Supreme Court Upholds Regulation on Compassionate Appointment: Rajasthan State Road Transport Corporation vs. Danish Khan (2019)

Introduction

Date of the Judgment: 04 October 2019

Citation: 2019 INSC 1070

Judges: L. Nageswara Rao, J. and Hemant Gupta, J.

Can an employer deny compassionate appointment to a dependent of a deceased employee simply because they received compensation for the same death under the Motor Vehicles Act, 1988? The Supreme Court of India recently addressed this question, examining the validity of a regulation that differentiates between dependents based on whether the accident involved a vehicle owned by the employer. This case revolves around the Rajasthan State Road Transport Corporation’s policy on compassionate appointments and whether it violates the principle of equality enshrined in the Constitution of India. The judgment was authored by Justice L. Nageswara Rao, with Justice Hemant Gupta concurring.

Case Background

Mohd. Shahid, an employee of the Rajasthan State Road Transport Corporation (referred to as ‘the Corporation’), tragically died in a motor accident while traveling in a Corporation bus. The bus collided with another bus. Following his death, his son, Danish Khan (referred to as ‘the Respondent’), filed a claim with the Motor Accident Claims Tribunal, Tonk, under Sections 166 and 140 of the Motor Vehicles Act, 1988. The Respondent initially claimed Rs. 1,35,50,000 but was awarded Rs. 22,95,775 as compensation.

Subsequently, the Respondent applied to the Corporation for compassionate appointment. This request was rejected, citing Regulation 4(3) of the Rajasthan State Road Transport Corporation Compassionate Appointment Regulations, 2010, which prohibits compassionate appointment if compensation has been claimed from the Corporation for the same incident.

Aggrieved by this rejection, the Respondent challenged the constitutionality of Regulation 4(3) in a Writ Petition before the High Court of Judicature at Jaipur. The High Court ruled in favor of the Respondent, declaring Regulation 4(3) as discriminatory and violative of Article 14 of the Constitution of India.

Timeline

Legal Framework

The core of this case revolves around Regulation 4(3) of the Rajasthan State Road Transport Corporation Compassionate Appointment Regulations, 2010. This regulation states:

“On the occasion of death of any employee of the Corporation while performing his duty or a vehicular death by the vehicle belonging to the Corporation. If the legal representatives of the deceased employee seek compensation from the Corporation by filing a claim petition before the accident tribunal and the same is awarded or the matter remains pending before the tribunal. In such a case the Legal representatives of the deceased employee shall have no right to seek appointment on compassionate ground, if compensation is awarded or the matter remains pending before the tribunal. If on the death of an employee of the Corporation his Legal representative at the time of compassionate appointment files an application for the same in the prescribed format then the application for appointment on compassionate ground has to be supplemented with an Affidavit on a non-judicial stamp paper of Rs.10/- by the legal representative that no claim petition against the corporation has been filed before any competent court and also that no such claim shall be filed in the future and if in future even if any of the legal representatives files a claim petition before MACT then the employer/ Corporation shall have right to cancel my appointment without any notice and that I won’t file any case against such dismissal before any competent court.”

The High Court had found this regulation to be in violation of Article 14 of the Constitution of India, which guarantees equality before the law and equal protection of the laws. The High Court reasoned that denying compassionate appointment to dependents who received compensation from the Corporation, while allowing it for those who received compensation from other sources, was discriminatory.

The Motor Vehicles Act, 1988, under which the compensation was claimed, provides for compensation to victims of road accidents.

Arguments

The Rajasthan State Road Transport Corporation (the Appellant) argued that the classification of dependents into two categories: (1) those who receive compensation from the Corporation and (2) those who receive compensation from other sources, is a reasonable classification. The Corporation contended that this classification is based on an intelligible differentia, which is the additional financial burden of providing both compensation and compassionate appointment.

The Appellant submitted that the object of Regulation 4(3) is to avoid the dual liability of the Corporation in paying compensation under the Motor Vehicles Act, 1988 and providing compassionate appointment. They argued that dependents of employees who claim both compensation and compassionate appointment from the Corporation form a separate class from those who claim compensation from other sources and compassionate appointment from the Corporation.

The Respondent (Danish Khan) argued that Regulation 4(3) is discriminatory as it treats dependents of employees who die in accidents involving Corporation vehicles differently from those who die in accidents involving other vehicles. The High Court agreed with the Respondent, holding that the object of compassionate appointment is to mitigate the hardship of the family, and therefore, all dependents should be treated equally, irrespective of the source of compensation.

The High Court had reasoned that the dependents of employees who die in accidents involving Corporation vehicles should not be treated differently from dependents of employees who die in accidents involving other vehicles. It was argued that the purpose of compassionate appointment is to provide relief to the family in distress, and this purpose should be applied uniformly.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. Whether Regulation 4(3) of the Rajasthan State Road Transport Corporation Compassionate Appointment Regulations, 2010, is discriminatory and violative of Article 14 of the Constitution of India?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

Judgment

The Supreme Court overturned the High Court’s decision, holding that Regulation 4(3) of the Rajasthan State Road Transport Corporation Compassionate Appointment Regulations, 2010, is not discriminatory and does not violate Article 14 of the Constitution of India.

How each authority was viewed by the Court?

• State of Mysore & Anr vs P . Narasing Rao, 1968 SCR (1) 407*: The Supreme Court relied on this case to reiterate that Article 14 permits reasonable classification. This authority was used to support the Court’s view that the classification made by Regulation 4(3) was valid.
• National Insurance Company Limited v. Rekhaben and Others, (2017) 13 SCC 547*: The Supreme Court used this case to clarify that the salary earned through compassionate appointment cannot be deducted from compensation under the Motor Vehicles Act, 1988, unless the employer is also the owner of the vehicle. This was used to show that the Corporation’s intent to avoid dual liability was a valid concern.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to balance the welfare of the dependents of deceased employees with the financial implications for the Rajasthan State Road Transport Corporation. The Court emphasized that the classification made by Regulation 4(3) was reasonable and had a rational nexus with the objective of avoiding dual liability for the Corporation. The Court also highlighted that the two categories of dependents were not similarly situated, justifying the differential treatment.

Fact:Law Ratio

The court’s reasoning was primarily based on legal principles and precedents, with a lesser emphasis on the factual aspects of the case.

Logical Reasoning:

The Court considered the argument that all dependents should be treated equally, but it rejected this view, emphasizing that the financial implications for the Corporation justified the differential treatment. The Court also considered the purpose of compassionate appointment, but it ultimately prioritized the need to avoid placing an undue financial burden on the Corporation.

The Court’s decision was based on a step-by-step analysis of the legal principles involved. It first determined that there were two distinct classes of dependents. It then examined whether the classification was based on an intelligible differentia and whether there was a rational nexus between the classification and the object of the regulation. The Court found that both conditions were satisfied, and therefore, the regulation was not discriminatory.

The Court quoted the following from the judgment:

“The reason for the disqualification of the dependents of an employee who died in an accident involving the vehicle of the Corporation is to avoid extra burden on the Appellant- Corporation.”

“The dependents of a deceased employee who claim compensation from the Corporation under the Act and compassionate appointment from the Appellant-Corporation from a separate class.”

“We find there is a rational nexus between the basis of classification and the object sought to be achieved by the Regulation.”

There were no dissenting opinions in this case.

The implications of this judgment are that employers can make regulations that differentiate between dependents of deceased employees based on the source of compensation, provided that the classification is reasonable and has a rational nexus with the objective of the regulation. This could have implications for other public sector undertakings with similar regulations.

There were no new doctrines or legal principles introduced in this case. The Court relied on existing principles of equality and reasonable classification under Article 14 of the Constitution of India.

Key Takeaways

• Employers can create regulations that differentiate between dependents of deceased employees based on the source of compensation, provided the classification is reasonable.
• The financial burden on the employer can be a valid basis for creating different classes of dependents for compassionate appointments.
• Dependents of employees who receive compensation from the employer can be treated differently from those who receive compensation from other sources, as they are not similarly situated.
• This judgment could influence similar cases in other public sector undertakings.

Directions

The Supreme Court set aside the judgment of the High Court and allowed the appeal of the Rajasthan State Road Transport Corporation. The Respondent’s claim for compassionate appointment was rejected.

Specific Amendments Analysis

There were no specific amendments discussed in this judgment.

Development of Law

The ratio decidendi of this case is that a regulation that denies compassionate appointment to the dependents of a deceased employee who have received compensation under the Motor Vehicles Act, 1988, from the same employer, is not discriminatory under Article 14 of the Constitution of India, provided that such a classification is based on an intelligible differentia and has a rational nexus with the object sought to be achieved by the regulation. This decision clarifies that employers can differentiate between dependents based on the source of compensation, especially when it involves an additional financial burden on the employer. There is no change in the previous position of law.

Conclusion

In conclusion, the Supreme Court upheld the validity of Regulation 4(3) of the Rajasthan State Road Transport Corporation Compassionate Appointment Regulations, 2010, finding that it is not discriminatory. The Court emphasized that the classification of dependents based on the source of compensation is reasonable and has a rational nexus with the objective of avoiding dual liability for the Corporation. This decision clarifies the scope of Article 14 in the context of compassionate appointments and provides guidance for other public sector undertakings with similar regulations.