3288815/2024/SEC-ME-ESICHQ

$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 03.09.2024
Judgment pronounced on: 10.09.2024

+ W.P.(C) 12260/2024 & CM APPL.50952-54/2024

DR ANKIT SHARMA & ORS. ....Petitioners
Through: Mr. Gautam Narayan, Ms. Asmita
Singh and Mr. Taha Yasin, Advocates
versus

UNION OF INDIA & ORS. ....Respondents

Through: Mr. Hemant Kumar Yadav, Senior
Panel Counsel with Mr. Rajat Sikri,
GP for UOI
Mr. Shlok Chandra, St. Counsel with
Mr. Sankalp Sharma, Mr. Sushant
Pandey, Advocates and Mr. Dinesh
Soni, SSO, ESIC

+ W.P.(C) 12261/2024 & CM APPL.50955-57/2024

DR. BARUN KUMAR SINGH & ORS. ....Petitioners

Through: Mr. Gautam Narayan, Ms. Asmita
Singh and Mr. Taha Yasin, Advocates
versus

UNION OF INDIA & ORS. ....Respondents

Through: Mr. Umang Chopra, Senior Panel
Counsel with Ms. Medha Chopra,
Advocate and Mr. Karan Malhotra,
GP for R-1

W.P.(C) 12260/2024 & connected petitions Page 1 of 14 pages

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Mr. Shlok Chandra, St. Counsel with

Mr. Sankalp Sharma, Mr. Sushant
Pandey, Advocates and Mr. Dinesh
Soni, SSO, ESIC

+ W.P.(C) 12264/2024 & CM APPL.50963-65/2024

DR ANKIT KUMAR SHAHI & ORS. ....Petitioners

Through: Mr. Gautam Narayan, Ms. Asmita
Singh and Mr. Taha Yasin, Advocates
versus

UNION OF INDIA & ORS. ....Respondents

Through: Mr. Mimansak Bhardwaj, Senior
Panel Counsel with Mr. Chetan
Jadon, GP, Mr. Sunny Chhoankar,
Mr. Pradeed Baisoya, Ms. Vidya
Mishra, Mr.Harsh Vardhan Singh
Rajawat, Ms. Shivangi Rajawat,
Advocates for R-1/UOI
Mr. Shlok Chandra, St. Counsel with
Mr. Sankalp Sharma, Mr. Sushant
Pandey, Advocates and Mr. Dinesh
Soni, SSO, ESIC
CORAM:
HON'BLE MR. JUSTICE SURESH KUMAR KAIT
HON'BLE MR. JUSTICE GIRISH KATHPALIA
JUDGMENT

GIRISH KATHPALIA, J.:

1. These three writ petitions have been filed under Article 226 of the
Constitution of India to assail common order passed by the Central

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Administrative Tribunal, Principal Bench, New Delhi in three Original

Applications of the present petitioners are taken up together, the factual and
legal matrix being similar. On the very first date of hearing, respondents
entered appearance through counsel and at request of both sides, final
arguments were heard at the initial stage itself.

2. Briefly stated, circumstances relevant for present purposes as pleaded

in the petitions are as follows.

2.1 The present petitioners are dentists by profession and at the time of
joining the course of Bachelor of Dental Surgery (Batches of 2014-19, 2015-
20, 2016-21 & 2017-22) in the Employees State Insurance Corporation
Dental College and Hospital, Rohini, Delhi (hereinafter referred to as “the
ESIC”), they submitted their individual service bonds in favour of the ESIC
in lieu of the ESIC agreeing to incur the expenditure for their education.

2.2 Those service bonds involved in WP(C) 12260/2024 stipulated that

the petitioners of the said petition would have to mandatorily serve the ESIC
for a period of three years after passing the said course, failing which they
would be liable to pay to the ESIC the bond amount of Rs. 10,00,000/- each
with interest at a rate of 15% per annum. Those service bonds involved in
WP(C) 12261/2024 and WP(C) 12264/2024 stipulated that the petitioners of
the said petitions would have to mandatorily serve the ESIC for a period of
five years after passing the said course, failing which they would be liable to

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pay to the ESIC the bond amount of Rs. 7,50,000/- each with interest at a
rate of 15% per annum.

2.3 The policy regarding tenure of those service bonds was revised from
time to time by the ESIC. Finally, by way of communications dated
28.07.2020, followed by 30.03.2021, the ESIC instructed all its Institutions
to reduce the bond tenure to one year.

2.4 However, after completion of their BDS course, none of the

petitioners was called upon by the ESIC to render services nor any of the
petitioners approached the ESIC for the said purpose. Some of the
petitioners proceeded further with higher studies.

2.5 By way of email dated 03.08.2023, the ESIC called upon the
petitioners to render their services in terms with the revised bonds for a
period of one year. In pursuance of the said communication, the petitioners
joined the service of the ESIC, where they continued to serve till the date of
institution of their respective Original Applications in the Tribunal and Writ
Petitions in this Court.

3. Against the above backdrop, the petitioners filed three Original

Applications seeking quashing of communication dated 30.03.2021 and
permission to serve the full tenure of five/three years in terms with the bond
conditions. By way of order impugned in the present writ petitions, the

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learned Tribunal dismissed the Original Applications of the petitioners. The

relevant portion of the impugned order is extracted below:
“10. The applicants joined the Corporation as students to pursue the
undergraduate course and at the relevant point of time, the applicants
signed the bond, to serve the respondents for five years, in view of the
expenses made by the Corporation to fund their education and in case,
the applicants did not serve the respondents for five years, they were
liable to pay an amount of Rs. 7,50,000/-. It is submitted in OA No.
750/2024, neither the applicants approached the respondents to
confirm if their services were needed nor did the respondents seek the
services of the applicants, therefore they proceeded to pursue their
Master Degree. It is also submitted that legal notice has been
responded to by the respondents and the same has been assailed by
the applicants in the OA 750/2024.

11. We have perused the bond signed by the applicants, In terms of the
same, the respondents were obliged to seek the services of the
applicants, if required that is to say need basis. Evidently, the
respondents did not require the services of the applicants at the
relevant point of time and therefore, the applicants did not serve the
respondents. During the interregnum, the tenure of the service bond
has been reduced considerably from five years to three years and
thereafter to one year. Only after the revised instructions were issued,
the respondents sought the services of the applicants. It is clarified
that the applicants’ services were sought on 05.08.2023 and by then,
the Corporation had issued revised instructions with respect to bond
period to one year and the applicants have joined on different dates in
pursuance of offer extended to them after 05.08.2023. Since the
revised conditions dated 28.07.2020 were operative, when the
applicants joined, according to us, they were obliged to serve only for
about one year.

12. Learned counsel for the applicants has submitted that the
applicants have not signed any new bond in pursuance to their
employment offered on 05.08.2022. Be that as it may, the instructions
changed in the interregnum, the service bond signed by the applicants
at the relevant point of time ceases to exist after the expiry of five
years and the same was not operated upon by both the respondents
and the applicants.”

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4. During arguments, learned counsel for petitioners took us through the

above background and the relevant documents to contend that the order
impugned in the present petitions is not sustainable in the eyes of law. It
was argued on behalf of petitioners that once the respondents had accepted
the service bonds for tenure of five/three years, they had no authority to
unilaterally alter tenure of service, reducing the same to one year. Learned
counsel for petitioners contended that the service bonds are basically
contract between the ESIC and the petitioners, therefore, the petitioners have
a right to continue in the employment of ESIC for a period of five/three
years from the date of their joining the service. In support of his arguments,
learned counsel for petitioners placed reliance on the judgments in the cases
titled Adeeba Asrar vs All India Institute of Medical Sciences, 2022 SCC
OnLine Del 1780; Dr. K. Ashwarya vs Union of India, 2020 SCC OnLine
Mad 9304; Hemant Kumar Verma & Ors vs Employees State Insurance
Corporation & Ors., 2022 SCC OnLine SC 924; Association of Medical
Superspeciality Aspirants & Residents & Ors vs Union of India & Ors,
(2019) 8 SCC 607; Krishna Rai & Ors vs Banaras Hindu University &
Ors, (2022) 8 SCC 713; Manuelsons Hotels Pvt. Ltd vs State of Kerala &
Ors, (2016) 6 SCC 766; and State of Jharkhand vs Brahmaputra Mettalics
Ltd., (2023) 10 SCC 634.

5. On the other hand, learned counsel for respondents supported the

impugned order and contended that the present petitions are devoid of
merits. Learned counsel for respondents repelled the rival contention to

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treat the said service bonds as a contract between the ESIC and the
petitioners. It was contended on behalf of respondents that the ESIC is well
within its rights to reduce the tenure of service in terms with the said bonds.

6. Thence, the issue before us is as to whether the subject service bonds

can be read in a manner as to create a right to employment in the petitioners.

7. It would be apposite to examine the wordings of the said bonds,

which are extracted below:

BOND
(Total value of Rs 100/- Stamp Paper)
(FOR BDS & MBBS STUDENTS
TO KNOW All MEN BY THESE PRESENTS THAT We, ______
son/daughter/wife of ______ residing at ______ (herein-after called
the Bounden) and
(1) Shri ______ (Parents/Guardian) residing at ______(Here enter
address) (hereinafter called 'the surety) do hereby bind ourselves and
each of us, our and each of our heirs, executors and administrators
jointly and severally to pay to the Employee's State Insurance
Corporation (hereinafter referred to as 'the Corporation') on demand
the total amount of Rs 7,50,000 (Rupees Seven lakh fifty thousand
only) the amount spent by Corporation for their studies ·with 15%
interest as fixed by Corporation.

Signed this .......... Day of .......... in the year .......... by the bounden
Shri/Smt .......
Signature
In the presence of Witness:
1. ······································ 1. Signed by bounden (Name & Address)
(Name & Address with official seal)
2. ··································· 2. Signed by Shri/Smt ................. (The Surety)
(Name & Address) (Residential Address with proof is compulsory)

WHEREAS the Bounden undergo MBBS/BDS in Corporation Medical

College/Dental College in the merit quota for the duration of the

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course as prescribed by Medical Council of India/ Dental Council of

India

AND WHEREAS, the Corporation have agreed to incur the

expenses on condition that after successful completion of the course of
study within the prescribed period the bounden shall serve the ESI
Corporation/ESI Scheme for a period of five years in any institution of
the Corporation/Scheme any where in India, if the Corporation
requires and also subject to the terms and conditions hereinafter
appearing and the bounden and the sureties have agreed to the
same.

NOW the condition of the above written obligation is that in the event
the Bounden after successful completion of the Graduate course of
study to which he/she was selected, fails to serve the Corporation for
period of five years, if required by the Corporation, the Bounden and
sureties shall forthwith pay to the Corporation for violation of
conditions, on demand the total amount of Rs 7,50,000/- (Rupees
Seven lakh fifty thousand only) the amount spent by the Corporation
for their studies along with 15% interest as fixed by the Corporation.
On the quantum of amount payable by the Bounden and the sureties,
the decision of the Corporation shall be final and legally binding on
the bounden and sureties and upon the payment of such sum the above
written obligation shall be discharged.

PROVIDED further that the bounden and the sureties do hereby

agree that if the Bounden fails to serve the Corporation for a period of
five years, if Corporation requires, it may be construed as
'professional misconduct' and the fact reported to the Medical Council
of India /Dental Council of India for suitable action including
cancellation of Registration by the Council.

PROVIDED further that the bounden and the surety do hereby

agree that all sums found due to the Corporation under or by virtue of
this bond shall be recovered jointly and severally from them and their
properties movable and immovable as if such dues were arrears of
land revenue under the provisions of the Revenue Recovery Act for the
time being in force or in such other manner as the Corporation may
deem fit.
The liabilities of the sureties under this Bond is Co extensive
with that of the Bounden and shall not be affected by the Corporation
giving time or any other indigence to the bounden of by the

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Corporation varying of the terms and conditions herein contained,

Signed this ..........Day of .......... in the year .......... by the bounden

Shri/Smt. ..........
Signature
In the presence of Witness:
1. ······································ 1. Signed by bounden (Name & Address)
(Name & Address with official seal)

2. ··································· 2. Signed by Shri/Smt ................. (The Surety)

(Name & Address) (Residential Address with proof is compulsory)
________________________________________________________
Dean/Administrative Officer of ESIC Medical College/ESI
PGIMSR/Dental College will sign as witness.
(emphasis supplied)

8. The email dated 03.08.2023 (printout whereof has been filed by the
petitioners at pdf 288 of W.P.(C) 12260/2024) issued certain clear
instructions to the petitioners. Clause 4 of the said instructions specifically
clarified as under:
“4. Bond service will be for ONE YEAR ONLY. After one year, the
candidates will be relieved from the bond service irrespective of the
bond duration they have signed. No extension will be given.”

(emphasis in capital letters as in the original document)

9. The salient features of the said service bond, as reflected from the
above extract are that it is a unilateral document executed by the petitioners
and their respective sureties; that the Dean/Administrative Officer of ESIC
Medical College/ESI PGIMSR/ Dental College would sign the same as a
witness only and not as an executor party; that the said bonds were got
executed from the petitioners in lieu of the expenses incurred by the ESIC
on education of the petitioners; that the said bonds clearly stipulate the

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monetary consequences in case the executor of the bond refuses or fails to

serve the ESIC; that the said bonds even implicitly, what to say of explicitly,
do not stipulate any duty on the part of the ESIC to avail or to seek services
from the executors thereof, much less to provide services to the executors;
and that as is obvious, unlike in the case of the executors, the said bonds do
not stipulate or even contemplate any consequence, monetary or otherwise
befalling the ESIC in case services of the executors are not availed of.

10. That being so, we are of the clear view interalia that the said bonds do
not and cannot create any right to employment in the petitioners. The
petitioners having already enjoyed benefit in the form of expenses incurred
by the ESIC on their education, grant of right to employment in them on the
basis of the said bonds would be granting them double benefit, which is
nowhere contemplated in the said bonds or justified in any manner.

11. Merely because at a subsequent stage the ESIC opted to reduce the
service period from five/three years to one year, it cannot be read to their
detriment, much less to the benefit of the petitioners in the form of creation
of right to employment under the ESIC. It was completely a matter of
discretion for the ESIC to avail services of the bond executors for any period
depending upon the requirement, though that period could not be more than
the period of five/three years contemplated in the said bonds. By reducing
the bond period to one year, the ESIC shortened the benefit which it could
avail from the said bonds; and the ESIC cannot be compelled to avail

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services of the bond executors for the complete bond period irrespective of
their requirement. There is not even a whiff of any stipulation in the said
bonds to the effect that the ESIC cannot reduce the benefit in terms of tenure
they want to avail out of the said bonds.

12. Besides, assumably if the petitioners felt that joining services with the
ESIC for a period of one year would block their career to that extent, they
could have refused to join services and could have resisted to pay bond
amount to the ESIC claiming that either they would work for five years or
not at all. But that was not done.

13. The petitioners themselves have always been conscious that the said
bonds do not create right to employment in their favour. That is the reason
why none of them claimed or even sought employment from the ESIC
immediately after completion of their respective course. Not just this, the
petitioners joined services with the ESIC specifically for a period of one
year. Although the petitioners did submit a representation to the effect that
the period of service ought to be five/three years, but that representation
having met no positive response, they abandoned the same and joined the
one year service with the ESIC.

14. Coming to the judicial precedents cited on behalf of the petitioners,

none of those is of any help to the petitioners, as discussed hereafter.

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14.1 In the case of Adeeba Asrar (supra), the only issue was as to whether
a petition for quashing of the advertisement for recruitment of doctors is
maintainable directly before the High Court, without first approaching the
Administrative Tribunal. In the six paragraph order, the learned Single
Judge of this Court answered the issue in negative.

14.2 In the case of Dr. K. Ashwarya (supra), the petitioner, working as

Junior Resident under ESIC Residency Scheme, having completed her
MBBS raised a grievance that she is required to compulsorily work for five
years on the basis of service bond executed by her under compulsion and the
same is in contravention of her fundamental rights. The learned Single
Judge of the Madras High Court dismissed the writ petition on the ground
that the jurisdiction to entertain the dispute lies with the Central
Administrative Tribunal. In any case, none of the petitioners herein claim
that the service bonds in question were got signed under duress.

14.3 In the case of Hemant Kumar Verma (supra), the issue before the
Hon’ble Supreme Court was parity qua service conditions between the in-
service doctors and the doctors serving under service bonds. The issue was
decided in negative.

14.4 In the case of Association of Medical Superspeciality Aspirants

(supra), the issue before the Hon’ble Supreme Court was the
constitutionality of mandatory service bonds, as imposed in superspeciality

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courses by a number of States. After elaborate analysis of the contentions

advanced before High Courts of the each of the concerned State, the Hon’ble
Supreme Court upheld the constitutionality of such mandatory service
bonds. The apex court held that a policy decision taken by the State
Governments to utilize the services of doctors who are beneficiaries of
government assistance to complete their education cannot be termed
arbitrary; that the period of compulsory service and the exit should be
reasonable; and that such mandatory service bonds are not a restraint on
profession of the doctors. None of these is the issue in the cases before us.

14.5 In the case of Krishna Rai (supra), the issue before the Hon’ble
Supreme Court was as to whether the doctrine of estoppel and acquiescence
would prevail over statutory service rules prescribing the procedure for
promotion of Class IV employees to Class III, working in the Banaras Hindu
University. That is completely distinct from the issue before us.

14.6 In the case of Manuelsons Hotels Pvt. Ltd. (supra), the issue before
the Hon’ble Supreme Court was the scope of the doctrine of promissory
estoppel, which again is not the issue involved in the present case, it being
nobody’s case that by way of the subject service bonds, the ESIC had
promised to give employment to the petitioners. As described above, in the
present case, the said bonds encumbered obligation only on the petitioners to
serve the ESIC according to the requirement of the latter.

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14.7 In the case of Brahmaputra Mettalics Ltd. (supra) also the issue
involved was the scope of promissory estoppel in the situation where the
State Government had promised certain rebates to certain industries but did
not notify the rebates and the Hon’ble Supreme Court held the State
Government bound to grant those rebates. In the present case, to repeat,
there was no promise of the ESIC to provide employment to the petitioners.

15. In view of above discussion, we are unable to find any infirmity in the
impugned order, so the same is upheld and the present petitions are
dismissed.

GIRISH KATHPALIA
(JUDGE)

SURESH KUMAR KAIT

(JUDGE)
SEPTEMBER 10, 2024/as

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