M. Sham Singh v. State of Mysore (AIR 1972 SC 2440)
Scholarship bond, six-month clause, and alleged novation — a clear, classroom-style explainer with timeline, IRAC, and FAQs.
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Table of Contents
Quick Summary
The scholar got a State scholarship and signed a bond to serve the Government for five years after studies, with a six-month employment clause. He returned briefly, then asked to go back to the U.S. for more training and promised in writing to serve five years after return. He never came back and took private work abroad. The Supreme Court held him liable: the bond stood; the six-month clause never started because he did not present himself for Government service.
Issues
- Was the bond discharged because the Government did not employ him within six months of his return?
- Did a later letter amount to a novation that replaced the original bond?
Rules
Scholarship Bond Terms
Serve the State for 5 years after studies; if the State cannot employ within 6 months of return, the service duty ends; breach → refund with interest.
Novation (S.62, ICA)
Discharge by new contract needs a clear mutual agreement replacing old terms. Mere permission with reaffirmed duty is not novation.
Facts (Timeline)
Arguments
Appellant (Scholar)
- Old contract got discharged when Govt let him go back in 1951.
- Six-month clause released him; Govt failed to offer job in time.
- Even if liable, only a smaller sum (≈ ₹16,000) was due.
Respondent (State)
- No novation; letter only restated 5-year duty after training.
- Six-month clause never started; he did not present for duty and left again for personal reasons.
- Refund with interest is payable per bond terms.
Judgment
Held: For the State of Mysore. The bond was not discharged. The later correspondence confirmed the 5-year service duty. Since the appellant chose to go abroad and did not seek State employment, the six-month clause did not apply.
Result: Liability to refund with contractual interest stood as per the bond.
Ratio Decidendi
There was no novation replacing the bond. The six-month employment relief applies only when the scholar returns and offers to serve but the State cannot place him. Voluntary departure to continue private plans prevents that clause from operating.
Why It Matters
- Upholds enforceability of scholarship/service bonds.
- Clarifies limits of the six-month clause in government employment bonds.
- Shows that novation needs clear, mutual replacement of the old contract.
Key Takeaways
- No job within six months frees the scholar only if he returns and is available for posting.
- Permission to train further abroad with a promise to serve later is not novation.
- Breach triggers refund with agreed interest under the bond.
Mnemonic + 3-Step Hook
Mnemonic: “Return → Report → Recruit.”
- Return: Come back after studies.
- Report: Present for duty → six-month clock starts.
- Recruit: If no post in time, you’re free; else serve 5 years.
IRAC Outline
Issue
Was the bond discharged by novation or by the six-month clause?
Rule
Novation requires clear replacement (S.62 ICA). Six-month relief applies only after bona fide offer to serve.
Application
Appellant sought to go abroad again and promised 5-year service later; he never returned; clause not triggered.
Conclusion
No discharge; breach established; refund with interest due.
Glossary
- Scholarship Bond
- A contract where the State funds study and the scholar promises service or refund.
- Novation
- Replacing an old contract with a new one by agreement (S.62 ICA).
- Six-Month Clause
- If the State cannot offer a job within six months after the scholar reports, the service duty ends.
FAQs
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