I was working in a company 3 years back where I had signed a service bond of Rs. X amount. This amount was payable to them by me if I leave them before completing 2 years.
Under some circumstances, I had to leave the company within 6 months. Now after 3 years, I got a notice from company's lawyer demanding Rs. X.
1) Should I reply back?
2) If Yes, what should be my reply?
3) If No, can they take me to the court on the basis of this bond?
4) In general, what should be my next step? Is this something to take care of urgently?
2 Answers from Attorneys
The limitation period to enforce bond is 3 years, from the date when such bond condition is broken. In this case, it appears that three years period is already over, so even if they file suit, it will be barred by limitation period.
So here are the answers to your question
(1) No need to reply.
(2) Question does not arise
(3) As stated, since 3 yrs is already over, their suit will be barred by limitation, so even if they take to court, their suit will not be maintainable.
(4) No need to panic. Nothing to be urgently taken care of.
Let me know should you require any assistance.
Vivek N Mapara
Dear Sir / Madam,
A performance / service bond, being against the principle of natural justice, is illegal and a criminal offence.
1. You should reply to the Company MD citing the facts with reference to terms and conditions contained in your Appointment letter, especially that the performance bond was one sided.
2. In addition to what has been stated in Point (1) above, you should also highlight any contrary or contradictory clauses in your Appointment letter.
3. Yes, the Company on its part, may try its best to compel you to settle the bond amount.
4. You should reply to the Company on the lines cited in points (1) and (2) above.
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