IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF JULY, 2019 BEFORE THE HON’BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY R.F.A.No.1226 OF 2011 BETWEEN:
1. Dr. Rekha R D/o. Sri. T.Ramachandra Setty, Aged about 2. Sri. T.Ramachandra Setty, S/o. Late M.D. Tirumala Setty, Both are residing at No.401, 2nd “B” Cross, 3rd Stage, 3rd Block, Basaveshwaranagar, Bangalore-560 079.
Represented by their GPA Holder Sri. R.Raghu S/o T. Ramachandra Shetty, Aged 34 years, R/at No.401 2nd ‘B’ Cross, 3rd Stage, 3rd Block, Basaveshwaranagar, Bangalore-79.
…Appellants (By Sri. G.Devaraj & Sri. G.H.Arjun, Advocates) AND:
Union of India Air Vice Marshall, Commandant, Command Hospital, Air Force, Post Agarama, Bangalore-560 007.
(By Sri. Pradeep Singh, Advocate) **** …Respondent This Regular First Appeal is filed under Section 96 of the Code of Civil Procedure, 1908, against the judgment and decree dated:23-05-2011 passed in O.S.No.4701/2008 on the file of the 42nd Additional City Civil and Sessions Judge, Bangalore City, (CCH.No.43), decreeing the suit for recovery of money.
This Regular First Appeal coming on for Hearing this day, the Court delivered the following:
J U D G M E N T It is a defendants’ appeal. The present respondent as a plaintiff had instituted a suit against the present appellants arraigning them as defendants in O.S.No.4701/2008 in the Court of the learned 42nd City Civil and Sessions Judge, Bangalore City (CCH-43) (hereinafter for brevity referred to as “Trial Court”) for recovery of a sum of `5,00,000/- along with interest at the rate of `12% per annum from the date of suit till realisation.
2. The summary of the case of the respondent/ plaintiff in the Trial Court was that, the Armed Forces Medical Service (hereinafter for brevity referred to as “AFMS”) fills up vacancies that arise in the said service and therefore, conducts campus selection for students aspiring to join AFMS. The AFMS conducts Post Graduation courses for selected students in different branches of Medicine at designated Defence Hospitals to make them specialist Medical Officers. Accordingly, defendant No.1 was selected to undergo Post Graduation course in D.A. at Command Hospital, Air Force, Bangalore, which is affiliated to Rajiv Gandhi University of Health Sciences (hereinafter for brevity referred to as “RGUHS”) and defendant No.1 joined the Post Graduation course in the year 2003 and successfully completed the said course by passing in April 2005.
The selection and admission of defendant No.1 to the said Post Graduation course was based on an Undertaking given by defendant No.1 on the surety- ship of defendant No.2 (father of defendant No.1) that on successful completion of Post Graduation course by her, she would serve in the Defence force at least for a period of five years as a Short Service Commissioned Officer (hereinafter for brevity referred to as “SSCO”). Defendant No.1 executed a bond of Undertaking in that regard, joined by her father – defendant No.2 who stood as a surety. It was further agreed to by the defendants in the very same bond that, in case of any default on the part of defendant No.1 by which she fails to join the defence service as a ‘SSCO’, the defendants would pay a sum of `5,00,000/- to the plaintiff as liquidated damages.
It was further the case of the plaintiff that prior to admitting defendant No.1 to the Post Graduation course, she was subjected to a pre-admission Medical test, where she was medically found fit for admission to Post Graduation course. However, after her completion of the Post Graduation course, she was subjected to two Medical Examinations to see her eligibility and medical fitness to join the service as a ‘SSCO’. In both those tests conducted for the first time on 13-04-2005 and for the second time on 25-08-2005, she was found as suffering with obesity at 70% & 75% respectively, more than the normalcy. As such, she was found medically unfit.
Since she was found medically unfit, she was not taken to serve as a ‘SSCO’ in the Defence force, on the contrary, she was asked to pay the bond amount of a sum of `5,00,000/- as undertaken by defendants at the time of joining the Post Graduation course. Since the defendants failed to pay the said amount, a legal notice was served upon them. However, the defendants since did not pay the bond amount, the plaintiff was constrained to institute a suit for recovery of the said bond amount together with interest there upon.
3. In response to the summons served upon them, the defendants appeared through their counsel and filed their Written Statement. In their Written Statement, the defendants admitted about defendant No.1 joining the AFMS for Post Graduation course and also defendants executing a ‘surety bond’ as averred in the plaint. However, they said that at no point of time, defendant No.1 either refused or denied to join the service as a ‘SSCO’. On the contrary, the defence Department itself did not give her any offer to join the service as a ‘SSCO’, as such, her childhood dream to serve the Nation as a Doctor in the Defence force has been shattered by not accepting her to serve as a ‘SSCO’ by the plaintiff. Stating so, the defendants denied that they were under any liability to pay any amount to the plaintiff much less the bond amount.
4. Based on the pleadings of the parties, the Trial Court framed the following issues for its consideration:-
“1] Whether the plaintiff proves that defendant No.1 was declared unfit for military services by the Medical Board on account of obesity?
2] Whether the plaintiff proves that the defendants are jointly and severally liable to refund the amount of `5,00,000/- as liquidated damage?
3] Whether the defendants prove that the plaintiff did not permit defendant No.1 to serve in the Military Hospital as Doctor inspite of her completion of course successfully?
4] Whether the defendants prove that they have not committed any breach of conditions of surety bond?
5] Whether the plaintiff is entitled for recovery of the suit amount?
6] What decree or order?”
The plaintiff examined one of its Squadron Leaders, Ms. Shalini Chowdhary as PW-1 and through her got produced and marked Exhibits from P-1 to P-7. On behalf of the defendants, one Sri. R. Raghu, who is said to be the Power of Attorney holder for the defendants was got examined as DW-1 and he got produced and marked the documents from Exhibits D-1 to D-6.
5. After hearing both side, the Trial Court by its impugned judgment and decree dated 23-05-2011 answered issue Nos.1, 2 and 5 in the ‘affirmative’, issue Nos.3 and 4 in the ‘negative’ and decreed the suit of the plaintiff, holding that the plaintiff is entitled for recovery of the liquidated damages of `5,00,000/- from defendant Nos. 1 and 2, jointly and severally along with future interest at the rate of `5% per annum from the date of suit till realisation. It is against the said judgment and decree, the defendants have preferred this appeal.
6. Lower Court records were called for and the same are placed before this Court.
7. Heard the arguments of the learned counsels from both side and perused the material placed before this Court including the memorandum of appeal and the impugned judgment.
8. For the sake of convenience, the parties would be henceforth referred to with the ranks they were holding before the Trial Court respectively.
9. Learned counsel for the appellants/defendants in his argument submitted that, admittedly, there was no offer or proposal from the plaintiff asking the defendant No.1 to join the service as a “SSCO’, as such, the question of defendant No.1 refusing to join the defence force as a ‘SSCO’ does not arise. The liability under the bond would arise provided there is any offer made to the Post Graduate candidate and that the said Post Graduate candidate (defendant No.1) refuses to join the defence force. The Trial Court did not consider the said point, as such, the impugned judgment is erroneous in its finding.
Learned counsel for the appellants/ defendants further submitted that the bond at Ex.P-3 though mentions about the exemption for a candidate when medically unfit from joining the service as a “SSCO’, but, it does not speak about the condition whether the medical unfitness of such a Post Graduate candidate was beyond his or her control and does not mention as to the liability of such a candidate in the situation.
10. In the light of the materials placed before this Court and the arguments addressed by both side counsels, the points that arise for my consideration in this appeal are:-
“1] Whether the finding of the Trial Court holding that there is breach on the part of the defendants of surety bond at Ex.P-3, as such, they are liable to pay the suit claim to the plaintiff, was an erroneous finding?
2] Whether the judgment and decree under consideration warrants interference at the hands of this Court?”
PW-1 – Squadron Leader Smt. Shalini Chowdhary, in her Examination-in-chief in the form of Affidavit evidence has reiterated the contentions taken up by the plaintiff in their plaint apart from stating that, the defendant Nos.1 and 2 had executed a ‘surety bond’ as per Ex.P-3 at the time of defendant No.1 joining the Post Graduation course, as such, they are liable to pay the bond amount since the defendant No.1 failed to join the defence service as a ‘SSCO’.
The witness has also stated that the alleged medical unfitness was self-inflicted and uncontrolled on the part of the defendant No.1, as such also, the defendants are liable to pay the bond amount. Even in her cross-examination from the defendants’ side, she adhered to her original version.
11. DW-1 – Sri.R. Raghu (General Power of Attorney holder of defendants) in his Examination-in- chief in the form of Affidavit evidence also has reiterated the contentions taken up by defendants in their Written Statement. He has stated that though the defendant No.1 was ready and willing to serve the defence force, however, she was not permitted to join by the plaintiff, citing that, she was found medically unfit.
He further stated that defendant No.1 had a childhood dream of serving as a Doctor in the defence force and the same was shattered by the act of the plaintiff. That being the case, the plaintiff is not entitled to claim any liquidated damages, much less a sum of `5,00,000/- under Ex.P-3.
12. The undisputed facts are that, the defendant No.1 was selected in the Campas interview to pursue her Post Graduation course in Medicine at Command Hospital in Bengaluru in the year 2003 and that at the time of her admission, she, joined by her father – defendant No.2 had executed a ‘surety bond’ as per Ex.P-3, undertaking to serve in the defence force as a ‘SSCO’ for a period of five years once she successfully completes her Post Graduation course. It is also not in dispute that defendant No.1 completed her Post Graduation course in April-2005. It is thereafter to enable her to join the defence force as a Short Service Commissioned Officer, she was subjected to a medical fitness Examination for the first time on 13-04-2005 as could be seen in the medical report at Ex.P-4. In the said medical Examination, it was noticed that she was found unfit on account of over weight by 70%. Thereafter she was subjected to a second similar medical Examination on 25-08-2005, wherein also she was found medically unfit because of her over weight by 75%. It was observed that she was suffering with simple obesity. Thus for the reason of the alleged obesity and over weight by 70% and 75% on two occasions respectively, she was found medically unfit. As such, she was not admitted to join the defence force as a ‘SSCO’.
13. Admittedly, it is thereafter the plaintiff has demanded for a sum of `5,00,000/- as liquidated damages based on the surety bond executed by the defendants as per Ex.P-3.
14. The bone of contention of both the parties in the suit revolves round the ‘surety bond’ which is at Ex.P-3. The said document is titled as “surety bond for Post Graduation (PG) Students seeking admission to Post Graduate course at Command Hospital, Air Force, Bangalore – 560 007”.
Though Ex.P-3 consists of several covenants in it, those particular covenants which are applicable to the instant case are at paragraph No.2 (a) and paragraph 2(b)(iv) of the said ‘surety bond’, which are reproduced herein below:-
“AND WHEREAS the PG student has undertaken to join and pursue post graduate studies in accordance with rules and regulations of the Rajiv Gandhi University of Health Sciences Karnataka, Bangalore and the Command Hospital Air Force, (CHAF) Bangalore, obtaining PG Degree in General Medicine (subject) of the RGUHS and join the Armed Forces Medical Services as a short service commissioned Officer for five years on successful completion of the course if found medically fit for the same. And whereas in consideration of the Government having agreed to sanction the admission to the said PG Student, the surety has agreed to execute the above bond with such conditions as hereunder written.
(a) That in consideration of the PG student being admitted by the Government to the Command Hospital, Air Force, Bangalore – 560 007 for the purposes of obtaining PG degree, the PG Student and surety covenant with the Government that the said PG Student will attend the Command Hospital Air Force, Bangalore for obtaining PG degree and such other training as Government may determine from time to time for the prescribed period until he / she successfully completes his / her PG degree course and is declared fit (as to which the decision – of Director General Armed Forces medical Services shall be final) to be granted Short Service Commission and that the PG Student will be commissioned as a Medical Officer in the regular army or the Indian navy or Indian Air Force as SSC Officer unless he / she, the PG Student is prevented from doing so on account of ill health or some other reasons over which he / she, the PG Student has no control as determined by a service medical board (as to which the Government shall be the sole judge) or by being removed on the ground that the PG Student is considered by the said appropriate authority to be unfit to continue as PG Student, or any other ground, to be granted a Commission.
(b) That in the event of PG Student (i) xxx xxx xxx (ii) xxx xxx xxx (iii) xxx xxx xxx (iv) refusing to accept admission in the Armed Forces Medical Services, if offered, the PG Student and the Surety shall jointly and severally be liable to pay and refund forthwith to the Government on demand and without demur in cash an amount of Rupees Five Lakhs, the amount may be subject to revision upward in respect of which the decision of the Government shall be final and binding on the PG Student and surety failing which he / she shall be removed from the college rolls in addition to payment of amount calculated as aforesaid.” (emphasis supplied) 15. A reading of the above terms of the ‘surety bond‘ clearly goes to show that, in paragraph 2 of the said bond, it is stated that, if a Post Graduate candidate, if found medically unfit for the same, then, he or she would not be compelled to or entitled to join the Armed Forces Medical Services as a ‘SSCO’. Thus, the first exemption from serving as a ‘SSCO’ is, his or her medical unfitness.
The very same covenant in paragraph 2(a) further says that the said exemption from serving as a ‘SSCO’ due to medical unfitness would be due to a Post Graduate student being prevented on account of his or her ill-health or some other reasons over which he or she has no control as determined by a Service Medical Board.
16. In the instant case, admittedly, the defendant No.1 was found medically unfit to serve in the Armed Forces as a ‘SSCO’ as may be seen in Exs.P-4 and P-5, as observed above. The reason for her medical un-fitness was her alleged obesity of about 75%. However, neither Ex.P-4 nor Ex.P-5 anywhere mentioned that the said alleged obesity of defendant No.1 was controllable by the act of defendant No.1. The entire report at Exs.P-4 and P-5 is silent on the said aspect. Even though PW-1 in her evidence has stated that, the defendant No.1 could have controlled obesity, her said statement has been denied in her cross-examination made from the defendants’ side. Furthermore, no where in the plaint, the plaintiff has taken any stand or made any averment to the effect that the alleged obesity found with defendant No.1 was self-inflicted or self-invited. Nowhere the plaintiff has whispered that the defendant No.1 could have controlled the alleged obesity during her stay while pursuing her Post Graduation course. As such, in the absence of any whisper in the form of averment in the plaint that defendant No.1 had control over her obesity and that she had failed to control it, which has resulted in she inviting obesity upon herself, making her medically unfit to appoint her as a ‘SSCO’ to the Armed Forces, any amount of oral evidence led on the point would not give any advantage to the plaintiff. This is more so in the light of any observation or finding given by the medical expert or the Medical Board in their Medical Examination report of defendant No.1 itself at Exs.P-4 and Ex.P-5. According to the ‘surety bond’ at Ex.P-3, whether the Post Graduate student had any control over the alleged medical disqualification or medical unfitness is required to be determined by the Service Medical Board itself. The opinion or finding of the said Service Medical Board about the Post Graduate student having any control about the medical unfitness would be the only finding which the ‘surety bond’ recognises as a valid finding regarding controllability of the alleged medical unfitness by a Post Graduate candidate.
17. In the instant case, including the Medical Board’s Examination reports at Exs.P-4 and P-5, there are no materials to show or to arrive at any conclusion that the alleged obesity with defendant No.1 was self- inflicted or self-invited and the same was a result of her non-exercising any control in regulating her body within the limits. Thus, apart from Medical Board’s opinion, there is no piece of documentary evidence, much less, the medical records to show that, the alleged obesity of the defendant No.1 was due to an act of defendant No.1 herself in not exercising or not having any control upon it.
Therefore, at the primary stage of enforcement of the ‘surety bond’ as per Ex.P-3 itself, the plaintiff has stumbled to show and establish that the defendant No.1 had any control over her alleged obesity, as such, she was considered as medically unfit for being appointed as a ‘SSCO’.
18. The second point of argument of the learned counsel for the appellants/defendants is that, the question of invoking the ‘surety bond’ would arise once there is an offer made to defendant No.1 to join the Armed Forces as a ‘SSCO’, after completion of her Post Graduate course and thereafter when the defendant No.1 refuses to such an offer. Otherwise, in the absence of any such offer or refusal in the case, question of invoking the ‘surety bond’ at Ex.P-3 does not arise.
19. Learned counsel for the respondent/plaintiff in his argument vehemently submitted that the said terms of offer and refusal in para.2(b)(iv) of Ex.P-3 cannot be read in its isolation and has to be read with context to the entire para-2 on the said point. He further submitted that a reading of the ‘surety bond’ in its entirety clearly goes to show that the very act of the plaintiff in admitting a candidate to a Post Graduation course is only assuring the candidate of his or her admission to join as a ‘SSCO’ in the defence force, once the candidate successfully completes his or her Post Graduation course and medically found fit.
As such, the question of the plaintiff separately making a proposal or offer to the candidate after he or she completes the Post Graduation course inviting him or her to join the defence force as a ‘SSCO’ would not arise. On the other hand, the continuation of the process of subjecting the candidate to undergo Medical Examination would itself go to show that in continuation of the offer, the candidate would be examined to ascertain whether he/she is medically fit to join the defence as a ‘SSCO’.
20. I find more force in the said argument of the learned counsel for the respondent/plaintiff on the said point.
A reading of Ex.P-3 in its entirety makes it very clear that, nowhere the plaintiff has averred or undertaken that, after the candidate completes his/her Post Graduation course successfully, the plaintiff should at the same time make a fresh offer giving a proposal to the candidate to appoint him/her as a ‘SSCO’ and accepting such an offer would be at the discretion of the candidate. On the other hand, a reading of the entire bond would clearly go to demonstrate that, it is with the condition that once the candidate admitted for Post Graduation course completes his or her Post Graduation course successfully, he or she is bound to serve the defence force joining it as a ‘SSCO’, which meaning is hidden in the said ‘surety bond’ at Ex.P-3 and it does not require a special or a separate offer once again. However, the only condition which prevents a candidate from joining the defence as a ‘SSCO’ would be the infirmity found in the said candidate including the medical unfitness of a candidate which was beyond the control of the candidate as determined by the Medical Board. Therefore, the argument of the learned counsel for the appellants/defendants that the invocation of the ‘surety bond’ would arise provided any offer was made to defendant No.1 and in response to the said offer, the defendant No.1 refused the said offer, is not acceptable. Still, as observed above, the plaintiff in the first instance itself has failed to establish that the alleged medical unfitness of defendant No.1 was either self-invited or self-inflicted and controlling of the same was within the hands and reach of defendant No.1. That being the case, even in the absence of interpretation of para-2 (b) of ‘surety bond’ at Ex.P-3, suffice it to say that the plaintiff has failed to show that, it is entitled to invoke the bond as against defendant Nos.1 and 2 in the facts of the case.
21. The Trial Court while appreciating the materials and evidence led before it, has ignored the said fact as to when and under what circumstance the ‘surety bond’ at Ex.P-3 can be invoked against the defendants. On the other hand, it was carried away with the evidence of PW-1, who, in her Examination- in-chief has stated that, the defendant No.1 failed to control her obesity which resulted in she being declared as ‘medically unfit’ to join the defence service. The said part of the evidence, the Trial Court accepted without noticing that, there was no medical observation, much less, by the Medical Board which was a requirement under Ex.P-3 to hold that, the controlling of the said obesity was within the hand and reach of defendant No.1.
22. The Trial Court reached to its conclusion in decreeing the suit of the plaintiff for one more reason i.e. by discrediting the belief in the evidence of DW-1, only on the point that, he was a Power of Attorney holder for defendant Nos.1 and 2, as such, with respect to those aspects, the facts which were exclusively within the knowledge of the defendants and more particularly defendant No.1 - the candidate, he was not competent to lead his evidence.
Though the Trial Court, to arrive at such a conclusion, had relied upon the decision of the Hon’ble Apex Court reported in Janki Vashdeo Bhojwani and another Vs. Indusind Bank Ltd. and others reported in I.L.R. 2005 Kar.729, but, it did not notice that even in the absence of any evidence by defendants’ side, the plaintiff’s case ought to have stood on its own legs. The case of the plaintiff cannot lean upon or bank upon the weaknesses of the defendants’ case.
23. In the instant case, as observed above, independent of the evidence from the defendants’ side, the pleading and the evidence led by the plaintiff itself were not sufficient to hold that the plaintiff has made out a case. As already observed above, the plaintiff has neither averred in its plaint that the alleged medical unfitness on the part of the defendant No.1 was a self-inflicted disability or self-invited disability nor that controlling the percentage of obesity was within the control and reach of defendant No.1. In the absence of any such pleading and also in the absence of any medical opinion, more particularly in the medical examination reports at Exs.P-4 and P-5 on the said point, the invocation of the ‘surety bond’ demanding liquidated damages from defendant Nos.1 and 2 cannot be made. The said aspect, the Trial Court ignored which has led it to decree the suit of the plaintiff, as prayed for.
24. Since in view of the analysis made above, it is held that, the Trial Court finding leading to decreeing the suit deserves to be set aside and in view of the fact that the plaintiff has failed to make out its case for claiming the bond amount of a sum of `5,00,000/- from the defendants, there is necessity to interfere in the finding given by the Court below by setting aside the impugned judgment and decree.
Accordingly, I proceed to pass the following:-
O R D E R [i] The appeal is allowed;
[ii] The judgment and decree dated 23-05-2011 passed in O.S.No.4701/2008 by the learned 42nd Additional City Civil and Sessions Judge, Bangalore City, (CCH. No.43), is hereby set aside;
[iii] The suit of the plaintiff is dismissed;
[iv] There is no order as to costs;
[v] The amount deposited by the appellants/defendants in this appeal, if any, at the time of filing of this appeal be refunded to the appellants after the period of appeal and if no appeal is preferred in the matter.
Registry to transmit a copy of this judgment along with the Lower Court records to the concerned Trial Court, without delay.
Sd/- JUDGE BMV*