Supreme Court Sets Aside Kerala High Court’s Order Granting Compassionate Appointment, Emphasizes Indigence as a Mandatory Criterion—“Compassionate Appointments Are Not an Entitlement but an Exception”

Court’s Decision

The Supreme Court overturned the Kerala High Court’s orders that had directed the appointment of the respondent on compassionate grounds under the 1993 scheme of Canara Bank. The Court ruled that the respondent’s family was not in financial distress or indigence, a fundamental requirement for compassionate appointment. While the Court acknowledged the respondent’s prolonged wait for justice, it invoked its powers under Article 142 of the Constitution to direct Canara Bank to pay ₹2.5 lakhs to the respondent as a final settlement, in addition to ₹50,000 already paid.

Facts

1. The respondent’s father, an employee of Canara Bank, passed away in 2001 while still in service, leaving behind his widow, the respondent (his son), and three daughters. At the time of his death, the family received:
   • Family pension of ₹4,637.92 per month.
   • Terminal benefits of ₹3.09 lakhs.
   • They also owned a house.
2. The respondent applied for compassionate appointment under the 1993 Scheme, which aimed to provide relief to families in indigent circumstances due to the loss of the sole breadwinner.
3. The application was rejected by Canara Bank in 2002 on the following grounds:
   • The family’s financial position, bolstered by terminal benefits and pension, was sufficient.
   • The respondent was overage by eight months for the sub-staff cadre post.
4. The respondent and his mother made multiple requests for reconsideration, all of which were denied by the bank.
5. In 2005, Canara Bank introduced a new scheme for lump sum ex-gratia payment, discontinuing appointments on compassionate grounds. However, the respondent’s application was still governed by the 1993 Scheme, as it was filed before the new policy.
6. The respondent filed a writ petition in the Kerala High Court, which quashed the rejection and directed reconsideration under the 1993 Scheme. Despite this, Canara Bank once again rejected the claim, leading to further litigation.
7. The Division Bench of the Kerala High Court not only upheld the Single Judge’s directions but also ordered the respondent’s appointment and imposed exemplary costs of ₹5 lakhs on Canara Bank for their handling of the case.

Issues

1. Whether the financial condition of the respondent’s family disqualified him from compassionate appointment under the 1993 Scheme?
2. Whether the High Court was correct in directing the respondent’s appointment despite his financial position and without a suitability test?
3. Whether relaxation of the upper age limit should have been granted?

Petitioner’s Arguments (Canara Bank)

1. Financial Condition: The family’s financial condition, supported by terminal benefits and a family pension, did not justify the need for compassionate appointment.
2. Eligibility: The respondent did not qualify for compassionate appointment due to the absence of indigence and being overage by eight months.
3. Suitability Test: The High Court erred in directing the appointment without assessing the respondent’s suitability for the sub-staff post.
4. Precedent: The High Court’s reliance on Canara Bank v. M. Mahesh Kumar was misplaced, as the facts of the case differed significantly.

Respondent’s Arguments

1. Financial Hardship Irrelevant: Under the 1993 Scheme, financial hardship was not a condition for compassionate appointment. Terminal benefits and pension could not justify rejection.
2. Age Relaxation: The bank arbitrarily refused to relax the age limit, despite having the power to do so under the scheme.
3. Delay by Bank: The prolonged litigation and delays caused by the bank’s actions had unfairly deprived the respondent of timely relief.
4. Precedent: The respondent relied on Canara Bank v. M. Mahesh Kumar, where it was held that pension and terminal benefits could not substitute compassionate appointment.

Analysis of the Law

1. Objective of Compassionate Appointment: The 1993 Scheme aims to provide immediate relief to families in dire financial distress due to the sudden death of the breadwinner. Indigence is the core criterion, and compassionate appointments are not an entitlement or a mode of recruitment.
2. Evaluation of Financial Condition: The Court held that terminal benefits, pensions, and family income must be considered to determine indigence. The respondent’s family, owning a house and receiving substantial benefits, did not meet the criteria for indigence.
3. Age Relaxation: Relaxation of the upper age limit applies only if the applicant satisfies all other eligibility criteria, including indigence and suitability. In this case, the threshold of indigence was not crossed.
4. High Court’s Overreach: The High Court erred by directing the respondent’s appointment without subjecting him to a suitability test, violating the scheme’s procedural requirements.
5. Precedent in Canara Bank v. M. Mahesh Kumar: While the Kerala High Court heavily relied on this precedent, the Supreme Court clarified that financial evaluation is integral to compassionate appointments.

Precedent Analysis

The Court analyzed various precedents, including:

• Umesh Kumar Nagpal v. State of Haryana (1994): Compassionate appointments are for families in penury and not to provide employment as a matter of right.
• Union of India v. Amrita Sinha (2021): Appointment must be based on financial evaluation, and non-indigent families cannot claim the benefit.
• Canara Bank v. M. Mahesh Kumar (2015): Pension and terminal benefits do not automatically disqualify a claimant but must be considered in the financial assessment.

The Court reconciled these judgments, emphasizing that financial hardship is a prerequisite.

Court’s Reasoning

1. No Indigence: The respondent’s family was not in financial distress, as they received a family pension and terminal benefits, owned a house, and had no significant liabilities.
2. Suitability Assessment Omitted: The High Court directed the respondent’s appointment without evaluating his suitability for the post, contrary to the scheme’s requirements.
3. Prolonged Litigation: While acknowledging the respondent’s long wait, the Court noted that delays were not entirely attributable to him.

Conclusion

The Supreme Court upheld the denial of compassionate appointment, ruling that:

• The respondent’s family did not meet the indigence criterion.
• The High Court erred in bypassing the suitability requirement and ordering an appointment. The Court invoked Article 142 to grant the respondent a lump sum of ₹2.5 lakhs as final relief, closing the matter.

Implications

This judgment clarifies that:

• Compassionate appointments are exceptions to the rule of merit-based public employment and are contingent on financial need.
• Terminal benefits and pensions must be considered in assessing indigence.
• Judicial directions cannot bypass the procedural requirements of compassionate appointment schemes.

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