"Unless appointment is made soon after the need to mitigate hardship arises, the very objective of such appointments may be frustrated." With this significant observation, the Supreme Court examined the long-standing issue of compassionate appointments in the case between Canara Bank and Ajithkumar G.K. The dispute revolved around the rejection of Ajithkumar’s request for a job under the bank’s 1993 scheme following his father’s demise in service. The case saw multiple rounds of litigation, with the Kerala High Court ruling in favor of the applicant, prompting Canara Bank to challenge the decision.
Brief Facts:
Canara Bank appealed against the Kerala High Court’s Division Bench judgment upholding a Single Bench order directing the bank to grant compassionate appointment to Ajithkumar G.K., son of a deceased employee.
Ajithkumar’s father passed away in service on December 20, 2001, with four months left until retirement. Under the bank’s 1993 scheme, he applied for compassionate appointment, but his request was rejected due to his mother’s family pension and exceeding the age limit of 26 years. Multiple reconsideration requests were also denied.
In 2005, the bank replaced the scheme with a lump sum ex-gratia policy. Ajithkumar’s writ petition in 2015 led to a High Court order directing reconsideration, but the bank again denied his request. A second writ petition was allowed in 2016, ordering his appointment and Rs. 5 lakh compensation. The bank’s intra-court appeal was dismissed with an additional Rs. 5 lakh exemplary cost, leading to this appeal.
Contentions of the Petitioner:
The petitioner argued that the reliance on paragraph 19 of the Canara Bank decision was misplaced. The case had different facts, and the paragraph contained mere observations, not a binding precedent. Moreover, the issue of terminal benefits affecting financial status was never decided in that case, and the ruling had been referred to a larger bench.
The petitioner contended that the Single Judge and Division Bench’s decisions contradicted Supreme Court precedents. In compassionate appointments, terminal benefits and family pensions must be considered when assessing financial need.
On age relaxation, the petitioner stated that it applies only if the applicant is otherwise eligible. Since the respondent was found ineligible due to a lack of indigent circumstances, age relaxation was irrelevant. The High Court, therefore, applied incorrect legal tests in allowing the claim.
Contentions of the Respondent:
The respondent argued that the 1993 scheme did not require financial assessment for compassionate appointments. Paragraph 19 of Canara Bank supported that financial condition could not be a basis for rejection. The claim’s dismissal due to pension and terminal benefits contradicted this precedent.
The respondent contended that the age-bar argument was untenable. The petitioner did not consistently raise this issue, and the High Court had quashed the rejection in 2015, making the objection barred by res judicata.
The petitioner had the power to relax the age limit but arbitrarily rejected the application without considering this. There was no real assessment of financial need, and the conclusion relied only on pension and benefits, contrary to Canara Bank. Given the long delay, the respondent sought dismissal of the appeal with costs.
Observation of the Court:
The Court meticulously examined the issue of compassionate appointment, emphasizing that such appointments must be granted at the earliest to serve their intended purpose. The Court observed that "unless appointment is made soon after the need to mitigate hardship arises," the very objective of such appointments may be frustrated. However, it clarified that delays caused by judicial proceedings should not be held against the applicant, stating that "it would, therefore, not be prudent or wise to reject a claim only because of the time taken by the court(s) to decide the issue."
On the financial condition of the applicant's family, the Court stressed that the assessment must be thorough, stating, "examination of the financial condition to ascertain whether the respondent and his mother were left in utter financial distress... is not something that can be loosely brushed aside." It distinguished between mere loss of income and indigent circumstances, noting that compassionate appointments should be reserved for cases where the family is in a "hand-to-mouth" situation.
Addressing the binding nature of precedent, the Court remarked that while High Courts must follow Supreme Court rulings, even an "obiter dictum of this Court could be binding on the high courts." However, the Court clarified that it was not bound by the previous decision in Canara Bank and found that "the objectives of the scheme of 1993 and the requirements of disclosure relating to financial condition" were clear indicators that indigence is a fundamental criterion.
Ultimately, the Court reaffirmed that compassionate appointments cannot become a form of hereditary entitlement, cautioning that "grant of relief in furtherance of protective discrimination would result in a sort of reservation for the dependents of the employee dying-in-harness, thereby directly conflicting with the ideal of equality guaranteed under Articles 14 and 16 of the Constitution."
The decision of the Court:
The impugned judgments of both the Division Bench and Single Bench are set aside. The civil appeal is allowed. No costs.
Case Title: Canara Bank v. Ajithkumar G.K.
Case no: CIVIL APPEAL NO. 255 OF 2025
Citation: 2025 Latest Caselaw 131 SC
Coram: Hon'ble Mr. Justice Dipankar Datta and Hon'ble Mr. Justice Manmohan
Advocate for Petitioner: Adv. Rajesh Kumar Gautam
Advocate for Respondent: Adv. Mohammed Sadique T.A.
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