Help me--service matter
Harekrishna Sahu
(Querist) 23 October 2018
This query is : Resolved
Sir
I had executed a bond with BSNL to work 5 years after completion of training otherwise I have to pay Rs 200000 with 18% interest p.a.,before training I had appeared an interview in another psu same was informed to BSNL through letter, during the training period I got selected in that PSU .So I left my training not completed it and submitted my resignation in BSNL. Later BSNL demand Rs.242000 as bond amount as per point no 5 & 6 of bond agreement including interest so I had to pay it because I need relieving letter to joining other organisation.For 1 month training I have not received any stipends and staying my own expenses. What should I do now without any benefits I had to pay huge amount.What happened to me is it right sir? Should I file case against BSNL? please guide me.
BOND AGREEMENT
This agreement is made at ………………………………this………………………day of…………………………betweenShri/Smt/Kum…………………………………………………………son/daughter/wife of Shri/Smt/Kum………………………………… resident of …………………………………………… …………………………………………………………………… ….…………………………………………………(hereinafter called the Trainee which expression shall unless excluded or repugnant to this context be deemed to include its successors/ assignees, executors, legal heirs, administrators) of the FIRST PART and Shri/Smt/Kum………………………………………………………………………son/daughter/wife of Shri………………………………………………………………… resident of ……………………………………………………….. …………………………………………… …………………………………… (herein after called the Surety which expression shall unless excluded or repugnant to this context be deemed to include its successors/assignees, executors, legal heirs, administrators) of the SECOND PART and BHARAT SANCHAR NIGAM LIMITED a Company incorporated under the Companies Act , 1956 having its Registered Office at BHARAT SANCHAR BHAWAN, Harish Chandra Mathur Lane, Janpath, New Delhi-110001 (hereinafter called BSNL which expression shall unless excluded or repugnant to this context be deemed to include its successors/ assignees, executors, legal heirs, administrators) of the THIRD PART acting through Chief General Manager, Telecommunications, Gujarat Circle, Ahmedabad is authorized official. WHEREAS the trainee has been selected by the BSNL for training in the Cadre of Junior Account Officer at BSNL Training Centre for a period of 10 (Ten) weeks/years and the trainee has agreed to undergo the same on the terms and conditions contained hereinafter. AND WHEREAS the BSNL shall spend a substantial amount for the training of the trainee and shall pay a monthly stipend at the rate applicable from time to time during the pre – appointment training period at specified location (s) as may be decided by the CGMT. AND WHERES the sum of Rs.5000/- (Rupees Five Thousand only) has been deposited by the trainee Shri/Smt/Kum………………………………………………………….in favour of Accounts Officer (Cash), BSNL, O/o CGMT, Gujarat Circle, Ahmedabad vide Demand Draft No………………………..dated ………………….. as interest free security for due fulfillment of conditions of this agreement.
Now these presents witness and it is hereby mutually agreed and declared by and between parties hereto as follows:
1. BSNL shall provide training, the nature and duration of which shall be determined by the Chief General Manager NATFM Hyderabad (herein-after referred to as the CGM NATFM) whose decision in this behalf shall be final and binding. Provided that the CGM NATFM may at any stage without assigning any reason discontinue his training, if in his opinion (which shall be final and binding), the trainee appears to be unlikely to be an efficient Junior Account Officer.
2. The said trainee shall: (A) Undergo the course of training at any BSNL training Center, selected from time to time by the CGM NATFM. (B) Undergo such training at the said places with due diligence and comply with the instructions of all authorized officers in regard to training and discipline at the said places.
3. THAT the trainee has agreed with the company that after completion of the training, he/she shall serve BSNL in such department or departments at such place or places in India in such capacity in connection with BSNL`s business as BSNL may require from time to time, for at least 5 years after completion of aforesaid training, on terms and conditions contained hereinafter and in accordance with the Rules and Regulations of BSNL as applicable from time to time to such trainees.
4. THAT the BSNL has called upon the trainee to furnish a Bond to the extent of Rs.2,00,000/-(Rupees Two Lac only) for indemnifying the Company against all loses or damages which the BSNL may suffer by reason of the breach of the terms of this agreement by the trainee.
5. THAT the Surety, at the request of the trainee, has agreed to give a Bond for said sum of Rs.2,00,000/-(Rupees Two Lac only) in the manner hereinafter appearing.
6. THAT the Trainee and Surety have agreed that in the circumstances if the trainee commits breach of any conditions of this Agreement or, in case the training of the said trainee is discontinued under the provisions to clause(1) above and the CGMT is satisfied that the failure of the trainee to reach the necessary standard is due to his/her work (the decision of the CGMT in this behalf being final), or in case of continued adverse reports regarding his/her conduct or his/her political activities directed against the Government of his/her Country /BSNL, or if the trainee voluntarily quits for reasons not beyond his/her control any time during the course of training, or on completion thereof does not serve the BSNL for a period up to five years or during such period of service does not carry out his/her duties with diligence. BSNL shall have full powers to forfeit the amount of security deposit without any notice to the trainee and surety. Trainee & Surety have further agreed that they are jointly or severally shall pay forthwith to the BSNL on demand an amount of Rs. 2,00,000/- (Rupees Two Lac only) as Bond amount along with the interest @18% p.a., which BSNL may suffer by reason of the Breach of the conditions of the Agreement and upon the trainee and/or the surety making such payment, the above written bond shall be void and of no effect, otherwise it will remain in full force and virtue.
7. THAT Liability of the surety hereunder shall not in any manner be affected by any time granted to the trainee or any other indulgence which may be shown to him/her in respect of the recovery of the said money(s) by BSNL or shall it be necessary for the BSNL to sue the trainee before suing the surety for the amount due hereunder. 8. THAT during the continuance of this agreement the trainee shall not, without the previous consent of BSNL, enter the services of, nor be employed in any capacity, whether advisory, executive or otherwise or for any part of his time by any person, company undertaking or concern other than BSNL. Similarly, the trainee shall also not undertake /commence any business or trade etc., of any kind without prior permission of BSNL. 9. THAT during the period of this Agreement, the trainee shall confirm strictly to all Rules, regulations , instructions, bye-laws , etc., of BSNL and work diligently and faithfully and obey all lawful commands of his seniors. 10. The trainee shall devote his whole time and attention to the business of BSNL as above mentioned and shall not participate, be engaged or be interested or concerned, directly or indirectly, in any other business or occupation of any kind or nature whatsoever. 11. The trainee shall at all times conduct himself/herself in a manner befitting his/her position and the prestige of BSNL and show civility to and strictly obey and carry out all lawful orders and instructions of all persons placed by BSNL in authority over him and shall in all things use his best endeavor to promote the interest of BSNL in its business and will not utilize or divulge to any person, any of BSNL`s or his/her connections, trade, secrets or affairs. He/She shall also observe and conform to all the Rules and Regulations and arrangements of BSNL for time being in force and amended from time to time for the control of BSNL staff. 12. In witness whereof, the trainee and the surety have here unto set their respective hands and BSNL has here unto caused their signatures on his/her behalf to set his/her hand this the …………………….day of ……………………………… …… ……………………..
Isaac Gabriel
(Expert) 24 October 2018
You have not fulfilled the condition and therefore bound to repay the amount as stipulated.Neverthless request the BSNL for pardon showing the circumstances that compelled to discontinue the training. .
Dr J C Vashista
(Expert) 24 October 2018
Have you sought permission from BSNL before applying to another PSU ? If so, you may get refund of bond amount on pro-rata basis, otherwise you will have to cough-up.
However, consult a local lawyer practicing service matter for issuance of legal notice and further proceeding.
H. S. Thukral
(Expert) 25 October 2018
Before I reply to your query, I want to say that I am amused by reading the advice of one of the experts preceding my advice.
An employment contract is like any other contract governed by provisions of Indian Contract Act. An employer will be justified in seeking performance bond from an employee where he has to spend money and time in training the incumbent. This is called liquidated damages clause; meaning thereby that parties have pre- estimated the damages which a party suffering breach is likely to incur. However these are the maximum damages but the employer has to show the actual loss. If there is no special favour of the employer on training etc, then any such bond is in the shape of a penalty and not enforceable.
It appears from your query that you left the job before availing any such favour from the employer and therefore you were not liable to pay full amount on bond. But the problem is that you have already paid under compulsive circumstances. I don't think you lodged any protest at the time of payment. Yet I think you can file a suit for recovery terming the payment under pressure and coercion.
KISHAN DUTT KALASKAR
(Expert) 27 October 2018
Dear Sir,
The Employer cannot recover entire bond amount. He is only entitled for the actual amount spent on the employee during training. The relevant Supreme Court Judgment is as follows:
While granting liquidated damages under the employment bond, Courts apart from going into the legal injury caused to the employer also take into consideration factors like actual loss suffered by the employer, period of service already completed by the employee under the contract and other conditions, if any, stipulated under the contract. Only after going into these factors, courts determine the loss suffered by the employer to reach a reasonable compensation figure. For instance, in the case of Sicpa India Limited vs Shri Manas Pratim Deb (MANU/DE/6554/2011), the employer incurred expenses, while imparting training to the employee for which an employment bond was executed. According to the bond, the employee was to serve the employer for period of three years or to make payment of rupees two lakhs to the employer. The employee left the employment within two year of signing the bond. To enforce the agreement the employer went to the court, which awarded sum of only Rs 22,532 to the employer as against the compensation amount of Rupess two lakhs stipulated in the contract. While coming to such conclusion, the Court relied upon the law laid down by Supreme Court regarding liquidated damages. The law with respect to liquidated damages have been crystallized by the Supreme Court vide two landmark decisions. First is the decision in case of Sir Chunilal V. Mehta And Sons, Ltd vs The Century Spinning (1962 AIR 1314), wherein it was held that liquidated damages are not in the nature of penalty and can be awarded as mentioned in the contract if loss from the breach of contract cannot be calculated for the remaining period of the contract. Whereas, in the case of Fateh Chand vs. Balkishan Das (AIR 1963 SC 1405), the provision of liquidated damages in the nature of penalty was held to be void, since the actual damages could be calculated and, thus the liquidated damages were held as the upper limit which are to be paid once the actual damages are proved. Since in the present case the damages could be calculated, Court considered the total expenses borne by the employer and the period of service completed by the employee under the contract and thus, divided the total expenses incurred into three parts for three years and awarded the damages for the remaining one year of the employment due to the breach of contract.
Therefore, from the above discussion, it is evident that employment bond stipulating a specified sum as payable by the employee in case of breach of contract is enforceable only if employer has actually spent money on the employee against a promise from the employee that he or she would not leave the employment for the specified duration and has consequently suffered a loss on account of the employee having received the training and leaving the employment before the stipulated period in breach of the employment bond / contract. With the employees in our country free to decide their employment these bonds play an important role to protect the interest of the employer and enable the employer, in appropriate circumstances, to recover the money spent or incurred by the employer in case of an early resignation by the employee.
Please mark “LIKE” if satisfied by my answer.
