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Canara Bank & Anr. v. M. Mahesh Kumar

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 260 of 2008)Decided 15 May 2015
Civil Appeal No. 260 of 2008
Justice T.S. Thakur · Justice R. Banumathi

Background

The respondent's father, a bank clerk, died in service in 1998, and the respondent applied for compassionate appointment under Canara Bank's 1993 "Dying in Harness Scheme." The bank rejected the claim in 1999, saying the family's financial condition did not justify it. While the matter was pending, the bank adopted a 2005 scheme that scrapped compassionate appointment in favour of a one-time ex-gratia payment, and the bank argued this newer scheme, not the 1993 one, should govern the respondent's claim. The Kerala High Court (Single Judge, upheld by the Division Bench) ordered the bank to reconsider the claim under the 1993 scheme; the bank appealed to the Supreme Court along with two similarly-placed cases.

Decision Breakdown

The Supreme Court held that a compassionate-appointment claim must be decided under the scheme in force when the employee died and the claim first arose, here, the 1993 scheme, not a later scheme adopted while the claim was still pending, since an administrative circular cannot retrospectively strip away an already-accrued right. The Court also noted the 2005 ex-gratia-only scheme had itself since been superseded by a 2014 scheme reviving compassionate appointment, undercutting the bank's "passage of time" argument. It rejected the bank's argument that the family's receipt of pension/terminal benefits disqualified them, following precedent that such payments are not a substitute for compassionate employment. All three connected appeals were dismissed, and the bank was directed to reconsider each respondent's case under the 1993 scheme.

Lesson Learnt

When an employer changes its compassionate-appointment or similar welfare policy while a claim is already pending, the claim is ordinarily still governed by the policy that existed at the time of the employee's death, not a later, less generous one: an administrative circular generally cannot retroactively cancel an already-accrued entitlement. Receiving a pension or terminal benefits does not by itself disqualify a family from also seeking compassionate appointment.

Official source (sci.gov.in)View Judgment (PDF)

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