JUDGEMENT REVIEW : COMPASSIONATE APPOINTMENT IS A MATTER OF POLICY AND CANNOT BE DECIDED BY COURTS

Case Name: Canara Bank vs. Ajithkumar G.
Court: Supreme Court of India
Citation: 2025 INSC 184
Bench: Justice Dipankar Datta and Justice Prashant Kumar Mishra
Date of Judgment: February 11, 2025

FACTS OF THE CASE

Ajithkumar G., the son of a deceased Canara Bank employee, applied for a compassionate appointment after his father passed away in December 2001, just four months before his retirement. At the time, the 1993 Scheme for Compassionate Appointments was in force. Canara Bank rejected the application in 2002, citing that the respondent’s mother was receiving a family pension of Rs. 4,367.92, and the family was not in financial distress. Displeased with this rejection, the respondent challenged the decision before the Kerala High Court, arguing that financial benefits alone should not determine eligibility. The High Court ruled in the favour of the plaintiff and asked Canara Bank to appeal the ruling in a higher court, commenting that financial distress is a mandatory condition for granting such compassionate appointments. After the appeal, this case reached the Supreme Court, where the bank asked for a reconsideration of its discretionary power when granting such appointments.

 

KEY ISSUES

1. Is financial distress a mandatory condition for granting compassionate appointments?
2. Should pension and retirement benefits be considered when assessing eligibility for such appointments?
3. Do public sector banks have discretion in granting compassionate appointments, or is it a legally enforceable right?

 

LEGAL PROVISIONS INVOLVED

1. Article 14 of the Constitution of India – Right to equality before the law.
2. Article 16 of the Constitution of India – Equal opportunity in public employment.
3. Article 142 of the Constitution of India – Power of the Supreme Court to do complete justice.
4. 1993 Scheme for Compassionate Appointments – Governing rules for compassionate hiring in public sector banks.
5. Canara Bank v. M. Mahesh Kumar (2015) 7 SCC 412 – Precedent regarding financial distress as a condition for compassionate appointments.

 

ARGUMENTS

 

Petitioner’s Arguments:

1. Compassionate appointments are not a right but an exception meant for families in dire financial distress.
2. The respondent’s family was financially stable, receiving a pension and other terminal benefits.
3. The High Court exceeded its jurisdiction by directing employment rather than reviewing the bank’s policy compliance.

 

Respondent’s Arguments:

1. The bank misinterpreted financial distress, ignoring future financial needs of the family.
2. Compassionate appointments should not be limited by rigid financial calculations.
3. Courts have previously ruled that receipt of pension alone should not disqualify a candidate.

 

ANALYSIS

The Supreme Court overturned the Kerala High Court’s ruling, holding that financial distress is a key factor in compassionate appointments. The Court again told that compassionate appointments are not a fundamental right to a family but they are based on policy that provides relief for families in genuine financial problems. It also confirmed that during this process,  pension and retirement benefits must also be considered while making a report of financial stability and that Canara Bank was right to reject the application for appointment. The Court also re-confirmed that the role of judiciary in matters of policy like this should be less unless and until there is a direct violation of rights. This judgment by the Supreme Court made sure that compassionate appointments remain an exception which would help in maintaining the balance between merit-based employment and considerations for financial stability.

 

JUDGMENT

 

1. Kerala High Court’s decision was overturned.
2. Canara Bank’s rejection of the appointment was upheld.
3. The Supreme Court reaffirmed that compassionate appointments must be based on financial distress.
4. A one-time ex gratia payment of Rs. 2.5 lakh was granted under Article 142.

 

CONCLUSION

The Supreme Court’s decision has gotten clarity to compassionate appointments by making it clear that these appointments should be a rare exception.  By making sure of the need for financial distress as a key eligibility requirement. The Supreme Court has again enforced the principle of merit-based employment in public sector banks. In this judgement, they approved a one-time ex gratia payment of Rs. 2.5 lakh under Article 142 to recognize the financial aspects of the plaintiff in the case while ensuring that the overall policy goal is preserved and the judiciary does not have a say in it. This ruling effectively balances judiciary and policy.

 

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WRITTEN BY TANMAYEE VELLORE RAGHUNANDAN