The Supreme Court of India, in a significant ruling, has held that compassionate appointments should be granted only to families facing extreme financial hardship, where they are below the poverty line and struggling to meet basic expenses. The Court emphasized that compassionate employment is not a vested right but a concession provided to alleviate immediate financial distress.
The judgment was delivered in the case of Canara Bank v. Ajithkumar G.K. (Civil Appeal No. 255 of 2025) by a Bench comprising Justice Dipankar Datta and Justice Prashant Kumar Mishra. The Supreme Court set aside the Kerala High Court’s direction to appoint Ajithkumar G.K. under the 1993 Compassionate Appointment Scheme and instead ordered the bank to pay ₹2.5 lakh as lump sum compensation, in addition to ₹50,000 already paid.
Background of the Case
The case arose from the death of V.C. Gopalakrishna Pillai, a Canara Bank employee, who passed away on December 20, 2001, just four months before retirement. His son, Ajithkumar G.K., applied for compassionate appointment under the bank’s 1993 Scheme, which was in force at the time.
However, Canara Bank rejected his application, citing two reasons:
1. The family was not in financial distress since the deceased’s widow was receiving a monthly family pension of ₹4,637.92, and they had received terminal benefits amounting to ₹3.09 lakh.
2. Ajithkumar exceeded the prescribed age limit of 26 years by eight months, making him ineligible.
After multiple rejections by the bank, Ajithkumar approached the Kerala High Court through a writ petition under Article 226 of the Constitution.
High Court’s Ruling and Canara Bank’s Appeal
A Single Judge Bench of the Kerala High Court ruled in favor of Ajithkumar, directing the bank to reconsider his application under the 1993 Scheme.
A Division Bench of the High Court later dismissed Canara Bank’s intra-court appeal, imposed a ₹5 lakh compensation on the bank, and directed it to appoint Ajithkumar in the sub-staff cadre.
Aggrieved by this, Canara Bank approached the Supreme Court, arguing that the respondent’s family was financially stable and therefore did not qualify for compassionate appointment.
Supreme Court’s Observations: Not a Vested Right, Only for Indigent Families
The Supreme Court ruled in favor of Canara Bank, setting aside the High Court’s order. Writing for the Bench, Justice Dipankar Datta made a crucial observation:
“Compassionate appointment is meant only for families in ‘hand-to-mouth’ situations, where they are below the poverty line and struggling to meet basic expenses. It is not an inheritance or a vested right.”
The Court clarified that the financial condition of the deceased employee’s family must be strictly examined before granting a compassionate appointment to prevent misuse of the scheme.
Key Legal Issues Considered by the Supreme Court
1. Is compassionate appointment a legal right?
– The Court reaffirmed that compassionate appointment is not a right but a concession to support families facing severe financial hardship.
2. Should terminal benefits and family pension be considered while assessing financial distress?
– Yes. The Court ruled that family pension and terminal benefits must be considered when evaluating whether a family is in genuine need of compassionate employment.
3. Can exceeding the age limit by a few months be a valid ground for rejection?
– The Court clarified that age relaxation is discretionary and can only be considered if the applicant qualifies under the scheme.
4. Did Canara Bank act arbitrarily?
– The Court found that the bank followed its policy correctly, though the prolonged delay in deciding the case was unfortunate.
Final Verdict
Acknowledging that the case had dragged on for over two decades, the Supreme Court invoked its powers under Article 142 of the Constitution to ensure equitable relief. It directed Canara Bank to pay ₹2.5 lakh as a lump sum settlement to Ajithkumar within two months, in addition to ₹50,000 already paid during the proceedings.
