Every private company has their own set of rules and conditions for newcomers. It is not illegal to ask for an original certificate as long as the employer provides you with an acknowledgement. There is not any law made for keeping original certificates, so we cannot say it is illegal. As per law, it is illegal to take the original certificates of employees for the purpose of security except in some special cases like: if the company is going to depute abroad for training or working with a client incurring heavy expenditure or
Employers may request the original documents only to verify them with photocopies and ensure that the original documents are returned as soon as possible.If the original documents must be kept by the employer for verification purposes for a day or two, always get a written acknowledgement of the submission of such original documents. Moreover, bonds/contracts/agreements to restrict an employee to leaving employment before a particular period of time are void in terms of Sec. 27 of the Indian Contract Act. Hence, you cannot be forced to work by the company.
If you wish to leave, you have to serve the notice period or pay the equivalent sum in lieu thereof in terms of your letter of appointment. The employer cannot retain the original education certificates, and such an act cannot be said to be lawful. As rightly suggested by Prabhakar, if the employer wants to safeguard his interests, he may have a provision for notice period or damages in the agreement, but the retention of original educational certificates is not permissible under any legal provision.
Reference: IPC – 202100499-20210041-11002