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Rajasthan High Court · body

2013 DIGILAW 1825 (RAJ)

Prafull Mehta v. State of Rajasthan

2013-10-17

VIJAY BISHNOI

body2013
Hon'ble BISHNOI, J.—The petitioner has filed this writ petition with the following reliefs: It is, therefore, humbly prayed that the Writ petition may kindly be allowed and by an appropriate, order and direction- (i) it may be declared that the Respondents cannot recover the amount of stipend paid to the Petitioner during Post Graduation Course. (ii) the condition in the Surety Bond relating to refund of the stipend may be declared illegal and confiscatory. (iii) Any other order or direction which this Hon'ble Court deems just and proper may kindly be passed." 2. Brief facts of the case are that the petitioner has done his MBBS (Bachelor of Medicine & Bachelor of Surgery) from Dr. S.N. Medical College in 2010. After appearing in Pre-PG Examination, 2011, the petitioner was allotted 'Radiotherapy' for pursuing Post Graduation Course vide letter dated 12.04.2011. At the time of reporting, the petitioner was asked to submit surety bond on non-judicial stamp of `100/- containing an undertaking that he would undergo entire course on regular basis and if he leave the course before its completion, he would pay a sum of `5,00,000/-. As per the case of the petitioner, at the time of reporting for pursuing Post Graduate Course, in pursuance of the order dated 12.04.2011, the petitioner was asked to furnish his original documents such as mark-sheet, certificate, secondary school mark-sheet etc. along with a surety bond on non-judicial stamp of `100/- containing an undertaking that he would undergo entire course on regular basis and if he leaves the course before its completion, he would pay a sum of `5,00,000/-. As per the petitioner, he was asked to submit the said surety bond along with two sureties of two persons on a proforma, and in pursuance of that, the petitioner has submitted the same on 18.04.2011. It is further stated by the petitioner that when he reported for joining the course, he was asked to furnish a surety bond of Rs.3,50,000/- and a bank guarantee of Rs.1,50,000/- along with the stipend in case he leaves the course before its completion and in case of non-fulfillment of the said conditions, the respondents shall have a right to retain the original certificates of the student and as the petitioner was desirous to pursue the P.G. Course, he had no other option except to furnish such undertaking. As per the case of the petitioner, while pursuing the P.G. Course with the respondent, he appeared in All India Pre-P.G. Course Examination, 2012, where he secured 1226 rank at all India level and, therefore, he decided to leave the P.G. Course in Radiotherapy and moved a representation to the State Government with a request to relax or waive the condition of depositing of `5,00,000/- as well as the stipend received by him. The petitioner moved another representation to the respondents with a request to handover the set of original documents, in which it was stated by the petitioner that he is prepared to furnish the bank guarantee of `3,50,000/- and assured that he would return the set of documents and continue the P.G. Course in Radiotherapy, if he does not get better branch as per his ranking in All India Pre-P.G. Examination 2012 and has also stated that if he does not report for the present course by 30.04.2012, the college may encash both the bank guarantees and recover the sum of `5,00,000/- contemplated in surety bond. The case of the petitioner is that the respondent No.2 has refused to return the original documents of the petitioner and asked him to pay a sum of `2,38,000/- received by him as stipend in addition to `5,00,000/- as contemplated in the surety bond. 3. The petitioner again moved a representation on 12.04.2012 before the Principal and Controller of Dr. S.N. Medical College and Associate Hospital, Jodhpur and prayed for releasing of his original documents along with a cheque amounting to `3,50,000/-, while offering that the bank guarantee of `1,50,000/-, furnished by him, may be encashed, however, the said request was not accepted by the respondents. 4. The petitioner has filed this writ petition, while challenging the action of the respondents of recovering the amount of the respondents of recovering the amount of `2,38,000/- paid to him as stipend. The petitioner has claimed that the recovery of the stipend paid to him is absolutely illegal and arbitrary and violative of fundamental rights of the petitioner. It is also contended that the stipend paid by the respondents to the petitioner was in lieu of the services rendered by him in the hospital while pursuing the P.G. Course and the said amount is not liable to be recovered. It is also contended that the stipend paid by the respondents to the petitioner was in lieu of the services rendered by him in the hospital while pursuing the P.G. Course and the said amount is not liable to be recovered. The petitioner has also contended that the action on the part of the respondents to recover the stipend and taking surety/undertaking to refund the stipend amount is illegal and arbitrary. It is contended that the said condition of paying the stipend is illegal and deserves to be quashed and set aside as being violative of Articles 14, 19(1)(g) and 300-A of the Constitution of India. 5. Reply to the writ petition has been filed on behalf of the respondents, wherein some preliminary objections have been raised regarding maintain-ability of the writ petition, while claiming that the petitioner has submitted the surety bond on 29.06.2011, while undertaking that in case he leaves the P.G. Course before its completion, he will pay a sum of `5,00,000/- as well as the amount received by him as stipend, once he has given the undertaking with open eyes, he is estopped from challenging the same before this Court. It is also stated in the reply that the terms and conditions of a contract cannot be challenged by way of filing the writ petition under Article 226 of the Constitution of India and it is required to take proper recourse in law. 6. So far claim of the petitioner that the condition of paying the amount of stipend, in case a person leaves P.G. Course before its completion is arbitrary and illegal, is concerned, the respondents have claimed that the said condition is already upheld by this Court at Jaipur Bench in SBCWP No.3000/2011 and several other connected matters decided on 07.04.2011 and, therefore, the challenge of the petitioner to the said condition is liable to be rejected. The sum and substance of the reply filed by the respondents is that once the petitioner has given the undertaking for paying back the stipend amount, in case he leaves the P.G. Course before its completion, it is not open for the petitioner to challenge the said condition by way of this writ petition. 7. Rejoinder to the reply of the State has also been filed by the petitioner, wherein the averments made in the writ petition have been reiterated. 8. 7. Rejoinder to the reply of the State has also been filed by the petitioner, wherein the averments made in the writ petition have been reiterated. 8. The learned counsel for the petitioner has argued that at the time of getting admission in the P.G. Course, the petitioner had no option except to file the undertaking as directed by the respondents, but so far the condition mentioned in the undertaking of paying the stipend amount in addition to `5 Lac, in case the petitioner leaves the P.G. Course before its completion, is concerned, he same is illegal, arbitrary and violative of Articles 14, 19(1)(g) and 300A of the Constitution of India. It is also contended by the learned counsel for the petitioner that the stipend amount received by the petitioner was in lieu of services rendered by him, which cannot be termed as the expenses incurred by the State Government while providing training to the petitioner or other persons and, therefore, the said amount cannot be recovered by the State Government. It is also contended by the learned counsel for the petitioner that if a condition of contract is illegal, it is always open for the petitioner to challenge the same being unreasonable and arbitrary. The learned counsel for the petitioner has further contended that in SBCWP No.3000/2011 and other connected writ petitions decided by this Court on 07.04.2011, the question of paying back the stipend was neither raised nor decided by this Court because at that time, no such condition was there in the proforma of undertakings, which was furnished by the candidates, while undergoing the P.G. Course. 9. The learned counsel for the petitioner has placed reliance on decisions of Hon'ble Supreme Court in Central Inland Water Transport Corporation Ltd. & Anr. vs. Brojo Nath Ganguly & Anr. reported in AIR 1986 SC 1571 and LIC of India & Anr. vs. Consumer Education & Research Centre & Ors. 9. The learned counsel for the petitioner has placed reliance on decisions of Hon'ble Supreme Court in Central Inland Water Transport Corporation Ltd. & Anr. vs. Brojo Nath Ganguly & Anr. reported in AIR 1986 SC 1571 and LIC of India & Anr. vs. Consumer Education & Research Centre & Ors. reported in (1995) 5 SCC 482 and has argued that the petitioner and the respondents cannot be termed equal in bargaining power as the petitioner was in need of getting admission in the P.G. Course, he was forced to file an undertaking to the effect that in case he leaves the P.G. Course before its com-pletion, he is required to pay an amount of `5,00,000/- along with the amount received by him as stipend but the said condition is absolutely illegal and opposed to the public policy and, therefore, is liable to be declared as void. 10. Per contra, the learned counsel for the respondents has argued that it is not open for the petitioner to challenge the said condition, which he has accepted with his open eyes. It is also contended by the learned counsel for the respondents that once this Court has held that the condition of paying the expenses incurred by the respondents in providing training along with the stipend to the petitioner is just and valid, the writ petition filed by the petitioner is liable to be rejected. 11. Now the question before this Court is whether the condition mentioned in standard proforma of Surety Bond of paying the stipend, in addition to pay a sum of `5,00,000/-, in case a candidate leaves P.G. Course before its completion, is unconscionable? 12. This Court on 22.07.2013, granted time to the learned counsel for the respondents to satisfy the Court about the reason for which the stipend is paid to the Resident Doctors, however, the respondents did not furnish any material to satisfy the Court that for which reason, the stipend is paid to the Resident Doctors. 13. Now for the proper adjudication of the question formulated herein-above, the standard proforma of surety bond is reproduced here as under: "SURETY BOND 4. This bond is made on the ........................ in favour of the Government of the State of Rajasthan (hereinafter) called the Government and Dr. .................... Son/Daughter of Shri ........................... Resident of ......................................... (hereinafter called student.) 2. 13. Now for the proper adjudication of the question formulated herein-above, the standard proforma of surety bond is reproduced here as under: "SURETY BOND 4. This bond is made on the ........................ in favour of the Government of the State of Rajasthan (hereinafter) called the Government and Dr. .................... Son/Daughter of Shri ........................... Resident of ......................................... (hereinafter called student.) 2. WHEREAS, on the basis of merit the student was offered various courses(s) at various Institutions available at the time of his/her counseling and he/she has voluntarily opted for the course at the College and he/she has been admitted in the course at the college with understanding and subject to the under taking that the student shall undergo the course on full time and regular basis and shall maintain the required standard of performance and shall not indulge in indiscipline/misconduct. 3. WHEREAS, the P.G. Student has been allotted by the government for postgraduate course in the specialty of ..................... in the Principal, Dr.S.N. Medical College, Jodhpur upon the condition that: (a) If the (P.G. Student) does not join the course at the allotted institution on or before the stipulated date. (b) If the student leaves the P.G. course before its completion. (c) If the admission/registration of the student is cancelled / terminated by the University/Medical college on account of unsatisfactory performance/Misconduct/indiscipline. 4. In view of above clause (a)/(b)/(c) the student undertake that till entire course a surety amount Rs.5.00 Lac. (rupees five Lacs only) including bank guarantee of Rs.1.50 lac) alongwith stipend received will be paid to the college and college shall have the right to retain the original certificate of the student. 5. In case I fail to pay the above amount following are my Guarantor/or sureties who are responsible jointly for payment of the said amount for me: 1. Sureties name (with address) ................................................................. 2. Sureties name (with address) ................................................................. Witness Signature Signature of P.G. student Name of witness With address & mobile No. Name of students Address & mobile No. 6. In consideration of the bond executed by the student Dr. ............................Son/Daughter of .............................. Resident of .......................... in favour of Principal, Dr. S.N. Medical College, Jodhpur a sum of Rs.3.50 Lac (in words rupees Three lac fifth thousand only) we ............................................................ In consideration of the bond executed by the student Dr. ............................Son/Daughter of .............................. Resident of .......................... in favour of Principal, Dr. S.N. Medical College, Jodhpur a sum of Rs.3.50 Lac (in words rupees Three lac fifth thousand only) we ............................................................ hereby stand as surety, jointly and severally for the payment of the said amount on the terms mentioned above, in cases the student fails to pay on demand a sum of Rs.3.50 Lac (in words rupees Three lac fifty thousand only) we, the said surety shall without any objection will be paid to the college on demand. 1. Signature of Surety 2. Signature of surety Name of surety ................... Name of surety ................. Present address.......................... Present address............................. Phone/Mobile No....................... Phone/Mobile No....................... Signature of witness Name of witness Present address Phone/Mobile No." 14. Clause 4 of the Surety Bond provides to undertake a student to pay Rs. 5 Lac along with Stipend received in case he or she leaves the course before its completion and if his or her case falls in either of condition mentioned in (a)(B) & (c) of clause 3 of Surety Bond. 15. This Court in SBCWP No.3000/2011 - Dr. Vishnu Sharma vs. State of Rajasthan & Ors. decided on 7th April, 2011 has upheld the condition of paying the amount of `5 Lac on leaving the course in between. In Dr. Vishnu Sharma's case (supra) this court has observed that the condition of paying the amount of `5 Lac has a reasoning behind it. This court has held that the condition of furnishing the surety bond is applied to curtail the tendency of leaving the course in between as the same is against the public policy. This Court has also taken into consideration that to keep the infrastructure intact apart from teaching staff and laboratories etc. in the medical colleges the condition of surety bond of paying `5 Lac on leaving the course cannot be said to be reasonable. The court has observed as under: "A medical college is required to provide complete infrastructure apart from the expert teaching staff and laboratories etc. and if it is not utilized to the extent it is meant for, it goes in waste. Keeping aforesaid in mind, if surety bonds contain a condition for payment of Rs.5 Lac on leaving the course in between then it cannot be said to be illegal." 16. and if it is not utilized to the extent it is meant for, it goes in waste. Keeping aforesaid in mind, if surety bonds contain a condition for payment of Rs.5 Lac on leaving the course in between then it cannot be said to be illegal." 16. From the entire reading of the judgment rendered in Dr. Vishnu Sharma's case (supra), it is clear that there was no occasion before this Court to consider the question of reasonableness of the condition of paying the stipend received by a student in addition to `5 Lac in case he leaves the P.G. Course before its completion, probably because at that time, no such condition was incorporated by the respondent in the standard proforma of surety bond to be filled by an aspirant of admission in the P.G. Course. 17. The meaning of word 'stipend' given in Merriam - Webster Dictionary is "a fixed sum of money paid periodically for services or to defray expenses". 18. A stipend is paid to a person for services rendered by him or her. It is the case of the petitioner that while pursuing P.G. Course, a student is required to attend hospital and discharge his duties during hospital hours. The respondents have not denied this fact that during hospital hours, a student pursuing P.G. Course has to perform certain duties in the hospitals during hospital hours. The respondents have also not contended that amount payable as stipend to a student of P.G. Course is part of the expenditure incurred by the State in imparting training to a student undergoing P.G. Course. This Court on 22.07.2013 has granted time to the counsel for the respondents to satisfy about the reason for which stipend is paid to the Resident Doctors, but the respondents have failed to satisfy this Court on the above question. Hence, there is no doubt that the stipend paid to the student while pursuing P.G. Course is honorarium for the services rendered by him or her. 19. Now coming to the question, whether the condition incorporated in the standard proforma of surety bond of paying stipend in the event a student leaves the P.G. Course before its completion is reasonable? 20. A condition of a contract must be supported by objects and reasons. Section 23 of the Indian Contract Act, 1872 says that every agreement of which the object or consideration is unlawful is void. 20. A condition of a contract must be supported by objects and reasons. Section 23 of the Indian Contract Act, 1872 says that every agreement of which the object or consideration is unlawful is void. 21. Section 23 of the Indian Contract Act is as under: "23. What consideration and objects are lawful, and what not.—The consideration or object of an agreement is lawful unless— it is forbidden by law, or is of such a nature that, if permitted, it would defeat and provisions of any law; or is fraudulent; or involves or implies, injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is void." 22. It is settled law that every citizen is entitled to get fair wages, remuneration and salary etc. for the services rendered by him or her in lawful manner. If a person is deprived of his hard earned wages or salary by a condition of a contract, then such a condition of this nature would defeat the provisions of various laws. It also involves or implies injury to the property of another. Any person paid for the services rendered cannot be compelled to pay back the wages, remuneration or salary received in lieu of services rendered because the services rendered cannot be undone by leaving the services. The condition of paying an amount of Rs. 5 Lac in case a student undergoing P.G. Course leave the course in between is understandable for the reason that the Medical Colleges have to keep the infrastructure intact apart from teaching staff and laboratories etc. for providing training to the students, who are undergoing P.G. Courses and for that purpose they can ask a student to pay cost for maintaining infrastructure and standard in case he leaves P.G. Course in between. It is also understandable that to curb the tendency of leaving the P.G. Course in between a certain amount should be charged so that any student may not leave in between in routine or without there being any compelling circumstance. However, the condition of paying the stipend along with the amount of Rs. It is also understandable that to curb the tendency of leaving the P.G. Course in between a certain amount should be charged so that any student may not leave in between in routine or without there being any compelling circumstance. However, the condition of paying the stipend along with the amount of Rs. 5 Lac incorporated in the surety bond is neither supported by any reasons nor having any object to achieve and, therefore, cannot be termed as a reasonable condition. Such a condition without any object or reason is opposed to the public policy and is liable to be declared as void. 23. The Hon'ble Apex Court in LIC of India vs. Consumer Education & Research Centre reported in 1995(5) SCC 482 has held as under: "32. An unfair and untenable or irrational clause in a contract is also unjust amenable to judicial review. In common law a party was relived from such contract. In Gillespie Brothers & Co. Ltd. vs. Roy Bowles Transport Ltd., 1973(1) Q.B. 400, Lord Denning for the first time construing the indemnity clause in a contract stated that the court to permit party to enforce his unreasonable clause, even when it is so unreasonable, or applied so unreasonably, would be unconscionable, it was stated: "When it gets to this point, I would say, as I said many years ago. There is the vigilance of the common law which while allowing freedom of contract, watches to see that it is not abused. It will not allow a party to exempt himself from his liability at common law when it would be quite unconscionable for him to do so." 33. In Lloyds Bank Ltd. vs. Bundy, 1973(3) All E.R. 757, inequality of the bargaining power was enunciated by Lord Denning M.R. and held that one who enters into a contract on terms which are very unfair or transfers property for a consideration which is grossly inadequate, when his bargaining power is grievously impaired by reason of his own needs or desires, or by his own ignorance of infirmity ......... the one who stipulates for an unfair advantage may be moved solely by his own self-interest, unconscious of the distress he is bringing to the other .......... One who is in extreme need may knowingly consent to a most improvident bargain, solely to relieve the strains in which he finds himself. the one who stipulates for an unfair advantage may be moved solely by his own self-interest, unconscious of the distress he is bringing to the other .......... One who is in extreme need may knowingly consent to a most improvident bargain, solely to relieve the strains in which he finds himself. It would not be meant to suggest that every transaction is saved by independent advice. But the absence of it may be fatal........ 47. It is, therefore, the settled law that if a contract or a clause in a contract is found unreasonable or unfair or irrational one must look to the relative bargaining power of the contracting parties. In dotted line contracts there would be no occasion for a weaker party to bargain or to assume to have equal bargaining power. He has either to accept or leave the services or goods in terms of the dotted line contract. His option would be either to accept the unreasonable or unfair terms or forego the service forever. With a view to have the services of the goods, the party enters into a contract with unreasonable or unfair terms contained therein and he would be left with no option but to sign the contract." 24. The students aspiring for undergoing P.G. Course have no bargaining power and has to fill the surety bond provided by respondents in the standard proforma. If any student, refuses or fails to fill the surety bond provided by respondents in the standard proforma, will certainly be ineligible for admission in P.G. Course. 25. In view of the above discussion, this writ petition is allowed and it is held that the condition of paying the stipend back, in case a student leaves P.G. Course before is completion, is declared as void and is hereby quashed and set aside. The respondents are restrained from recovering the amount of stipend paid to the petitioner during post graduation course.