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2012 DIGILAW 780 (KAR)

Col (Retd. ) H. S. Manjunath v. Union of India

2012-09-14

A.S.BOPANNA

body2012
JUDGMENT A.S. BOPANNA, J.—The appellants herein are the defendants in O.S. No. 4702/2008. The said suit was filed by the respondent herein seeking for a judgment and decree against the defendants holding them liable to pay the security amount of Rs. 5,00,000/- with interest at the rate of 12% p.a. The Court below after considering the rival contentions has decreed the suit by its judgment dated 05.11.2011. The defendants claiming to be aggrieved by the same are before this Court in this appeal. 2. The parties would be referred to in the same rank as assigned to them before the Court below for the purpose of convenience and clarity. 3. The case of the plaintiffs was that the Armed Forces Medical Services in order to fill up the vacancies that arise in the service had conducted the Campus selection for students aspiring to join Armed Forces Medical Service (for short the ‘AFMS’). The AFMS conducts Post Graduation Courses for selected students in different branches of Medicine at the designated Defence Hospitals to make them Specialist Medical Officers. In that regard, the first defendant was selected to undergo Post Graduation Course in DDVL at Command Hospital, Air Force, Bangalore. The said Hospital is stated to be affiliated to Rajiv Gandhi University of Health Sciences, Bangalore. Accordingly, the first defendant joined the Post Graduation Course in the year 2003 and successfully completed the Post Graduation by passing out in April 2005. The case of the plaintiff is that the selection and admission of the first defendant into the Post Graduation Course was based on an undertaking which had been given by the first defendant that on successful completion of the Post Graduation Course by the first defendant, she would serve in the AFMS for a minimum period of five years as a Short Service Commissioned Officer. In that regard, the first defendant is stated to have executed a surety bond on 22.10.2002 to which defendant No. 2 has signed as a co-obligant. According to the case of the plaintiff, under the said surety bond, the defendants had agreed to pay the liquidated damages of Rs. 5,00,000/- in the event of not complying with the requirement indicated therein i.e., to join the Short Service Commission after completion of the Post Graduation Course. According to the case of the plaintiff, under the said surety bond, the defendants had agreed to pay the liquidated damages of Rs. 5,00,000/- in the event of not complying with the requirement indicated therein i.e., to join the Short Service Commission after completion of the Post Graduation Course. The details of the said bond has been stated by the plaintiff contending that in the event of first defendant not joining the service for the reasons indicated therein, she would become liable to pay the amount. 4. In the instant case, it is contended that though the first defendant had availed the benefit of the training relating to the course offered by the Command Hospital, she had not subsequently joined the service. The medical examination conducted on the first defendant on 13.04.2005 as well as on 25.08.2005 is referred to indicate that the first defendant was declared unfit due to obesity and therefore, was not medically fit within the parameters of medical fitness provided for defence services. It is in that context, the plaintiff contends that the first defendant though having taken the benefit of the Post Graduation Course offered by the plaintiff was not thereafter commissioned and as such, the defendants are jointly and severally liable to make good the amount which has been agreed by them under the surety bond. 5. The defendants on being served with the suit summons had appeared before the Court below, more particularly through the second defendant. They had filed the written statement. The case of the plaintiff insofar as admitting the first defendant to the Post Graduation Medical Course was not disputed. However, the contention put forth on behalf of the defendants is that the surety bond is limited only to the circumstance, which has been indicated therein. So far as the penalty is concerned, it is the case of the defendants that the defendants have not violated the terms indicated therein in the context of the right which was available to the plaintiff to seek for payment of penalty. On the other hand, it is contended that though the first defendant had successfully completed the course and was willing to join the services, unfortunately, she was found medically un-fit and therefore, she was prevented from taking up the services. On the other hand, it is contended that though the first defendant had successfully completed the course and was willing to join the services, unfortunately, she was found medically un-fit and therefore, she was prevented from taking up the services. In any event, it is the contention of the defendants that subsequent to completion of the course, the Short Service Commission had not been offered by the plaintiff inasmuch as the plaintiff themselves were of the opinion that she was not medically fit. Hence, the question of not joining despite the same being offered does not arise. The plaintiff instead of providing opportunity to join had straightaway issued the legal notice seeking for damages under the surety bond. Being medically unfit is not one of the circumstance which would make her liable. Therefore, in such circumstance, the first defendant was not liable to pay the amount as claimed. Alternatively, it is also contended by the defendants that, even if for any reason, the first defendant was found to be liable, the question of claiming the entire amount of Rs. 5,00,000/- would not arise inasmuch as what was required was the determination to be made and only the said amount could have been recovered. In the light of the said contentions, the defendants have sought for dismissal of the suit. 6. The Court below after taking note of the rival contentions has framed as many as seven issues for its consideration. The plaintiff in an attempt to discharge the burden cast on them have examined an Officer as P.W.1 and relied upon the documents at Exhs.P1 to P7. The defendants though had filed the written statement, did not choose to examine themselves nor have they produced any documents. In the light of the evidence which was available before the Court below, the Court below has held the material issues in favour of the plaintiff and has therefore decreed the suit. 7. Learned counsel for the defendants while assailing the judgment would contend that the Court below in fact has proceeded at a tangent. It is his contention that in the instant case, when the bond contained the relevant part relating to the penalty, the said part alone should have been construed strictly in respect of the surety and it cannot be made as done in the case of other contracts. It is his contention that in the instant case, when the bond contained the relevant part relating to the penalty, the said part alone should have been construed strictly in respect of the surety and it cannot be made as done in the case of other contracts. It is his case that in such circumstance, the burden was on the plaintiff to show that after completion of the Course, the 1st defendant despite being medically fit and being offered to join the services, she had not joined the service. It is only then she would have made herself liable for the penalty. In this regard, there is absolutely no evidence available on record is the contention of the learned counsel. 8. On the other hand, it is contended that the very document relied upon by the plaintiff would indicate that though she was medically fit at the point, when she had joined the Course, the very medical examination conducted on the defendant by the plaintiff’s Medical Board would indicate that she was not medically fit and the plaintiff themselves did not choose to offer to take her on Short Service Commission. In such circumstance, the question of enforcing the Security Bond against the 1st defendant would not arise. It is therefore contended by the learned counsel that even in the absence of there being any evidence on behalf of the defendants and in a circumstance, where the burden was to be discharged by the plaintiff, the evidence both oral as well as documentary does not establish the case of the plaintiff and therefore the Court could not have imported certain words which were found in the earlier part of the Bond to be incorporated into the terms, which had been agreed with regard to the liability for the damages in the later part of the Bond. 9. The learned counsel also referring to the decision of the Hon’ble Supreme Court with regard to the nature of construction of Surety Bond would contend that the judgment passed by the Court below is not sustainable and is liable to be set aside. 10. Insofar as plaintiff is concerned, the contention as pleaded in the plaint and the contention before the Court below is the same for the purpose of sustaining the judgment of the Court below. 10. Insofar as plaintiff is concerned, the contention as pleaded in the plaint and the contention before the Court below is the same for the purpose of sustaining the judgment of the Court below. As noticed from the pleadings, based on which the plaintiff had approached the Court below it would indicate that the entire case of the plaintiff is that the 1st defendant had joined the PG Course after undertaking that on completion of the PG Course, she would join the Short Service Commission, when offered and on failure to do so, the 1st defendant will be liable to pay a sum of Rs. 5 lakhs, which is agreed in the Surety Bond to which the 2nd defendant is a Co-obligant. Hence, in that regard, it is the case as putforth by the plaintiff before the Court below that the Bond if construed would indicate that since, the 1st defendant had not joined the Short Service Commission, after taking benefit of the Course, she would be liable to pay the said amount and therefore the Court below has considered that aspect of the matter and has arrived at its conclusion. 11. In the light of what is contended in this appeal, the following points arise for consideration in this appeal: (1) Whether, based on the Security Bond (Ex-P2) executed by the 1st defendant to which the 2nd defendant is a Co-obligant, the 1st defendant could be held liable for the damages as claimed by the plaintiff? (2) Whether in the circumstances, where the 1st defendant is assessed to be medically unfit by the Medical Board of the plaintiff themselves, the 1st defendant would still remain liable for payment of the amount? (3) In the said circumstances, whether the Court below was justified in arriving at its conclusion? 12. At the outset, it is to be noticed that though the learned counsel for the defendants referred to the judgment of the Court below to point out the errors committed by the Court below, keeping in view the fact that this Court is required to reappreciate the materials available on record in a first appeal, it would be necessary for this Court itself to look into the documents and evidence and arrive at its decision and thereafter come to a conclusion as to whether the Court below was justified or not. 13. 13. In that regard, the undisputed facts in the instant case is that the plaintiff had offered a seat for the Post Graduation Course in DDVL at Command Hospital, Air Force (CHAF), Bangalore to the 1st defendant. The fact that she joined the said Course and in that regard, she had executed a Security Bond on22.10.2002 is also not in dispute. The penalty clause existing in the said Security Bond is also evident from the document. However, the question for consideration in the instant case is as to whether in the facts and circumstances arising in the present case, the 1st defendant had become liable to pay the damages as contemplated under the Surety Bond dated 22.10.2002 or not. 14. At the outset, with regard to the manner of construction of the document of the present nature, the law is well settled as seen from the decision of the Hon’ble Supreme Court referred by the learned counsel for the plaintiff in the case of Kamla Devi vs. Takhatmal and another, reported in AIR 1964 SC 859 , wherein the Hon’ble Supreme Court has held that a Surety Bond cannot be construed in the context of surrounding circumstances, but would have to be construed by referring to the specific laws, which provide for imposing such penalty. To the similar effect is the decision relied on in the case of The State of Bihar vs. M. Homi and another, reported in 1955 2 SCR 78 . Keeping this aspect in view, the Security Bond which is produced and marked as Ex-P2 in the instant case needs to be noticed. 15. A perusal of the said bond would indicate that the 1st defendant, who is described as the PG student in the said bond has been admitted to undergo Post Graduation Course and it also provides that on the 1st defendant successfully completing the PG decree Course and if she is declared fit to be granted Short Service Commission, she would be commissioned as a Medical Officer in the regular Army or the Indian Navy or Indian Air Force as Short Service Commission Officer, unless she is prevented from doing so on account of ill-health as determined by the Service Medical Board or some other reasons over which the PG student has no control. It is in that context, the other terms of the Bond have been stipulated. 16. It is in that context, the other terms of the Bond have been stipulated. 16. Insofar as the penalty, which has been provided for not joining the service, the same is contemplated in Clause-(b) to the said bond. A perusal of the said Clause would indicate that the non joining the services by the PG student, if she is found medically unfit is not one of the condition for which the penalty is proposed. Further non joining should be despite the offer being made. Keeping this aspect in view, the other evidence, which is available on record requires to be perused. The document at Ex-P3 is the Application Form. Ex-P7 is the Medical Examination Report of the examination, which was conducted on the 1st defendant on 11.01.2003 i.e., immediately after she had joined the Post Graduation Course. The remarks in the said report would indicate that as on the said date she was medically fit. Thereafter, the subsequent medical examination conducted on the 1st defendant is as per Ex-P5, which is dated 13.04.2005. In the said report, the remark column would indicate that it is recorded she is medically unfit on account of obesity that is 40% overweight. This is at a point when she almost completed her PG Course. Subsequently, one more medical examination has been conducted on the 1st defendant as per Ex-P4, which is dated 16.07.2005. The remarks column would indicate that it is recorded she is overweight by 30%, simple obesity and she is medically unfit. A reference to the said medical report would indicate that at the point when the 1st defendant had completed her PG Course, the Medical Board of the plaintiff themselves had found her to be unfit medically. This aspect of the matter becomes relevant in the instant case since there is nothing on record placed by the plaintiff to indicate that notwithstanding the same the plaintiff had offered to take the 1st defendant as a Short Service Commission Officer pursuant to completion of the Course and despite that she had not joined. In that regard, the witness who was examined on behalf of the plaintiff as PW-1, in his cross-examination, has admitted that no such offer letter had been issued to the 1st defendant and the plaintiff had issued the legal notice straight away seeking for the damages. In that regard, the witness who was examined on behalf of the plaintiff as PW-1, in his cross-examination, has admitted that no such offer letter had been issued to the 1st defendant and the plaintiff had issued the legal notice straight away seeking for the damages. The said aspect would indicate that it is not a circumstance, where the offer to join the Short Service Commission was made to the 1st defendant and despite she being medically fit, she had not joined the services. 17. The further aspect which is required to be noticed is that in the Security Bond, where the provision for penalty is depicted, the same does not indicate that the plaintiff would be entitled to seek for damages if the 1st defendant is not commissioned due to the fact of her being medically unfit. In fact the earlier portion of the Security Bond, which had been noticed by me only provides that the PG student would join the Course after completion of the Course, if she is found medically fit. In the second part of the Security Bond, it only provides for damages in the circumstances, which have been indicated in Clause-(b) and as noticed it does not provide for damages to be paid if the PG student is found to be medically unfit. Since the student being medically unfit, in the instant case more particularly in a circumstance, when the Medical Board of the plaintiff themselves carried out the examination and the Board declared her unfit, the reasons for joining would be beyond the control of the PG student and therefore in such circumstance, the question of imposing damages would not arise. Furthermore, the plaintiff has also not issued the offer letter to join short service. 18. In the instant case, apart from that aspect of the matter, before the plaintiff approaching the Court they ought to have indicated that the 1st defendant was medically fit, and she had been offered to be taken as Short Service Commission Officer, yet she has refused to join the service, which has made her liable for the damages. In the alternative, at least the plaintiff should have established before the Court that even in respect of the circumstances, where the candidate is not medically fit, the damages has been provided. In the alternative, at least the plaintiff should have established before the Court that even in respect of the circumstances, where the candidate is not medically fit, the damages has been provided. Though, in the plaint it is sought to contend that the damages is payable even if the candidate is found to be medically unfit, the same is not indicated in Clause-(b), where the circumstances for being liable to pay the damages has been clearly stated and the PG student not joining the service for being medically unfit is not one of the conditions and therefore in the present circumstances, when the Security Bond is construed and there is absolutely no material to show that the 1st defendant had contravened the condition indicated therein so as to make herself liable, the plaintiff could not have instituted the suit for damages and the pleading is not supported by evidence. 19. Therefore, keeping this aspect in view, when the document produced by the plaintiff themselves does not establish their case and the document at Ex-P6 indicates that the plaintiff, contrary to the Security Bond has issued the notice and demanded the damages, which in fact the 1st defendant was not liable to pay, the point raised in this appeal would have to be answered in favour of the defendants. Accordingly, the answer to the said points would indicate that the Court below was not justified in the manner of answering the issues in favour of the plaintiff and granting the decree in their favour. 20. In the result, the following: ORDER (1) The appeal in RFA. No. 1941/2011 is allowed. (2) The judgment and decree passed in O.S. No. 4702/2008, which is impugned in this appeal is set aside. (3) Consequent thereof, the suit in O.S. No. 4702/2008 is dismissed. (4) In the facts and circumstances of the case, the parties to bear their own costs throughout. (5) In view of the above, the appellants herein would be entitled to refund of the 25% of the decreetal amount, which had been deposited before this Court. Hence, Registry is directed to refund the same to the appellants on proper identification.