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Would a service agreement be valid as per the Indian Contract Act under section 23 & 24- In case an employer takes a Cheque of Rs. 1 Lacs from a new employee with condition to present the same with his banker if he leaves the company with in 5 years?
Hi.
Service Agreement is valid as it is a form of a contract, which is enforceable in Law.
But the terms and conditions mentioned therein cannot be against the law.
The condition that the new employee submits a cheque to the employer on the condition that if he leaves before a certain period can be termed as against the law, as it conveys Bonded Labour. Further as per the provisions of the Contract Act, if the contract is induced by force, undue influence or coersion, the same is void.
The employee can always make a statement in the court of law, that as he was in need of employment, he was forced to accept the terms and conditions of the contract, which he did. The Court may held the same against the employer.

Thanks Mr. Ashish. Do you have any citation of HC or SC in this regards. 138 proceeding has been initiated against the employee. We can place the citation before the Hon'ble court
Ashutosh verma

Hi,
138 case is altogether a different case, and is contested on a diffrent law point. In case of bonds, i am not sure, but there is a oild citation of a Rubber/ Tyre manufacturing company. If i get the same. i would surely update here.

Hi,
It must be understood, that while seeking employment the candidate is in a dis-advantageous position. The prospective employer is in a position to impose any condition that he likes, howsoever ridiculous they may be, (like the present one).Such conditions have no legal validity. Even 'one sided bonds' have no legal validity. If the employer says that the employee cannot leave the organization during a specific period, the employer also has an obligation not to terminate the employee during that period.
All said an done, do not worry about such ridiculous conditions, as they have NO legal validity.
Cyril

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