“The Employee agrees to serve the Company for a minimum period of 2 (two) years from the date of joining. In the event of resignation or termination before completion of this period, the Employee shall pay a sum of ₹2,00,000 (Two Lakhs) as liquidated damages towards training and recruitment costs incurred by the Company.”
This is a service bond — you're being asked to pay ₹2 lakhs if you leave before 2 years. Under Section 27 of the Indian Contract Act 1872, any agreement in restraint of trade is void. Indian courts have consistently held that service bonds are unenforceable unless the employer can prove they spent a specific, verifiable amount on specialised training (not general onboarding or orientation). A flat ₹2L penalty with no proof of actual training cost will not hold up in court.
💡You can sign this and still leave — this clause is very likely unenforceable. However, if you want to be safe, ask HR to either remove the bond clause or reduce it to actual verifiable training costs only. If they insist, get written proof of what training costs ₹2L.