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2017 DIGILAW 2745 (RAJ)

Laxman Lal v. State of Rajasthan

2017-12-11

SANGEET LODHA, VINIT KUMAR MATHUR

body2017
JUDGMENT : Sangeet Lodha, J. 1. The question that falls for our determination in this reference made by the learned single Judge of this Court at Jaipur Bench, reads as follows: "Whether the stipend paid to the M.D. students during the three year course is liable to be refunded in the event of such students abandoning the said course contrary to the conditions of the surety bonds executed by them. The surety bond provides that in the event of the students in the M.D. Course leaving before its completion, they would be liable to refund the stipend received during the period of pursuing the M.D. Course." The aforementioned question has been referred by the learned single Judge for consideration by a Larger Bench vide order dated 1.8.16 passed in S.B.C. Writ Petition No. 4529/16, noticing a conflict between two Single Bench decisions of this court in S.B.C. Writ Petition No. 3098/08 "Dr. Sandeep Goswami v. State of Rajasthan" and S.B.C. Writ Petition No. 3703/12 (reported in (2014) 2 Raj LW 1039); "Dr. Prafull Mehta v. State of Rajasthan & Anr.". 2. On 2.11.16, learned counsel appearing for the State pointed out that against the decision of the learned single Judge in S.B.C. Writ Petition No. 3703/12 "Dr. Prafull Mehta v. State of Rajasthan & Anr.", the State has preferred D.B. Civil Special Appeal (Writ) No. 228/04, which is pending before the Principal Seat at Jodhpur. In this view of the matter, to avoid any divergence of views, the present matter was transferred to the Principal Seat at Jodhpur to be heard along with D.B.C. Special Appeal (Writ) No. 228/14 and accordingly, the original record of the present case was transmitted to the Principal Seat at Jodhpur for listing along with D.B.C. Special (Appeal) No. 228/14. The said petition transferred by the Jaipur Bench to the Principal Seat has been registered as D.B.C. Writ Petition No. 13124/16. 3. The reference came for consideration before a co-ordinate Bench on 24.10.17. In the meantime, appeal preferred by the State in the case of Prafull Mehta (supra) came to be dismissed, as barred by limitation. However, in view of two conflicting decisions, the question referred by the learned single Judge in the present case remains pending for consideration. Hence, the matter is before us. 4. In the meantime, appeal preferred by the State in the case of Prafull Mehta (supra) came to be dismissed, as barred by limitation. However, in view of two conflicting decisions, the question referred by the learned single Judge in the present case remains pending for consideration. Hence, the matter is before us. 4. The background facts leading to the reference of the question for consideration by a Larger Bench may be summarised thus: The petitioner herein after completion of his MBBS appeared in All India Post Graduate Medical Entrance Examination 2013. He was selected and allotted MD Bio-chemistry at SMS Medical College, Jaipur vide allotment letter dated 30.8.13. He joined the course on 2.9.13. At the time of joining the course, as per the norms laid down he executed a surety bond which contains an undertaking in terms that in case the petitioner herein leaves the course he will be liable to make payment of Rs. 5,00,000/- including bank guarantee of Rs. 1.50 lacs along with stipend received during the period of PG Course else, the Medical College shall have the right to retain his original certificates. 5. While pursuing the PG Course in Biochemistry, the petitioner appeared in All India Post Graduate Medical Entrance Examination 2016. On being declared successful, he was admitted to the PG Course in General Surgery and was allotted S.N. Medical College, Jodhpur to pursue the course. The petitioner made an application accompanied by a banker's cheque of Rs. 5,00,000/- to the Principal & Controller, SMS Medical College and Associated Hospitals, the second respondent herein, for release of the original documents. The second respondent refused to release the documents unless the amount of stipend paid while pursuing PG course in Bio-chemistry is deposited in terms of the surety bond. 6. In these circumstances, the petitioner preferred the present writ petition questioning the legality of condition No. 4 of the surety bond dated 8.11.13 to the extent it permits the second respondent to retain the original documents/certificates till the amount of stipend paid is refunded. The matter was taken up for consideration by the learned single Judge on 13.4.16, however, noticing conflicting views taken by two single Benches of this Court in Prafull Mehta's case and Dr. Sandeep Swami's case (supra), the matter was directed to be placed before the Hon'ble the Chief Justice for constitution of Larger Bench. The matter was taken up for consideration by the learned single Judge on 13.4.16, however, noticing conflicting views taken by two single Benches of this Court in Prafull Mehta's case and Dr. Sandeep Swami's case (supra), the matter was directed to be placed before the Hon'ble the Chief Justice for constitution of Larger Bench. It was ordered that prayer for interim relief be made before the Larger Bench as constituted. The Larger Bench constituted, vide order dated 8.7.16 remitted the matter to the learned single Judge for formulation of question of law keeping in view the provisions of Rule 59 of Raj as than High Court Rules, 1952. Pursuant thereto, vide order dated 1.8.16, learned single Judge formulated the question as aforesaid and directed the matter to be placed before the Division Bench. 7. By way of an additional affidavit, it is brought on record by the petitioner that since no interim order was passed by this Court in his favour; lest on failure to furnish the original certificates, the admission granted to him to PG Course in General Surgery was liable to be cancelled, he has deposited the amount of stipend paid while pursuing the PG Course in Bio-chemistry, a sum of Rs. 12,54,116/-, by banker cheque drawn in favour of Principal & Controller, SMS Medical College, Jaipur, which deserves to be directed to be refunded. 8. At this stage, it would be appropriate to refer to two conflicting decisions of Single Benches of this Court, which has given rise to reference of the question formulated for consideration of the Larger Bench. 9. In Dr. Sandeep Swami's case, the learned single Judge declined to interfere with the order directing the petitioner therein to refund the amount of stipend with the following observations: "I find that petitioner took admission in PG course pursuant to the entrance examination of 2007. He again participated in the entrance examination of 2008 and took admission with the change of discipline. He resigned from the earlier PG course where he was getting stipend. The petitioner was asked to refund the amount of stipend because PG studies are supported by the Government's fund which was wasted for one seat and even the seat could not be utilised for other eligible candidate. He resigned from the earlier PG course where he was getting stipend. The petitioner was asked to refund the amount of stipend because PG studies are supported by the Government's fund which was wasted for one seat and even the seat could not be utilised for other eligible candidate. Now-a-days, the respondents are taking bond so that heavy amount incurred in PG course may not result in waste due to leaving of course in between. It is not only loss of one seat but the expenditure incurred by the Government for that purpose also. In the instant case, petitioner had taken benefit of stipend and, subsequently, resigned from the course thus he was under an obligation to at least refund the amount of stipend paid to him. If bond would have been taken then petitioner was liable to pay Rs. 5 lac as is arranged now. In the background aforesaid, direction for refund of the amount of stipend is just and proper, rather, in the present scenario, a candidate is required to furnish bond of Rs. 5 lac for a contingency like in the present case i.e. if the course is left in between." 10. It is pertinent to note that in Dr. Sandeep Swami's case (supra), there was no bond executed by the student for the refund of the amount of stipend yet the amount of stipend was directed to be refunded, which was held to be just and proper by the learned single Judge precisely on the ground that PG studies are supported by Government's fund and if a candidate leaves the course in between, the Government money goes wasted and even the seat vacated by the student leaving the course cannot be utilised for other eligible candidate. 11. In Prafull Mehta's case (supra) where the petitioner therein was pursuing the PG course in Radiotherapy had executed a surety bond 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 Rs. 5 lacs along with stipend. The petitioner on being selected for a better branch of his choice pursuant to All India Pre PG Course Examination 2012, made a representation to the State Government for waiver of the condition of depositing Rs. 5 lacs and refund of the amount of stipend and prayed for return of the original documents. 5 lacs along with stipend. The petitioner on being selected for a better branch of his choice pursuant to All India Pre PG Course Examination 2012, made a representation to the State Government for waiver of the condition of depositing Rs. 5 lacs and refund of the amount of stipend and prayed for return of the original documents. The representation was not acceded to. In these circumstances, the petitioner while furnishing a cheque of Rs. 3,50,000/- and agreeing for encashment of bank guarantee for Rs. 1,50,000/-, requested the respondents to release the original documents. The respondents therein insisted for refund of the amount of stipend quantified at Rs. 2,38,000/-. In these circumstances, the petitioner challenged the action of the respondents in recovering the amount of stipend. After due consideration of the rival submissions, the learned single Judge arrived at the finding that the stipend paid to the student is honorarium for the services rendered and therefore, the student cannot be deprived of the same. The court held that the condition incorporated in the surety bond for repayment of the stipend cannot be termed as reasonable and declared the same as void being oppose to public policy. While examining the issue as to whether the condition incorporated in the surety bond providing for the refund of amount of stipend is unconscionable, the learned single Judge observed: "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. 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. 5 lac incorporated in the surety bond is neither supported by any reason 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." 12. We have heard the learned counsels for the parties. 13. Learned counsel appearing for the petitioner contended that the amount paid as stipend to the student during the period pursuing the PG course is for the services rendered and therefore, the same cannot be permitted to be recovered. It is submitted that a student intending to join the course of studies has no option but to accede the condition of executing the surety bond in the terms suggested by the respondents and therefore, merely because, the petitioner herein having no equal bargaining power acceded to onerous condition imposed, cannot be compelled to abide by the same. Learned counsel would submit that the condition incorporated being unconscionable term of contract is void and cannot be enforced. Learned counsel submitted that in view of the law laid down by this Court in Prafull Mehta's case after due consideration of all the relevant aspects, the petitioner is entitled for refund of the amount of stipend recovered from him during the pendency of the petition before this Court. Distinguishing the decision of this Court in Dr. Sandeep Swami's case (supra), learned counsel submitted that at the relevant time, no indemnity bond used to be taken in the form of surety bond of Rs. 3.5 lacs and bank guarantee for Rs. Distinguishing the decision of this Court in Dr. Sandeep Swami's case (supra), learned counsel submitted that at the relevant time, no indemnity bond used to be taken in the form of surety bond of Rs. 3.5 lacs and bank guarantee for Rs. 1.5 lacs and therefore, in the changed scenario when to cover up the loss likely to be incurred by the State Government in the training of the student while pursuing the PG course, the surety bond for Rs. 5 lacs including the bank guarantee of Rs. 1.5 lacs is already obtained from the student, the question of further recovery of stipend already paid is absolutely unjustified. Learned counsel submitted that while pursuing the PG course, the students are required to discharge hard duties in the hospitals which is not even in dispute and thus, apparently, the stipend is paid for services rendered, which stands further fortified by the fact that on the amount of stipend to be paid even the dearness allowance is admissible. Learned counsel emphasised that looking to the nature of the payment which is not even in dispute, the view taken by the learned single Judge in Dr. Prafull Mehta's case (supra), deserves to be upheld and the decision in Sandeep Swami's case (supra) not laying down the correct law, deserves to be overruled. 14. On the other hand, learned counsel appearing for the State while not disputing that the students pursuing the MD Course are required to discharge duties in the hospitals in attending the patients submitted that it is part of the training programme and therefore, the stipend paid cannot be treated to be an amount paid for services rendered. According to the learned counsel even the stipend paid is the expenditure incurred by the Government on the students pursuing the PG course and therefore, if a student leaves the course in the midst, cannot be permitted to retain the amount of stipend inasmuch as, it results in creating unnecessary burden on the State exchequer. Learned counsel would submit that the petitioner having accepted the condition incorporated in the indemnity bond with open eyes, cannot be permitted to retract from the same on any ground whatsoever. 15. We have given thoughtful consideration to the rival submissions and perused the material on record. 16. Learned counsel would submit that the petitioner having accepted the condition incorporated in the indemnity bond with open eyes, cannot be permitted to retract from the same on any ground whatsoever. 15. We have given thoughtful consideration to the rival submissions and perused the material on record. 16. Indisputably, all the candidates joining the Post Graduate Medical Course in various disciplines regulated by Medical Council of India Post Graduate Medical Regulations, 2000 (for short "the Regulations"), are required to work as "Full lime Residents" during the training period. It is true that the candidates admitted to Post Graduate Medical Course are not recruited to any post and remain student pursuing the course of studies involving practical training. But then, fact remains that the 'stipend' which as per sub-clause 13.3 of the Regulations as it was existing prior to substitution of the said clause vide notification dated 20.10.08 was referred as 'remuneration', is paid to students pursuing the PG Course for services rendered. 17. As a matter of fact, the question regarding the payment made to the students pursuing PG Medical Course as stipend being remunerative in character, is no more res integra. 18. In the matter of "Kantesh Khetani & Ors. v. State of Rajasthan & Ors." [ 2005 (1) SCT 790 (Raj)], where while examining the validity of a condition incorporated in the bond executed by the students undergoing training in Diploma of National Board (DNB) Course conducted by National Board of Examination providing that the State Government would not bear any financial liability and further that the students would undergo training in DNB course on honorary basis, a learned single Judge of this Court having arrived at the conclusion that the duties performed by the students of PG Course of DNB are similar and equivalent to the duties which are being performed by students of PG Course (MD/MS), declared the condition incorporated as aforesaid as unfair and unconscionable. The court further held that the condition incorporated denying the stipend to the students pursuing DNB course performing similar duties qua the students pursuing PG Course (MD/MS) is arbitrary, unreasonable, discriminatory and violative of Articles 14 & 16 of the Constitution of India. 19. Aggrieved by the decision of the learned single Judge in Kantesh Khetani's case (supra), the State of Rajasthan preferred a special appeal. 19. Aggrieved by the decision of the learned single Judge in Kantesh Khetani's case (supra), the State of Rajasthan preferred a special appeal. A Bench of this Court while upholding the decision rendered by the learned single Judge (vide 'State of Rajasthan v. Kantesh Khetani & Ors.,' 2015 (3) Raj LW 1870), categorically observed that the State Government was not justified in taking the services of the students pursuing DNB course free only on the ground that they were admitted to the course with an understanding that it will be on honorary basis and for which they had also submitted an undertaking. The court observed that the exhaustive training courses with practical experience, did not justify that students will not be paid any stipend as the course was not confined to theory but practical examination, in which the students were required to work in hospitals. 20. Thus, in a case where there was a condition incorporated in the surety bond that the student pursuing the DNB Course shall not claim any stipend, the court found the condition incorporated unreasonable and unfair and categorically held that even the student pursuing DNB Course are entitled for the stipend for services rendered during the training. 21. Suffice it to say that the stipend is paid to the students pursuing PG Medical Course who are made to discharge the duties in the hospitals as Full Time Residents for the services rendered and therefore, the recovery of the amount of stipend paid on their leaving the course in midstream would amount to taking 'begar' from them which is prohibited under Article 23 of the Constitution of India. 22. Obviously, the petitioner desirous of admission to PG Course had no choice but to execute the bond in favour of the State Government in the prescribed or standard form containing unfair, unreasonable and unconscionable clause mandating refund of the amount of stipend paid to him for the services rendered while pursuing the PG Course. 23. As laid down by the Hon'ble Supreme Court in the matter of "Central Inland Water Transport Corporation Ltd. & Anr. 23. As laid down by the Hon'ble Supreme Court in the matter of "Central Inland Water Transport Corporation Ltd. & Anr. v. Brojo Nath Ganguly", AIR 1986 SC 1571 , a condition incorporated in the contract entered into by the party with superior bargaining power with large number of persons who have far less bargaining power or no bargaining power at all, if found to be unconscionable, unfair and unreasonable, ought to be adjudged void. 24. In view of the discussion above, in our considered opinion the view taken by the learned single Judge in Prafull Mehta's case (supra) holding that the amount of stipend paid to the student pursuing the PG Course cannot be permitted to be recovered and the condition incorporated in the surety bond providing for refund of the amount of stipend on the student leaving the course before completion is unreasonable, against the public policy and void, is the correct view of the matter and consequently, the decision of the learned single Judge in Dr. Sandeep Swami's case (supra), justifying the recovery of the amount of stipend on the student leaving the course in the mid, deserves to be overruled. 25. For the aforementioned reasons, the question referred by the learned single Judge is answered in terms that the amount of stipend paid to the students pursuing PG Medical Course is not liable to be refunded in the event of such students abandoning the course in the midstream notwithstanding the undertaking given by them by way of surety bond executed at the time of admission providing for the refund of amount of stipend in case of such students leaving the PG Course before its completion. The condition incorporated in the surety bond in the terms indicated above deserves to be declared unfair, unreasonable, unconscionable and void. 26. In the ordinary course, the question having been answered as aforesaid, we would have sent the matter back to the learned single Judge for decision of the writ petition on merits but since, the controversy involved in the writ petition stands adjudicated while answering the reference made, no fruitful purpose will be served in sending the matter back to the learned single Judge for disposal. In the result, the writ petition succeeds, it is hereby allowed. In the result, the writ petition succeeds, it is hereby allowed. The condition No. 4 of me Surety Bond (Annexure 3) to the extent it provides for refund of the amount of stipend on the petitioner leaving the PG Course before its completion is declared unfair, unreasonable, unconscionable and void. The petitioner shall be entitled for the refund of amount of stipend already deposited by him during the pendency of this petition. The amount shall be refunded to the petitioner within a period of four weeks, failing which it shall carry interest @ 9% per annum. No order as to costs.