Does Centre's Scheme For Compassionate Appointment/ Payment Of Ex Gratia By Banks Operate Retrospectively? Allahabad HC Full Bench To Decide

The Allahabad High Court has referred to a larger bench the question whether Central government's Scheme for Appointment on Compassionate ground/Payment of Ex gratia, which has been adopted by several regional banks, would operate retrospectively.

As per Clause 8 of the Scheme, application for compassionate appointment could be filed within five years of death of an employee.

In the case of Chairman, Baroda U.P. Bank (Erstwhile Baroda U.P. Gramin Bank), Gorakhpur and Others vs. Jitendra and Others, coordinate bench of the Allahabad High Court had held that a conjoint reading of Clauses 8.1 and 8.2 of the Scheme shows that the intent of the legislature was to apply the Scheme retrospectively. The banks were supposed to consider all claims of compassionate appointment wherein the deceased employee would had died five years before the Scheme coming into force.

However, the bench comprising Justice Manoj Kumar Gupta and Justice Donadi Ramesh was of the opinion that a scheme for compassionate appointment cannot be applied retrospectively, unless it specifically states so. The Court was of the opinion that the Clause 8 of the scheme only talks about applications for compassionate appointed can be made till 5 years after the death of the employee. The right to apply accrued only after the scheme came into force on 1^st March 2019.

Due to difference of opinion between the bench headed by Justice Gupta, and the decision of a coordinate bench in Chairman, Baroda U.P. Bank (Erstwhile Baroda U.P. Gramin Bank), Gorakhpur and Others vs. Jitendra and Others, the following question has been referred for consideration by a larger bench of the High Court:

“Whether the interpretation given to Clause 8 of the Scheme dated 10.5.2019 in Chairman, Baroda U.P. Bank (Erstwhile Baroda U.P. Gramin Bank), Gorakhpur and Others vs. Jitendra and Others and analogous Schemes, is sustainable in law, in view of judgment of Supreme Court in Secretary to Government Department of Education (Primary) and Others vs. Bheemesh alias Bheemappa and other judgments?”

Factual Background

When the husband of the respondent died in harness, there was no scheme for appointment on compassionate grounds in the appellant banks. The “Scheme for Appointment on Compassionate ground/Payment of Ex gratia” was adopted by the appellant bank on 01.03.2019. In 2021, the Bank informed the respondent that it would not be possible to consider her request for compassionate appointment as her husband had died before the commencement of the Scheme.

The respondent challenged the said order in the writ petition before the Allahabad High Court which. Learned Single Judge while allowing the petition, held that under Clause 8 of the Scheme, application for compassionate appointment could be filed within five years of death of an employee. Accordingly, it was held that even if death had taken place before commencement of the Scheme, but application was filed within five years from the date of death, it would be covered under the Scheme.

Counsels for appellant banks argued that the decision of the coordinate bench did not consider the law laid down by Supreme Court in various judgments. It was argued that Apex Court has held that if on the date of death of the employee, there no scheme for compassionate appointment, then benefit of a subsequent scheme cannot be extended unless there is specific provision in the scheme for retrospective application.

High Court Verdict

The Court specifically noted that a reference is pending before the Supreme Court regarding the retrospective applicability of compassionate appointment scheme. The Court took note of the three judge bench decision of the Supreme Court in N.C. Santosh vs. State of Karnataka wherein it was held that

“where the benefit under the existing Scheme was taken away or substituted with a lesser benefit, judicial opinion was in favour of applying the new Scheme, but in cases where the benefits under an existing Scheme were enlarged by a modified Scheme after the death of the employee, the Scheme applicable on the date of death of the employee was applied. This is fundamentally due to the fact that compassionate appointment was always considered to be an exception to the normal method of recruitment and looked down upon with lesser compassion for the individual and greater concern for the rule of law.”

The Apex Court had also held that the application of Scheme will be based on a fixed criteria, like the date of death and not variable criteria such as date of application or its consideration.

In the facts of the present case, the Court observed that on the date of death there was no scheme for compassionate appointment. The right to apply for compassionate appointment first arose in 2019, after the scheme came into force, whereas the death of the employee happened in 2018. The Court held that applying the decision of Apex Court in Secretary to Government Department of Education (Primary) and Others vs. Bheemesh alias Bheemappa, the Scheme would not applicable to the respondents.

“Compassionate appointment is never a part of service condition of any employee or a vested right. It cannot be given in absence of rules or regulations issued in this behalf. The right comes into existence for the first time upon death of the employee in harness. If there is no scheme for compassionate appointment applicable on date of death, then no such right accrues except in cases where a future scheme unequivocally declares that it would apply retrospectively.”

The Court observed that its coordinate bench in Jitendar gave wider interpretation to applicability of the compassionate appointment scheme as it is a piece of beneficial subordinate legislation. However, the bench headed by Justice Gupta was of the opinion that if the legislature intended to make the scheme retrospectively applicable, the same would have been mentioned in the Scheme.

The Court also noted the decision of the Allahabad High Court in Bechan Giri vs. Union of India, wherein considering the same scheme, learned Single Judge had held that the scheme does not envisage retrospective applicability.

Accordingly, due to difference of opinion from the decision of the coordinate bench in Jitendar, the interpretation of Clause 8 of the scheme has been referred to a larger bench.

Case Title: Authorized Officer, Prathama U P Bank v. Smt. Manjeet Kaur [SPECIAL APPEAL No. - 541 of 2023]

Case citation: 2023 LiveLaw (AB) 443

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