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Canara Bank v. Ajithkumar G.K.

Civil Appeal · 2025 INSC 184Decided 11 Feb 2025
C.A. No.-000255-000255 - 2025 (arising out of SLP(Civil) No. 30532/2019)
Justice Dipankar Datta · Justice Prashant Kumar Mishra

Background

The respondent's father died in 2001 while working for Canara Bank, four months short of retirement, and the respondent applied for compassionate appointment under the bank's 1993 scheme. The bank rejected the claim, citing that the family received a family pension and that the respondent was over-age for the post (though the scheme allowed age relaxation which was not considered). After a writ petition succeeded in the Kerala High Court directing reconsideration, the bank's MD & CEO again refused the claim, and this refusal was challenged all the way up, with the High Court's Division Bench siding with the respondent based on an earlier Supreme Court ruling (Canara Bank v. M. Mahesh Kumar).

Decision Breakdown

The Supreme Court disagreed with the reasoning of the earlier coordinate-bench decision (Canara Bank v. M. Mahesh Kumar) that terminal benefits and family pension are irrelevant to compassionate appointment claims, holding instead that indigence, genuine financial need, is the fundamental prerequisite for such appointments, since the scheme exists to relieve immediate financial distress, not to create hereditary employment rights. Since a proper larger-bench reference would cause further long delay, the Court proceeded to hold that the bank's refusal was justified given the family's financial circumstances, and set aside the High Court's judgments. However, invoking its special equitable power under Article 142 of the Constitution, it directed the bank to pay the respondent a lump sum of Rs. 2.5 lakh (in addition to Rs. 50,000 already paid) given the decades of litigation and false hope generated.

Lesson Learnt

Compassionate appointment schemes exist to relieve genuine financial hardship after a breadwinner's death, not as an automatic entitlement. Courts will look at the family's actual financial condition (pension, terminal benefits) even where a scheme's language could support a different reading; but courts can still order fair monetary compensation using equitable powers when litigation has dragged on unreasonably.

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

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