Government Medical Colleges in India often enforce medical bonds on doctors after MBBS completion. An employment bond, also known as a compulsory service bond or a rural service bond (in this scenario), is a legal agreement signed between a medical student and a medical institution or government agency. The bond typically requires the student to serve a specified period, usually in rural or underserved areas, upon completion of their medical education.
According to the medical bond policy, doctors are required to serve for a specific period in State hospitals after the completion of their MBBS undergraduate and postgraduate degrees, failing which they have to pay a penalty (amount specified beforehand by every State and Union Territory) to the State or medical college.
It’s important to note that the specifics of medical bonds can vary between different medical schools and government policies. Some medical schools may require a bond, while others may not. The terms and conditions of the bonds, including the duration of service and penalties for non-compliance, also differ from State to State. It is also common practice amongst some States to collect a signed and undated cheque from candidates to the equivalent of the bond amount at the time of their counselling, as well as collect the original MBBS degree certificates. In case of a default, either the cheque is encashed thereby risking criminal prosecution on the grounds of cheque dishonour, or the original MBBS degree is withheld until the payment is made.
Starting a new job, especially in the medical field, comes with its own set of challenges and learning curves. Our guide, ‘Employees in India Starting a New Job‘, offers valuable insights for new professionals navigating their early career stages. From understanding workplace culture to managing professional responsibilities effectively, this article provides a comprehensive overview for making a smooth transition into your new role. For those embarking on their journey after fulfilling or deciding on their medical bond obligations, this guide is a must-read.
Table of Contents
Is the Government Medical Bond Policy getting scrapped?
In November 2022, it was widely reported that the Union Health Ministry is working on creating guidelines to eliminate the bond policy that requires doctors to work for a specified period in a state-run hospital after completing their graduation and post-graduation courses. This decision follows a recommendation from the National Medical Commission (NMC) and the Supreme Court’s suggestion to establish a uniform policy for compulsory service by doctors trained in government institutions.
The NMC expressed the view that medical students should not be burdened with bond conditions, considering the changing landscape of medical education in the country. The Health Ministry formed a committee to review the bond policy, and after examining the matter, it was proposed to re-evaluate the policy with the involvement of all States, Union Territories, and stakeholders.
The bond policy, which varies between States, aims to address the shortage of healthcare services in rural areas by requiring doctors to serve in Community Health Centers (CHCs) and Primary Health Centers (PHCs). The bond amount, determined by the State, is intended to compensate for the subsidized education provided in government medical colleges.
The bond amount varies significantly, ranging from ₹5 lakhs to ₹1 crore for MBBS and may go even up to ₹2-2.5 crore for postgraduate and super-speciality courses. The duration of compulsory service also varies from 1 year to 5 years.
During discussions, it was agreed upon that there should be mandatory rural service to improve access to doctors in rural and remote areas, but with flexibility. The implementation of the bond could be non-financial and administered through an administrative mechanism. The aim is to ensure the availability of doctors in underserved areas while considering the concerns of medical students.
What do Courts say about Bonds for Doctors?
The Supreme Court, in the case of Association of Medical Super Speciality Aspirants and Residents & Ors. v Union of India, held that compulsory bonds executed by doctors to serve the State Government for a fixed period of time are contractual obligations that must be fulfilled and do not hinder the practice of their profession under Section 27 of the Indian Contract Act.
Section 27 of the Contract Act invalidates any agreement that is in restraint of one party’s right to pursue a valid trade, business, or profession. In cases of private employment, Section 27 operates on the legality of employment bonds and is a key legal pointer aiding employees who are caught up in unfair bonds. You can read about this in detail here.
In the above mentioned case, the Supreme Court declined to issue a writ of mandamus to quash a notification by the West Bengal Government that required post-graduate trainees in medical courses to sign compulsory indemnity bonds. The bonds obligated them to serve the state government for 3 years after completing their postdoctoral/ MD/ MS courses and for 2 years after completing the PG Diploma course. Failure to fulfill the bond would result in a penalty of Rs. 10 lakhs for each defaulting year.
While medical bonds are specific to the healthcare sector, the concept of employment bonds is widespread across various industries. In our detailed article, ‘Employment Bonds and Their Validity‘, we explore the legal aspects of employment bonds beyond the medical field. This includes how they are structured, their enforceability, and what employees should know before signing such agreements. Understanding the legal landscape of employment bonds can empower professionals across sectors to make informed decisions.
The court considered 4 key points:
- Jurisdiction of the State Government: The Court concluded that the State Government had the authority to issue executive orders within the scope of its legislative powers. Therefore, the West Bengal Government’s notification was within its competence.
- Violation of Fundamental Rights: The Court held that a 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. A reasonable stipend is also 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, the Court noted the reduction of compulsory service time in other institutions has 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.
The Court stated that the State Governments have the responsibility to provide healthcare and address the shortage of super specialists in their respective states. The policy decision to utilize the services of doctors who received government assistance for their education was not arbitrary. The court directed State Governments and the Armed Forces Medical College to consider reducing the compulsory service period to two years, with a penalty of Rs. 20 lakhs for default. - Contract of Personal Service: The Court noted that none of the State Governments had attempted to enforce the contracts entered into through the service bonds, and Section 14 of the Specific Relief Act prohibits the enforcement of contracts of personal service.
- Restraint on Profession: The court agreed with the Calcutta High Court’s finding that the bond did not impose a restraint on the profession but rather seemed to promote it. The condition for admission did not violate Section 27 of the Indian Contract Act.
In conclusion, while dismissing the batch of writ petitions and appeals, the Court emphasized the need for the Union of India and the Medical Council of India to establish a uniform policy regarding compulsory service for doctors trained in government institutions.
For our Hindi-reading audience, ‘Employment Bond की पूरी जानकारी‘ provides a thorough understanding of employment bonds in India, including those within the medical sector. This article delves into the nuances of bond agreements, their legal implications, and practical advice for navigating them. Whether you’re a medical professional bound by a service agreement or exploring opportunities in other fields, gaining insight into how employment bonds work is crucial.
Which States have Bonds for Doctors?
In this blog post, we have provided the details of bonds stipulated by medical institutions in all States and Union Territories in India, as per the information available in the public domain and government websites. As per this list, the details of Indemnity Bonds are mentioned, which are required to be furnished by students pursuing Post-Graduation in Government Colleges, or on government seats in private colleges.
1. LADAKH
All the candidates of the UT of Ladakh availing reservation benefit of ST Quota/UT of Ladakh Quota/any other Quota seats shall have to execute a Service Bond in favour of the Ladakh Administration stating that he/she shall serve under the UT Administration for a period of 3 years immediately after successful completion of PG Degree Courses and 2 years immediately after successful completion of PG Diploma Courses and Dental Specialty Courses, or 50 lakhs.
Further, the candidates of UG Courses (MBBS/BDS) selected under ST Quota/UT of Ladakh Quota/any other Quota seats outside the Union Territory of Ladakh shall have to execute a Service Bond in favour of the Ladakh Administration stating that he/she will serve under the UT Administration for a period of 5 years in case of MBBS Courses and 3 years in case of BDS Courses immediately after successful completion of the Course.
However, this policy was revised by Ladakh UT Administration on June 20th, 2022, stating that the administration has removed the stringent rider that in case a student fails to complete the MBBS degree, he or she has to pay half the bond amount (Rs. 50 lakhs) to the government. The UT administration has also substituted that a candidate would be given a government job within 2 months (earlier it was 10 months) from the date of communication to the administration regarding his or her successful completion of the course and eligibility for service. In such cases, the obligation to serve a compulsory period will not be applicable.
The Health Department has cited the scarcity of doctors in the Union Territory of Ladakh as the reason behind the introduction of CGSP, saying “There is an urgent need to take certain measures to ensure the availability of doctors to provide quality healthcare to people in the Union Territory of Ladakh. With the objective of overcoming the scarcity of doctors in Ladakh, the Administration of Union Territory had formulated the Compulsory Government Service Policy for those who avail of Central Pool Ladakh Merit Seats or J&K State Pool Ladakh Merit Seats under the notification issued on August 23,” an order of health and medical education department said. The revised version of the notification came into effect from the 2022 season and onwards.
2. JAMMU & KASHMIR
N/A
3. HIMACHAL PRADESH
According to a notification put out by the Government of Himachal Pradesh and the Department of Health and Family Welfare, dated 8th March 2019, all students and General Duty Officers (GDO) enrolling for Post Graduate in the state of Himachal Pradesh shall have to execute a bond for service after completion of their respective courses. As the government incurs substantive expenditure on each candidate for Post-Graduation and pays them in full along with all benefits, allowances, and seniority during their courses, all students shall have to furnish a bond of 4 years including the mandatory first year of field posting after completion of their courses.
All GDOs will also have to furnish a bond of at least 5 years including mandatory first year of field posting after completion of their courses. All candidates will also have to furnish an undated cheque of Rs. 40,00,000/- in the name of the Director, of Health Services (DHS) as a failsafe against their bond. The DHS reserves the right to encash the undated cheque if the candidate fails to fulfil the terms of the bond. The candidates shall also deposit their bachelor’s degree with the DHS; the concerned university shall be informed about the same and the candidate shall be barred from obtaining any duplicate degrees. The bachelor’s degree of the candidate shall only be released after the completion of the bond period or after payment of the penalty mentioned in the bond agreement. The candidates shall also furnish an undertaking as a part of the bond that if they fail to complete their course, they will have to pay Rs. 10,00,000/- to the state government as a penalty for the wastage of seats.
The following shall be considered as a violation of the bond agreement:
i. Failing to join the given field posting within 10 days of issuance of orders,
ii. Putting in the request for EOL/Study Leave/NOC during the mandatory period of service,
iii. Putting in a request for Senior Residency within the mandatory first year of field posting.
Following actions shall be taken by the DHS in the event of violations of the terms of the bond agreement:
i. Salary paid to the candidate during sponsorship shall be recovered,
ii. Bond amount shall be recovered,
iii. The undated cheque shall be encashed,
iv. Disciplinary proceedings shall be initiated against the candidate,
v. The original bachelor’s degree shall not be returned and the concerned university shall be made aware of the decision as well,
vi. Registration in the Medical Council shall be cancelled.
Exceptions shall be made in the following cases:
i. Candidates who chose not to take any stipend during post-graduation (such candidates shall furnish an affidavit stating the same),
ii. If the government/DHS fail to issue any order for the candidate’s mandatory field posting within 1 month of the declaration of PG results.
4. HARYANA
After continuous and rigorous protests by the medical students of Haryana, the State Government finally amended the bond service policy by Notification No. 16/17/2019-6HBIV, dated 21st December 2022. The notification is aimed to incentivize doctors to opt for Government Service after completion of an MBBS Degree Course from Government/Government Aided Medical Colleges in the state of Haryana. The Government of Haryana also aims to provide affordable, quality medical care to the public and bridge the gap between demand and supply of medical professionals and incentivize the doctors graduating from Government/Government Aided Medical Colleges in the state of Haryana to serve the state for further scaling up and strengthening overall health facilities in the state of Haryana.
The total duration of the bond shall be 5 years starting from completion of the MBBS course. The bond amount for males graduating from Government Medical Colleges and Government Aided Medical Colleges has been reduced to Rs. 25,77,090/- and Rs. 21,90,000/- respectively. Similarly, the bond amount for females graduating from Government Medical Colleges and Government Aided Medical Colleges has been reduced to Rs. 23,19,381/- and Rs. 19,71,000/- respectively.
The candidate will execute a tripartite bond which will be signed by the student, the bank and the government through the student’s institution. After completion of the students’ MBBS course, they will have the following 3 options to choose from:
i. Consent for government service,
ii. Not opting for government service and declaring to pay the bond amount in lumpsum,
Not opting for government service and declaring to pay the bond amount in monthly instalments.
In case the student consents to government service, and thus, completes the services, the government will repay the entire bond amount with interest to the bank in lieu of the service rendered by the candidate. The state government shall offer a Contractual Service in Public health institutions/government/government aided Medical Colleges to the candidate within 1 year of completion of the MBBS Course, upon which the repayment of the bond amount by the state government will begin immediately. The candidate shall only be liable to repay the bond amount in case he/she chooses not to join any government service, either permanent/contractual when offered the service. Upon selection for Post-Graduation in Haryana or any other state, the period of Post-Graduation will be deducted from the total bond period of five years. If the candidate is not able to secure a contractual service within 1 year of completion of his/her course, the candidate can take up any employment and the payment of bond against such candidate shall be made by the Government of Haryana. Such a candidate will still be liable to serve in the government sector, if offered a job by the government, within the period of service as envisaged under the bond, i.e., within 5 years after the completion of the course. If the candidate chooses to pay the entire bond amount without any help from the bank on a lump sum basis or equal annual instalments during the course of the study, in this case, the candidate shall not be required to serve with the government.
5. PUNJAB
According to Notification No. 5/26/2016-5HB-III/557, dated 25th January 2018, all in-service doctors shall have to submit a bond of Rs. 50,00,000/- to serve the Punjab Government for a period of 10 years after completion of Post-Graduate degree or a bond of Rs. 25,00,000/- to serve the Punjab Government for a period of 6 years after completion of Post-Graduate diploma. If the candidate fails to do so, he/she shall have to deposit the bond money with the government. Any student shall have to submit a bond of Rs. 15,00,000/- to serve the Punjab Government for a period of 2 years after completion of Post-Graduate. This clause will not be applicable in case the offer is not given by the government within a period of 1 year of passing the post-graduate examination. The student will inform the government that he/she has passed the post-graduate examination. Failure to serve the government for a period of 2 years will lead to the recovery of the bond amount by the government of Punjab.
However, in January 2023, the Government of Punjab submitted a proposed draft of the revised bond policy for the state of Punjab, for which suggestions have also been invited. The indemnity bond for doctors securing admission in post-graduation degree courses is set to reduce from 10 years to 7 years; and in PG diploma courses, from 6 years to 4 years. Meanwhile, the bond amount is also set to increase from Rs. 50,00,000/- to Rs. 75,00,000/- for the PG degree course and from Rs. 25,00,000/- to Rs. 45,00,000/- for the PG diploma course. The state government will invoke the bond against doctors who fail to complete the minimum service period after the completion of their course. Non-compliance with conditions will be treated as gross misconduct and the department will get the registration of erring doctors struck off from the register of the Punjab Medical Council/ Punjab Dental Council.
6. UTTARAKHAND
According to letter number 874/XXVIII(1)/2017-19/M.C./2015 dated 15.07.2017, by the Medical Education Department of the Government of Uttarakhand, all the bonded students who have completed the courses of MBBS/MD/MS, have to serve the time that has been determined by the Government of Uttarakhand or pay the stipulated penalty. According to the above-mentioned letter by the Government of Uttarakhand, the penalty has been determined at Rs. 1,00,00,000 (Indian Rupees One Crore Only) for the period of 5 years; that has been increased from 3 years vide letter dated 15.07.2017, that has been mentioned above. These conditions have been put to be applicable from the academic year of 2017-18 has been continuing since. This letter also states that if a student who has signed the bond with their respective college, does not appear for their post for more than 2 months, they shall have to pay the penalty amount that has been stipulated for them to the Government of Uttarakhand. Furthermore, if the student is absent for 1-10 days without proper authorization, they shall also bear a salary cut according to the per diem that they receive. However, after 10 days of absence, the student shall bear the salary cut according to the monthly salary that they receive.
7. DELHI
No penalty and no service compulsory
8. UTTAR PRADESH
According to letter no. 950/71/-2-82/2017, dated 07/03/2017, students of state medical colleges studying MBBS/BDS/Post-Graduate/Diploma or Super Speciality courses, have to sign a bond with the state government of a certain amount, with specific conditions according to the course that the student is pursuing. If the student is pursuing MBBS/BDS course, they will have to sign a bond with the state government of 2 years with an amount of Rs. 10,00,000/- These students will be required to serve, according to the bond, in the state’s medical colleges that are not situated in any metropolitan cities, on the post of non-postgraduate, junior resident along with serving under the subordinate of Medical and Health Department, i.e., primary health and community centre as a medical officer.
If the student is pursuing MD/MS/MDS/ PG Diploma, they will have to sign a bond with the state government of 2 years with an amount of Rs. 40,00,000/- (for MD/MS) or with an amount of Rs. 20,00,000 (for PG Diploma/MDS). According to the bond, these students will be required to serve in state medical colleges that are not situated in metropolitan cities as senior residents or as contractual spokespersons or as contractual experts in the district hospitals or community health centres located anywhere except the metropolitan cities of the state.
If the student is pursuing Super Specialty courses/DM/MCH, they will have to sign a bond with the state government of 2 years with an amount of Rs. 1,00,00,000/-. These students will have to serve, according to the bond, state medical colleges/ trusts/ medical universities or district board hospitals as a contractual spokesperson or contractual super specialty medical officer.
Along with the above conditions of the bond that the students will have to sign when they choose their courses in their respective colleges, they will also have to sign a separate penalty bond of Rs. 5,00,000/- which states that if the student decides not to join the college after the last counseling session conducted by the college, they will have to pay Rs. 5,00,000/- as a penalty for wasting a seat at such a college.
9. BIHAR
According to the स स – 1/ विविध – 58/ 2015 – 278(1) released by the Department of Health of the Government of Bihar dated 27/02/2019, if a selected candidate of a medical university decides not to take up their seat in their respective university, they will have to pay Rs. 15,00,000/- for failure to do so along with the repayment of the stipend paid to such candidate. In another case, if a student does not provide a minimum service of three years to the Government of Bihar, they shall have to pay Rs. 25,00,000/- as a penalty to the Government of Bihar.
10. SIKKIM
N/A
11. ARUNACHAL PRADESH
N/A
12. ASSAM
Notification No, HLB.267/2018/130, dated 06.12.2021 – minimum service period 1 year, maximum 10 years, amount 20L for completing degree/diploma course and 15L for PG Diploma candidates.
13. MEGHALAYA
Discontinuation Bond of ₹10 Lakh in the First year, ₹15 Lakh in the Second year and ₹20 Lakh Third year of the MD/MS course.
14. NAGALAND
Notification No. MED-9/AE/1/99(A)Pt. Dated 27.01.2022 – Minimum service – 3 to 5 years.
15. MANIPUR
20,00,000/- for 1 year
16. MIZORAM
N/A
17. TRIPURA
Notification No. F.11(31)-DME/UG/PG BOND/2016/8019-50 dated 13.12.2019 – In the event of failure to serve the stipulated period under Govt. of Tripura as per Bond, he/she has to pay an amount of Rs. 35.00(Rupees thirty-five) lakhs only for Post Graduate Pre & Para Clinical Subjects Courses (Anatomy, Physiology, Biochemistry, Pharmacology, Pathology, Microbiology, Forensic Medicine & Toxicology, Community Medicine, etc.) and Rs. 50.00 (fifty lakhs) oNly for Clinical Subjects Courses (General Medicine, General Surgery, Orthopedics, Otorhinolaryngology (ENT), Obstetrics & Gynaecology, Anaesthesiology, Paediatrics, Ophthalmology, Psychiatry, Respiratory Medicine, Radio Diagnosis, Dermatology, Radiotherapy, etc.) and Rs. 15(fifteen) lakhs for PG Diploma Courses to the Government of Tripura. Execution of a Bond by a Candidate stating that a Candidate will pay an amount of Rs. 25.00 lakhs in Pre-Clinical & Para Clinical PG Degree Courses and Rs. 35.00 lakhs in Clinical PG Degree Subjects Courses and Rs. 10.00 lakhs for all PG Diploma Courses to the Govt. Tripura/Concerned of Institution if he/she discontinues his /her PG Course.
18. RAJASTHAN
25,00,000/- for 2 years (revised for the 2019-20 academic year and onwards)
19. GUJARAT
Resolution No. MCG/1019/1643/J – 30,00,000/- for 1 year
20. MADHYA PRADESH
Notification for Madhya Pradesh Government Autonomous Medical and Dental PostGraduate Courses (Degree/Diploma) Admission Rules, 2016 – 1 year of service under the state government with a penalty of 10L for a postgraduate degree and 8L for diploma courses.
21. CHATTISGARH
50,00,000/- for 2 years for PG
25L for 2 years for UG
22. JHARKHAND
30,00,000/- plus stipend received for 3 years
23. WEST BENGAL
Notification No: HF/O/MERT/912/ME/MISC-78-13, Dated: 31.07.2013; Penalty – 10L, minimum service – varies.
24. DADRA AND NAGAR HAVELI & DAMAN AND DIU
Notification No. DE/ADM/MSC/2022-23/2578 dated 15.11.2022; Penalty – 10L, minimum service – varies.
25. MAHARASHTRA
As per Government Resolution (G.R. No. MED 1007/CR-490/07/Ed-2 dated 8.02.08 All India quota through NEET UG 2020 will be required to sign a bond to serve the Government of Maharashtra or local self-government or Defence services for a period of one year, after the completion of the internship, failing which he/she will be required to pay Non-Refundable Rs.10,00,000/- for the default as penalty.
26. ODISHA
Resolution No. ME-II-IXM/88/ 2008/ 3418/H, dated 03.02.2017; 2 years of service; penalty – equivalent to double the amount of stipend/salary for 3 years of study.
27. GOA
Circular No. 1/1/2018-II/PHD/253, dated 25.04.2019; minimum service – 1 year, bank guarantee amount – 5L (MBBS/Allied Health Science Course), 10L (Post Graduate Degree Courses, 3 years), 7L (Post Graduate Diploma Degree, 2 years), 5L (BDS), 10L (Post Graduate Degree).
Discontinuation penalty – 50L (MD/MS/Diploma/MDS), 10L (MBBS/BDS/AHS)
28. KARNATAKA
Discontinuation penalty – 5L plus stipend; minimum service – 1 year, penalty – 50L
29. TELANGANA
Rc. No. 1794/P3/2018, dated 20/03/2018; Minimum service – 1 year; penalty – 10L (Post Graduate Diploma courses) and 20L (Post Graduate Degree courses)
30. ANDHRA PRADESH
Minimum service – 1 year, penalty – 40L (PG) and 50L (Super Speciality)
31. KERALA
Notification No. G.O. (Ms.) No. 45/2019/H&FWD, dated 18.03.2019; Minimum service – not less than 1 year and not more than 3 years, penalty – 50L
32. TAMIL NADU
Minimum service – 5 years, penalty – 20L (post-graduate diploma courses) and 40L (post-graduate degree courses)
40,00,000/- for 5 & 2 year for clinical & pre, para clinical respectively
33. ANDAMAN & NICOBAR ISLANDS
Minimum service – 1 year, penalty – 10L; will not leave India for a period of 5 years, penalty – 10L
34. LAKSHADWEEP
N/A
35. PUDUCHERRY
Minimum service – 3 years, penalty – 10L
Conclusion
In conclusion, the landscape of medical bonds across various states in India presents a diverse and challenging scenario for medical graduates. As states strive to balance the need for accessible healthcare in rural and underserved areas with the aspirations and rights of medical professionals, the debate around medical bonds continues to evolve. While some argue that such bonds are essential for improving healthcare delivery, others view them as restrictive and burdensome.
If you found this discussion enlightening and are eager to explore more such insightful topics, consider subscribing to our newsletter, The Success Circle. Each edition is crafted to enrich your knowledge and empower you with information that propels you toward success in your professional and personal life. Join our community by subscribing here and be part of the circle where success meets purpose and knowledge.
