Supreme Court Denies Compassionate Appointment Based on Gratuity Claim: Indian Bank vs. Promila (2020) INSC 12

Introduction

Date of the Judgment: 8 January 2020

Citation: (2020) INSC 12

Judges: Sanjay Kishan Kaul, J., K.M. Joseph, J.

Can a family claim compassionate appointment after receiving full gratuity benefits following the death of a bank employee? The Supreme Court of India recently addressed this question in a case involving Indian Bank and the family of a deceased employee. The core issue revolved around whether the family of a deceased employee, who had already received gratuity, could claim compassionate appointment under the bank’s scheme. The judgment was delivered by a two-judge bench comprising Justice Sanjay Kishan Kaul and Justice K.M. Joseph, with Justice Sanjay Kishan Kaul authoring the opinion.

Case Background

Jagdish Raj, husband of Respondent No. 1 and father of Respondent No. 2, was employed as a Clerk-cum-Shroff at Indian Bank. He passed away on 15 January 2004, while still in service. At the time of his death, he was earning a gross monthly salary of Rs. 16,486.60. Following his demise, the bank calculated and sanctioned benefits amounting to Rs. 5,45,872 for his family. After deductions for staff housing and vehicle loans, a net payment of Rs. 2,99,672 was made to the family, along with a monthly pension of Rs. 5,574.12. Jagdish Raj was survived by his wife (Respondent No. 1) and three minor children. Respondent No. 1 was employed at the time of her husband’s death. An application for compassionate employment was made on 24 January 2004, on behalf of their son (Respondent No. 2), who was a minor at the time.

Timeline

Legal Framework

The primary legal framework in this case is the compassionate appointment scheme of the Indian Bank. The relevant scheme in force at the time of Jagdish Raj’s death was Circular No. 56/79, which came into effect on 4 April 1979. Para 7 of this scheme states:

“7. According to an agreement with the Union, the dependant will either be paid gratuity as if the deceased employee has served the full term of service, which will be calculated as per gratuity rules on the basis of his/her last drawn pay at the time of his/her death or given the option for appropriate employment for one dependent subject to the rules framed for appointment under compassionate grounds. It is therefore, obvious that appointments under compassionate grounds will be open only to dependents who do not opt for payment of gratuity for the full term of service of the employee who died while in service.”

This provision clearly states that dependents can either receive gratuity or opt for compassionate appointment but not both. Para 8 of the scheme further states:

“8. No person or dependent can claim, as a matter of right, employment in the Bank under this Scheme and appointments will be considered purely at the sole discretion of the Bank. The Bank reserves to itself the right to modify, suspend, or withdraw the scheme at any time at its sole discretion and the Bank’s decision in this regard will be final and cannot be called in question.”

This clause emphasizes that compassionate appointment is not a right but a discretion of the bank. A new scheme was introduced on 5 November 1985, but para 4 clarified that the norms for appointment of a dependent of a confirmed employee who dies in service remained unchanged.

Arguments

Arguments by the Appellants (Indian Bank):

• The bank argued that the relevant scheme for compassionate appointment was the one in force on the date of the employee’s death (15 January 2004), which was the 1979 scheme.
• According to the 1979 scheme, the family had the option of either receiving gratuity or compassionate appointment. Since the family had availed the gratuity, the bank was not obligated to offer compassionate appointment.
• The bank contended that compassionate appointment is not a matter of right, but is at the bank’s discretion.
• The bank highlighted that subsequent schemes introduced in 2004 and 2005 were not applicable to the case, but even under those schemes, the respondents would not qualify due to the income criteria.

Arguments by the Respondents (Promila and her son):

• The respondents sought compassionate appointment for their son, arguing that the family was in financial distress after the demise of Jagdish Raj.
• They contended that the bank should consider their application under the 2004 scheme, which they believed was more beneficial.
• They argued that the ex-gratia benefits were held back and sought interest on the same.

Issues Framed by the Supreme Court

The Supreme Court framed the following key issue:

1. Whether the case of the respondents should be examined in the context of the scheme of 4 April 1979 or subsequent schemes?

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Cases:

• Canara Bank & Anr. v. M. Mahesh Kumar [(2015) 7 SCC 412] – This case established that the cut-off date for applying a compassionate appointment scheme is the date of the employee’s death. The Court held that the claim for compassionate employment under a scheme of a particular year could not be decided based on a subsequent scheme.
• State of Himachal Pradesh & Anr. v. Parkash Chand [(2019) 4 SCC 285] – This case emphasized that courts should not substitute or alter the terms of a scheme in judicial review.

Legal Provisions:

• Circular No. 56/79, dated 4 April 1979 – The compassionate appointment scheme in force at the time of Jagdish Raj’s death, which stated that dependents could either receive gratuity or compassionate appointment, but not both.
• Circular No. PRNL/09/2004-05, dated 27 April 2004 – A new scheme introduced by the bank, which was not applicable to the respondents’ case.
• Circular No. PRNL/72/2005-06, dated 30 August 2005 – A scheme that denied compassionate appointment to dependents of employees who died in service.

Judgment

How each authority was viewed by the Court:

• Canara Bank & Anr. v. M. Mahesh Kumar [(2015) 7 SCC 412]: The Supreme Court followed this authority, emphasizing that the relevant scheme is the one in force on the date of the employee’s death.
• State of Himachal Pradesh & Anr. v. Parkash Chand [(2019) 4 SCC 285]: The Supreme Court relied on this authority to reiterate that courts should not substitute or alter the terms of a scheme.
• Circular No. 56/79, dated 4 April 1979: The court considered this scheme as the applicable scheme, which stated that dependents could either receive gratuity or compassionate appointment, but not both.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the strict interpretation of the applicable scheme and the legal principles governing compassionate appointments. The court emphasized that compassionate appointment is not a matter of right and that the relevant scheme is the one in force on the date of the employee’s death. The fact that the family had already availed the gratuity benefit was a key factor in denying the compassionate appointment. The court also noted that subsequent schemes were not applicable and that even under those schemes, the family would not qualify due to the income criteria. The court’s reasoning was based on the legal position that courts cannot substitute or alter the terms of a scheme.

The Court’s reasoning was primarily based on legal interpretations and precedents. The court emphasized that it could not substitute or alter the terms of the scheme, as highlighted in State of Himachal Pradesh & Anr. v. Parkash Chand [(2019) 4 SCC 285]. The court also noted that compassionate appointment is not an alternative to regular employment, and its purpose is to provide immediate relief to the family at the time of the employee’s death.

The Supreme Court stated, “The option of compassionate appointment was available only if the full amount of gratuity was not taken, something which was done. Thus, having taken the full amount of gratuity, the option of compassionate appointment really was not available to the respondents.”

The Court further observed, “We have to keep in mind the basic principles applicable to the cases of compassionate employment, i.e., succor being provided at the stage of unfortunate demise, coupled with compassionate employment not being an alternate method of public employment.”

The Court also noted, “It is not for the Courts to substitute a Scheme or add or subtract from the terms thereof in judicial review.”

Key Takeaways

• Compassionate appointment is not a matter of right but a discretion of the employer.
• The scheme applicable for compassionate appointment is the one in force on the date of the employee’s death.
• If the family has availed the gratuity benefit, they cannot claim compassionate appointment under the 1979 scheme of Indian Bank.
• Courts cannot substitute or alter the terms of a scheme in judicial review.
• Sympathy alone cannot be a basis for granting relief in cases of compassionate appointment.

Potential Future Impact: This judgment reinforces the principle that compassionate appointments must adhere strictly to the terms of the applicable scheme. It clarifies that courts should not interfere with the policy decisions of employers and that compassionate appointments are not an alternative to regular employment. This decision may lead to a more cautious approach by courts in granting relief in compassionate appointment cases, emphasizing the need for strict compliance with the relevant scheme.

Directions

The Supreme Court set aside the impugned order of the High Court and dismissed the writ petition filed by the respondents. No specific directions were given other than the order to bear their own costs.

Specific Amendments Analysis

There were no specific amendments discussed in this judgment.

Development of Law

The ratio decidendi of this case is that compassionate appointment schemes must be strictly interpreted and applied based on the scheme in force on the date of the employee’s death. The court reiterated that compassionate appointment is not a matter of right and that if a family has availed gratuity, they are not entitled to compassionate appointment under the 1979 scheme. This decision reinforces the existing legal position and does not introduce any new legal principles but emphasizes the importance of strict adherence to the terms of the applicable scheme.

Conclusion

In the case of Indian Bank & Ors. vs. Promila & Anr., the Supreme Court held that the family of a deceased bank employee who had already received full gratuity benefits was not entitled to compassionate appointment. The court emphasized that the applicable scheme was the one in force on the date of the employee’s death, and that compassionate appointment is not a matter of right. This decision reinforces the importance of strict adherence to the terms of compassionate appointment schemes and clarifies that courts should not substitute or alter the terms of such schemes. The judgment highlights that compassionate appointment is intended to provide immediate relief to the family at the time of the employee’s death and is not an alternative to regular employment.

Category

• Service Law
  • Compassionate Appointment
  • Gratuity
  • Indian Bank
• Service Law
  • Circular No. 56/79

FAQ

Q: What is compassionate appointment?

A: Compassionate appointment is a provision that allows a family member of a deceased government or public sector employee to get a job in the same organization to provide financial support to the family.

Q: What was the main issue in the Indian Bank vs. Promila case?

A: The main issue was whether the family of a deceased bank employee could claim compassionate appointment after already receiving full gratuity benefits.

Q: What did the Supreme Court decide in this case?

A: The Supreme Court decided that the family was not entitled to compassionate appointment because they had already received the gratuity, and the applicable scheme did not allow both.

Q: Which scheme was applicable in this case?

A: The scheme applicable was the one in force on the date of the employee’s death, which was the 1979 scheme.

Q: Can a court change the terms of a compassionate appointment scheme?

A: No, the Supreme Court emphasized that courts cannot substitute or alter the terms of a scheme in judicial review.

Q: What is the key takeaway from this judgment?

A: The key takeaway is that compassionate appointment is not a matter of right and must strictly adhere to the terms of the applicable scheme.