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Reportable IN THE SUPREME COURT OF INDIA

CIVIL APPEALLATE JURISDICTION

CIVIL APPEAL NO. 5828  OF 2013 (Arising out of SLP(C) No.39067 of 2012)

Sant Longowal Instt. of Engg. & Tech. & Anr. Appellant(s)

Versus

Suresh Chandra Verma     Respondent(s)

J U D G M E N T

K.S. Radhakrishnan, J.

Leave granted.

2. The  question  that  has  come  up  for  consideration  in  this  

appeal is whether the appellant-institute is justified, in directing  

the respondent to refund the entire amount of Rs.12,32,126/- paid  

to  him towards  salary  and other  allowances  for  pursuing  Ph.D  

studies  at  IIT,  Kanpur,  on  failure  to  produce  the  certificate  of  

obtaining the Ph.D, for which study leave was granted.

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3. The  appellant-institute  was  established  by  the  Ministry  of  

Human Resource & Development, Government of India in the year  

1989 and has been fully funded by the Central Government.  The  

respondent  joined  the  service  in  the  appellant-institute  as  

Lecturer in Mechanical Engineering on 30.08.1993.  He applied for  

grant of study leave for pursuing his Ph.D at IIT,  Kanpur.   The  

competent authority acceded to that request and granted three  

years study leave commencing from 24.07.1999 to 22.07.2002.  

The  respondent  after  executing  necessary  bond  proceeded  on  

study leave on 24.07.1999 and three years period was completed  

on 24.07.2002.  Due to various reasons, the respondent could not  

complete  his  Ph.D  studies  and  he  joined  back  in  service  as  

Lecturer in the Institute in November 2003.  The respondent was  

asked to produce the completion certificate of the Ph.D course  

which  respondent  could  not  produce,  hence,  the  appellant-

institute demanded the refund of the amount of Rs. 12,32,126/-  

paid to him during the period of study for pursuing Ph.D as per  

the terms and conditions of bond executed by the respondent.

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4. Aggrieved by the steps taken by the appellant-institute to  

recover the amount, the respondent filed Civil Writ Petition No.  

12555 of 2010 before the High Court of Punjab and Haryana.   

Writ Petition was allowed by learned Single Judge vide judgment  

dated 02.02.2012 quashing the demand notice and also ordered  

refund of the amount already recovered with interest from the  

respondent.   

5. Aggrieved by the same, the appellant preferred LPA No. 363  

of 2012 before the Division Bench of the High Court of Punjab &  

Haryana and the High Court vide judgment dated 23.08.2012 took  

the view that the appellant could not point out any term in the  

bond executed by the respondent that he had to complete the  

Ph.D programme within a period of three years and that the only  

condition was that the respondent had to serve for a period of six  

years after joining service on the expiry of the study leave. The  

appeal was dismissed by the Division Bench of the High Court.   

6. Aggrieved by the judgment of the Division Bench of the High  

Court, this appeal has been preferred.   

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7. Shri Ajay Jain, learned counsel appearing for the appellant  

submitted  that  the  High  Court  has  completely  misunderstood  

terms and conditions on which the respondent was granted study  

leave which is reflected in the bond executed by the respondent  

on 5.05.1999.  Learned counsel submitted that the High Court has  

completely ignored the salutary principle of “no work no pay” and  

that  the  respondent  during  the  period  of  study  not  only  not  

worked in the appellant-institute but also was not successful in  

obtaining  the  Ph.D.   Consequently,  neither  the  institute,  the  

respondent  nor  the  students  have  been  benefited  and  public  

money has been spent for no use.

8. Shri Himanshu Shekhar, learned counsel for the respondent,  

on the other hand, submitted that he has completed his course  

work required for the Ph.D programme, completed comprehensive  

examination etc.  but the thesis could not be completed due to  

retirement  of  the  guide.   Further,  it  was  pointed  out  that  the  

respondent  had  also  made  a  written  request  on  24.05.2002  

seeking extension of six months period so that the respondent  

could  complete  his  thesis  work.   Another  representation  was  

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made  on  04.06.2002  and  all  those  representations  left  

unattended.   Under  such  circumstances,  he  had  to  join  duty  

without obtaining Ph.D.   Learned counsel also pointed out that  

similarly  situated  employee  named  Abanish  Kumar  Singh  was  

provided extension of time but the same was not done in the case  

of the respondent.  Further, it was pointed out that there is no  

condition in the bond that if the respondent could not complete  

the  Ph.D  then  the  entire  salary  and  other  benefits  could  be  

recovered from the respondent.  Learned counsel pointed out that  

the High Court  has  rightly  interpreted terms and conditions  of  

bond, consequently the demand made for the reimbursement of  

the salary and other allowances is not justified.

9. We have gone through terms and conditions  of  the  bond  

executed by the respondent on 05.05.1999.  Some of the relevant  

portions of the bond read as follows:

“Whereas I, Suresh Chandra Varma, am granted (kind of  leave) by the Institute.

And whereas for the better protection of the Institute, I  have agreed to execute this Bond with such conditions  as hereunder is written.

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Now the condition of the above written obligation is that  in the event of my failing of resume duty, or resigning or  retiring  from  service  or  otherwise  quitting  service  without  returning  from  duty  after  the  expiry  of  termination of the period of study leave or at any time  within a period of three years after my return to duty, I  shall forthwith pay to the institute or as may be directed  by the Institute, on demand, pay & allowances received  by  me  during  study  leave,  the  said  amount  of  Rs.10,000/-  (ten  thousand  only)  together  with  interest  thereon from the date of demand at Govt. rates for the  time being in force on Govt. loan.

And upon my making such payment the above written  obligation shall be avoided and of no effect, otherwise I  shall be and remain in full force and virtue.

The bond shall in all respects be governed by the laws of  India  for  the  time  being  in  force  and  the  rights  and  liabilities  hereunder  shall,  where  necessary,  be  accordingly  determined  by  the  appropriate  courts  in  India.”

10. Further,  it  is  the  specific  case  of  the  appellant  that  the  

respondent herein is governed by the provisions of the Central  

Civil  Services  (Leave)  Rules,  1972  forming  part  of  the  

Fundamental Rules and Supplementary Rules, Part III framed by  

the Constitution of India.  We notice there is no clear cut provision  

in  the  bond  either  expressly  referring  to  Rule  63  or  strictly  

imposing  a  condition  that  if  a  candidate  fails  to  complete  the  

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course study during the period of sanctioned leave, he will have  

to  refund  to  the  appellant-institute  the  total  amount  of  leave,  

salary and other benefits availed of by him during the period of  

study leave.   

11. Of late, such a specific provision was incorporated in bond by  

the  Board  of  Governors  of  the  appellant-institute  in  its  22nd  

meeting held on 28.06.2002, which reads as follows:

TO  APPROVE  THE  AMENDMENT  IN  BOND  CONDITIONS TO BE EXECUTED BY THE FACULTY  MEMBERS WHILE PROCEEDING ON STUDY LEAVE.

The  Board  of  Governors  of  the  Institute  in  its  22nd  meeting  held  on  28.06.2002  decided  that  a  faculty  member,  who  is  granted  study  leave  for  possessing  higher education such as M.E./M.Tech. and Ph.D, he/she  is required to execute a bond to serve the Institute for  double the period of study leave after returning from  study leave.

The conditions of the bond are silent on the point when  a  faculty  member  resume  his/her  duty  but  fails  to  produce the educational qualifying certificate for which  he/she was sanctioned study leave.

Following  provision  may  kindly  be  allowed  to  be  incorporated in the proforma of bond to be executed by  a  faculty  member  while  proceeding  on  study  leave /  extra  ordinary  leave  of  study  /  special  leave  for  training  /  sabbatical  leave  on  the  pattern  of  Central  Government Rules to avoid legal complicacy.

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Proforma  of  bond  presently  filled  by  a  faculty  members  while  proceeding  on  study  leave / extra ordinary leave of  study/special  leave  for  training/sabbatical leave

Proposed  Proforma  of  bond  to  be  filled  by  a  faculty  members  while  proceeding  on  study  leave  /  extra  ordinary  leave  of  study  /  special  leave  for  training  /  sabbatical leave.

KNOW  ALL  MEN  BY  THESE  PRESENTS  THAT  I,___________resident  of  ____________  at  present  employed  as __________ in the Sant Longowal  Institute  of  Engineering  &  Technology, do hereby bind myself  and  my  heirs,  executors  and  administrators  to  pay  to  the  Director, Sant Longowal Institute of  Engineering  &  Technology  (hereinafter called the Institute) on  demand  the  sum  of  Rs.____________(Rs.____________only )  together  with  interest  thereon  from  the  date  of  demand  at  Government  rates  for  the  time  being  in  force  on  Government  loans or, if payment is made in a  country  other  than  India,  the  equivalent  of  the  said  amount  in  the  currency  of  that  country  converted  at  the  official  rate  of  exchange  between  that  country  and India AND TOGETHER WITH all  costs between attorney and client  and all charges and expenses that  shall/or may have incurred by the  Institute.

KNOW  ALL  MEN  BY  THESE  PRESENTS  THAT  I,  ________  resident  of  _________  in  the  district  of  ___________  at  present  employed  as  _______in the Sant Longowal  Institute  of  Engineering  &  Technology, do hereby bind  myself  and  my  heirs,  executors  and  administrators to pay to the  Director,  Sant  Longowal  Institute  of  Engineering  &  Technology  (hereinafter  called the Institute) the total  amount of leave salary and  other  expenses  incurred  by  the  Institute,  if  any,  along  with bond money prescribed  the  Institute  together  with  interest  thereon  from  the  date  of  demand  at  Government  Rates  for  the  time  being  in  force  on  Government  loans  or  if  payment  is  made  in  a  country other than India, the  equivalent  of  the  said  amount  in  the  currency  of  that  country  converted  at  

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WHEREAS  I,  ___________,  am  granted  ______(kind  of  leave)  by  Institute.  

AND  WHEREAS  for  the  better  protection of  the Institute,  I  have  agreed to execute this  bond with  such  condition  as  hereunder  is  written

NOW  THE  CONDITION  OF  THE  ABOVE  WRITTEN  OBLIGATION  IS  THAT in the event of my failing to  resume  duty,  or  resigning  or  retiring from service or  otherwise  quitting  service  without  returning  to  duty  after  the  expiry  of  termination of the period of study  leave  or  at  any  time  within  a  double  the  period  of  study  leave  after  my  return  to  duty,  I  shall  forthwith pay to the Institute or as  may be,  directed by the Institute  on  demand,  the  said  sum  of  Rs.______________only together with  interest thereon from the date of  demand at Government Rates for  the  time  being  in  force  on  Government loans.

AND  upon  my  making  such  payment  the  above  written  obligation shall be void and of no  effect,  otherwise  it  shall  be  and  remain in full force and virtue.

The bond shall  in  all  respects  be  governed by laws of India for the  time being in force and the rights  

the official rate of exchange  between  that  country  and  India  AND TOGETHER  WITH  all  costs  between  attorney  and  client  and  all  charges  and  expenses  that  shall/or  may  have  incurred  by  the  Institute. WHEREAS  I,  ___________am  granted  ___________(kind  of  leave) by Institute.

AND  WHEREAS  FOR  THE  BETTER  protection  of  the  Institute,  I  have  agreed  to  execute this bond with such  condition  as  hereunder  is  written.

AND WHEREAS for the better  protection of the Institute, I  have agreed to execute this  bond with such condition as  hereunder is written.

NOW  THE  CONDITION  OF  THE  ABOVE  WRITTEN  OBLIGATION IS THAT in the  event  of  my  failing  to  resume duty, or resigning or  retiring  from  service  or  otherwise  quitting  service  without  returning  to  duty  after  the  expiry  or  termination of the period of  study  leave  or  failing  to  complete  the  course  of  study or at any time within  the  period  of  sanctioned  

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and  liabilities  hereunder  shall,  where  necessary,  be  accordingly  determined  by  the  appropriate  courts in India.

The  Institute  has  agreed  to  bear  the  stamp  duty  payable  on  this  bond.

Signed  and  dated  this  __________day of one thousand nine  hundred and signed and delivered  by  in  the  presence  of  _________________.  

leave  after  my  return  to  duty, I shall forthwith pay to  the  Institute  the  total  amount of leave salary and  other  expenses  incurred  by  the  Institute,  if  any,  along  with bond money prescribed  by  the  Institute  together  with  interest  thereon  from  the  date  of  demand  at  Government  Rates  for  the  time  being  in  force  on  Government loans.

AND upon my making such  payment  the  above  written  obligation shall  be void and  of  no  effect,  otherwise  it  shall  be  and  remain  in  full  force and virtue.

The  bond  shall  in  all  respects be governed by the  laws  of  India  for  the  time  being in force and the rights  and  liabilities  hereunder  shall,  where  necessary,  be  accordingly  determined  by  the  appropriate  courts  in  India.  

12. The above mentioned clause was inserted in the absence of  

a  specific  clause  to  that  effect  in  the  bond  executed  by  the  

faculty members.   

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13. The question as to whether Rule 63 referred to above is also  

applicable to the respondent was not seen specifically urged by  

the appellant-institute either before the learned Single Judge or  

before the Division Bench, hence, the High Court had no occasion  

to examine its applicability.  In this connection, we may refer to  

Rule 63 which reads as follows:

“63. Resignation  or  retirement  after  study  leave or non-completion of the course of study.

(1) If  a  Government  servant  resigns  or  retires  from service or otherwise quits service without  returning to duty after a period of study leave or  within a period of three years after such return  to duty or fails to complete the course of study  and is thus unable to furnish the certificate as  required under sub-rule (5) of Rule 53 he shall  be required to refund-

(i) The  actual  amount  of  leave  salary,  study  allowance, cost of fees, travelling and other  expenses, if any, incurred by the Government  of India; and

(ii) The  actual  amount,  if  any,  of  the  cost  incurred  by  other  agencies  such  as  foreign  Government,  Foundations  and  Trusts  in  connection with the course of study, together  with  interest  thereon  at  rates  for  the  time  being in force on Government loans from the  date  of  demand,  before  his  resignation  is  accepted or permission to retire is granted or  his quitting service otherwise.:

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(iii) Provided  that  except  in  the  case  of  employees who fail to complete the course of  study nothing in this rule shall apply –

(a) To a Government servant who, after return to  duty  from  study  leave,  is  permitted  to  retire  from service on medical grounds; or

(b) To a Government servant who, after return to  duty from study leave,  is  deputed to serve in  any Statutory or Autonomous Body or Institution  under  the  control  of  the  Government  and  is  subsequently permitted to resign from service  under  the  Government  with  a  view  to  his  permanent absorption in the said Statutory or  Autonomous  body  or  Institution  in  the  public  interest.

(2) (a) The  study  leave  availed  of  by  such  Government servant shall be converted into regular  leave standing at his credit on the date on which the  study leave commenced, any regular leave taken in  continuation of study leave being suitably adjusted  for  the  purpose  and  the  balance  of  the  period  of  study leave, if any, which cannot be so converted,  treated as extraordinary leave.

(b)  In addition to the amount to be refunded by  the Government servant under sub-rule (1), he shall be  required to refund any excess of leave salary actually  drawn over the leave salary admissible on conversion  of the study leave.

(3)  Notwithstanding  anything  contained  in  this  rule,  the  President  may,  if  it  is  necessary  or  expedient to do so, either in public interest or  having regard to the peculiar circumstances of  the case or class of cases, by order, waive or  reduce  the  amount  required  to  be  refunded  under  sub-rule(1)  by  the  Government  servant  concerned or class of Government servant.”

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14. If  a Government servant resigns or retires from service or  

otherwise quits service without returning to duty after a period of  

study leave or within a period of three years after such return to  

duty or fails to complete the course of study and is thus unable to  

furnish the certificates as required under sub-rule (5) of Rule 53,  

he shall be required to refund the actual amount of leave salary,  

study allowance, cost of fees,  travelling and other expenses,  if  

any, incurred by the Government of India.

15. The  above  mentioned  provision  has  a  laudable  object  to  

achieve.  A Government servant or person like the respondent is  

given study leave with salary and allowances etc. so as to enable  

him to complete the course of study and to furnish the certificate  

of  his  successful  completion,  so  that  the  institute  which  has  

sanctioned the study leave would achieve the purpose and object  

for  granting such study leave.   The purpose of  granting study  

leave  with  salary  and  other  benefits  is  for  the  interest  of  the  

Institution and also the person concerned so that once he comes  

back and joins the institute the students will be benefited by the  

knowledge and expertise acquired by the person at the expense  

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of the institute.  A candidate who avails of leave but takes no  

interest  to  complete  the  course  and  does  not  furnish  the  

certificate to that effect is doing a disservice to the institute as  

well  as  the  students  of  the  institute.   In  other  words,  such  a  

person only enjoys the period of study leave without doing any  

work at the institute and, at the same time, enjoys the salary and  

other benefits, which is evidentially not in public interest.  Public  

money cannot be spent unless there is mutual benefit.  Further, if  

the period of study leave was not extended or no decision was  

taken on his representation, he could have raised his grievances  

at the appropriate forum.

16. We notice that the appellant-institute has already recovered  

an amount of Rs.6.5 lacs as monthly installments from the salary  

of the respondent and the appellant-institute has also recovered  

an amount of Rs.1,75,000/- from the salary of the respondent and  

Rs.4,75,000/- from the arrears of revised scales admissible to the  

respondent  with  effect  from  01.01.2006  and  as  such  

approximately  Rs.6,50,000/-  has  been  recovered  from  the  

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respondent.  Now the appellant-institute claims balance amount  

of Rs.6,18,000/-.   

17. Considering  the  facts  and  circumstances  of  the  case  and  

considering the fact that the bond executed by the respondent is  

found to be vague, we find no reason for the appellant-institute to  

recover the balance amount of Rs.6,18,000/- from the respondent  

but the amount already recovered be not refunded, since public  

interest has definitely suffered due to non-obtaining of Ph.D by  

the  respondent  after  availing  of  the  entire  salary  and  other  

benefits.  We do so taking into consideration all aspects of the  

matter and to do complete justice between the parties.   

18. Appeal is allowed to the above extent and the judgment of  

the  learned  Single  Judge  and  Division  Bench  is  modified  

accordingly and no further amount be recovered by the appellant-

institute from the respondent.   

….…….…….……………J. (K.S. Radhakrishnan)

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………..………………….J. (Pinaki Chandra Ghose)

New Delhi, July 18, 2013

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