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Judgment
S.No.,"W.P. ( C )
No.","Name of the
petitioner","Post in
DFCCIL","Duration of
Employment with
Respondent","Current
Employment
1.,6597/2017,"Vijay Kumar
Anugandula v
DFCCIL","Executive
(Finance)","More than 2.5
years","Airport
Authorityof
India
2.,9279/2017,"Raj Kumar v
DFCCIL","Executive
(Civil)",2 years 1 month,"Ministry of
Road Transport
and Highway
3.,11517/2017,"Vikas Singhal
v DFCCIL","Assistant
Project
Manager","Completed 3
years","Delhi Metro
Rail
Corporation
4.,2167/2018,"Joginder v
DFCCIL","Executive
(Finance)",2 years 9 months,"Uttar Haryana
Bijli Vitran
Nigam LImited
5.,2779/2018,"Kuldeep
Kumar v
DFCCIL","Executive
(Electrical)",1 year 11 months,"New Delhi
Municipal
Corporation
6.,4278/2018,"SanjayPatel
v DFCCIL","Executive
(Finance)",Almost 3 years,"Department of
Finance
(Commercial
Officer)
,,v DFCCIL,,,"Transport
Corporation
8.,6349/2018,"Manish
Kumar
Shukla v
DFCCIL","Junior
Engineer",1 year 8 months,"Military
Engineer
Services
9.,4851/2017,"Naveen
Kumar Mehta
v DFCCIL","Executive
(Finance)","More than 2 years
and 3 months","National
Buildings
Construction
Corporation
In the meanwhile, the petitioner filed an application dated 03.03.2017 under the RTI Act seeking information as to the expenditure incurred on",,,,,
training by the Central Government. The petitioner received the required information by a reply dated 27.03.2017 wherein, as per the guidelines issued",,,,,
by the Railway Board dated 08.11.2016, the training cost was stated to be Rs.3,191/- per day. According to the petitioner, the costs incurred by",,,,,
DFCCIL works out to a sum of Rs.1,91,460/- for two months (60 days) of training period.",,,,,
Thereafter, on 23.05.2017, the Joint General Manager of DFCCIL sent a letter to the petitioner calling upon him to depositR s.6 lakhs in terms of",,,,,
Paragraph 10 and 12 of the appointment letter, consequent to which the resignation of the petitioner could be considered by the Competent Authority.",,,,,
In reply, the petitioner sent his representation dated 02.06.2017 highlighting the DPE Guidelines and the Railway Guidelines on transfer of Service",,,,,
Bond from one PSU to another PSU. In light of the said guidelines, the petitioner requested to transfer his Service Bond to AAI.",,,,,
The petitioner received a reply on 18.07.2017 to the said representation dated 02.06.2017, wherein it was stated that the petitioner’s request",,,,,
could not be acceded to, as his application was not forwarded through proper channel due to non-fulfillment of the terms and conditions of the Service",,,,,
Bond and the appointment letter. It was further stated therein that the said DPE Guidelines would not be applicable as per the prevailing policy in,,,,,
DFCCIL.,,,,,
Reasons and Conclusion,,,,,
The first and foremost question to be addressed is whether DFCCIL is required to refrain from enforcing the Service Bond in terms of the OMs,,,,,
issued by the Department of Public Enterprises (DPE) and the Railways.,,,,,
It is relevant to note that the website of DFCCIL indicates that it’s a special purpose vehicle set up under the administrative control of the,,,,,
Ministry of Railways to undertake plant and development, mobilization of financial resources and construction, maintenance and operation of dedicated",,,,,
freight corridors. It is also not disputed that the railway employee is permitted to apply in response to notices issued by Government Department/Public,,,,,
Sector Undertakings/Autonomous Bodies that are controlled wholly or substantially by Central or State Governments. The office order issued by,,,,,
Railway Administration expressly indicates that a railway employee may be given four opportunities to apply for such opportunities in an year. The,,,,,
applications of such employees are also required to be forwarded by the General Manager in case of officers below junior administrative grade or by,,,,,
any other subordinate authority, to whom such powers may be delegated. Applications of officers of Junior Administrate Grade and above are to be",,,,,
forwarded to the Railway Board (Office orders dated 16.12.1965 and 18.05.1973).,,,,,
Admittedly, several Office Memorandums (OMs) have been issued by various Ministries including the Ministry of Home Affairs and Ministry of",,,,,
Finance, clearly specifying that service bonds furnished by employees receiving scientific and/or technical training should be enforced only when such",,,,,
employees leave service to secure employment with private agencies. The petitioner has referred to an OM dated 09.05.1960 [OM No. 70/10/60-,,,,,
Estt(A)] issued by Department of Personnel and Administrative Reforms, Ministry of Home Affairs, wherein it has been stipulated that administrative",,,,,
authority should ordinarily forward the applications of employees except where public interest provides otherwise.,,,,,
The petitioners have also referred to OM dated 15.04.1966 issued by the Ministry of Home Affairs [OM No. F.5/10/66-Estt(C)]. The said OM is,,,,,
set out below:-,,,,,
No.F.5/10/66-Ests(C),,,,,
Government of India,,,,,
Ministry of Home Affairs,,,,,
New Delhi, the 15th April, 1966",,,,,
OFFICE MEMORANDUM,,,,,
Subject: Applications of Governments servants for employment elsewhere - principles to be observed while considering the question of forwarding.,,,,,
The undersigned is directed to refer to para 4 of this Ministry's O.M. No. 70/10/60-Ests(A) dated the May, 1960 according to which the terms of the",,,,,
bond (Which Government Servants receiving scientific or technical training at Government expenses have to execute undertaking to repay the money,,,,,
in the event of their failure to serve Government for a specified number of years after completion of their training) are to be enforced only against,,,,,
those Government Servants who leave Government Service in order to secure private employment. It has now been decided, in consultation with the",,,,,
Ministry of Finance, that, while the terms of the bond referred to above may not be enforced, as at present, in the case of Government Servants who",,,,,
leave government service to secure employment under a State Government, a public sector undertaking owned wholly or partly by the Central",,,,,
Government or by a State Government, or under quasi Government Organizations, a fresh bond should be taken from such Government servants to",,,,,
ensure that they serve the new employer viz. the State Government / undertaking / Organization for a period of three to five years, the exact period",,,,,
being determined in each case by the Ministry / Department taking into account the amount spent by them (Ministry / Department) on their training.,,,,,
Ministries etc. are requested to bring the above to the notice of all concerned.,,,,,
Sd/-,,,,,
(Harish Chandra),,,,,
Under Secretary to the Govt. of India,,,,,
The Bureau of Public Enterprises, Ministry of Finance also issued an Office Memorandum dated 13.06.1977 on the subject. The said OM is",,,,,
relevant and is set out below:-,,,,,
Mayor Bhavan (7th Floor), Conn. Circus,",,,,,
New Delhi, the 13th June, 1977",,,,,
OFFICE MEMORANDUM,,,,,
Subject: Enformation of bounds in respect of employees of public enterprises, who leave the services of one undertaking to joint another",,,,,
undertaking/government.,,,,,
Instances have come to the notice of the Government where employees of the Public Enterprises who get selected for Allied Services or for Central /,,,,,
State Government services through competitive examinations held by the Union Public Service Commission / State Public Service Commissions, or for",,,,,
services under quasi-Government Organizations / Public Enterprises on the basis of its interview laws, have been called upon to pay varying amounts,",,,,,
to themselves released from the bonds executed by them at the time and ongoing higher scientific / technical training at the cost of Public Enterprises.,,,,,
Barriers like this have not only hampered the aspects of bright candidates but have also inhibited the mobility of employees between the Public,,,,,
Enterprises on the one hand and the Central / State Government and other semi-government organizations the other.,,,,,
According to the extant instructions issued by the agreement in 1966, if a central government servant leaves his job taking up employment under a",,,,,
State Government / Public Sector Undertaking, owned wholly or partially by the Central Government by a State Government or under quasi",,,,,
government organization, terms of any bond committing him to serve the Government for a stipulated period, which might have been executed by him",,,,,
did not be informed, although afresh bond should be taken from a government servant to ensure that he serves the now employer the government,",,,,,
Public Sector Undertaking / quasi government organization, for an appropriate period to be determined in each case by erstwhile Ministry /",,,,,
Department, taking into account the amount by them on their training.",,,,,
The question whether the terms of the bond executed by the employees of the Public Enterprises, who have received scientific / technical training at",,,,,
the cost of Public Enterprises should be informed or not in cases where they join Central Government / State Government services or take up,,,,,
employment under quasiâ€"government organizations / Public Enterprises either on the basis of competitive examinations / tests / in previous,,,,,
organized by those organizations of the Union Public Service Commission / State Public Service Commission, or otherwise has been under",,,,,
consideration for some time. It has been now decided that the enforcement of bond not be insisted upon in the case of an employee of a Public,,,,,
Enterprises who joins the Central Government / State Government, quasi - government organizations or another Public Enterprises, subject to the",,,,,
conditions that a fresh bond is taken to ensure that the employee serves the new employer for the balance of the organization bond period.,,,,,
Ministry of Industry, etc. are requested to bring the foregoing to the notice of the Public Enterprises under their administrative control for",,,,,
compliance.,,,,,
Sd/-,,,,,
(S. Krishna Moorthy),,,,,
Joint Director Tele. No. 46191,,,,,
The DPE also issued further OMs dated 23.05.1981 and 05.02.1985 on the above mentioned subject.,,,,,
The DPE withdrew the aforementioned OMs by an OM dated 10.12.1997 (OM NO. 20(5)/95-DPE(GM). After deletion of the said guidelines, the",,,,,
Department of Public Enterprises received various representations and references for revival of the said guidelines. The position was reviewed and,,,,,
DPE decided to revive the said OMs with certain modifications. In this regard, the DPE issued another OM dated 29.07.2004 (DPE OM No.",,,,,
15(2)/2003-DPE(GM)/GL-57) clearly stating that the OMs dated 13.06.1977, 23.05.1981 and 05.02.1985 were revived subject to certain modifications,",,,,,
which are set out below:-,,,,,
(a) The bond executed by employees of the Public Enterprises, who have received scientific/technical training at the cost of Public Enterprises and",,,,,
have applied through proper channel during the currency of the bond join Central Govt./State Govtsen/Ices or take up employment under quasi-,,,,,
government organizations or any other public enterprise either on the basis of competition examinations/tests/interviews organized by those,,,,,
organizations or the Union Public Service Commission should riot been forced subject to the condition that a fresh bond Is takeri to ensure that the,,,,,
employee serves the new employer for the balance of the original bond period.,,,,,
(b) The terms of bond whereby an employee of a Central public enterprise receiving scientific and technical training out the expenses of the,,,,,
Govt./Public Sector Enterprises undertakes to repay this specified amount In the event of his failure to serve the enterprise for a Stipulated period,,,,,
after completion^ of his tralriing should not been forced against an employee who leaves service of public enterprise to secure, with proper permission,",,,,,
employment under the Central Govt, a public enterprise or an autonomous body wholly or substantially owned/financed/controlled by the Central/State",,,,,
Govt. Afresh bond should be taken from the person concerned to ensure that he serves the new employer for the balance of the original period.,,,,,
(c) To ensure that the requirement of obtaining a fresh bond from a person, where necessary, is fulfilled, the enterprise with whom-the employee has",,,,,
executed the original bond may at the time of forwarding his application write to the organization etc. under whom the employee intends to take up,,,,,
another appointment intimating them about the bond obligation of-the individual and clarifying that In the case of his selection for the new post, his",,,,,
release will be subject to the condition that the new organization take from him afresh bond binding him to ser/e them for the balance of the original,,,,,
bond period: in case he falls to serve the new department/organization etc. or leaves- it before completion of the original bond period for a job where,,,,,
exemption from bond obligation Is not available, the proportionate bond money should be realised from the individual and refunded to the first",,,,,
organization with whom heoriginally executed the bond.,,,,,
All the administrative Ministries/Departments are requested to kindly Issue necessary instructions accordingly to the public sector enterprises under,,,,,
their administrative control.,,,,,
The learned counsel for DFCCIL conceded that the said OMs issued by the Department of Public Enterprises were binding on DFCCIL.,,,,,
However, it was contended that the said OMs would not be applicable in the case of the petitioners for two reasons; (i) that the petitioners were not",,,,,
imparted any scientific or technical training; and,,,,,
(ii) that their applications were not forwarded through proper channels. The DFCCIL relied upon its policy circular dated 20.02.2014 which, inter alia,",,,,,
provided that no request for forwarding of application will be entertained during the initial phase of three years from the date of joining. He,",,,,,
accordingly, submitted that the petitioners could not avail of the benefit of the OMs dated 13.06.1977 and 29.07.2004.",,,,,
It is also relevant to note that Clause 10 of the appointment letter also expressly clarified that an application of a candidate for outside employment,,,,,
will not be forwarded during the initial period of three years from the date of joining DFCCIL.,,,,,
The contentions advanced on behalf of DFCCIL are merited. There is no material on record to indicate that the training imparted to the petitioners,,,,,
(except the training imparted to Sh Raj Kumar and Sh Kuldeep Kumar petitioners in W.P.(C) 9279/2018 and 2279/2018) was technical training. The,,,,,
S.No.,"W.P. ( C )
No.","Name of the
petitioner","First salary drawn (First
Pay + D.A.)","LastSalaryDrawn
(Current Pay + D.A.)",
1.,6597/2017,"Vijay Kumar
Anugandulav
DFCCIL","12600+12663=Rs.25,263","13370+15910=Rs.29,280",
2.,9279/2017,Raj Kumar v,"12600+12928=Rs.25,528","13370+15910=Rs.29,280",
,,DFCCIL,,,
3.,11517/2017,"Vikas Singhal
v DFCCIL","24900+24427=Rs.49,327","30880+36902=67,782",
4.,2167/2018,"Joginder v
DFCCIL","12600+12663=25,263","13370+16619=29,989",
5.,2779/2018,"Kuldeep
Kumar v
DFCCIL","12600+15158=27,758","13370+16619=29,989",
6.,4278/2018,"Sanjay Patel v
DFCCIL","12600+12663=25,263","13370+16619=29,989",
7.,520/2018,"Jagmohan
Singh Rawat v
DFCCIL","12600+12663=25,263","13370+16619=29,989",
8.,6349/2018,"Manish Kumar
Shukla v
DFCCIL","12600+15158=27,758","12980+16134=29,114",
9.,4851/2017,"Naveen Kumar
Mehta v
DFCCIL","12600+12663=Rs.25,263","12980+15511=Rs.28,491",
This Court is of the view that construing Clause 10 of the appointment letter and the term of the Service Bond in a manner as canvassed by,,,,,
DFCCIL, would render the same as illegal and opposed to public policy.",,,,,
The petitioners had agreed to indemnify DFCCIL to the extent as stated in the appointment letter as well as in the Service Bond.,,,,,
The Shorter Oxford English Dictionary defines the word Indemnify as under:-,,,,,
Preserve, protect, or keep free from, secure against (harm or loss); secure against legal responsibility for events; give an indemnity to.",,,,,
Compensate for loss suffered, expenses incurred, disadvantages, annoyances, hardships, etc.",,,,,
The petitioners had, thus, agreed to compensate DFCCIL for loss that may be suffered by it on account of their failing to serve DFCCIL for a",,,,,
period of five years. Clause 10 of the appointment letter, and the Service Bond, must be construed as embodying the agreement to pay liquidated",,,,,
damages. As stated above, given the remuneration on which the petitioners were engaged and the limited training imparted to them, it appears that the",,,,,
stipulation to pay minimum liquidated damages of Rs.6 lakhs is in the nature of penalty. As held by the Supreme Court in Fateh Chand v. Balkishan,,,,,
Dass: AIR 1963 SC 1405; Maula Bux v. Union of India: AIR 1970 SC 1955; and Union of India v. Raman Iron Foundry: AIR 1974 SC 126,5 clauses",,,,,
of liquidated damages which are in nature of penalty are void. Thus, there is good ground for the petitioners to contend that the stipulations contained",,,,,
in the Service Bond fall foul of Section 74 of the Contract Act 1872 and are not enforceable. (Also see: M/s Sicpa India Limited v. Shri Manas Pratim,,,,,
Deb: RFA No. 596/2002, decided on 17.11.2011).",,,,,
Having sated above, DFCCIL would be entitled to reasonable damages.",,,,,
In the present case, the petitioners have already paid a part of the amount demanded by the DFCCIL. As noticed above, the cost incurred in",,,,,
imparting training to the petitioners has been computed by the petitioners on the basis of the applications furnished under the Right to Information Act,",,,,,
2005 and there is no serious doubt as to such costs. In all cases, the cost so worked out is around Rs.2 lakhs or below.",,,,,
In the aforesaid view, this Court is of the opinion that the petitioners must pay a sum of Rs.2 lakhs each to DFCCIL. The said amount would be",,,,,
paid within a period of four weeks from today. In case the petitioners have paid an amount in excess of Rs.2 lakhs to DFCCIL, DFCCIL would refund",,,,,
the same to the concerned petitioner within the same period. This is without prejudice to the rights and contentions of the parties, and it would be open",,,,,
for the DFCCIL to institute appropriate suit for recovery of the said amount. It would be open for DFCCIL to establish the actual cost or loss incurred,,,,,
by it on account of failure on the part of the petitioners to complete a minimum term of service of five years. The petitioners, of course, would have",,,,,
full right to contest the said proceedings.,,,,,
The petitions are disposed of with the above directions. The pending applications also stand disposed of.,,,,,