• Bond recovery after leaving a job

Hi,
I worked for an Indian MNC till last year. I was deputed by them to go out to a different country and work for them. I had signed a bond to pay them if I left the company while still being abroad. I recently took up another position and left the company. Now they have sent me an email asking me to pay up. My question is:
1) Can the company move legally ahead to recover money from me? If yes, what am I being made liable for legally?
2) I don't live in India anymore, would this be a problem whenever I return to India?
3) What is your advice in terms of should I be paying this or is it ok to not entertain this request?

Thanks.
Asked 4 years ago in Labour

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18 Answers

Yes, they can recover the money . If the court pass order in their favour and they proceed to execute it the court can attach your property irrespective of the fact that you arr living in India or not.

Hope this helps.

Regards

Swarupananda Neogi
Advocate, Kolkata
2973 Answers
6 Consultations

If you have already paid then you are not liable to pay again 

No there will be no issues if you stay abroad

Need to check exactly the notice which demands the money from you and decide whether it's legitimate or not

Prashant Nayak
Advocate, Mumbai
32366 Answers
199 Consultations

It is necessary to peruse terms of bond signed by you 

 

2) if you don’t pay company can file civil suit in India to recover bond amount 

 

3)if decree is passed against you it would be enforced by attachment of your property 

 

4) amicable settlement is best option 

Ajay Sethi
Advocate, Mumbai
96755 Answers
7804 Consultations

1. The rights and obligations of respective parties are mentioned in the agreement of that Bond.  So before commenting on merit of the claim of your company the Bond is to be seen. 

2. This is a civil dispute for which there is no problem in making visit to India. 

3. Send me the copy of the Bond before I speak my mind on this. 

Devajyoti Barman
Advocate, Kolkata
23191 Answers
510 Consultations

Yes, company can take action against you. If there is NDA and Non-Competent Contract plus Bond, that needs to check what it has been written in it under the terns and conditions, like Termination of Clause, Training or Travelling cost, investment done on you for various expenses like salary, travelling, training, Accommodations etc.  They will raise all these types of allegations on you. But only Training amount you're liable to pay rest of the things court vanish it. So whenever they ask you to pay they bond amount ask them bifurcation in details.

Ganesh Kadam
Advocate, Pune
12987 Answers
262 Consultations

1. The company may file suit to recover the bond amount. You have to contest the suit before the court, in case you fail to appear or contest the court may decide the suit ex-parte.

2. As such there will be no problems as it is a civil matter and no criminal complaint in same can be filed.

3. See you may reply there email and further in case if they file suit contest same before the court. 

Shubham Jhajharia
Advocate, Ahmedabad
25514 Answers
179 Consultations

Dear Sir,

You are suggested not to leave any of their email or any other form of communication un-replied. Rather bounce back and accuse that you were compelled to leave the job due to and in compelling circumstances and for the same that company is solely responsible. it is suggested that your such kind of stand will reduce the bond amount and you will be able to settle the matter in lesser amount.  

Ganesh Singh
Advocate, New Delhi
6757 Answers
16 Consultations

- As per Specific Relief Act, if any employee quits before the notice period, the Employer can only recover the Notice pay, and the Company cannot force to serve the entire notice period.

- Further, the resignation decision is the employee’s decision, and the employer cannot sue for breach of contract, if the employee leaves without serving contractual notice. 

- Except, recovery of the said amount, company cannot harm you for the same

- Further, no employer can refused to return the original certificates or to issue relieving letter .If they are doing so, their act is illegal, unjustified and against the fundamental rights of the employee.

- Further , as per the Employment Act, employees have the right to resign at any time, by serving notice or by compensating the employer with salary in lieu. It is an offence for employers to disallow employees to leave their job.

- Further, the employment bond with the negative covenant is valid and legally enforceable, if the parties agree with their free consent i.e. without force, coercion, undue influence, misrepresentation and mistake, but it is not enforceable, if it is either one sided, unconscionable or unreasonable.

- Further, section 27 of the Indian Contract Act prohibits any agreement in restraint of trade and profession.

1. You are only liable to pay notice period , which is mentioned in your offer/appointment letter, and not  enough. 

2. No , but the said company can file a recovery case against you for the recovery of notice period amount. 

3. Indian Contract Act prohibits any agreement in restraint of trade and profession , hence you are not bound to pay . 

 

Good luck and dont forget to rating Positively. 

- You can connect me via kaanoon.com , if needed further suggestion. 

Mohammed Shahzad
Advocate, Delhi
14415 Answers
221 Consultations

Yes, you are under oath to compensate the company if violate the bond. 

Company can file civil suit of recovery, no problem when you will return but must represented in case otherwise court will pass ex parte order. 

Don`t entertain there request and impose resignation on him that due to companies XYZ reasons, you were forced to resign. Also find loophole in bond language to absolved from any liability to pay. 

Yogendra Singh Rajawat
Advocate, Jaipur
22984 Answers
31 Consultations

1. You have to pay and should pay to avoid unwanted legal headache but first stop receiving any mail or post at your home town or abroad, on phone and see what they do, if they take any action then ready to pay as it will take time and don't bother you have not committed any fraud or cheating, say for the betterment you switch to another job , not now if need be.

2. Yes recovery proceedings can be initiated but by order of the court they take action against you such as attachment of the property, so tell your family members not to receive any communication from company or court , they should tell the postman that you live abroad.

3. Deal as suggested at no.1.

Koshal Kumar Vatsa
Advocate, Gurgaon
2283 Answers
3 Consultations

1. Yes there could be recovery process against you.

2. Yes 

3. You should pay

Rahul Jatain
Advocate, Rohtak
5365 Answers
4 Consultations

Yes they may file a case. They may send a legal notice and if you don't pay then  they will file a case. Ask the bond amount and litigation expenses.

Yes they may serve summons outside India.

It depends upon what the amount is.

Share details of the amount and agreement and then only the issues can be discussed.

Rahul Mishra
Advocate, Lucknow
14107 Answers
65 Consultations

Firstly, the terms and conditions of the Bond needs to be seen to guide you properly.

However, if you defaulted the T&C of said Bond, the company may sue you for recovery of bond money.

If the same is allowed in their favor, they can initiate execution proceedings against your movable & immovable properties apart from seeking your arrest.

It is better and advisable to go for settlement.

Talk to the HR / Company and go for amicable settlement to avoid repercussions. 

The above could be WIN-WIN  Situation for both of you.

Avoid litigation.

S Srinivasa Prasad
Advocate, Hyderabad
2876 Answers
9 Consultations

Obviously the company can initiate a legal proceeding against you to recover the amount, but in court they have to prove the actual amount of money spent on you for providing special training.

Initiating a legal proceeding is not a big deal but winning is. Before initiating a legal proceeding, the company is supposed to give you a notice. Please carefully handle and reply to the notice, taking help of professionals/ lawyers, if required

Mohammed Mujeeb
Advocate, Hyderabad
19306 Answers
32 Consultations

1. Yes company can initiate legal proceedings against you for recovery of bond amount.

2. No there will No problem in returing to India because it's not criminal offence.

3. You need to pay the bond amount otherwise your previous employer can initiate recovery suit and get your assets attached for recovery.

Mohit Kapoor
Advocate, Rohtak
10687 Answers
7 Consultations

1. 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.

The validity of Employment bonds can be challenged on the basis of Section 27 of the Indian Contract Act. Section 27 of the Indian Contract Act, 1872 prohibits any agreement in restraint of trade and profession. Any agreement in trade and profession according to Section 27 is void.

2. They may send a legal notice, if not responded they may file a money recovery suit and may hold their grip on the sureties you have furnished.

3. If an employment bond is breached, the employer might be entitled to compensation. The compensation awarded should be reasonable to compensate the loss and should not exceed the penalty, if any stipulated in the contract. The court computes the reasonable compensation amount by computing the actual loss incurred by the employer having regard to all facts and circumstances of the case. Even if the bond stipulates payment of any penalty amount in the event of breach, it does not mean that the employer shall be entitled to receive the stipulated amount in full; the courts shall determine the reasonable amount of compensation to be paid.

You may wait for the company to initiate any action then you can decide based on the circumstances.

T Kalaiselvan
Advocate, Vellore
86956 Answers
2334 Consultations

1. You have signed the Band and had agreed to pay the Bond amount in case you left the Company while being posted abroad which you have done. Your Company can sue you claiming the amount mentioned in the Band. It is not a criminal matter for which you will not face any problem after coming to India on this issue. However, you might get legal notice and copy of the notice if they file any Money Suit against you.

 

2. Under such circumstances, it is argued by the departing employee that his fundamental right to work with any company has been impaired by the said Bond for which it's enforcement  should be set aside.

 

3. Sometimes, the amount lost by the Company towards training the employee and for sending him abroad is directed to be mitigated by the Court.  

Krishna Kishore Ganguly
Advocate, Kolkata
27430 Answers
726 Consultations

  1. As per the information mentioned in the present query, makes it clear that you had signed the agreement/ bond about the same that have now not been complied by you and you have been served with a demand to pay the amount.
  2. I would like to apprise you that yes it may be problematic for you in future if they happen to have go before the court of law as eventually look out notice may also be there against you.
  3. But, yes, before you make your mind to pay, I would request you to revert back the request in positive and also point out if some loop whole you can see in the bond to play in your favour.

Sanjay Baniwal
Advocate, South Delhi
5474 Answers
13 Consultations

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