Full Text
HIGH COURT OF DELHI
DR. PRABHAT KUMAR SINGH .....Petitioner
Through: Mr. K. K. Rai, Sr. Advocate alongwith Mr. AwanishKumar, Mr. S.
K.Pandey, Mr. Chandrashekhar, Mr. A.Chakalabbi, Mr. Anshul Rai, Mr.Sreoshi Chattarjee, Ms. MedhaTandon, Mr. Ravilochan Dalipatri, Mr. Sanket Shankrappa Ambali, Ms.G Anusha, Ms. Aishwarya Hiremath, Mr. Varnik Kundaliya, Advocates
Through: Mr. Shlok Chandra, Standing Counsel for ESIC
R-1 & 2.
JUDGMENT
1. The instant writ petition has been filed under Article 226 of the Constitution of India by the petitioner, seeking issuance of writ/order or direction in the nature of mandamus or any other appropriate writ/order directing the respondents to return the original documents of the petitioner forthwith and further to desist from insisting upon payment of the Bond amount as a condition precedent for returning the original documents.
FACTUAL ASPECTS
2. The case set out by the petitioner is that he had pursued Bachelor of Medicine and Bachelor of Surgery [„MBBS‟] program from Army College of Medical Sciences, New Delhi, and Doctor of Medicine [„MD‟] from Ram Manohar Lohia Hospital, New Delhi.
3. In 2023, the petitioner had secured an All India Rank of 1064 in the National Eligibility Entrance Test [„NEET‟] for Doctor of Medicine [„DM‟] (Super-Specialty) and was admitted to the DM (Cardiology) program at respondent no. 2 Institute i.e. Employee‟s State Insurance Corporation Medical College and Hospital, Faridabad, Haryana [„ESIC Hospital‟].
4. Eventually, the petitioner had applied for and was accepted into a prestigious program at AIIMS, Bhubaneswar, Odisha, through the Institute of National Importance Super Speciality Test [„INI-SS‟] Examination 2024, offering him better career prospects.
5. At the time of admission in the ESIC Hospital, the petitioner was required to sign a Bond, which stated that the petitioner would have to pay Rs. 15 lakh with 12% interest to respondent no. 1 i.e. ESIC, New Delhi, if he discontinued his studies or failed to serve the Corporation for two years after completing the course. Further, the original documents (testimonials) of the petitioner were to be retained by ESIC, pending the submission of Bank Guarantee. Thus, when the petitioner requested the respondents to return his original documents, on account of his admission in the DM Course at AIIMS, Bhubaneswar, the respondents failed to supply the relevant documents.
6. Therefore, the petitioner has approached this Court, seeking direction to the respondents to immediately return his original documents and to refrain from insisting on the payment of the Bond amount as a condition for their return, since he claims that the same is arbitrary, unlawful and unjust.
7. Learned Senior Counsel for the petitioner further submits that the petitioner, on 30.05.2024, had made a representation to the respondents, requesting for waiver of the bond and returning of his documents submitted at the time of admission. The petitioner had again given a representation to the respondents on 28.06.2024 informing about his selection at AIIMS, Bhubaneswar in the DM (Cardiology) Course and had requested the respondents to return his original documents. However, no response from the respondents was ever received.
8. It is argued that the original documents of the petitioner cannot be retained by respondents, as they cannot claim to have lien under Section 171 of the Indian Contract Act, 1872 over them as those documents are not „saleable goods‟ as envisaged in the Sales of Goods Act, 1930, whereas the original documents (testimonials) of the petitioner were to be retained by the ESIC pending the submission of Bank Guarantee. However, as per the terms and conditions of the Bond, the Petitioner is to furnish the Bank Guarantee amounting to Rs. 15 Lakhs in favour of the Dean of the ESIC Hospital in two instalments, i.e. Rs. 7.[5] lakhs at the beginning of second academic year, and Rs. 7.[5] Lakhs at the beginning of the third academic year. Thus, his original documents/testimonials cannot be retained for want of such a Bank Guarantee till the furnishing of the same becomes due. In this regard, it is also argued that the respondents have no right to withhold the petitioner‟s original documents/testimonials for the unpaid bond amount and he has a right to get his documents back so that he can pursue his career in the institution of his choice.
9. It is thus submitted that retaining the original documents till the payment of the Bond amount is manifestly arbitrary as the petitioner has put in only 6 months and is seeking his documents for pursuing his studies in an institution i.e. AIIMS, Bhubaneswar, which admittedly has better prospects having been conferred with INI status. It is further argued that even otherwise, the bond which the petitioner was made to sign by the ESIC Hospital is disproportionate as other institutions of similar status have bonds seeking comparatively nominal amounts. To buttress his arguments, learned Senior Counsel for the petitioner has placed reliance on a judgment of the Hon‟ble Supreme Court in R.D Saxena v. Balram Prasad Sharma (2000) 7 SCC 264 and on a judgment of the Punjab and Haryana High Court in the case of Rajat Satija v. Pt. B.D Sharma and Others 2017 SCC OnLine P&H 1047. Submissions on Behalf of ESIC
10. Learned counsel appearing on behalf of respondent nos. 1 and 2 opposes the present writ petition and states that it is no longer res integra that state-run medical institutes can obtain bonds from medical students, and that any objection qua the Bond, its legality, enforceability and imposition of penalty for violation of the Bond stands settled by the Hon‟ble Supreme Court in Association of Medical Superspeciality Aspirants and Residents v. UOI (2019) 8 SCC 607, whereby it has been held that doctors who have executed compulsory bonds are bound by the conditions contained therein. It is further argued that the Hon‟ble Punjab and Haryana High Court in Amit Kumar v. Post Graduate Institute of Medical Education & Research 2023 SCC OnLine P&H 3221, while adjudicating a petition on similar facts, held that when a candidate executes an agreement in terms of an institute‟s prospectus stating that the candidate would not resign without completing the course to which he/she has been admitted, and should the candidate leave the course prior to its completion, the said candidate shall be liable to pay penalty as provided. It was further noted that in highly competitive courses that are seat-based, the withdrawal by a candidate would entail blocking of the vacancy which would ultimately go vacant, and in these circumstances, such binding clauses (penalty clauses) are incorporated into the bond to secure the institution‟s interest.
11. Learned counsel for the respondents submits that it is undisputed that the petitioner herein is bound by the terms of the Bond, and as such, any violation of the terms of the Bond will necessarily have to be penalised as per the terms of the Bond itself. It is argued that the terms of the Bond, being unequivocally clear, require the petitioner, in the event he discontinues his study at the ESIC Hospital mid-way or leaves the services of ESIC without completing two years, to pay to ESIC an amount of Rs. 15 lakhs. Furthermore, the Bond also lays down the requirement of the petitioner to submit bank guarantees in favour of ESIC, pending which, the documents of the Petitioner, in original, would be retained.
12. It is further contended that the Student Trainees are provided stipend during their course of study, which further reduces the burden on their shoulders. It is stated that there were only 2 seats for the DM (Cardiology) super-speciality course, out of which, one seat would now be vacant for the entire period of the course, and ESIC would be out of pocket for a trained doctor for more than 4 years, since a course seat vacated mid-way cannot be filled up mid-course. It is also submitted that ESIC would have to engage the services of a cardiologist from the open market. Therefore, the ESIC and its would be at a loss when someone leaves the course mid-way or does not complete the bond condition of two years of service. It is also pointed out that ESIC subscribers are low-income employees of private entities, whose salary is less than Rs. 21,000/- per month.
13. Insofar as the provision for the deposit of documents and the condition for their return is concerned, it is submitted that the concerned ESIC College retains the original documents of the student trainee as security in the event the student trainee decides to abort his course of study, and the obligation to furnish the bank guarantee only kicks in after commencement of the second academic year, which was purposefully done in order to ensure that the student trainee does not face undue financial hardship. Therefore, it cannot be contended that the documents of the petitioner have to be necessarily returned by ESIC in consideration of the fact that the liability to pay the bank guarantee was never fructified. Thus, it is submitted that it is only after the petitioner fulfils the conditions of the Bond i.e. pay Rs. 15 lakhs, that he can obtain his original documents from the respondents.
14. This Court has heard arguments addressed on behalf of both the parties and has also given its careful consideration to the documents placed on record.
ANALYSIS & FINDINGS
15. To recapitulate, the case of the petitioner is that he was admitted to the DM (Cardiology) course at ESIC Hospital, after securing a rank in the NEET Super-speciality Exam, 2023. He had signed a bond, requiring payment of Rs. 15 lakh with 12% interest in case he discontinued the course or failed to serve ESIC for two years after completing the program. After being selected for a more prestigious DM program at AIIMS Bhubaneswar through the INI-SS Exam 2024, the petitioner sought a waiver of the conditions of the bond and the return of his original documents so as to pursue studies at AIIMS Bhubaneswar. It has been contended on behalf of the petitioner that the terms and conditions of the bond are arbitrary and the same do not justify the withholding of his original documents.
16. To adjudicate the present case, it will be essential to peruse the terms and conditions of the Bond, executed by the petitioner in favour of the respondents, on 18.11.2023. The relevant clause of the Bond is set out hereunder: “......do hereby bind ourselves and each of us & our respective heirs, executors & administrators jointly and severally to pay to the Employees State Insurance Corporation (hereinafter referred to as „the Corporation‟) on demand the total amount of Rs. 15,00,000/- (Rupees Fifteen lakh only) with interest @ 12% towards failure to fulfil the obligation/for violation of the condition hereinafter mentioned. The bounden and sureties shall furnish Bank Guarantee amounting to Rs. l[5],00,000 (Rupees Ten lakh only) in favour of the Dean of the ESIC Institution in lieu of the total in phases (Rs. 7.[5] lakh at the beginning of 2nd academic year and Rs. 7.[5] lakh at the beginning of 3rd academic year respectively) so that;the amount of Bank Guarantee furnished the balance amount does not exceed the total obligation amount (Rs. 15 lakh) at any stage. The original documents of the student trainee would be retained by the Corporation pending the submission of Bank Guarantee. *** NOW the condition of the above written obligation is that in the event the Bounden discontinues the study, the Bounden and surety/ sureties shall forthwith pay to the Corporation on demand the total amount of Rs. 15,00,000 (Rupees Fifteen lakh only); or after completion of the DM course of study to which he/she was selected fails to serve the Corporation for period of two years, the Corporation shall have right to invoke the Bank Guarantee so furnished by the Bounden and sureties. In event of partial default, the amount payable to the Corporation would be based on the period of service rendered as mentioned hereunder Period of service rendered Bond Amount payable in lieu a) Less than 01 year Full amount i.e. Rs. 15 lakh b) 01 year to less than 02 years Rs. 7.[5] lakh The Corporation would invoke Bank Guarantee for an amount proportionate to the period of default...”
17. A perusal of the Bond and its relevant clauses reveals that the condition imposed vide the Bond is unequivocally clear, and that the petitioner herein was under obligation in two parts i.e.
(i) in the event the Bounden discontinues the study, the
(ii) after completion of the DM course of study, to which the
Bounden was selected, fails to serve the Corporation for a period of two years, the Corporation shall have the right to invoke the Bank Guarantee so furnished by the Bounden and sureties.
18. Therefore, there is no force in the contention of the learned Senior counsel for the petitioner that the conditions of the Bond were applicable only in case the petitioner would have not served the ESIC, and that it would have no applicability in case he discontinues his studies. The first part of the condition, in clear terms, mentions that if the Bounden i.e. the petitioner herein discontinues his studies, the Bond will stand forfeited. In such circumstances, the petitioner herein was bound by the terms and conditions of the Bond which he had signed.
19. This Court is also conscious of the fact that ESIC is a statutory body, under the Ministry of Labour and Employment, Government of India, that provides medical, financial, and other benefits to employees in India, particularly those in the lower-income bracket. ESIC is primarily focused on serving employees earning less than Rs. 21,000/- per month. Its healthcare scheme is designed to provide medical care to insured individuals and their families, which includes access to specialized treatments through its medical institutions. This Court was also informed that ESIC funds the education and training of super-specialized medical professionals, like the petitioner, and in exchange, these professionals are expected to commit to serving ESIC or its associated institutions upon completion of their studies, ensuring that the ESIC‟s resources and the healthcare needs of its subscribers are adequately managed.
20. It is to be further noted that under the current scheme in which the petitioner is enrolled, the respondents had committed to finance the petitioner‟s studies. The Student-trainees are also provided with a stipend, which reduces their financial burden. In addition, it was also submitted before this Court that the DM (Cardiology) program in ESIC Hospital had only two seats available, and the petitioner was selected for one of these limited seats. Given this, the requirement for furnishing the Bond becomes significant. If the petitioner was permitted to leave the course midway, one of the two seats would remain vacant for the remainder of the four-year program, and the respondent would be left without a student in that seat.
21. In this background, this Court is of the view that the petitioner herein, prior to taking admission in the ESIC Hospital, had willingly signed the Bond, being fully aware of its terms and conditions, and one such condition clearly outlines the petitioner‟s undertaking regarding the completion of the course and his subsequent service to the ESIC. It is essential to recognize that once the petitioner has entered into this agreement, he cannot simply disregard the binding terms and conditions of the Bond. The Bond was not only a formal commitment of the petitioner towards the institute, but also a reflection of the trust placed in him by the ESIC, which was to invest resources into his education with the expectation of his return as a qualified professional. Such bonds serve as safeguards in ensuring that the institute can maintain its operational integrity and continue providing essential services to low-income employees who depend on its healthcare programs.
22. In this regard, this Court notes that the Hon‟ble Supreme Court in Association of Medical Superspeciality Aspirants and Residents v. UOI (2019) 8 SCC 607 has held that the laudable objective with which the State Governments have introduced compulsory service Bonds is to protect the fundamental right of the deprived sections of the society guaranteed to them under Article 21 of the Constitution of India and that doctors who have executed compulsory Bonds are bound by the conditions contained therein. The relevant extract of the same is reproduced hereunder: “...18. The appellants are aggrieved by the decision of the State Governments imposing conditions for their admission in the postgraduate courses and superspeciality courses. According to them, the State Governments have understood the decision of this Court in Harsh Pratap Sisodia [Harsh Pratap Sisodia v. Union of India, (1999) 2 SCC 575] to be a restraint on the exercise of their power in matters relating to eligibility criteria for admission to medical course. Suddenly, the introduction of the compulsory bonds after 15 years of the judgment in Harsh Pratap Sisodia [Harsh Pratap Sisodia v. Union of India, (1999) 2 SCC 575] is the result of decision taken by the State Governments which is dubbed by the appellants as arbitrary. This Court in Harsh Pratap Sisodia [Harsh Pratap Sisodia v. Union of India, (1999) 2 SCC 575] was concerned with the additional eligibility criteria being introduced by the State Governments for the 15% all-India quota students. The decision taken by the State Governments to impose a condition of compulsory bond for admission to postgraduate courses and superspeciality is on the basis of relevant material. Huge infrastructure has to be developed and maintained for running medical colleges with postgraduate and super speciality courses. The amount of fees charged from the students is meagre in comparison to the private medical colleges. Reasonable stipend has to be paid to the doctors. Above all, the State Governments have taken into account the need to provide healthcare to the people and the scarcity of superspecialists in their States. Consequently, a policy decision taken by the State Governments to utilise the services of doctors who were beneficiaries of government assistance to complete their education cannot be termed arbitrary.
19. Reasonableness is a ground that pervades through the submissions made by the counsel on both sides. In the State of West Bengal, the requirement of a compulsory bond was initially a service of one year in the State in default of Rs 10 lakhs was to be paid. This was enhanced to three years and Rs 30 lakhs by a Notification dated 9-10-2014. In the State of Tamil Nadu, the bond condition was that a doctor has to serve for ten years in the State and in default of which, the doctor was to pay Rs 2 crores. This was reduced to two years and Rs 50 lakhs. The Armed Forces Medical College imposes a condition of five years' compulsory service in the Army for postgraduate and superspeciality doctors who prosecuted their study in the college. They have an option of not serving for five years by recompensing the Government by paying Rs 25 lakhs. The main contention of the counsel appearing for the appellants is that the condition of a long period of service that is imposed is unreasonable. The basis for the submission is that they have already served the society by working in government hospitals while undergoing their course. Further conditions imposed on them would impede the progress of their careers. Restrictions placed on their choice of place of work are also unreasonable according to them. An alternate submission made by the counsel appearing for the appellants is that the imposition of the condition of compulsory bond should be reasonable and the exit clause should be relaxed. Notifications issued by the State Governments imposing a condition of compulsory service and a default clause are per se not unreasonable. However, we are in agreement with the learned counsel for the doctors that the period of compulsory service and the exit should be reasonable. The State Governments and the Armed Forces Medical College are directed to consider imposing the condition of compulsory service period of two years in default of which the doctors shall recompense the Government by paying Rs 20 lakhs. Article 19
20. According to the appellants, the right to carry on their profession which is guaranteed by Article 19(1)(g) is violated by the compulsory bonds. They contend that the compulsory bonds place a restriction on their right to carry on their profession on completion of their course. It is also submitted that any restriction on their right to carry on their profession by the State Government can be made only by a “law” as per Article 19(6) of the Constitution. Consequently, the notifications that were issued by the State Governments fall foul of Article 19(1)(g). The compulsory bond executed by the appellants is at the time of their admissions into postgraduate and superspeciality courses. Conditions imposed for admission to a medical college will not directly violate the right of an individual to carry on his profession. The right to carry on the profession would start on the completion of the course. At the outset, there is no doubt that no right inheres in an individual to receive higher education. Violation of a right guaranteed under Article 19(1)(g) does not arise in a case pertaining to admission to a college. There is no doubt, that the condition that is imposed has a connection with the professional activity of a doctor on completion of the course. However, the appellants have, without any protest, accepted the admissions and executed the compulsory bonds. Execution of bonds is part of a composite package. We are in agreement with the judgment of the Calcutta High Court that the appellants have not been able to succeed in their attempt of assailing the notifications for being violative of Article 19(1)(g) of the Constitution. We uphold the said finding of the Division Bench. ****
(2) of the Constitution of India. The Appellants who are required to work for a short period on a decent stipend cannot complain that they are made to perform. 'forced labour ', especially after the Appellants have taken an informed decision to avail the benefits of admission in govermnent medical colleges and received subsidized education. By no means, the service rendered by the Appellants in Government hospitals would fall under the expression of 'forced labour '.
39. The argument advanced on behalf of the Appellants that compulsory bonds placed a restraint on their profession and thus, would be contrary to section 27 of the Indian Contract Act, 1872. The High Court of Calcutta repelled this submission by holding that the compulsory bond does not amount to any restraint on the professional activity of the Appellants. The High Court observed that the Appellants are offered the job of Medical Officer in the State of West Bengal and that the covenant in the compulsory bond operates only during the period of such employment. Relying upon the dictum of Lord Morris in Essa Petroleum Co. Ltd. v. Harper's Garage (Stourport) Ltd., that:- "If A made a contract under which he willingly agreed to serve B on reasonable terms for a few years and to give his whole working time to B, it would be swprising indeed, if it were sought to describe the contract as being in restraint of trade; in fact, such a contract would very likely be for the advancement of trade." The High Court concluded that a contract entered into by Appellants to serve the government for a few years under reasonable terms cannot be described as one in restraint of trade. We are in agreement with the findings recorded by the High Court of Calcutta. Therefore, we are of the considered opinion that the conditions of compulsory bonds for admission to postgraduate and super-Speciality courses in government medical colleges are not in violation of Section 27 of the Indian Contract Act, 1872.
40. The upshot of the above discussion is that the Writ Petitions and the Appeals deserve to be dismissed. Consequently, all the Doctors who have executed compulsory bonds shall be bound by the conditions contained therein”.
23. In light of the abovesaid, this Court is of the opinion that the petitioner‟s insistence on ignoring the terms and conditions of the Bond is without any merit.
24. During the course of arguments, learned Senior Counsel for the petitioner argued that the petitioner comes from a poor background, and this fact should be taken into account by this Court while adjudicating the present case. In this regard, this Court observes that if the petitioner comes from a financially disadvantaged background, he should understand the plight of those he is obligated to serve under the Bond he signed, which required him to not discontinue the studies in-between and work for ESIC after completing his course. The ESIC was investing in his education and providing him with a stipend too. The petitioner, therefore, should be more empathetic toward those less fortunate, who have no access to quality medical facilities and belong to an income group earning less than Rs. 21,000/- per month. As noted above, if the petitioner leaves the program to pursue his studies at another institute, the seat he vacates would remain unfilled for the remainder of the academic year. This will leave ESIC without a cardiologist to serve its beneficiaries. Therefore, allowing such petitions would also disrupt the discipline and sanctity of executing Bonds, as it would encourage other students to leave their courses midway, believing they could secure better opportunities elsewhere. Furthermore, such actions would result in a loss of opportunity for another deserving student who could have taken the vacated seat but was deprived of it because another candidate blocked it but decided to leave the program midway.
25. Thus, in conclusion, this Court notes that while the petitioner has been selected for a prestigious program at AIIMS, Bhuvneshwar he must first honour the Bond he had voluntarily signed with the ESIC. As per the terms of the Bond, the petitioner is required to pay Rs. 15 lakhs to the respondent before discontinuing his current course. Once the petitioner fulfils this financial obligation, he shall be at liberty to pursue his studies at AIIMS as he wishes. Furthermore, it is directed that upon receiving the Bond amount, the ESIC shall return the petitioner‟s original documents within a period of one week, allowing him to proceed with his academic and professional goals at AIIMS, Bhuvneshwar without any further hindrance.
26. In view of the above, the present writ petition along with any pending applications if any stand dismissed.
27. The judgment be uploaded on the website forthwith.
SWARANA KANTA SHARMA, J SEPTEMBER 23, 2024