Employer cannot be compelled to issue relieving letter where employee breaches training-linked mandatory service bond.

The Petitioner company provides engineering services to foreign airlines.

The Respondent was employed as a technician and later executed a bond/agreement on 7 November 2022 to undergo specialized training for Boeing B777 aircraft

Under the agreement, the Respondent committed to serving the company for three years post-training or paying ₹10 lakhs in liquidated damages and providing a 60-day notice

After becoming a certified Aircraft Maintenance Engineer, the Respondent resigned via email on 9 April 2024, without serving the notice period or paying damages

When the Petitioner withheld his Relieving Letter and Service Certificate, the Respondent filed a complaint (ULP No. 450 of 2024) under the MRTU & PULP Act, 1971.

The Industrial Court, via an interlocutory order dated 13 January 2025, directed the Petitioner to issue the documents

The Petitioner challenged this interim order in the High Court.

The court applied the principles of contractual obligations under the Indian Contract Act, 1872, and the MRTU & PULP Act, 1971.

It relied on Amrit Pal Singh v. Pawan Hans Helicopters Ltd., which established that an employer is not required to relieve an employee until contractual conditions (notice period and bond payment) are satisfied

It further applied the Apex Court's ruling in Vijaya Bank v. Prashant B. Narnaware, which held that restrictive covenants for minimum service tenures (even without training costs) are not unconscionable or in restraint of trade under Section 27 of the Contract Act, provided they aim to reduce attrition and improve efficiency

The Court observed that the Respondent prima facie breached the agreement by failing to provide 60 days’ notice and refusing to pay liquidated damages

It noted that the Respondent's resignation was a unilateral act and, since the Petitioner had not accepted it due to the breach, the issuance of a relieving letter—a consequential act of acceptance—could not be forced

The Court reasoned that if employees are allowed to secure specialized training at the employer’s expense and then jump to competitors without consequences, it would foster "unhealthy competition" and "poaching"

The Court held that while the employer can sue for damages, it is also justified in withholding documents to enforce the bond.

The Industrial Court erred by granting final relief at the interim stage without considering that the Petitioner’s refusal was a legitimate exercise of contractual rights

The High Court allowed the Writ Petition and set aside the Industrial Court’s order dated 13 January 2025

The Court clarified that findings are prima facie and directed the Industrial Court to decide the main complaint within six months, while suggesting the Respondent may offer a pro-rata amount of damages to settle the dispute