Case Note & Summary
The Bombay High Court dealt with a writ petition filed by Bharat Aviation Pvt. Ltd. and its director challenging an interlocutory order of the Industrial Court, Mumbai, which directed the employer to issue a relieving letter/service certificate to the respondent employee, Rahul Sudhindra Soni. The respondent had executed a bond on 7 November 2022 agreeing to serve the petitioner for three years after undergoing specialized training on Boeing B777 aircraft conducted by American Airlines. However, the respondent resigned via email on 9 April 2024 without serving the required 60 days' notice and without paying liquidated damages of Rs. 10 lakhs as stipulated in the bond. He stopped attending duties from 12 April 2024 and demanded a relieving letter and service certificate, which the petitioner denied. The respondent then filed Complaint (ULP) No. 450 of 2024 under Section 28 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, seeking issuance of a relieving letter and payment of monetary dues. The Industrial Court passed an interim order on 13 January 2025 directing the petitioner to issue the relieving letter/service certificate. The petitioner challenged this order in the High Court. The High Court framed the issue as whether the Industrial Court can direct the employer to issue a relieving letter/service certificate to an employee who leaves before completing the bond period. The court held that the Industrial Court has such power, as the right to a service certificate is not conditional on completion of the bond period. The employer's remedy for breach of bond is to claim liquidated damages, not to withhold the certificate. The court dismissed the petition, upholding the Industrial Court's order.
Headnote
A) Industrial Law - Relieving Letter - Service Certificate - Power of Industrial Court - Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, Section 28 - The Industrial Court has the power to direct an employer to issue a relieving letter/service certificate to an employee who leaves employment before completing the bond period, as the right to such certificate is not conditional on completion of the bond period. The employer's remedy for breach of bond is to claim liquidated damages, not to withhold the certificate. (Paras 1-17) B) Contract Law - Bond - Liquidated Damages - Specific Relief Act, 1963 - Breach of bond by employee leaving before agreed service period entitles employer to claim liquidated damages, but does not justify withholding of service certificate. The employee's obligation to pay damages is separate from the employer's obligation to issue service certificate. (Paras 3-17)
Issue of Consideration
Whether the Industrial Court can direct the employer to issue relieving letter/service certificate to the employee who, after securing training, leaves the job before completion of the service agreed in the Bond executed by him with the employer.
Final Decision
The Bombay High Court dismissed the writ petition, upholding the Industrial Court's interim order dated 13 January 2025 directing the petitioner to issue a relieving letter/service certificate to the respondent.
Law Points
- Industrial Court can direct employer to issue relieving letter/service certificate to employee who leaves before completing bond period
- employee's right to service certificate is not conditional on completion of bond period
- employer's remedy for breach of bond is to claim liquidated damages
- not to withhold service certificate
