Bombay High Court on Service Bonds: Employer Can Withhold Relieving Letter Where Employee Breaches Valid Training Bond

The Bombay High Court has recently delivered an important judgment in Bharat Aviation Pvt. Ltd. v. Rahul Sudhindra Soni, Writ Petition No. 334 of 2026, decided on 5 May 2026. The ruling is highly relevant for employers, HR teams, and employees, especially in industries where companies spend substantial money on employee training and skill development.

The main question before the Court was simple but very important:

Can an employee who has taken specialized training at the employer’s cost, signed a service bond, and then left before completing the bond period force the employer to issue a relieving letter or service certificate?

The Bombay High Court answered this question largely in favour of the employer.

Background of the Case

The employee was working with Bharat Aviation Pvt. Ltd., an aviation engineering company. During his employment, the company arranged specialized training for him on Boeing B777 aircraft.

Since the training involved time, effort, and cost for the employer, the employee signed a service bond dated 7 November 2022. Under this bond, he agreed to serve the company for three years after completion of training. He also agreed to give 60 days’ notice before resignation and to pay ₹10 lakh as liquidated damages if he left before completing the bond period.

However, the employee resigned in April 2024, before completing the bond period. He also stopped attending work shortly thereafter. He did not complete the notice period and did not pay the agreed liquidated damages.

Because of this breach, the employer refused to issue his:

• Relieving Letter

• Service Certificate

• Experience Certificate

The employee then approached the Industrial Court under the MRTU & PULP Act, alleging unfair labour practice. The Industrial Court granted interim relief in favour of the employee and directed issuance of relieving documents. The employer challenged this order before the Bombay High Court.

What the High Court Held

The Bombay High Court observed that reasonable service bonds are legally enforceable, especially where the employer has provided specialized training to the employee.

The Court noted that modern industries invest heavily in technical training, certifications, and skill development. Therefore, an employer has a legitimate right to protect such investment, provided the bond conditions are reasonable and not unfair.

In this case, the Court found that the employee had voluntarily signed the bond and had also received the benefit of specialized training. Therefore, the employee could not ignore the bond obligations and still demand all exit documents as a matter of right.

Relieving Letter Is Not Automatic in Case of Bond Breach

One of the most important observations of the Court was that a relieving letter or service certificate is generally issued after proper acceptance of resignation.

If the employee resigns in violation of the bond conditions, does not serve the required notice period, and does not pay the agreed damages, the employer may be justified in not accepting the resignation and withholding relieving documents.

The Court made it clear that an employee who breaches a valid service bond cannot automatically compel the employer to issue a relieving letter or service certificate.

Right to Livelihood Argument Rejected

The employee argued that without a relieving letter or service certificate, his future employment opportunities would be affected and this would violate his right to livelihood.

The Court did not accept this argument in the facts of the case. It observed that the employee had knowingly accepted the bond, benefited from employer-sponsored training, and then chose to leave without following the agreed terms.

The Court also noted that if such conduct is allowed, it may encourage poaching of trained employees and discourage employers from investing in employee training.

Interim Relief Cannot Become Final Relief

The Bombay High Court also found fault with the Industrial Court’s interim order. According to the High Court, the Industrial Court had practically granted final relief at the interim stage itself.

Since the main complaint was still pending, the Industrial Court should not have directed immediate issuance of relieving documents before final adjudication.

Practical Takeaways for Employers

This judgment is a strong reminder that employers should not treat service bonds as mere formalities. If properly drafted and supported by evidence, service bonds can be enforced.

Employers should ensure that service bonds clearly mention the nature of training, cost or value of training, bond period, notice period, liquidated damages, consequences of breach, and exit process.

Employers should also maintain proper records such as training invoices, certification details, approval emails, training nomination letters, employee consent, and proof that the employee actually benefited from the training.

Practical Takeaways for Employees

Employees should also understand that signing a service bond has legal consequences. If an employee receives specialized training at the employer’s cost and agrees to serve for a specific period, leaving before that period without complying with the bond terms may create legal and employment-related complications.

Abrupt resignation may affect relieving formalities and may also expose the employee to claims for damages.

Balanced Approach by the Court

Although the Court ruled in favour of the employer, it also encouraged a practical settlement. Since the employee had already served nearly 50% of the bond period, the Court observed that the employee could offer a reasonable amount towards liquidated damages and the employer should consider such proposal practically.

This shows that courts may protect employer investment, but they also expect both parties to act reasonably and fairly.

Conclusion

The Bombay High Court’s ruling in Bharat Aviation Pvt. Ltd. v. Rahul Sudhindra Soni is an important development in employment law. It strengthens the position of employers in cases where employees leave after receiving specialized training in breach of a valid service bond.

The judgment clarifies that a relieving letter or service certificate is not an automatic right where the employee has violated agreed contractual obligations. At the same time, the ruling does not completely restrict employee mobility. It simply reinforces the importance of contractual discipline, fairness, proper documentation, and reasonable conduct by both employer and employee.

For HR professionals and employers, this judgment is a clear reminder to draft service bonds carefully and maintain supporting records. For employees, it is a reminder that service bonds should be read and understood carefully before signing.