Leaving IT company in internship period with signature bond term of two year

Dear client,

Your situation involves a service bond agreement during the internship period, where the company is demanding compensation of ₹80,000 for leaving before completing the two-year term. Here are the key points to address your concerns, along with the relevant laws and arguments that could support your case:

If you were classified as an intern and not a full-time employee, labor laws like the Industrial Disputes Act and Shops and Establishments Act do not typically apply. Interns usually don't fall under the ambit of traditional employee regulations.
As you rightly mentioned, interns are not bound by strict labor laws. Therefore, your resignation during the internship period could be argued as valid, as the bond may not apply in the same way it would to a regular employee.
The stipend you were receiving does not automatically categorize you as a permanent employee. Hence, the service bond's enforceability during the internship phase can be challenged.
Enforceability of Service Bonds:

Article 19(1)(g) of the Indian Constitution guarantees every citizen the right to practice any profession or carry out any occupation. Unreasonable restrictions on this right, such as forcing someone to work under a bond agreement, can be seen as violating this constitutional provision.
Courts have held that employment bonds are enforceable only under certain conditions:
If the bond is reasonable and there is a justifiable reason for compensation.
If genuine training costs were incurred by the employer, these need to be clearly documented and reasonable.
In your case, since you claim that the company did not provide any significant training, it may be difficult for the company to justify the demand for compensation based on supposed training expenses.


Indian Contract Act, 1872 – Section 27 deals with “restraint of trade” and invalidates agreements that prevent individuals from practicing their profession. Any unreasonable bond that restricts you from leaving a job or imposes excessive penalties can be challenged as void.
Courts generally disfavor agreements that impose unfair financial penalties on employees for leaving, especially if no genuine loss to the employer can be proved.


You can raise a counter-claim that the company did not pay your stipend of ₹25,000 and the pending ₹10,000 from previous months, which constitutes a breach of their contractual obligations. You can demand this amount from them through legal notice.
Failure to pay your due stipends weakens their case since they themselves are in breach of the contract.


The company claims they spent ₹2 lakhs on your training, but since you did not receive substantial training or found the skills redundant, this claim can be disputed. They must provide evidence of actual training costs (invoices, detailed documents) to support this claim.
Courts have ruled that employers must provide proof of training expenses in order to enforce compensation demands in bond agreements.

You can send a legal notice to the company, demanding payment of your pending stipend and rejecting their claim of ₹80,000 compensation.
In the notice, highlight that you did not receive the training they claim and that there is no legal basis for their demand during the internship period.


You can argue that the service bond agreement is unreasonable and violates your rights under Article 19(1)(g) of the Constitution. Also, the lack of training makes their demand for compensation baseless.
If the company proceeds with a legal case, you can defend your position by citing the Indian Contract Act (Section 27) and various court rulings on unenforceable employment bonds.

If necessary, file a complaint with the Labour Commissioner or Small Causes Court to recover the pending stipend and compensation for the inconvenience caused.

You should consult a lawyer to help you.