Case Note & Summary
The case pertains to a writ appeal filed by Vijaya Bank (now Bank of Baroda) against an order of a learned Single Judge of the Karnataka High Court. The Single Judge had allowed the writ petition of the respondent, Abhimanyu Kumar, and directed the Bank to refund Rs. 3,00,000 recovered from him as bond amount. The respondent was appointed as a Probationary Officer by the Bank and executed an indemnity bond agreeing to serve for a stipulated period. He resigned before completing the period, and the Bank recovered the bond amount as per Clause 11(k) of the appointment letter. The respondent challenged the recovery, and the Single Judge held it unjustified. The Bank appealed. The Division Bench, comprising the Chief Justice and Justice K.V. Aravind, allowed the appeal, setting aside the Single Judge's order. The Court held that the bond and clause were valid and enforceable, and the Bank was entitled to recover the amount as the employee had voluntarily resigned before completing the stipulated service period, constituting a breach of contract. The Court emphasized that the employee had accepted the condition at the time of appointment and could not later challenge it. The appeal was allowed, and the writ petition was dismissed.
Headnote
A) Service Law - Bond Amount Recovery - Enforceability of Service Bond - Clause 11(k) of Appointment Letter - Indemnity Bond - The respondent-employee was appointed as a Probationary Officer and executed an indemnity bond agreeing to serve for a stipulated period. He resigned before completing the period. The Bank recovered the bond amount. The Single Judge held the recovery unjustified. On appeal, the Division Bench held that the bond and clause were valid and enforceable, and the Bank was entitled to recover the amount. (Paras 1-10) B) Contract Law - Service Contract - Breach of Condition - The employee voluntarily resigned before completing the agreed service period, constituting a breach of the contractual condition. The Bank's recovery of the bond amount was held to be lawful and justified. (Paras 5-8) C) Banking Service - Probationary Officer - Service Bond - The appointment letter contained a clear condition that if the employee leaves the service before completing the stipulated period, he shall pay the bond amount. The employee having accepted the condition, the Bank's action was upheld. (Paras 3-6)
Issue of Consideration
Whether the appellant-Bank was justified in recovering the bond amount of Rs. 3,00,000 from the respondent-employee who resigned before completing the stipulated service period, and whether Clause 11(k) of the appointment letter and the indemnity bond were valid and enforceable.
Final Decision
The appeal is allowed. The judgment and order dated 19.04.2023 passed by the learned Single Judge in W.P. No. 6063/2014 is set aside. The writ petition stands dismissed.
Law Points
- Contract of service
- Bond amount recovery
- Indemnity bond
- Stipulated service period
- Resignation before completion
- Enforceability of contractual terms
- Public sector bank service conditions
