Compassionate Appointment : Supreme Court Flags Conflicting Judgments On Whether Scheme Prevalent On Date Of Death Or Date Of Consideration Applies

In brief, the respondent's father was working for the Canara bank and passed away in the year 2001, before his retirement. Accordingly, the respondent sought an appointment on compassionate grounds under the 1993 scheme. However, during the pendency of this litigation before the High Court, another scheme (2005) was introduced. The same entitled the family members of the deceased employees to lump sum ex-gratia payment. Notably, the bank issued a circular, discontinuing appointments under the scheme of 1993. A detailed background can be read here.

Against this backdrop, the Bench of Justices Dipankar Datta and Prashant Kumar Mishra made the observation regarding conflicting judicial opinions. Most importantly, in the case of Canara Bank v M Mahesh Kumar., (2015) 7 SCC 412, it was held that a compassionate appointment claim cannot be decided based on a subsequent scheme that was introduced after the claim. However, given there were still divergent views, the Court in State Bank of India v. Sheo Shankar Tewari., (2019) 5 SCC 600, referred the matter to the larger bench. Before going further, it is important to explore the divergent views in several decisions as pointed out by the Court through this present judgment.

Divergent Views

In Abhishek Kumar v. State of Haryana., (2006) 12 SCC 44, the Court opined that since the 2003 Rules were not in existence at a time when the claim for appointment on compassionate grounds was made, thus, the same would be considered as per the 2001 rules. A similar view was rendered in Canara Bank's decision.

In contrast, the Court in SBI v. Raj Kumar., (2010) 11 SCC 661 and MGB Gramin Bank v. Chakrawarti Singh., (2014) 13 SCC 583 took the view that a new scheme alone would apply and there is no vested right to have the matter considered under the former scheme.

Close on the heels of the reference made in Sheo Shankar Tewari, the Court N.C. Santhosh v. State of Karnataka., (2020) 7 SCC 617 held that while considering such a claim, the norms prevailing on the date of consideration of the application would be applicable. The concerned portion reads as:

“Applying the law governing compassionate appointment culled out from the above cited judgments, our opinion on the point at issue is that the norms, prevailing on the date of consideration of the application, should be the basis for consideration of claim for compassionate appointment. A dependent of a government employee, in the absence of any vested right accruing on the death of the government employee, can only demand consideration of his/her application.”

Thus, the decision in N.C. Santhosh seemingly overruled Canara Bank by holding that the applicable scheme would be the one prevailing on the date of consideration of the application. However, the controversy re-emerged with subsequent decisions being rendered in line with Abhishek Kumar and Canara Bank's decision.

For instance, in a three-judge bench decision in State of Madhya Pradesh v. Amit Shrivas., the Court observed that the compassionate appointments have to be in terms of the applicable policy as existing on the date of demise unless a subsequent policy is made applicable retrospectively.

“We place on record that the decision in Amit Shrivas (supra) refers to an earlier decision in State of Gujarat v. Arvind T. Tiwari in paragraph 16, extracted above, as if such decision lays down the law that a subsequent policy could be made applicable retrospectively.,” the Court marked.

To support it cited the relevant portion of Arvind T. Tiwari. The same reads as:

“18. Thus, the question framed by this Court with respect to whether the application for compassionate employment is to be considered as per existing rules, or under the rules as existing on the date of death of the employee, is not required to be considered.,”

It is indeed debatable whether a policy for compassionate appointment, which is in the nature of an executive order, can have retrospective application., the Court said in the present case.

Following the decision in Amit Shrivas, the judge bench in Indian Bank v. Promila and State of Madhya Pradesh v. Ashish Awasthi., reiterated that the policy prevalent at the time of death of the deceased employee will be considered for the appointment on compassionate grounds. The Court in the latter case observed:

“"As per the settled preposition of law laid down by this Court for appointment on compassionate ground, the policy prevalent at the time of death of the 4 deceased employee only is required to be considered and not the subsequent policy. 4.1 In the case of Indian Bank and Ors. Vs. Promila and Anr., (2020) 2 SCC 729, it is observed and held that claim for compassionate appointment must be decided only on the basis of relevant scheme prevalent on date of demise of the employee and subsequent scheme cannot be looked into. Similar view has been taken by this Court in the case of State of Madhya Pradesh and Ors. Vs. Amit Shrivas, (2020) 10 SCC 496.”

Cementing this background, the Court noted that the three-judge bench decisions in N.C. Santhosh and Amit Shrivas were clearly at variance. Further, the reference made by Sheo Shankar Tewari is yet to be decided by the larger bench.

Disagreement With Canara Bank Decision

In Canara Bank also a similar question was before the Court. The issue was whether the family members of the deceased employee were entitled to claim compassionate appointment notwithstanding that their financial condition was good and that the scheme of 1993 had been replaced with the scheme of 2005.

Among other findings, the Court had held that the grant of family pension and terminal benefits would not affect the application for compassionate appointment. Referring to clause 3.2, the Court said in spite of such a grant, the Bank may keep the offer of appointment open till the minor attains the age of majority.

“19. Insofar as the contention of the appellant Bank that since the respondent's family is getting family pension and also obtained the terminal benefits, in our view, is of no consequence in considering the application for compassionate appointment. Clause 3.2 of the 1993 Scheme says that in case the dependant of the deceased employee to be offered appointment is a minor, the Bank may keep the offer of appointment open till the minor attains the age of majority. This would indicate that granting of terminal benefits is of no consequence because even if terminal benefit is given, if the applicant is a minor, the Bank would keep the appointment open till the minor attains majority.”

Disagreeing with this view, the Court said that clause 3.2 has to be seen as a benevolent clause, covering exceptional cases to ensure the right of the family members of the deceased employee to live with human dignity.

“The idea for incorporation of this clause in the scheme of 1993 cannot be confused with grant/release of terminal benefits. Both operate in different arena and, therefore, we respectfully disagree with the reasoning in paragraph 19 of Canara Bank (supra).,” the Court said.

However, the Court did not refer the case to the larger bench given that a reference was already made and the present case has been pending for more than two decades. Thus, a reference would only add to the agony and pain of the respondent.

“At the same time, we cannot be oblivious of Canara Bank (supra) having been rendered by a coordinate bench. Having disagreed with Canara Bank (supra), judicial propriety demands that we follow the appropriate course, i.e., to refer the matter to a larger bench. We are also not oblivious of the legal position that so long the decision that is doubted is overruled, it continues to remain binding. A reference to a larger bench, as made by the coordinate bench in Sheo Shankar Tewari (supra), if made by us would only add to the agony and pain of the respondent considering that one cannot foresee an imminent resolution of the controversy, in light of the admitted fact that the reference made by Sheo Shankar Tewari (supra) in 2019 is still unanswered.”

As far as the claim is concerned, the Court said that the deceased left behind him his widow, the respondent and three daughters. However, the daughters were married and settled. Thus, only his spouse and son could count as dependants.

The Court concluded that the present case is not the one where the respondent's father's death caused such severe hardship that could only have been remedied through the compassionate appointment. Thus, it set aside the impugned orders and dismissed the appeal.

Also from the judgment - Compassionate Appointment To Be Granted Only In “Hand-to-Mouth” Cases, Not Due To Mere Fall In Life Standard : Supreme Court

Case Name: CANARA BANK VERSUS AJITHKUMAR G. K., CIVIL APPEAL NO. 255 OF 2025

Citation : 2025 LiveLaw (SC) 187

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