Moreover, the contract must not be too one-sided, so it loses the character of a commercial promotion contract and acquires the character of a trade agreement. The cases of Jet Airways (I) Ltd v Jan Peter Ravi Karnik and Lalbhai Dalpatbhai – Co v Chittaranjan Chandulal Pandya explain this recognized legal principle. In the first case, the accused resigned within six months of the end of the training, in violation of the employment obligation. The Bombay High Court, however, rejected an injunction in favour of the company on the grounds that the negative Confederation was unilateral and inappropriate. The Court found that there was no interest in the property of the vulnerable employer. Similarly, a federation that instructed the employee to serve for a period of 20 years was held as oppressive and unilateral in Shree Gopal Paper Mills Ltd against Surendra K Ganeshdas Malhotra. In order to complete a valid employment loan, the parties must ensure that the following conditions are met: (i) the agreement must be signed by the parties with free consent; (ii) conditions must be appropriate; and (iii) the conditions imposed on the worker must be proven in order to protect the interests of the employer. In addition, employment bonds, the conditions of service required to the employer for a specified period or a penalty to be paid for the purchase of the fees, in the very nature of the loan of benefits, and therefore such a type of employment obligation must be carried out on stamp paper of appropriate value to be valid and enforceable.3 The most relevant question now arises as to whether the contract of employment with a confederation is binding under Indian law? The simple answer is yes. Such employment contracts with the Negative Confederation are valid and legally applicable if the parties accept their free consent, i.e. without violence, without coercion, without undue influence, misrepresentation and error.
The Indian courts have held in their various cases that in the case of a worker`s offence, the employer is only entitled to damages if a significant amount has been spent on training or if other costs have been incurred for the worker. In addition, the courts refused to prevent the worker from joining a competitor or other employer. The employment obligation is not applicable if it is unilateral, unacceptable or unreasonable. It is therefore appropriate to be cautious in the development of the employment obligation, since it is mandatory that the conditions set out in the employment requirement, including the period of compulsory employment and the amount of the penalty, be reasonable to be valid under Indian law.