any employee and by the time he / she is ready to deliver results, they quit. Recruitment process is time and money taking.
The employment bonds are agreements between employee and employer where it contains the terms and conditions of employment. The employment bond contains a clause which requires the employee to serve the employer compulsorily for a specific period of time or else refund the amount specified as bond value.
The validity of Employment bonds can be challenged on the basis of Section 27 of the Indian Contract Act.
As per the mandate of Section 27, any terms and conditions of an agreement which directly or indirectly compels the employee to serve the employer or puts a restriction on them joining the competitor or other employer is not valid under the Indian law, The employee has right to resign from the employment even if he has agreed in the employment bond to serve the employer for a specific period of time.
The conditions imposed on the employee must be proved to be necessary to safeguard the interest of the employer.
The employment bond is to be executed on a stamp paper of appropriate value in order to be valid and enforceable.
