The Supreme Court on 19th August held that compulsory bonds executed by Doctors for serving the State Government for a fixed time is a contract that must be performed and in no way hinders practice of their trade under Section 27 of the Indian Contract Act.
In Association of Medical Super Speciality Aspirants and Residents & Ors.v Union of India, the bench comprising Justices L. Nageswara Rao & Hemant Gupta refused to direct a writ of mandamus to quash the notification of the West Bengal Government which enjoined every post-graduate trainee to execute compulsory indemnity bonds for admission to post-graduate medical courses and super speciality courses that they would serve the State Government for a period of three years after successful completion of postdoctoral/MD/MS course and for a period of two years after successful completion of the PG Diploma course; else they would have to pay up Rs. 10 lakhs for each defaulting year.
Court laid down four pertinent points requiring consideration:
1. Jurisdiction of the State Government
Entry 66 of List I of the 7th Schedule to the Constitution refers to coordination and determination of standards in institutions for higher education or research and scientific and technical institutions. Court said that “the State Government has the competence to issue executive orders under Article 162 of the Constitution on matters over which the State legislature has the power to legislate.” WB Govt was thus within its authority and competence to issue the notification.
2. Violation of Fundamental Rights
On the question of arbitrariness, Court held: “Huge infrastructure has to be developed and maintained for running medical colleges with post-graduate and super Speciality courses. The amount of fees charged from the students is meagre in comparison to the private medical colleges. Reasonable stipend has to be paid to the doctors. Above all, the State Governments have taken into account the need to provide health care to the people and the scarcity of super specialists in their States. Consequently, a policy decision taken by the State Governments to utilize the services of doctors who were beneficiaries of Government assistance to complete their education cannot be termed arbitrary.”
On the question of reasonableness, court noted the reduction of compulsory service time in other institutions have been reduced to two years. Thus, Court directed the State Governments and the Armed Forces Medical College “to consider imposing the condition of compulsory service period of two years in default of which the Doctors shall recompense the Government by paying Rs. 20 Lakhs.”
On the question of freedom to practise profession under Art 19(1)(g), Court said that “private rights, when in conflict with public interest, have to take a back seat… Article 47 of the Constitution reiterates the constitutional obligation imposed on the State to improve public health.” Government hospitals and health centres are meaningful only if the State can “provide all facilities to employ best of talents”. It is thus for the larger good that compulsory service be enlisted from doctors trained at government institutions.
3. Contract of Personal Service
Section 14 of the Specific Relief Act, 1963 prohibits the enforcement of contracts of personal service. Court said, “None of the State Governments have made an attempt to enforce the contracts entered into by them with the Appellants through the service bonds.”
4. Restraint on Profession.
Court agreed with the findings of the Calcutta High Court that it was not restraint, rather the bond seemed more to advance the trade. The condition of admission was not in violation of Sec 27 of the Indian Contract Act, 1872.
In the end, Court, while dismissing the batch of writ petitions and appeals, has expressed the need for suitable steps to be taken by the “Union of India and the Medical Council of India to have a uniform policy regarding the compulsory service to be rendered by the Doctors who are trained in government institutions.”
— India Legal Bureau