CANARA BANK versus AJITHKUMAR G.K.

Summary

The Supreme Court upheld Canara Bank's refusal of compassionate appointment to the son of an employee who died four months before superannuation. It held that indigence is the first precondition for such appointment, that terminal benefits and family pension must be weighed in assessing it, and, respectfully disagreeing with paragraph 19 of Canara Bank v. M. Mahesh Kumar, that the family was not in penury. It set aside the High Court's direction to appoint him without a suitability test, but under Article 142 directed a lump-sum payment of Rs. 2.5 lakh.

Issues

1. Whether the High Court was justified in directing the respondent's compassionate appointment more than two decades after his father's death, when he was over 44 years old.
2. Whether delay caused by litigation, and the respondent's present age, bar consideration of the claim.
3. Whether terminal benefits and family pension may be taken into account in assessing the family's indigence, and whether the bank properly assessed it.
4. Whether age relaxation under the 1993 scheme arises before indigence and other eligibility conditions are satisfied, and whether the appellate court could direct appointment without a suitability test.
5. Which scheme governs a compassionate appointment claim: the one in force on the date of death or the one in force on the date of consideration.

Provisions considered

• Articles 14 and 16, Constitution of IndiaHeld that compassionate appointment is an exception to equality in public employment. Without indigence it would become a reservation for dependants of employees dying in harness, contrary to Articles 14 and 16, so the family's financial condition must be assessed. (¶¶ 11, 44)
• Article 141, Constitution of IndiaHeld that the ratio, and even obiter, of a Supreme Court decision binds the High Courts, so the High Court could not be faulted for following Canara Bank v. M. Mahesh Kumar. A coordinate bench of the Supreme Court is not bound by an earlier decision's obiter or by a principle laid down without considering the issue from all relevant perspectives. (¶¶ 37, 38, 39, 48)
• Article 142, Constitution of IndiaInvoked to direct a lump-sum payment of Rs. 2.5 lakh to the respondent, in addition to Rs. 50,000 already paid, and close the proceedings, given the long litigation and the hope raised by his success in the High Court. (¶ 49)
• Order XLI Rule 33, Code of Civil Procedure, 1908Held that, unless a case is so exceptional as to call for a power akin to this rule, an appellate court should not grant relief beyond the order under appeal. The Division Bench, without invoking any such source of power, could not leave the appellant worse off by directing appointment where the Single Judge had directed only reconsideration. (¶¶ 36, 48)
• Objectives, paragraph 3.2 and paragraph 5.1, Canara Bank Scheme for Compassionate Appointment (Circular No. 154/93 dated 08.05.1993)Read the objectives (overcoming immediate financial difficulty; indigent circumstances are a precondition), paragraph 3.2 (offer kept open for a minor dependant) and paragraph 5.1 (discretionary age relaxation). Held that paragraph 3.2 does not make terminal benefits irrelevant, and that age relaxation arises only after all other conditions are met. (¶¶ 8, 35, 43)

Held

• The Court restated settled principles. Compassionate appointment is a concession, not a right or an inheritance; it is an exception to equality in public employment and must be strictly construed under the governing scheme. Its object is to relieve a family from sudden destitution, so it should be offered promptly. Indigence is the first precondition, and the family's financial condition, including retiral benefits, must be evaluated. (¶¶ 10, 11)
• Relief cannot be refused solely because of time lost in litigation through no fault of the claimant. Lapse of time is a valid ground only where the claim is lodged belatedly, and an application made within the period the scheme prescribes cannot be rejected for delay. As the respondent applied within a month and pursued his claim diligently, his present age did not bar consideration on merits. (¶¶ 25, 26, 27, 28)
• Compassionate appointment should be considered only in 'hand-to-mouth' cases, where the family struggles to meet basic expenses for lack of any steady source of sustenance. This is distinct from a mere fall in the standard of living after the breadwinner's death. There is no strait-jacket formula, and each case depends on the family's financial condition. (¶¶ 29, 30, 31)
• On the undisputed figures (the deceased was four months from retirement, the daughters were married, the widow and son lived in their own house, the family pension was not inadequate for two people compared with the pension the deceased would have drawn, and the net terminal benefits equalled what he would have received on superannuation), the family was not in penury. The bank's rejection was therefore unexceptionable. (¶¶ 32, 46)
• Respectfully disagreeing with paragraph 19 of Canara Bank v. M. Mahesh Kumar, the Court held that paragraph 3.2 of the 1993 scheme (keeping an offer open for a minor dependant) is a benevolent clause for exceptional cases and does not make terminal benefits irrelevant. Since indigence lies at the heart of the scheme, terminal benefits and family pension are relevant to the assessment. The Court noted that propriety would ordinarily call for a reference to a larger bench, but did not make one because of the delay the respondent had already suffered. (¶¶ 41, 42, 43, 44, 45, 47)
• Age relaxation under the scheme is a final-stage step that arises only when the claimant satisfies all other conditions, including indigence and suitability. Where indigence is not established, considering relaxation is an idle formality. The Court also accepted that the over-age ground could not be reopened in this case, because the original rejection on that ground had been set aside in the first round (res judicata). (¶¶ 34, 35)
• The scheme's terms, including the suitability assessment, must be followed strictly. The Division Bench erred in directing appointment without a suitability test, particularly since Canara Bank v. M. Mahesh Kumar itself directed only reconsideration. (¶¶ 33, 36, 48)
• The Court noted, without deciding, the conflict among three-Judge Bench decisions (N.C. Santhosh v. State of Karnataka and State of M.P. v. Amit Shrivas) on whether the scheme in force on the date of death or on the date of consideration governs, as well as the pending reference in SBI v. Sheo Shankar Tewari. It also observed that whether an executive compassionate-appointment policy can apply retrospectively is debatable. (¶¶ 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22)

Result

Appeal allowed; judgments of the Single Judge and Division Bench of the Kerala High Court set aside; under Article 142, the bank directed to pay the respondent a lump sum of Rs. 2.5 lakh within two months, in addition to Rs. 50,000 already paid, and the proceedings closed; no costs.