IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN MONDAY, THE 16TH AUGUST 2010 / 25TH SRAVANA 1932 WP(C).No. 18308 of 2006(D) -------------------------- PETITIONER(S): --------------- M.N. AJITHKUMAR, AGED 32 YEARS, S/O.NARAYANAN M.A., MADATHILPARAMBIL HOUSE, CHEROOR. BY ADV. SRI.K.JAJU BABU RESPONDENT(S): --------------- 1. THE PRINCIPAL, MEDICAL COLLEGE, KOTTAYAM, GANDHI NAGAR P.O., KOTTAYAM. 2. DIRECTOR OF MEDICAL EDUCATION, THIRUVANANTHAPURAM. 3. STATE OF KERALA, REPRESENTED BY THE SECRETARY TO THE DEPARTMENT OF HEALTH, SECRETARIAT, THIRUVANANTHAPURAM. GOVERNMENT PLEADER SRI.M.V.MANU THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 16/08/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C). No. 18308/2006 APPENDIX PETITIONER'S EXHIBITS: P1. COPY OF THE PETITION DTD.4.4.06. P2. COPY OF THE MEMORANDUM DTD.26.4.06. P3. COPY OF THE PROSPECTUS. P4. COPY OF THE PETITION DTD.30.5.06. P5. COPY OF THE PETITION DTD.2.6.06. P6. COPY OF THE LETTER DTD.19.6.06. P7. COPY OF THE DISCHARGE SUMMARY. P8. COPY OF THE DISCHARGE SUMMARY. P9. COPY OF THE INTERVIEW MEMO DTD.16.9.06. P10. COPY OF THE LETTER DTD.28.9.06. RESPONDENT(S)'EXHIBITS R1A. COPY OF THE ORDER DTD.21.2.06. sdk+ ///True copy/// P.A. to Judge S.SIRI JAGAN, J. ================== W.P.(C).No. 18308 of 2006 ================== Dated this the 16th day of August, 2010 J U D G M E N T The petitioner is a doctor. He applied for admission to the course of DNB (Diplomat of National Board) in the speciality of Orthopedics. There were five seats. The petitioner was admitted in one and he joined the course. But in view of the petitioner's mother's serious health condition, who was suffering from lung malignancy, the petitioner could not continue the course. Therefore, the petitioner submitted a representation on 4.4.2006 seeking permission to discontinue the course on that special ground. The 1st respondent demanded Rs.3 lakhs as liquidated damages for such permission since the petitioner had discontinued the course after the expiry of the rank list prepared for admission to the course and as per the conditions of admission, in such situation, the petitioner was liable to pay the same. It is under the above circumstances, the petitioner has filed this writ petition seeking the following reliefs: “i. issue a writ of certiorari or any other appropriate writ, direction or order quashing the condition in Ext.P3 to pay Rs.3,00,000/- as illegal, irrational, improper and unjust. ii. issue a writ of certiorari or any other appropriate writ, direction or order quashing Ext.P2 and P6. iii. issue a writ of mandamus or any other appropriate writ direction or order commanding the 1st respondent to return the original certificates given by the petitioner at the time of admission to the DNB Course in Medical College, Kottayam.” w.p.c.18308/06 2 2. According to the petitioner, the Government has not suffered any damages on account of the discontinuance by the petitioner of the course and, therefore, there is no question of recovery of damages. The reason stated by the petitioner for the same is that only three candidates had joined the course, including the petitioner, although there were five seats. Therefore, whether the rank list expired or not, even if the petitioner had discontinued the course before the expiry of the rank list, there would not have any candidate wishing to join the course. Therefore, the petitioner would contend that it is totally arbitrary and unreasonable for the respondents to insist upon the petitioner paying Rs.3 lakhs on the basis of Ext.P3 prospectus. 3. A counter affidavit has been filed by the 1st respondent, wherein the 1st respondent would take the stand that the liability of the petitioner to pay Rs.3 lakhs as per the conditions in the prospectus is absolute and once the petitioner discontinues the course after the expiry of the rank list, payment of Rs.3 lakhs as liquidated damages is automatic and the petitioner cannot escape from the liability. 4. I have considered the rival contentions in detail. 5. The relevant clause in Ext.P3 prospectus reads thus; “In the event of discontinuing the Course within the validity period of the rank list they shall have to refund the whole amount of stipend received and remit an additional amount of Rs. 31,250/- towards liquidated damages and thereafter Rs. 3,00,000/- (Three lakhs). w.p.c.18308/06 3 6. It is not disputed before me that the petitioner discontinued the course after the expiry of the rank list. But the question to be decided is as to whether simply because of the fact that the rank list expired before the petitioner discontinued the course, the petitioner should be saddled with the liability to pay liquidated damages of Rs.3 lakhs. I am of opinion that if all five seats were filled up, the liability of the petitioner under the said clause would be absolute and nothing can save the petitioner from payment of the same. But here there is a situation which would come to the rescue of the petitioner. The petitioner has specifically stated in paragraph 5 of the writ petition that although there were five seats for the said course in Kottayam Medical College, where the petitioner had joined, only three candidates including the petitioner had joined. Although a counter affidavit has been filed on behalf of the 1st respondent, that specific averment has not been controverted. Therefore, I must accept the averment of the petitioner that in the five seats available for admission, only three candidates joined the course as correct. The question of payment of compensation for breach of contract where penalty has been stipulated is contained in Section 74 of the Indian Contract Act, which reads thus: “74. Compensation for breach of contract where penalty stipulated for.- When a contract has been broken, if a sum is named in the w.p.c.18308/06 4 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.” 7. In this case also, the clause in the prospectus is a term of a contract which has been accepted by the petitioner by applying pursuant to the contract and joining the course in accordance with the prospectus. Therefore, I have to decide the question as to whether the petitioner has to pay the liquidated damages as prescribed in Ext.P3 prospectus in view of Section 74 of the Contract Act. The main part of Section 74 stipulates that where liquidated damages are specified in the contract, the party complaining of 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. As such, the main part of Section 74 still w.p.c.18308/06 5 gives a discretion for the court to decide whether compensation to be awarded is reasonable or not. Going by the main part, perhaps the petitioner is entitled to contend that Rs.3 lakhs is not a reasonable compensation for the Government. Still the petitioner has to contend with the exception to Section 74, wherein when any person gives the State any bond for the performance of any public duty or act in which the public are interested, upon breach of that condition, a person is liable to pay the whole sum mentioned in the contract. I have to consider the contention of the petitioner in the light of that exception. 8. The clause mentioned above contains two parts specifying different damages for two different situations. First is a situation where the students discontinue the course within the validity period of the rank list and other where candidates discontinue after the validity period of the rank list. Of course, in this case, the petitioner discontinued after the validity period of the rank list. But the matter does not end there. This was a case where although there were five seats available for admission only three students including the petitioner joined. Therefore, the question as to whether the petitioner discontinued the course before or after the expiry of the rank list becomes totally immaterial insofar as nobody whatsoever would have been affected by the petitioner discontinuing the course, since there would not be anybody to replace the petitioner even if the petitioner w.p.c.18308/06 6 had discontinued prior to the expiry of the rank list. Therefore, I am inclined to hold that this is a case where the public was not interested and, therefore, the petitioner should not be visited with a penalty of Rs.3 lakhs applicable to a candidate who discontinues after the expiry of the period of the rank list. But still the said clause prescribes a penalty for discontinuance before the expiry of the validity of the period. I am of opinion that that clause would certainly apply to the petitioner. As per that clause, the petitioner would be liable to pay the whole amount of stipend received along with additional amount of Rs.31,250/-. I am of opinion that for the breach committed by the petitioner, the petitioner is liable to pay that amount and not Rs.3 lakhs. Accordingly, it is declared that the respondents are entitled to recover only the amount of stipend received by the petitioner, if any, and Rs. 31,250/-, and not Rs.3 lakhs mentioned in the clause applicable to the candidates who discontinue the course after the period of the validity of the rank list. Accordingly, Ext.P3 is quashed leaving it open to the respondents to recover from the petitioner that amount only. The writ petition is disposed of as above. Sd/- sdk+ S.SIRI JAGAN, JUDGE ///True copy/// P.A. to Judge w.p.c.18308/06 7