Receipt Of Financial Benefits Due To Employee's Death Not A Bar To Seek Compassionate Appointment For Dependents : Karnataka High Court

A division bench of Justice B V Nagarathna and Justice N S Sanjay Gowda in its order of October 15, 2020 said "We are not inclined to accept the reasoning of the learned Single Judge and we are, therefore, of the view that the learned Single Judge erred in dismissing the writ petition solely on the ground that the appellant's family had received a huge sum of money as terminal benefits."

"..the receipt of any terminal benefits cannot and should not be the yardstick to disentitle a dependent member of the family to seek for appointment on compassionate grounds and so long as there is a policy in force regarding compassionate appointment in force, the case of the dependents would have to be considered in accordance with the Rules notwithstanding the receipt of any financial benefit that the family of the deceased had received from the employer", the bench observed.

It accordingly directed the Bangalore Development authority (BDA) to issue an order of appointment on compassionate ground to the appellant (Kiran P), if there is no other legal impediment in doing so. The said exercise shall be carried out within a period of four weeks from the date of receipt of a certified copy of this judgment. The BDA recently informed the court that appointment order was issued on March 17, while hearing a contempt petition filed by the petitioner.

Case Background:

Prakash, the father of the writ petitioner/Sri Kiran, while working as Second Division Clerk in BDA was dismissed from service on 24.02.2003. Prakash raised an industrial dispute which was referred to the Labour Court. The Labour Court, on consideration of the materials produced before it, accepted the reference and set aside the order of dismissal dated 24.02.2003 and directed the BDA to reinstate Prakash into service to his original post within one month from the date the award became enforceable. The Labour Court also awarded full backwages from the date of dismissal till reinstatement and also granted continuity of service with all other consequently benefits.

The award of the Labour Court was passed on 04.09.2013. However, Prakash passed away on 18.03.2014. The BDA accepted the award of the Labour Court and did not challenge the same. The award in favour of Prakash was notified by the State after the death of Prakash on 20.10.2014.

The petitioner immediately after the death of his father, submitted a representation on 19.07.2014 seeking for an appointment on compassionate grounds. Since the said request was not considered, he approached the High Court. The said writ petition was contested by the BDA by filing a detailed statement of objections. The single judge, taking note of the objections filed by the BDA, directed the BDA to consider the representation made by the petitioner. Following which the BDA rejected the representation made by the petitioner.

This rejection order by BDA was challenged by the petitioner and the single judge did not really venture to consider the validity of the reasoning given by the BDA. However, the bench came to the conclusion that the rejection of the BDA could not be found fault with, since the family of the appellant had received a sum of Rs.33,63,465/- as terminal benefits and the receipt of this had obviated any hardship that the family had been put into. This order was challenged by way of an intra-court appeal.

Submission on behalf of appellant.

Senior Advocate G.S.Kannur, submitted that BDA could not have proceeded to reject the claim of the appellant on the ground that the father of the appellant was not in service in light of the judgment rendered in the earlier round of litigation in W.P.No.38608/2017. He also contended that once the dismissal order had been set-aside, the deceased employee is deemed to have been in service, more so, when the Labour Court had also granted continuity of service to the deceased Prakash.

Further, he submitted that since the employee was deemed to be in service, his death on 18.03.2014 would have to be taken as the death of an employee which had occurred while he was in service. It was also contended that He submitted that the reasoning of the learned Single Judge regarding the receipt of monetary benefits were not germane to the issue on hand. The receipt of terminal benefits is not a largesse granted to an employee and it is in effect, the result of the benefits that an employee has earned over a long period of service rendered to his employer. The payment of terminal benefits has absolutely no relation to the need to provide an appointment on compassionate ground.

BDA Opposed the appeal

Advocate K. Krishna, appearing for BDA submitted that the order of the learned Single Judge cannot be found fault with since it was based on equitable considerations. The appellant could not be considered for appointment on compassionate grounds, having regard to the huge sum of money that the family had received as terminal benefits.

Court findings:

Firstly, the court said "On notification of the award, the terms of the award became enforceable, on the passing of the award, the order of dismissal was set aside and since the workman was granted continuity of service, the relationship of employer and employee stood restored from the date of dismissal itself. Thus, the appellant's father would be deemed to have been in service on the date of the award itself, especially when the award was in fact notified by the Government. The argument of the BDA regarding notification of the award is, therefore, devoid of merit and the same is rejected."

It added "In our view, the entire approach of the BDA in considering the matter is arbitrary and irrational. Once the order of dismissal was set aside and Prakash was directed to be reinstated with full back wages and also continuity of service, in law, Prakash is deemed to have been in service till he passed away. The notification of an award is essentially a ministerial act to allow for its enforcement and the delay in notifying the award would have no bearing to the fact that the relationship on employer and employee stood restored under the Award."

The court then went on to reject the reasoning of the Single Judge that the appellant's family had received a huge sum of money as terminal benefits and therefore, they were not in distress. It said "The family of the appellant thus by virtue of an award of the Labour Court was recipient of money which was due to them due to an illegal act committed by the BDA and this receipt of money awarded to them as a consequence of an illegal act could not be used against them for refusing any rights that they possessed for appointment on compassionate ground."

Finally it said "We would like to reiterate that the receipt of any terminal benefits cannot and should not be the yardstick to disentitle a dependent member of the family to seek for appointment on compassionate grounds and so long as there is a policy in force regarding compassionate appointment in force, the case of the dependents would have to be considered in accordance with the Rules notwithstanding the receipt of any financial benefit that the family of the deceased had received from the employer."

It added "It is to be borne in mind that the employer while framing a policy for providing appointment on compassionate ground, would be conscious of the fact that the dependents of a deceased would receive financial benefits and the employer had framed a policy only because it would be well aware that mere receipt of financial benefits would not by itself ameliorate the condition of the family of the deceased and the family of the deceased would be able to tide over the crisis only if one of the dependents was provided employment. It is precisely for this reason that the policy for providing compassionate appointments does not disentitle a dependent from seeking for a compassionate appointment merely because the family is recipient of certain financial benefits due to the death of the employee."