Allahabad High Court
Dr. Vaibhavi Dhasmana vs State Of U.P. Thru. Chief Secy. Gov. Of ... on 13 September, 2022
Author: Pankaj Bhatia
Bench: Pankaj Bhatia
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH Court No. - 18 A F R Case :- WRIT - C No. - 5940 of 2022 Petitioner :- Dr. Vaibhavi Dhasmana Respondent :- State Of U.P. Thru. Chief Secy. Gov. Of U.P. Lko. And Another Counsel for Petitioner :- Pawan Kumar Nigam,Ram Babu Singh Counsel for Respondent :- C.S.C.,Kshitij Mishra Hon'ble Pankaj Bhatia,J.
1. Heard learned counsel for the petitioner and Shri Sanjay Bhasin, learned Senior Advocate assisted by Shri Kshitij Mishra, learned counsel appearing for respondent no.2.
2. Present petition has been filed seeking refund of the security amount deposited by the petitioner after first round of counseling.
3. The facts in brief are that,the petitioner participated in the UP NEET Counseling 2021 and was allotted seat in M.D. Anesthesia by respondent no.2, the State Counseling Board. Subsequently and prior to the second round of counseling, the petitioner got admission in Hemwati Nandan Bahuguna Uttarakhand Medical Education University, Dehradun on 28.1.2022, which fact was informed by the petitioner to the respondents on 31.1.2022 alongwith a copy of the allotment letter. In the said application, there was a request for refund of the security deposit also.
4. The respondents did not pass any order on the request of the petitioner for refund of the security deposit, as such, the present petition has been filed.
5. Submission of learned counsel for the petitioner is that the State itself has issued Government Order dated 7.10.2021 wherein it is specifically stated in Clause 8(a)(I) that there is a provision for refund of the entire security deposit in the case of a resignation on the ground that the petitioner has been granted admission in a private medical college.
6. In the light of the said Government Order, it is argued that the security amount deposited by the petitioner amounting to Rs.2,00,000/- is bound to be refunded.
7. Learned counsel for the petitioner further places reliance on the directions given in the judgment dated 16.12.2021 passed in Petition(s) for Special Leave to appeal (C) No(s).10487 of 2021; Nihila P.P. v. The Medical Counseling Committee (MCC) & Ors. wherein the Supreme Court ,referred to the modified scheme of allotment of All India Quota which recorded that in terms of the modified scheme, there will be an option for up-gradation and free exit, only in Round 1 of the AIQ counseling. In the light of the said, he argues that the security deposit is liable to be refunded.
8. Shri Sanjay Bhasin, learned Senior Advocate on the other hand argues that in terms of Clause 8(a)(II) of the Government Order dated 7.10.2021, the entire security deposit was liable to be forfeited. Clause 8 is being quoted below:
"8. त्याग-पत्र दिये जाने के संबंध में-
(क) यदि अभ्यर्थी शैक्षणिक सत्र 2021-22 की प्रथम काउन्सिलिंग से आवंटित होकर प्रदेश के किसी भी मेडिकल / डेण्टल की सीट पर प्रवेश प्राप्त कर लेता है तत्पश्चात् :-
(I) अभ्यर्थी आल इण्डिया या अन्य प्रदेश की काउन्सिलिंग के माध्यम से किसी अन्य पर आवंटन प्राप्त करता है और वह प्रदेश की प्रथम काउन्सिलिंग से प्रवेशित सीट से त्याग पत्र देना चाहता है (त्याग पत्र के समय अन्य काउन्सिलिंग से आवंटन का प्रमाण पत्र प्रस्तुत करना अनिवार्य होगा) तो ऐसे अभ्यर्थी द्वितीय काउन्सिलिंग की च्वाईस फिलिंग से दो दिन पूर्व (उदाहरणार्थ यदि द्वितीय चक्र की काउन्सिलिंग 24.09.2021 से प्रारम्भ होनी है, तो अभ्यर्थी 21.09.2021 को सायं 4.00 बजे तक) अपनी सीट से त्याग पत्र दे सकता है ऐसी स्थिति में अभ्यर्थी द्वारा जमा की गयी सिक्योरिटी धनराशि तथा शिक्षण शुल्क से निम्नानुसार कटौती करते हुए वापस किया जाएगा:-
- राजकीय क्षेत्र के मेडिकल / डेण्टल कालेजों में प्रवेशित अभ्यर्थियों की जमा समस्त शुल्क के 10 प्रतिशत की कटौती करते हुए शेष धनराशि तथा धरोहर धनराशि (Security Money) वापस देय होगी।
- निजी क्षेत्र मेडिकल / डेण्टल कालेजों में प्रवेशित अभ्यर्थियों की जमा शिक्षण शुल्क से 10 प्रतिशत की कटौती करते हुए शेष धनराशि तथा धरोहर धनराशि (Security Money) वापस देय होगी।
(II) प्रथम चक्र की काउन्सिलिंग से आवंटन के पश्चात यदि अभ्यर्थी द्वारा आवंटित कालेज में प्रवेश ले लिया जाता है तथा अभ्यर्थी को आल इण्डिया / अन्य प्रदेश की काउन्सिलिंग से कोई भी आवंटन प्राप्त नहीं होता है, फिर भी अभ्यर्थी निर्धारित तिथि (द्वितीय चक्र की च्वाईस फिलिंग से दो दिन पहले) से पूर्व त्याग पत्र देता है तो ऐसी दशा में जना की धरोहर धनराशि (Security Money) जब्त कर ली जायेगी तथा शिक्षण शुल्क में से 50 प्रतिशत की कटौती करते हुए शेष धनराशि वापस किया जाएगा।
यदि अभ्यर्थी के द्वारा निर्धारित तिथि के पश्चात त्याग पत्र दिया जाता है तो ऐसी दशा में जमा की गयी धरोहर धनराशि (Security Money) व शिक्षण शुल्क जब्त कर लिया जायेगा।
(ख) राजकीय क्षेत्र के मेडिकल / डेण्टल कालेजों हेतु -
प्रदेश की द्वितीय चक्र की काउंसिलिंग समाप्त होने के पश्चात् प्रवेशित अभ्यर्थी को सीट रिक्क करने की अनुमति नहीं होगी, फिर भी यदि अभ्यर्थी अपनी सीट से त्याग पत्र देता है तो अभ्यर्थी द्वारा जमा की गयी धरोहर धनराशि तथा समस्त शैक्षणिक शुल्क जब्त कर लिया जायेगा व साथ ही साथ रू0 5,00,000/- (रुपये पाँच लाख मात्र) का बाण्ड प्रभावी मानते हुए उक्त धनराशि सरकार के पक्ष में देय होगी, जिसे अभ्यर्थी को आवंटित कालेज में जमा कराना होगा।
(ग) निजी क्षेत्र के मेडिकल / डेण्टल कालेजों हेतु -
शासनादेश संख्या:686/71-4-2021-15/2018 टी0 सी0, दिनांक 16 जुलाई, 2021 के क्रम में प्रदेश की द्वितीय चक्र की काउंसिलिंग समाप्त होने के पश्चात् प्रथम व द्वितीय चक्र से प्रवेशित अभ्यर्थी को सीट रिक्त करने की अनुमति नहीं होगी, फिर भी यदि अभ्यर्थी माप-अप राउण्ड से दो दिन पूर्व अपनी सीट से त्याग पत्र देता है, तो अभ्यर्थी द्वारा जमा की गयी धरोहर धनराशि तथा उत्तके द्वारा तत्समय जमा किये गये शिक्षण शुल्क का 50 प्रतिशत जब्त कर लिया जायेगा।
मॉप अप राउण्ड के पश्चात निजी क्षेत्र के मेडिकल कालेजो/ विश्वविद्यालयों/ डेण्टल कालेजों में प्रवेशित अभ्यर्थी पाठ्यक्रम पूर्ण करने से पूर्व यदि सीट से त्याग पत्र देता है तो उक्त पाठ्यक्रम की समस्त शैक्षणिक शुल्क (Tuition Fee) सम्बन्धित मेडिकल कालेज/विश्वविद्यालय/ डेण्टल कालेज को देय होगी और सिक्योरिटी धनराशि जब्त कर ली जायेगी तथा यदि अभ्यर्थी को सिक्योरिटी धनराशि वापस की जा चुकी है तो वह भी उसे जमा करना होगा।"
9. He further argues that even in terms of the brochure/guidelines issued in pursuance to which the petitioner had applied, there was a clear stipulation that the security deposit shall be forfeited in respect of candidates who do not join after the first round of counseling or resign after joining and the said brochure/guidelines were in nature of an offer which was accepted by the student and thus there was a contract created in between the parties by which the petitioner is bound.
Relevant extracts of the document issued as guidelines are quoted herein below:
"For detailed information see the Government Order Dated 7 October, 2021 ......
Step-5:- Seat Allotment:
1.....
2.....
3. (a) If Seat allotted (First Round):- In case i. Candidate does not join or after joining resigns from the seat, security money will be forfeited. For participation in second round of counseling security money will have to be deposited again.
ii. Candidate joins the college in first round but wants to upgrade his/her seat, he/she will remain eligible for second counseling and can fill the choices for second round of counseling.
....."
10. Shri Bhasin further places reliance on Section 74 of Indian Contract Act. He argues that even in the allotment letter issued to the petitioner as contained in Annexure - 4, it was clearly stipulated that in case the candidate does not take admission after allotment, the security deposit will be forfeited. He further argues that the judgment of the Supreme Court relied upon by the petitioner refers to free exit only on up-gradation whereas in the present case, the case of the petitioner is not that of up-gradation but that of resignation on account of the allotment subsequently elsewhere.
11. He further argues that even otherwise the judgment of the Supreme Court pertains to the allotment of All India Quota whereas the issue at hand relates to UP NEET Counseling, thus, the same has no applicability to the facts of the present case as the directions issued in the said judgment pertain to All India Quota seats.
12. In rejoinder, learned counsel for the petitioner argues that the petitioner was allotted seat in the All India Quota seats and thus, the judgment of the Supreme Court is applicable to the facts of the present case.
13. In the light of the arguments as advanced by the parties, this Court is to consider as to whether the confiscation of security deposit, is bad in law? and whether the petitioner is entitled to refund of security amount ?
14. Considering the first submission that the security deposit was liable to be refunded in terms of the Government Order dated 7.10.2021. On plain reading of Clause 8 of the said Government Order, I am of the firm view that the case of the petitioner would fall under Clause 8(a)(I) and not under Clause 8(a)(II) as is being argued by learned counsel for the respondent. Clearly, in terms of Clause 8(a)(I), the petitioner is entitled for refund of entire security deposit.
15. Reverting to the second submission of Shri Bhasin that there was a contract which flows from the offer and acceptance as made through the brochure/guidelines/allottment letter, in between the parties and in terms of the Section 74 of the Indian Contract Act, the respondents are well within their right to forfeit the security deposit, Section 74 of the Indian Contract Act with illustrations is quoted herein below:
"74. Compensation for breach of contract where penalty stipulated for.-- When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for.
Explanation.--A stipulation for increased interest from the date of default may be a stipulation by way of penalty.
Exception.--When any person enters into any bail-bond, recognizance or other instrument of the same nature, or, under the provisions of any law, or under the orders of the Central Government or of any State Government, gives any bond for the performance of any public duty or act in which the public are interested, he shall be liable, upon breach of the condition of any such instrument, to pay the whole sum mentioned therein.
Explanation.--A person who enters into a contract with Government does not necessarily thereby undertake any public duty, or promise to do an act in which the public are interested.
Illustrations
(a) A contracts with B to pay B Rs. 1,000, if he fails to pay B Rs. 500 on a given day. A fails to pay B Rs. 500 on that day. B is entitled to recover from A such compensation, not exceeding Rs. 1,000, as the Court considers reasonable.
(b) A contracts with B that, if A practises as a surgeon within Calcutta, he will pay B Rs. 5,000. A practises as a surgeon in Calcutta. B is entitled to such compensation; not exceeding Rs. 5,000, as the Court considers reasonable.
(c) A gives a recognizance binding him in a penalty of Rs. 500 to appear in Court on a certain day. He forfeits his recognizance. He is liable to pay the whole penalty.
(d) A gives B a bond for the repayment of Rs. 1,000 with interest at 12 per cent. at the end of six months, with a stipulation that, in case of default, interest shall be payable at the rate of 75 per cent. from the date of default. This is a stipulation by way of penalty, and B is only entitled to recover from A such compensation as the Court considers reasonable.
(e) A, who owes money to B a money-lender, undertakes to repay him by delivering to him 10 maunds of grain on a certain date, and stipulates that, in the event of his not delivering the stipulated amount by the stipulated date, he shall be liable to deliver 20 maunds. This is a stipulation by way of penalty, and B is only entitled to reasonable compensation in case of breach.
(f) A undertakes to repay B a loan of Rs. 1,000 by five equal monthly instalments, with a stipulation that in default of payment of any instalment, the whole shall become due. This stipulation is not by way of penalty, and the contract may be enforced according to its terms.
(g) A borrows Rs. 100 from B and gives him a bond for Rs. 200 payable by five yearly instalments of Rs. 40, with a stipulation that, in default of payment of any instalment, the whole shall become due. This is a stipulation by way of penalty."
16. In the present case, the guidelines issued and annexed, specifically provides that the detailed information contained in the Government Order dated 7.10.2021 would guide the issues pertaining to the counseling, forfeiture and the payments, as such, the information given to the student contained a clear stipulation that the provisions of Government Order dated 7.10.2021 would govern, however, even assuming that the guidelines given to the student and its acceptance form a separate contract (as argued by respondents), the stipulation of forfeiture of security is clearly by way of a penalty and in view of illustration as contained in Section 74, the stand taken by the respondent cannot be accepted and the State at best can claim reasonable compensation for the los suffered on account of breach of contract. As no loss has been shown to be caused to the respondent by way of resignation coupled with the fact that the seat of the State has not gone vacant, the State cannot even claim reasonable compensation.
17. Scope of Section 74 of the Indian Contract Act was considered and explained by the Hon'ble Supreme Court in the case of Fateh Chand v. Balkishan Dass - AIR 1963 SC 1405 wherein the Hon'ble Supreme Court has held as under:
"10. Section 74 of the Indian Contract Act deals with the measure of damages in two classes of cases (i) where the contract names a sum to be paid in case of breach and (ii) where the contract contains any other stipulation by way of penalty. We are in the present case not concerned to decide whether a contract containing a covenant of forfeiture of deposit for due performance of a contract falls within the first class. The measure of damages in the case of breach of a stipulation by way of penalty is by Section 74 reasonable compensation not exceeding the penalty stipulated for. In assessing damages the Court has, subject to the limit of the penalty stipulated, jurisdiction to award such compensation as it deems reasonable having regard to all the circumstances of the case. Jurisdiction of the Court to award compensation in case of breach of contract is unqualified except as to the maximum stipulated; but compensation has to be reasonable, and that imposes upon the Court duty to award compensation according to settled principles. The section undoubtedly says that the aggrieved party is entitled to receive compensation from the party who has broken the contract, whether or not actual damage or loss is proved to have been caused by the breach. Thereby it merely dispenses with proof of "actual loss or damage"; it does not justify the award of compensation when in consequence of the breach no legal injury at all has resulted, because compensation for breach of contract can be awarded to make good loss or damage which naturally arose in the usual course of things, or which the parties knew when they made the contract, to be likely to result from the breach.
11. Before turning to the question about the compensation which may be awarded to the plaintiff, it is necessary to consider whether Section 74 applies to stipulations for forfeiture of amounts deposited or paid under the contract. It was urged that the section deals in terms with the right to receive from the party who has broken the contract reasonable compensation and not the right to forfeit what has already been received by the party aggrieved. There is however, no warrant for the assumption made by some of the High Courts in India, that Section 74 applies only to cases where the, aggrieved party is seeking to receive some amount on breach of contract and not to cases where upon breach of contract an amount received under the contract is sought to be forfeited. In our judgment the expression "the contract contains any other stipulation by way of penalty" comprehensively applies to every covenant involving a penalty whether it is for payment on breach of contract of money or delivery of property in future, or for forfeiture of right to money or other property already delivered. Duty not to enforce the penalty clause but only to award reasonable compensation is statutorily imposed upon courts by Section 74. In all cases, therefore, where there is a stipulation in the nature of penalty for forfeiture of an amount deposited pursuant to the terms of contract which expressly provides for forfeiture, the court has jurisdiction to award such sum only as it considers reasonable, but not exceeding the amount specified in the contract as liable to forfeiture. We may briefly refer to certain illustrative cases decided by the High Courts in India which have expressed a different view."
18. Testing the third argument as raised in between the parties with regard to the judgment of the Supreme Court, learned counsel for the petitioner argues that, the contract, even if for the sake of arguments is considered to be correct, would stand superseded by the subsequent judgment of the Supreme Court whereas Shri Bhasin argues that the contract would not get affected by the said judgment inasmuch as the directions contained were based upon an affidavit filed by Directorate General of Health Services (DGHS) for counseling for 50% All India Quota seats.
19. Be that as it may, once I have held that even by virtue of Section 74 of the Indian Contract Act, the respondents - authorities are not entitled to impose a penalty over and above what they can establish as a loss caused to them, thus, the said argument becomes redundant and cannot be considered.
20. Thus, holding that the petitioner is entitled in terms of the Government Order dated 7.10.2021 for refund of the entire security deposit and the respondents are not entitled to resort to penal clause as contained in the guidelines for recovering damages over and above what they can establish, the present petition deserves to be allowed and is ordered accordingly.
21. Respondent No.2 i.e. Director General (Medical Education & Training), Chairman, Counseling Board, U.P. NEET PG - 21, Lucknow, U.P. is directed to refund the amount of Rs.2,00,000/- deposited by the petitioner as security deposit to her within a period of four weeks from today.
22. In the event the amount is not refunded within a period of four weeks from today, the same shall carry interest at the rate of 6% per annum from the date of application for refund till payment/realisation.
Order Date :- 13.9.2022 [Justice Pankaj Bhatia]
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