An Employment bond contract is a recorded promise made by an employee to the employer pledging that he/she will pay a certain amount to the employer if he leaves the organization before the agreed period. This agreement is usually made when an employee joins a new organization. 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.
Sample Format of Employment Bond by Employee to Employer is given below.
By this Bond Mr. ________________ s/o ________________ aged about ________________ resident of ________________ binds himself to pay to M/s ________________ Ltd the sum of Rs________________ as liquidated damages.
Whereas a is a qualified Programmer employed by ________________ Ltd in their IT Company Developing some software viz ________________ and in the course of employment Mr. ________________ may come to know the secret codes adopted by M/s ________________ Ltd in the Developing of such Software products.
And Where as a term of employment ________________ has promised to M/s ________________ Ltd not to misuse his position by disclosing to any person the knowledge acquired by him in the Developing of the said software products and has agreed to execute this Bond.
And Where as however, in the event of Mr. ________________ misusing his position as herein stated, he has at the request of M/s ________________ Ltd agreed and hereby agrees to make good the loss by paying him the said M/s ________________ Ltd a sum of Rs ________________ as compensation.
Now the condition of this bond is that if during the course of employment of
Mr. ________________ with M/s ________________ the said Mr. ________________
will work faithfully and honestly and shall not disclose to any person the
knowledge he may get regarding the development of the said products and the
formulae thereof and shall not after he ceases to be the employee of M/s.
________________Ltd due to his resignation or dismissal or removal or for any
reason whatsoever, carry on any business similar to the business of developing
the said products or medicines or work with any other Developer carrying on
similar business, either as an employee or on ad hoe
basis or partially or otherwise directly or Indirectly within the city of ________________and for a period of three years from the time he ceases to be in the service of the said M/s ________________ then this Bond will become void and of no effect but otherwise it will remain in full force and effect.
In Witness Whereof the said Mr.________________ has put his hand this day
________________ Signed and delivered by the within named Witnesses.
Name __________ Signature _________ Address________
Section 2(5) "Bond"- bond includes
(a) any instrument whereby a person obliges himself to pay money to another, on condition that the obligation shall be void if a specified act is performed, or is not performed, as the case may be;
(b) any instrument attested by a witness and not payable to order or bearer, whereby a person obliges himself to pay money to another; and
(c) any instrument so attested, whereby a person obliges himself to deliver grain or other agricultural produce to another:
Employment Bond is an agreement or a contract paper consisting all the terms and conditions of employment agreed by both an employee and the employer. This kind of contract agreement or bond mainly contains the minimum work period and under decided circumstances which will include salary, job profile, designation etc
Effect of Violating Employment Bond
The company may not sue you if you break the bond as it will not be successful in recovering any money from you through court order. The company may send you a legal notice as part of their pressure tactics. You should resign only if you are Sure of another secure job without your originals and a reliving letter.
Section 8. Bonds, debentures or other securities issued on loans under Act XI of 1879
(1) Notwithstanding anything in this Act, any local authority raising a loan under the provisions of the Local Authorities Loan Act, 1879 (XI of 1879) or, of any other law for the time being in force, by the issue of bonds, debentures or other securities, shall, in respect of such loan, be chargeable with a duty of one per centum on the total amount of the bonds, debentures or other securities issued by it, and such bonds, debentures or other securities need not be stamped and shall not be chargeable with any further duty on renewal, consolidation, sub-division or otherwise.
(2) The provisions of sub-section (1) exempting certain bonds, debentures or other securities from being stamped and from being chargeable with certain further duty shall apply to the bonds, debentures or other securities of all outstanding loans of the kind mentioned therein, and all such bonds, debentures or other securities shall be valid, whether the same are stamped or not:
Provided that nothing herein contained shall exempt the local authority which has issued such bonds, debentures or other securities from the duty chargeable in respect thereof prior to the twenty-sixth day of March, 1897, when such duty has not already been paid or remitted by order issued by the Central Government.
(3) In the case of willful neglect to pay the duty required by this section, the local authority shall be liable to forfeit to the Government a sum equal to ten per centum upon the amount of duty payable, and a like penalty for every month after the first month during which the neglect continues.