Hi Ramesh,
Tracking employee posiiton via GPS in tablet or mobile phone is not currently a feature of SAP Customer for Cloud (the solution formerly known as SAP Customer OnDemand). This feature is not on the roadmap.
However there is a check-in /check-out feature in planning but this only covers the timestamp and does not verify location. A GPS location for check-in may be developed at a later stage.
As to the legality question, this would have to be clarified depending on the laws of your country.
I hope this information helps!
Douglas KT