JAGADISH N vs. STATE OF KARNATAKA

IN THE HIGH COURT OF KARNATAKA, BENGALURU

DATED THIS THE 14th DAY OF FEBRUARY, 2020

BEFORE

THE HON'BLE MR. JUSTICE KRISHNA S.DIXIT

WRIT PETITION NOS. 29365-29368 OF 2018 (EDN-RES) C/W WRIT PETITION NOS. 29817-29818/2018 & 29820- 29822/2018, 29823-29828/2018, 29874/2018 & 29876-29879/2018, 30406-30411/2018 (EDN-RES)

IN W.P. NOS. 29365-29368/2018:

BETWEEN:

AND:

THESE WRIT PETITIONS ARE FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 03.07.2018 ANNEX-E (AT SL NO.4), ANNEX-F (AT SL.NO.3), AND (AT SL.NO.2), ANNEX-G (AT SL.NO.2) AND (AT SL.NO.5) ORDER NO. 15,8,11 BEARING IDENTICAL NUMBERS IN ALL ORDERS ISSUED BY R-3 POSTING THE PETITIONERS FOR COMPULSORY SERVICE FOR 5 YEARS; AND ETC.,

IN W.P. NOS. 29817-29818/2018 & W.P. NOS. 29820-29822/2018:

BETWEEN:

(BY SMT. AKKAMAHADEVI HIREMATH, ADVOCATE)

AND:

THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 03.07.2018 ANNEXURE-H(SL NO.5), ANNEXURE–J(SL.NO.5), ANNEXURE-K(SL.NO.3), ANNEXURE-L(SL.NO.2), ANNEXURE-M(SL.NO.5) AND ANNEXURE-N(SL.NO.4) ORDER NO. 13,9,11,10,12, 14/2018 BEARING IDENTICAL NUMBERS IN ALL ORDERS ISUED BY THE R-3 POSTING THE PETITIONERS FOR COMPULSORY SERVICE FOR 5 YEARS. AND ETC.,

IN W.P. NOS. 29823-29828/2018:

BETWEEN:

AND:

REP BY ITS DEAN, RAJAJINAGAR, BENGALURU 10.

THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 03.07.2018 ANNEXURE-H(SL NO.1) AND (SL.NO.4), ANNEXURE–J(SL.NO.7) AND (SL.NO.1), ANNEXURE-K(SL.NO.1), ANNEXURE-L(SL.NO.4) ORDER NO. 12,11,7,13,14/2018 BEARING IDENTICAL NUMBERS IN ALL ORDERS ISUED BY THE R-3 POSTING THE PETITIONERS FOR COMPULSORY SERVICE FOR 5 YEARS. AND ETC.,

IN W.P. NO. 29874/2018 & W.P. NOS. 29876-29879/2018:

BETWEEN:

THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 03.07.2018 ANNEXURE-H(SL NO.4), ANNEXURE–J(SL.NO.4) AND AT (SL.NO.6), ANNEXURE-

K(SL.NO.8), ANNEXURE-L(SL.NO.6), ANNEXURE-M(SL.NO.1) ORDER NO. 12,11,7,13,14/2018 BEARING IDENTICAL NUMBERS IN ALL ORDERS ISUED BY THE R-3 POSTING THE PETITIONERS FOR COMPULSORY SERVICE FOR 5 YEARS. AND ETC.,

IN W.P. NOS. 30406-30411/2018:

BETWEEN:

7TH BLOCK (WEST), JAYANAGAR, BENGALURU-560 070. ...PETITIONERS (BY SMT. AKKAMAHADEVI HIREMATH, ADVOCATE)

AND:

REP BY ITS SECRETARY. ...RESPONDENTS

(BY SRI. SANDESH KUMAR M, HCGP FOR R1 ; SMT. GEETHADEVI M P, & SRI. M C JAYAKIRTHI, ADVOCATES FOR R3 & 4; SRI. N K RAMESH, ADVOCATE FOR R2 & R6; SMT. RATNA SHIVAYOGIMATH, ADVOCATE FOR R5; SRI. N KHETTY, ADVOCATE FOR R7)

THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 03.07.2018 ANNEXURE-H(SL NO.8), ANNEXURE–J(SL.NO.6, ANNEXURE-K(SL.NO.2), ANNEXURE-L(SL.NO.9), ANNEXURE-M(SL.NO.5 AND SL.NO.9) AND ANNEXURE-N(SL.NO.8) ORDER NO. 12,11,7,13,14/2018 BEARING IDENTICAL NUMBERS IN ALL ORDERS ISUED BY THE R-3 POSTING THE PETITIONERS FOR COMPULSORY SERVICE FOR 5 YEARS. AND ETC.,

THESE PETITIONS HAVING BEEN HEARD AND RESERVED FOR ORDER, THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:

O R D E R

Petitioner-medical students prosecuting their studies in the respondent – ESI Medical College are knocking at the doors of Writ Court, in substance, for laying a challenge to the prescription of five year compulsory service to be rendered in the ESI Hospitals after the accomplishment of their graduation.

respondent – MCI has filed its Statement of Objections incidentally supporting the case of petitioners.

Authority are the “Government Seats” and therefore, the respondent – ESI Corpn/college could not have super added the condition for compulsory service; neither the Government nor the RGUHS nor MCI has permitted the prescription in question; it is only the MCI which has power to prescribe the minimum standards of medical education and therefore, implicitly it can supervise the qualifications/eligibility criteria for admission to medical courses; thus, the MCI Counsel finds fault with prescription of compulsory service.

A) As to competence of ESI Corpn/college to prescribe condition of compulsory service:

a) the respondent – ESI Corporation is established by the Central Government by issuing a notification in the Official Gazette u/s 3 of the Employees’ State Insurance Act, 1948 for the administration of the Scheme of Employees State Insurance; this section makes the ESI Corpn a juristic person having perpetual succession; ; the Act provides for certain benefits to the class of employees

who are covered by its fold; the short Preamble to the Act reads as under:

“An Act to provide for certain benefits to employees in case of sickness, maternity and employment injury and to make provision for certain other matters in relation thereto.”

much milk cannot be derived from the text of this Preamble; the question of looking to the Preamble to the Act does not arise inasmuch as the courts are reluctant to allow a Preamble to override or expand the scope and meaning of a provision which is plain and unambiguous vide Bennion on Statutory Interpretation, section 247, (Sixth Edition, LexisNexis Publication);

b) section 59B introduced by the Amendment Act 18 of 2010 w.e.f. 01.06.2010 enables the ESI Corporation to establish inter alia, the medical colleges with a view to improve the quality of services provided under the ESI Scheme; accordingly, the Colleges have been established, is true; all they function on ‘no profit & no loss’ basis, may not be much relevant; the contention of the learned panel counsel for the Corpn that this section when read with the Preamble of the Act vests power in the Corpn to stipulate a

condition for compulsory service appears to be too farfetched an argument; section 59B reads as under: “59B. Medical and para-medical education.- The Corporation may establish medical colleges, nursing colleges and training institutes for its para-medical staff and other employees with a view to improve the quality of services provided under the Employees’ State Insurance Scheme.”

power lies with the Corpn to establish the medical colleges cannot be disputed; but the text and context of the above provision cannot be construed so as to include the power to prescribe compulsory service to the candidates seeking admission to the medical courses in the respondent- colleges;

c) section 92 which was heavily banked upon by the learned panel counsel vests power in the Central Government to give direction from time to time inter alia to the ESI Corporation, for the efficient administration of the Act; it is not in dispute that no such direction providing for prescribing compulsory medical service by the candidates like the petitioners has been issued, as yet; the contention of the panel counsel that several decisions have been taken by the Corpn which have been approved by the Central Government and therefore, they partake the character of a

“direction” issued in terms of section 92(2) is difficult to countenance; section 92(2) reads as under: “92 (1)…….xxx…..

(2) The Central Government may, from time to time, give such directions to the Corporation as it may think fit for the efficient administration of the Act, and if any such direction is given, the Corporation shall comply with such direction.”

in modern times, the legislatures in their wisdom ordinarily incorporate a provision of the kind in Statutes dealing with special subject matters like the one in question, inasmuch as, it is humanly difficult to visualize the permutation and combination of situations/circumstances which may pose hardship in implementing the provisions of the Act and the delegated legislation made thereunder; the implementing authorities may not wash off their hands, in such situations by pleading that the Act does not provide for remedial measures; to overcome such difficulties, the Central Government may issue necessary directions on solicitation or suo moto; however, that is not the case here; it is also conceded on behalf of the Corpn. that no such directions have been issued concerning compulsory service; and,

(d) there are provisions in the Act which empower the Corporation to make orders and take decisions, which need to be authenticated by the signature of the Director General as prescribed u/s 7; these orders and decisions may have the approval of the Central Government; high rank officials of the Central Government may be part of the body that takes such institutional decisions, may be true; however, only by that, such orders/decisions do not partake the character of “directions” contemplated u/s 92(2) of the Act; had that been the intent of the Parliament, a provision to that effect would have been made in the Act itself; in the absence of such a provision, the contention does not merit acceptance; courts in the interpretative process of a Statute cannot read something which is conspicuously absent therein; therefore, several decisions/resolutions of the Corporation, copies whereof are part of the record, which the panel counsel banked upon for justifying the prescription of the impugned condition of compulsory service do not come to the rescue of the answering respondents.

B) Legality/enforceability of so called “contract” or “bond” in the Scheme of the Act:

a) learned Panel Counsel for the Corporation vehemently contended that regardless of power to prescribe a condition for compulsory service as mentioned above, it is open to the respondent-Corpn. to enter into a contract with the candidates seeking admission to the medical course in its colleges and accordingly, it has entered into ones with the petitioners and therefore, they are bound by the contracts and therefore they cannot challenge the obligation; there are some provisions in the Act like section 59 which empower the Corpn. to “enter into agreement” with any local authority, private body or individual for arranging for medical treatment of insured persons or for commissioning and running ESI hospitals; despite strenuous arguments, the learned panel counsel could not fish out any provision akin to the same in the Act which enables the Corpn/college to enter into a contract of the kind or extract a service bond from the candidates as a pre-condition for admission to the medical course, assuming that there are valid agreements or bonds which the Corpn. holds;

b) it has long been settled position of law that a natural person can do all that is not prohibited by law whereas a juristic person like the respondent –Corpn. can

do only that which is provided by law, expressly or by necessary implication; the Division Bench of Hon’ble High Court of Calcutta in the case of SATIBHUSHAN MUKHERJEE Vs. CORPORATION OF CALCUTTA, AIR (36) 1949 CAL 20 at para 10 observed as under: “10….. There is a fundamental distinction between the capacity of a natural person and of an artificial person which has been created by Statute or Charter. To a natural person whatever is not expressly forbidden by the law is permitted by the law. He has the capacity to do everything save and except those forbidden by law. In the case of an artificial person-e.g., a corporation, which can be created either by charter or by statute the rule applicable to a natural person is reversed. Whatever is not permitted expressly or by necessary implication by the constituting instrument is prohibited not by any express or implied prohibition of the legislature but by the doctrine of ultra vires. This fundamental principle has been laid down in many cases……;”

as already mentioned above, no provision in the Act, Rules or Regulations is brought to the notice of this Court which authorizes the Corpn. or its College to enter into an agreement or take bond of the kind from the medical students or their parents; thus on the basis of what is not provided in the Scheme of the Act, no legally enforceable obligation arises by virtue of so called contract or the bond; for the same reason the doctrine of estoppel pressed into

service by the Panel Counsel does not come to the aid of answering respondents;

c) the text of the instrument which the petitioners have executed does not support the contention of the panel counsel for the ESI Corpn. that there is a contract between the Corpn/college on the one hand and the petitioners on the other; “a contract is an agreement enforceable by law” says section 2 (h) of the Indian Contract Act, 1872; for an agreement to come into existence, there must be an offer followed by the acceptance; thus, invariably there need to be an offerer & the acceptor ie, two parties, as a minima; the text of the bond shows that the Corpn/College is not a party although its Dean has put his hand to the instrument as a witness and not as a party representing the Corpn/college; this position is fairly conceded by the learned Panel Counsel for the Corpn.; the Corpn can be represented only by the Director General or his delegate, as provided by Rule 16 of the Employees’ State Insurance (Central) Rules, 1950; delegation of this power by the Director if it has prior approval of the standing Committee, vide sub-Rule (2); nothing is placed on record even otherwise to treat the Dean of the college to be the delegate of the Director General even if it is assumed that he

purportedly represented the Corpn/College; therefore, the instrument executed by the petitioners cannot be treated as “an agreement”; and,

d) the other contention of the Panel Counsel for the Corporation that the instrument in question even if is not an agreement, it partakes the character of a bond wherein an undertaking is incorporated and therefore, petitioners are bound to serve, cannot be countenanced inasmuch as the Act, Rules & Regulations do not authorize the Corpn/College to extract such a bond from the students allotted to the respondent College by the Examination Authority under the Government Quota seats, as a precondition for such admission; if the Corpn cannot enter into a contract in respect of the subject matter in question, it cannot secure a bond for generating a legally enforceable obligation for serving the ESI hospitals, either;

C) Compulsory service and its Constitutionality: (a) Fundamental Right to Profession under Article 19(1)(g): the submission of the counsel for the petitioners that prescription of compulsory service regardless of its laudability is legally impermissible, has force; the

respondent-Corpn and its Colleges answer the description of ‘State’ under Article 12 of the Constitution of India is not in dispute; therefore their actions and inactions are susceptible to Part-III Discipline of the Constitution; the Fundamental Right to practise profession guaranteed u/a 19(1)(g) can be subject to reasonable restrictions, is true; however, such a restriction can be imposed only by the authority of law; the prescription of compulsory service obviously robs off the citizens’ choice which they have in the matter of employment or practice of profession; the right to practise profession obviously includes right not to practise if the citizen so chooses; it is already held above that the ESI Corpn and its colleges do not have authority of law to prescribe compulsory service; the prescription of five year compulsory service is in the best interest of the public at large since there is dearth of medical facilities, is beside the point; laudability is one thing & legality is another; laudability does not per se legitimize an act which is not legally permissible; Court is concerned with the legality; therefore, impugned prescription of compulsory service does not withstand judicial scrutiny;

(b) Prohibition of “Bonded Labour” under Article 23:

there is force in the contention of the petitioners that enforcing the service bonds in question virtually amounts to enforcing the bonded labour, which is prohibited by Article 23 of the Constitution of India as broadly interpreted by the Apex Court in PEOPLE’S UNION FOR DEMOCRATIC RIGHTS –vs- UOI, AIR 1982 SC 1473 inasmuch as the petitioners as already mentioned above, lacked “reasonable choice” in the matter; the bonds were taken from them by the respondent-college at the time of admission; joining a medical course by securing Government seat is a dream for many which comes true for a few; but for the bond, the admissions would not have been granted to the petitioners does not need elaboration, and it is not disputed either; Article 23 prohibits ‘compulsory service’ unless it is made pursuant to statutory enablement and for the public purpose; as already mentioned above, there was/is no statutory authority availing to the Corpn or its colleges to extract service bonds of the kind in question from the medical students; therefore, permitting the respondent – Corpn. or its colleges to enforce the said bonds militates against

constitutional prohibition enacted in Article 23; after all, the Fundamental Rights being in the nature of a prohibition addressed to the State or its instrumentalities falling within the definition of Article 12 cannot be waived or contracted away by an individual subject to all just exceptions vide BASHESHAR NATH Vs. INCOME TAX OFFICER, 1959 SUPPL. (1) SCR 528; the contention that during the service period the petitioners would be paid reasonable remuneration pales into insignificance; and,

(c) the related contention of Panel Counsel for the Corporation that this Court in the case of DR.SWAMY MANJUNATH –vs- STATE OF KARNATAKA, 2019 (2) Kar.L.J. 156, has upheld prescription of compulsory medical service by taking bond and that the said decision is affirmed by the Division Bench vide judgment dated 15.02.2019 in W.A.Nos.32-54/2019 (Edn-Res) between DR.VARUN & OTHERS –VS- STATE & OTHERS, does not come to the rescue of answering respondents, facts of those cases being miles away from those of these writ petitions; in the above cases, the State Government had obtained three year Service Bonds from the candidates seeking admission to Government Seats in medical colleges, is true; but this was done in terms of Rule 15 of

Karnataka Conduct of Entrance Test for Selection and Admission to Post-Graduate Medical and Dental Degree and Diploma Courses Rules, 2006; these Rules have been promulgated under Karnataka Educational Institutions (Prohibition of Capitation Fee) Act, 1984; thus there was statutory enablement unlike in the present writ petitions; therefore, the challenge to the enforcement of statutory bonds prescribing compulsory service came to be negatived;

D) Condition of compulsory service and admission qua Government Seats:

a) the respondent-college is established & administered in the State of Karnataka, having been affiliated to the respondent-Rajiv Gandhi University of Health Sciences; certain number of seats are surrendered by the colleges to the Government for being allotted to the candidates; after such surrender, the same are allotted to the candidates by the Karnataka Examination Authority after counseling, in accordance with law; petitioners are such allottees; the colleges do not have any competence to super-add any condition to the admission of candidates, who are allottees of the Government Seats, as rightly contended by learned MCI Counsel, Mr.N.Khetty; in fact,

for allotment of seats from the Government Quota, the petitioners have already executed a three year service bonds in terms of Rule 15 of 2006 Rules mentioned above; once such an allotment is made, the ESI colleges have neither competence nor justification for exacting any service bonds, that too unilaterally; this Court as already mentioned above, has upheld the enforcement of three year service bond given to the State Government; added to this, the petitioners are liable to put in one year compulsory service as prescribed by the Karnataka Compulsory Service Training by Candidates Completed Medical Courses Act, 2012 whose validity is upheld by this Court vide BUSHRA ABDUL ALEEM Vs. GOVERNMENT OF KARNATAKA 2019 (4) KCCR 3482; if the bonds in question are enforced by the ESI colleges, the total compulosry service period would be nine years; thus, the bonds in question are otherwise also unjust & unreasonable, since they render the petitioners virtually the ‘captive doctors’; and,

b) the above apart, the respondent –MCI being a special body established under Indian Medical Council Act, 1956 has power to prescribe minimum standards of medical education in which is implicit the authority to

supervise the qualifications or eligibility standards for admission to medical institutions vide STATE OF KERALA vs. T.P.ROSHNA, 1979 SCC 580 as rightly submitted by Mr. Khetty; the respondent-colleges have prescribed a five year compulsory service as a condition of admission to medical course not only without competence but even without the courtesy of seeking concurrence of the respondent – MCI, the respondent-Examination Authority & the respondent – Health University; it is un- understandable that even after noticing such incompetent & unscrupulous condition of compulsory service, these three respondents did not take up the matter with the Corpn. or the college concerned; there is a grave lapse on the part of these respondents; the State Government is also equally guilty, if not more for the similar lapse on its part.

E) The last contention of the Panel Counsel for the Corpn that the bonds in question were executed way back in the Academic Year 2012-13 and that the challenge is laid to the same years thereafter and consequently petitions are liable to be dismissed on the ground of delay & laches, does not impress this Court; true it is, that some years have lapsed since the bonds were furnished;

however, even going by the terms of the bond, the same becomes enforceable only in the year 2020; it was open to the petitioners to invoke the writ jurisdiction immediately after the bond was exacted from them, is true; but, choate cause of action accrues to them when an unlawful bond is sought to be enforced; the Apex Court in the case of NIRANJANLAL AGARWALA vs. UNION OF INDIA, AIR 1969 SC 23, has ruled that it does not behove the State to contest a good claim of a citizen on the off chance of success on some unsubstantial technical plea; in the facts of this case the contention of delay & laches cannot but be termed as “unsubstantial technical plea”; so is also the contention of estoppel; therefore, petitioners cannot be non-suited on these grounds too.

In the above circumstances, these writ petitions succeed; a Writ of Certiorari issues quashing the impugned orders; a Writ of Mandamus issues restraining the respondent – ESI Corpn and its colleges from enforcing against the petitioners the Five Year Compulsory Service Bond for any period; the respondent-Corporation and their colleges are directed to relieve the petitioners from the obligation of compulsory service unconditionally, and to issue Orders/Endorsements to that effect; no liability or

the like shall be fastened on the petitioners or their parents on account of the service bonds in question.

No costs.

Sd/- JUDGE

Snb/