Service employement bond
Balaji
(Querist) 19 February 2013
This query is : Resolved
I have signed a Service cum Employment bond with one of the XXX company on a bond paper of Rs.100 for a period of 3years , but now i have completed 2year & wish to change.
By violating this bond i need to pay some amount.
Does this bond is valid legally, if i violate the same what could be the harm caused to me in this regards or it could be OK if i pay the amount as agreed during bond process
Kindly pl. guide me on this critical issue.
attached the copy of bond format.
Regards
Balaji
Devajyoti Barman
(Expert) 19 February 2013
What are the terms of the Bond?
If the restraint clause is unreasonable then the Bond is not enforceable.
Balaji
(Querist) 19 February 2013
Following are the terms of Bond
SERVICE AGREEMENT CUM INDEMNITY BOND
This Service Agreement cum Indemnity Bond is made and entered into this _____________________day of _______________ 2011 by and xxxxxxxx (hereinafter referred to as The Company, which expression shall mean and include their Successors, Legal representatives and Attorneys) OF THE ONE PART;
AND
_____________________________ S/o___________________________, aged ___________________ years, and residing at ____________________________________________________________________________________________________________________________________________________________________________________ hereinafter referred to as “EMPLOYEE” OF THE SECOND PART (which term shall include his legal heirs, executors, administrators and assigns)
AND
_____________________________ S/o___________________________, aged ___________________ years, and residing at ____________________________________________________________________________________________________________________________________________________________________________________ hereinafter referred to as “SURETY OF THE THIRD PART (which term shall include his legal heirs, executors, administrators and assigns)
W I T N E S S E T H
WHEREAS, The Company desires to employ the Employee, and the Employee is willing to be employed by The Company, on the conditions herein set forth;
NOW, THEREFORE, in consideration of the covenants and agreements herein set forth, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is hereby agreed as follows:
1. The Company, hereby employs the Employee and the Employee hereby accepts employment upon the terms and conditions of this agreement and the provisions in the Appointment Letter, Business Conduct Guidelines / Non Disclosure Agreement accepted by the Employee.
2. The Company agrees to employ Employee and Employee agrees to work with the required professional skills, technical capabilities and resources for the Company for a term of 3 (three) years. This term of employment shall begin to run on Employee’s first day at a work site and not from the date of this Agreement.
Employee services are terminable by giving Three Month’s Notice or Payment of corresponding salary in lieu thereof by either side.
However, till the completion of the total period of 3 years, if Employee wish to resign, Employee has to pay Rs.1,00,000/- (Rupees One Lakh Only) towards breach of Contract.
3. Each party to this Agreement acknowledges, understands, and agrees that The Company’s obligation to employ Employee is subject to Employee’s acceptable performance of the job responsibilities assigned by the Company from time to time.
4. The Company shall provide necessary and relevant specialized technical training / training on automation tools / soft skills and others and also make available specialized and sophisticated machinery/equipments, computers, software and support facilities to the Employee to learn and perform.
5. Employee and the Surety shall be jointly and severally liable to the Company for any and all expenses and damages incurred by the Company on account of imparting specialized training and exposure to special technical skills relating to project / business of the Company as a result of
a. Employee abandoning the project assignment prior to its completion and without the prior express written approval of the Company,
b. Terminating his employment in any way whatsoever prior to the stated expiry of its term,
c. Employee intentionally failing to perform to the satisfaction of the Company and/or the Company’s Client for the purpose of inducing the Company to terminate this Agreement prior to its expiration.
Such damages shall include, but not be limited to, loss of business and/or loss of profits incurred by the Company, as a result of Employee’s departure.
6. Employee and the Surety hereby accept and acknowledge that the Company incurs substantial out-of-pocket costs in making employment possible for Employee (“Employment Costs”). Such costs incurred by the Company include, but are not limited to, those associated with: a) obtaining employment authorisation on Employee’s behalf; b) transportation expenses; c) relocation expenses; d) administrative expenses. Furthermore, e) imparting Training, f) use of specialized and sophisticated machinery/equipments, computers, software and support facilities, g) establishment and marketing expenses for procurement of work-orders, h) advertisements, pay remuneration to the Employee, etc. with a view to make commercial profits and enhance business-image and goodwill; All such out-of-pocket costs shall be regarded as a debt of Employee and the Surety to the Company.
7. WHEREAS the Employee benefits out of the specialized training facilities, skills, knowledge and expertise.
8. WHEREAS the usage of masculine gender, wherever occurring in this Service Agreement cum Indemnity Bond, shall apply to feminine gender also.
9. In the event of the Employee committing any breach of this contract, the Employee and the Surety hereby bind themselves jointly and severally to pay and compensate the Company with a sum of:
a. Rupees One Lakh Only in Indian currency payable to the Company, within 15 days after the receipt of notice or letter of claim from the Company, together with interest at 18 % per annum on Rs.1,00,000/- (Rupees One Lakh Only) from the date of breach of contract till realization in the event of Employee committing any breach of contract within 3 (three) years from the joining date.
b. In order to secure the specific performance of this Service Agreement cum Indemnity Bond, and for valuable consideration received from the company as stated above, the Employee and the Surety shall deliver to the company a crossed Cheque favoring the Company for the said sum of Rs 100,000/- on the specific understanding that the company will be entitled to deposit the said cheque in case of any perceived breach of any of the terms and conditions of this Service Agreement cum Indemnity Bond by the Employee.
10. Employee and the Surety further acknowledge that they have executed, entered into and delivered to the Company, this Indemnity Bond (Bond) to secure the amount owed by Employee and the Surety herein to the Company, as well as other future cash advances made by the Company and accepted by Employee from time to time. The indebtedness set forth in this Agreement, shall not be deemed paid or satisfied by tender of this bond, but only by actual payment of the obligation. The Company’s enforcement of its rights and remedies under the bond, shall not bar the Company from enforcing other rights and remedies granted to it under this Agreement, either in law or in equity.
11. Nothing herein shall be construed to limit the Company’s available rights and remedies hereunder and the Company expressly retains the right to pursue any and all legal, civil and/or criminal and/or equitable remedies which are available to the Company due to Employee’s and the Surety’s breach of this Agreement.
12. The Company shall not be responsible for personal indebtedness or other liabilities incurred by Employee during employment with the Company. Employee understands and accepts that Employee shall have no authority to pledge the credit of the Company to any person or entity without the Company’s prior written authorisation.
Notwithstanding the provisions contained above,
a. The Company may terminate Employee’s employment with the Company for causes, which shall specifically include, but not limited to, (I) direct or indirect competition with Employer on any given project; (ii) breach of written The Company policy; (iii) breach of any covenant, obligation or representation contained in this Agreement; (iv) dishonesty or criminal conduct; (v) insubordination; or (vi) malfeasance and the Employee would be deemed to have breached this agreement.
b. Employee’s services are terminable by giving Three Month’s Notice or Payment of corresponding salary in lieu thereof by either side. However in case of exigencies of work demand, the Management reserves the right to extend the Notice Period. However, till the completion of a total period of three 3 years, if the Employee resigns, the Employee has to pay Rs.1,00,000/- (Rupees One lakh Only) towards breach of Contract.
13. If any provision of this Agreement shall be declared to be illegal or unenforceable for any reason, the remaining provisions of this Agreement shall remain in full force and effect.
14. Employee and the Surety shall indemnify, defend and hold the Company, its officers, directors, Employee and agents, harmless from any and all claims, causes of action, damages, obligations or liabilities or any kind or nature arising out of or connected with any act or omission of Employee.
NOW THIS INDEMNITY BOND FURTHER WITNESSETH AS FOLLOWS:
Know all men by these presents, we, the above named Employee and the Surety hereby assure, and indemnify the loss and expenses as specified in the agreement on account of providing training and employment to the Employee in India and compensate the entire loss to the Company, arising out of and in the course of breach of the said agreement before a period of 3 (three) years, without the permission or action on the part of the Company, from and out of income, properties and estates of every description in India or abroad to credit of The Employee and/or Surety and the same shall be paid within 15 days after the receipt of notice or letter of claim from the Company.
I. The Employee and/or Surety further agree that income and properties belonging to them or to be acquired by them in future may be attached in case of breach or default to comply with the conditions stipulated in this bond, which may be decided by any proceedings held in due process of law, for the recovery of the loss that may be incurred by the Company, unless the Employee serves the Company for a duration of 3 (three) years.
II. The Employee and/or Surety hereby bind themselves jointly and severally to pay and compensate the Company with a sum of
a. Rs.1,00,000/- (Rupees One Lakh only) in Indian currency payable to the Company, within 15 days after the receipt of notice or letter of claim from the Company, together with interest at 18% per annum on Rs.1,00,000/- (Rupees One Lakh only) from the date of breach of contract till realization, in the event of Employee committing any breach of contract within 3 (three) years from the joining date.
III. The Employee and/or Surety agree that in case this Indemnity Bond has not been executed by both of them on the same day, but on different dates, the legal implications arising out of this indemnification shall secure validity from the earlier date on which one of them had set their hands.
IV. Governing Law and Forum: This agreement shall be construed in accordance with the laws of the Indian Court. Any claim or cause of action arising out of or connected with this Service Agreement cum Indemnity Bond shall be governed by Chennai Court both Civil and or Criminal Jurisdiction and the parties hereto consent to submit to the personal jurisdiction of such courts, and waive all objections to such jurisdiction and venue.
V. Notwithstanding the above, the Company may, at its sole and exclusive option, seek to enforce this Agreement by initiation legal action against Employee and The Surety in an appropriate Court in India, civil and/or criminal provided that Employee and The Surety are physically located in India at the time such an action is filed. In such case, the agreement shall be construed in accordance with the laws of India.
VI. This agreement contains the entire understanding of the parties with respect to the subject matter hereof. All prior promises, understandings or agreements are merged herein. It may not be modified orally, but only by an agreement in writing, signed by the party against whom enforcement of any waiver, change, modification or discharge is sought.
VII. In the event that the Company shall enforce any part of this Agreement through legal proceedings, civil and /or criminal the Employee agrees to pay to the Company any costs and Attorneys’ fees reasonably incurred by the Company in connection therewith.
VIII. This Agreement cum Indemnity Bond may be executed in counterpart originals, each of which shall be deemed an original.
IN WITNESS WHEREOF, the parties have set their hands and seals on the date first above written.
for xxxxxxxxxxx
Authorized Signatory
EMPLOYEE / SURETY: We have read, understood and agree to the terms set forth in this Service Agreement cum Indemnity Bond as evidenced by our signature below
Employee Signature Surety Signature
Employee Name Surety Name
Date: Date:
Place: Place:
Witness: Witness:
Signature Signature
Name Name
Address Address
Balaji
(Querist) 20 February 2013
Some one pl. guide me on this issue
ajay sethi
(Expert) 20 February 2013
The Employee and/or Surety hereby bind themselves jointly and severally to pay and compensate the Company with a sum of
a. Rs.1,00,000/- (Rupees One Lakh only) in Indian currency payable to the Company, within 15 days after the receipt of notice or letter of claim from the Company, together with interest at 18% per annum on Rs.1,00,000/- (Rupees One Lakh only) from the date of breach of contract till realization, in the event of Employee committing any breach of contract within 3 (three) years from the joining date.
under terms of bond in case of breach of contract you would be liable to pay Rs 1 lakh together with interest at 18%pa . the company will issue you notice . make payment
Kirti Kar Tripathi
(Expert) 23 February 2013
It is valid but for enforcement of this bond, your employer has to file civil suit.
Balaji
(Querist) 24 February 2013
But people say Civil laws are not applicable to Engineering candidate/Student, is it true.
regards
Balaji
Kirti Kar Tripathi
(Expert) 24 February 2013
It is contract of personal service, in which only monitory benefit can be claimed. The parties are bound by their contractual obligations,which can only be agitated in Civil Court.
