Advocate | Legal Blogger | Judicial Insights & Updates

  I. What Happened? The Supreme Court of India recently delivered a significant judgment regarding the enforceability of employment bonds. The matter arose when an employee of Vijaya Bank, Prashant B Narnaware, was required to pay Rs. 2 lakhs to the Bank after resigning before completing the stipulated three-year minimum service period, as per the terms of his appointment. The High Court had earlier invalidated this clause, but the Supreme Court reversed that decision, holding that such contractual provisions are not void for being in restraint of trade. II. Background Under Section 27 of the Indian Contract Act, 1872, any agreement that restrains a person from exercising a lawful profession, trade, or business is generally void, except in limited situations such as the sale of goodwill. The legal issue in this case was whether an employment bond, which requires an employee to serve a minimum period or pay liquidated damages if they resign early, violates this provision or is other...

  Supreme Court Denies Bonus Exemption to Factories Run by Charitable Trusts By Abhishek Jat, Advocate In a landmark ruling that clarifies the scope of exemptions under the Payment of Bonus Act, 1965, the Supreme Court has definitively established that factories operated by charitable trusts cannot claim exemption from paying statutory bonus to their workers. The judgment delivered on April 2, 2025, in the case of The Management of WORTH Trust v. The Secretary, WORTH Trust Workers Union, addresses the critical intersection of charitable purposes and commercial operations under labor welfare legislation. The case concerned the Workshop for Rehabilitation and Training of the Handicapped Trust (WORTH), formerly known as the Swedish Red Cross Rehabilitation Trust, which engages in rehabilitation of leprosy-cured patients and differently abled persons. While WORTH maintained its charitable character, since 1985 it has also conducted commercial manufacturing activities producing automo...

  Gujarat High Court Rejects Plea for Compassionate Appointment, Emphasizes Policy Integrity By Abhishek Jat, Advocate In a significant ruling, the  Gujarat High Court  has underscored that the  compassionate appointment policy  cannot be misused for personal gain. The court dismissed a petition filed by a mother seeking compassionate employment for her adult son from the  Life Insurance Corporation (LIC) , holding that the petitioner lacked the  locus standi  to file such a claim and had suppressed material facts regarding her family’s financial condition. Case Background The petitioner’s husband, an  Administrative Officer  at LIC, passed away in 2022 while in service. He was survived by his wife, a 23-year-old son, and a 22-year-old daughter pursuing her  MD in Pharmacology . Following her husband’s demise, the petitioner applied for  terminal benefits  and sought a  compassionate appointment  for her s...