Supreme Court Upholds Financial Criteria for Compassionate Appointment: Central Bank of India vs. Nitin (2022)

Date of the Judgment: 3 August 2022

Citation: 2022 INSC 675

Judges: Justice Indira Banerjee and Justice V. Ramasubramanian

Can a family’s financial status be a deciding factor in granting compassionate appointment? The Supreme Court of India recently addressed this question in a case involving the Central Bank of India. The court clarified that financial need is a crucial element in determining eligibility for compassionate appointment, reinforcing that such appointments are not automatic entitlements but are meant to alleviate genuine hardship. This judgment emphasizes the importance of adhering to established rules and schemes for compassionate appointments.

Case Background

The respondent’s father, Mr. Y.P. Arawade, was employed as a Special Assistant at the Central Bank of India. Due to medical issues, he applied for voluntary premature retirement on April 16, 2015, which was approved effective June 26, 2015. Following his father’s retirement, the respondent applied for compassionate appointment on July 20, 2015, under the bank’s scheme. At the time of application, the respondent was employed as a Clerk at ICICI Bank, a fact he did not disclose in his application. He resigned from ICICI Bank on March 2, 2016, almost eight months after applying for compassionate appointment. The bank rejected his application on January 25, 2018, because the family’s income exceeded the permissible limit under the scheme, without considering his income from ICICI Bank.

Timeline

Course of Proceedings

The respondent’s application for compassionate appointment was rejected by the Central Bank of India. He then filed a writ petition before the Aurangabad Bench of the High Court of Judicature at Bombay. The High Court allowed the writ petition, directing the bank to reconsider the respondent’s case based on his seniority in filing the application, but from the date he left his job at ICICI Bank. The Central Bank of India then appealed to the Supreme Court of India.

Legal Framework

The case revolves around the ‘Scheme for Payment of Ex-Gratia Lump Sum Amount in lieu of Appointment on Compassionate Grounds’ which came into effect on December 14, 2005. This scheme provided for ex-gratia payments to employees seeking premature retirement due to medical incapacitation. The scheme was later revised by the Indian Banks’ Association, and adopted by the Central Bank of India as the ‘Compassionate Appointment Scheme’ effective from August 6, 2014. The Compassionate Appointment Scheme stipulated that the total monthly income of the family should not exceed 60% of the last drawn gross salary of the retired employee for compassionate appointment to be considered. The Supreme Court also considered the principles laid down in Umesh Kumar Nagpal v. State of Haryana [(1994) 4 SCC 138], which established that compassionate appointments are meant to alleviate immediate financial crises and are not a means of providing a job irrespective of financial condition.

Arguments

Appellant (Central Bank of India) Arguments:

• The appellant argued that the High Court erred in disregarding the financial criteria for compassionate appointment as laid down in the Compassionate Appointment Scheme.
• The appellant contended that the respondent had suppressed the fact of his employment with ICICI Bank in his application for compassionate appointment, which was a misrepresentation.
• The appellant relied on the judgment in State Bank of India vs. Raj Kumar [(2010) 11 SCC 661], which held that compassionate appointment is only traceable to the scheme framed by the employer and there is no right outside the scheme.
• The appellant submitted that compassionate appointment is an exception to the rule of equality and is meant to provide immediate relief to a family in crisis.

Respondent (Nitin) Arguments:

• The respondent argued that the right to compassionate appointment should not be defeated merely because the family was not indigent.
• The respondent relied on the judgments in Canara Bank & Anr. vs. M. Mahesh Kumar [(2015) 7 SCC 412], Balbir Kuar & Anr. vs. Steel Authority of India Ltd. & Ors. [(2000) 6 SCC 493], and Yogesh Nagraoji Ugale vs. State of Maharashtra through Principal Secretary & Ors. [(2020) 19 SCC 426] to support his claim.
• The respondent contended that the family benefit scheme is not a substitute for compassionate appointment.

Innovativeness of the argument: The appellant’s argument was based on the strict interpretation of the scheme and the established principles of compassionate appointment, while the respondent’s argument attempted to broaden the scope of compassionate appointment by emphasizing the need for relief irrespective of financial status.

Issues Framed by the Supreme Court

The Supreme Court addressed the following key issue:

1. Whether the High Court was correct in directing the appellant to consider the case of the respondent for compassionate appointment, ignoring the financial criteria stipulated in the Compassionate Appointment Scheme.

Treatment of the Issue by the Court

Authorities

Judgment

How each authority was viewed by the Court?

• Umesh Kumar Nagpal v. State of Haryana [(1994) 4 SCC 138] – The court followed this judgment, emphasizing that compassionate employment is intended to help families overcome sudden crises and is not a general entitlement.
• Canara Bank & Anr. vs. M. Mahesh Kumar [(2015) 7 SCC 412] – The court distinguished this case, clarifying that it does not negate the importance of financial criteria in compassionate appointment.
• Balbir Kuar & Anr. vs. Steel Authority of India Ltd. & Ors. [(2000) 6 SCC 493] – The court distinguished this case, noting that the issue was the family benefit scheme and not the financial criteria.
• Yogesh Nagraoji Ugale vs. State of Maharashtra through Principal Secretary & Ors. [(2020) 19 SCC 426] – The court distinguished this case, stating that the issue of financial criteria was not in question in that case.
• State Bank of India vs. Raj Kumar [(2010) 11 SCC 661] – The court followed this judgment, holding that compassionate appointments are governed by the employer’s scheme, and there is no right outside of it.

What weighed in the mind of the Court?

The Supreme Court’s decision was heavily influenced by the established principles of compassionate appointment, which are intended to provide immediate relief to families in genuine financial distress. The court emphasized that compassionate appointment is an exception to the rule of equality and is not a general entitlement. The suppression of material facts by the respondent also weighed heavily against him. The court’s reasoning was primarily based on the need to adhere strictly to the rules and schemes governing compassionate appointments, ensuring that such appointments are made only in cases of genuine need and not as a matter of course.

Fact:Law Ratio Analysis: The court’s reasoning was more influenced by legal considerations (70%) than factual aspects (30%). The emphasis was on the legal principles governing compassionate appointments and the specific rules of the scheme, rather than the specific facts of the case.

Logical Reasoning

Key Takeaways

• ✓ Compassionate appointment is not an automatic right but is subject to the rules and schemes framed by the employer.
• ✓ Financial criteria are a valid and lawful basis for rejecting a claim for compassionate appointment.
• ✓ Suppression of material facts in an application for compassionate appointment is a valid ground for rejection.
• ✓ Compassionate appointments are meant to alleviate immediate financial crises and not to provide employment irrespective of financial condition.
• ✓ The courts will strictly interpret the rules and schemes governing compassionate appointments.

Potential Future Impact: This judgment reinforces the importance of adhering to the rules and schemes for compassionate appointments. It clarifies that financial need is a crucial factor and that applicants must be transparent in their applications. This decision is likely to be followed in similar cases involving compassionate appointments in other public sector banks and government organizations.

Directions

The Supreme Court set aside the impugned judgment and order of the High Court. No specific directions were given.

Development of Law

Ratio Decidendi: The ratio decidendi of this case is that compassionate appointment is not a matter of right but an exception to the rule of equality, subject to the rules and schemes framed by the employer. Financial criteria are a valid ground for rejection, and suppression of material facts is also a valid ground for rejection. This case reinforces the principle that compassionate appointments are meant to alleviate immediate financial crises and not to provide employment irrespective of financial condition.

Change in Previous Positions of Law: This judgment does not introduce a new position of law but rather reinforces existing principles regarding compassionate appointments. It emphasizes the importance of financial criteria and the need for transparency in applications, clarifying that compassionate appointments are not a matter of course but are subject to strict conditions.

Conclusion

The Supreme Court allowed the appeal filed by the Central Bank of India, setting aside the High Court’s order. The court held that the High Court erred in ignoring the financial criteria for compassionate appointment and that the respondent’s suppression of his employment with ICICI Bank was a valid ground for rejection. The judgment reinforces that compassionate appointment is not an automatic right but is subject to the rules and schemes framed by the employer and is meant to alleviate genuine financial hardship.

Category

Parent Category: Service Law

Child Categories: Compassionate Appointment, Financial Criteria, Suppression of Facts

Parent Category: Compassionate Appointment Scheme

Child Category: Financial Eligibility

FAQ

Q: What is compassionate appointment?

A: Compassionate appointment is a provision that allows a dependent family member of a deceased or medically incapacitated employee to be appointed to a job, typically in the lower categories, to help the family overcome a sudden financial crisis.

Q: Is compassionate appointment a right?

A: No, compassionate appointment is not an automatic right. It is an exception to the rule of equality and is subject to the rules and schemes framed by the employer. It is meant to provide immediate relief in cases of genuine financial distress.

Q: Can an application for compassionate appointment be rejected based on financial criteria?

A: Yes, financial criteria are a valid ground for rejecting an application for compassionate appointment. The family’s income must be below a certain threshold, as specified in the employer’s scheme.

Q: What happens if an applicant suppresses material facts in their application?

A: Suppression of material facts, such as employment status, is a valid ground for rejection of an application for compassionate appointment.

Q: What should an applicant do to ensure their application for compassionate appointment is considered?

A: Applicants should ensure they meet all the eligibility criteria, including financial need, and provide accurate and complete information in their application. They should also apply without undue delay.