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Judgment Summary — Compassionate Appointment Claim (Widow of Suresh Chandra Pathak)

Factual and Procedural Background

The petitioner is the widow of Suresh Chandra Pathak. The husband died on 6-4-1999 leaving behind the petitioner and four minor children. On 20-4-1999 the petitioner applied for appointment on compassionate grounds under the Bank's Scheme for employment of dependents of employees dying in harness. The Bank rejected the claim by an order dated 30-9-2000 (Annexure-5 to the writ petition) stating only that the request "has not found favour with the authorities" — a laconic refusal without stated reasons. The Bank's own internal report dated 22-5-1999 (Annexure-8) had indicated, by marking "Yes" in the eligibility column, that the petitioner was eligible for appointment under the Scheme. The record shows terminal dues paid to the petitioner (PF, Gratuity, Benevolent Fund, Leave Encashment, Ex-Gratia, Others, LIC) and that the petitioner owned a self-occupied house assessed at Rs. 2,00,000. The family pension column in the Bank's report was marked "Nil." The petitioner contended that the order contained no reasons and that the terminal dues and other payments could not, without consideration of circumstances, justify denial of compassionate appointment; she also alleged that much of the terminal benefits were exhausted repaying loans and interest taken for the deceased's medical treatment. The writ petition challenged the impugned order; the Court considered the record and arguments and allowed the petition, directing reconsideration in accordance with the Scheme and observations made in the judgment.

Legal Issues Presented

  1. Whether the Bank's rejection of the petitioner's application for compassionate appointment by a laconic order that assigns no reasons is legally sustainable.
  2. Whether the amounts received by the petitioner as terminal dues and the presence of a self-occupied house (assessed at Rs. 2 lakhs), together with a monthly pension of Rs. 3,093/-, constitute "sufficient means of livelihood" to deny compassionate appointment under the Scheme.
  3. How paragraph 10 of the Scheme (listing factors to be considered in assessing financial condition of the deceased's family) should be applied to determine entitlement to compassionate appointment.

Arguments of the Parties

Petitioner's Arguments

  • The impugned order contains no reasons and does not explain why the petitioner was not fit for appointment under the Scheme.
  • The petitioner had no source of livelihood and was left with four minor children dependent on her.
  • Receipt of terminal dues (PF, Gratuity, Benevolent Fund, Leave Encashment, Ex-gratia, Life Insurance) could not automatically be treated as sufficient to deny compassionate appointment.
  • Much of the terminal benefits were spent repaying loans and interest incurred for the deceased's cancer treatment, leaving the petitioner with little real means of sustenance.

Bank's Arguments

  • Counsel for the Bank urged that the order was passed in accordance with law and having regard to the spirit of the Scheme.
  • However, the Bank's counsel did not point to material on record showing reasons justifying the rejection of the compassionate appointment application.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Writ Petition No. 35344 of 2001, Smt. Kanti Srivastava v. State Bank of India Held that family pension scheme cannot be equated with compassionate appointment (the two are distinct). The case relied on earlier authority (Balbir Kaur). The Court relied on this decision to underscore that monetary benefits such as pension do not automatically displace entitlement to compassionate appointment and to support the proposition that compassionate appointment is a distinct, beneficial relief to be considered liberally.
Balbir Kaur v. Steel Authority of India Ltd., 2000 (3) ESC 1618 : (2000) 6 SCC 493 : AIR 2000 SC 1596 (SC) Authority for the proposition that a lump sum monetary amount given at or after death may offer solace to a bereaved family but is not a replacement for the compassionate appointment; the monetary benefit may assist the family temporarily. The Court cited this Apex Court authority (via Kanti Srivastava) to emphasize that receipt of terminal amounts does not automatically preclude compassionate appointment and that the underlying object of compassionate appointment is remedial and to provide social protection.

Court's Reasoning and Analysis

The Court's analysis proceeded in a sequential, fact-driven manner:

  • Record review: The Court examined the Bank's internal report (Annexure-8) which indicated the petitioner was eligible for appointment ("Yes" marked). The Court noted the amounts of terminal dues paid to the petitioner:
    • PF (Employee's/Employer's Contribution): Rs. 97,019.38
    • Gratuity: Rs. 95,369.00
    • Benevolent Fund: Rs. 40,000.00
    • Leave Encashment: Rs. 61,080.64
    • Ex-Gratia: Rs. 15,000.00
    • Others: Rs. 5,000.00
    • Details of LIC: Rs. 15,352.00
  • Material facts: The record also showed that the petitioner owned a self-occupied house assessed at Rs. 2,00,000 and that no family member was in employment (family pension column marked "Nil"). The petitioner had asserted that large sums were spent repaying loans and interest for the deceased's cancer treatment, leaving little of the terminal dues for ongoing maintenance.
  • Scheme analysis: The Court examined paragraph 10 of the Scheme, which directs that the financial condition of the family be assessed having regard to specified factors: family pension, gratuity, PF contribution, compensation/welfare fund proceeds, proceeds of LIC and other investments, income from other sources, employment of other family members, size of family and liabilities, etc.
  • Principle of liberal construction: The Court reiterated the established principle that the benefit of compassionate appointment schemes, being of a remedial and beneficial character, should be applied liberally unless there is clinching evidence that the family has sufficient means of livelihood. The object of the Scheme is to alleviate suffering and provide social protection to a bereaved family.
  • Failure to apply mind and lack of reasons: The Court found the impugned order to be a mechanical, laconic refusal ("has not found favour with the authorities") made without application of mind to vital aspects — notably, whether the petitioner and her four minor children could subsist on the monthly pension of Rs. 3,093/- and the remaining resources after repayment of treatment loans. The Court emphasized that administrative decisions under such schemes must record reasons as part of the requirements of fair decision-making and to guard against arbitrariness.
  • Application of precedents: Drawing on the precedents cited (Kanti Srivastava and Balbir Kaur), the Court held that receipt of terminal dues or lump sums cannot automatically be equated with sufficient means to deny compassionate appointment; context and actual financial condition (including liabilities and expenditure for treatment) must be considered.
  • Conclusion of analysis: Given the Bank's internal indication of eligibility, the documented financial circumstances (nil family pension, modest monthly pension, expenditure on treatment and loan repayment, four minor dependents), and the absence of reasons in the rejection order, the Court concluded that the Bank had acted without proper application of mind and contrary to the principles underpinning the Scheme and administrative fairness.

Holding and Implications

PETITION ALLOWED

Holding:

  • The Court held that the impugned order rejecting the petitioner's claim for compassionate appointment could not be sustained because it was passed mechanically and without assigning reasons; administrative authorities are required to apply their minds and record reasons when exercising powers under the Scheme.
  • The Court directed the competent authority to reconsider the petitioner's case in accordance with the Scheme and the observations made in the judgment.

Implications:

  • Direct effect on the parties: The Bank's laconic refusal is set aside in practice — the petition succeeds, and the competent authority must re-examine the petitioner's claim taking into account the Scheme's criteria (paragraph 10) and the factual circumstances recorded (terminal dues, liabilities, nil family pension, four minor dependents, expenditure on treatment). The Court requires reasons to be recorded for any decision taken on reconsideration.
  • No broader novel precedent: The decision applies established principles (as reflected in cited authorities) regarding liberal application of compassionate appointment schemes and the need for reasoned administrative action; the Court did not purport to lay down a new legal principle beyond these applications.

Order: Petition allowed and the matter remitted to the competent authority for fresh consideration in accordance with the Scheme and this judgment.

    Smt. Padma Pathak v. Managing Director, Punjab National Bank And Another

    1. Petitioner, widow of Suresh Chandra Pathak, claims appointment on compassionate ground under the scheme for employment of the dependents of the employees dying in harness (hereinafter referred to as ‘the Scheme’),

    2. It transpires from the record that the petitioner's husband died on 6-4-1999 leaving behind four minor children and petitioner and on 20-4-1999 the petitioner moved an application for compassionate appointment on the ground that she had no source of livelihood to fall back upon. The claim of the petitioner was rejected by order-dated 30-9-2000, Annexure-5 to the writ petition, which is impugned in the writ petition. The laconic ground spelt out in the order is that the application of the petitioner did not find favour with the authorities.

    3. Learned counsel for the petitioner urged that the order does not contain any reason. It has not disclosed why and how petitioner was not found fit for appointment under the scheme. He further urged that she has no source of livelihood. He further submitted that mere payment of certain amount towards the Provident Fund, Gratuity, Benevolent Fund, Leave Encashment and exgratia, Life Insurance Cannot be a ground for rejection of appointment on compassionate ground. It is further submitted that in the facts and circumstances of the case where it is clear from the own report of the department that there was no earning member in the family that there was no source of income to fall back upon and the fact that there were four minor children dependent on the widow the petitioner was entitled to get employment. Sri K.L Grover, learned Senior Advocate assisted by Sri Ramesh Singh appearing for the Bank urged that order was rightly passed in accordance with law and having regard to the spirit of the Scheme. However, he has not draw attention to any material on record in order to show reasons justifying rejection of appointment on compassionate ground.

    4. I have considered the arguments canvassed on behalf of the learned counsel for the parties. The following facts emerge from the record.

    5. According to the own report of the Bank submitted to the Deputy General Manager (Personnel), New Delhi, dated 22-5-1999, Annexure-8 to the writ petition, Suresh Chandra Pathak died leaving behind the petitioner and four minor children and that he had put in 26 years of service on the date of death i.e 6-4-1999. The department vide Annexure-8 opined that petitioner was eligible for appointment under the Scheme. It would be borne out from the word ‘Yes’ marked against the column, which signifies that the petitioner was eligible for appointment under the scheme. What were the terminal dues paid to the widow of the deceased may be excepted below for consideration whether the authorities were justified in holding those dues to be sufficient means for the deceased family to keep the pot boiling.

    Amount of Terminal Dues

    a. PF (Employee's/Employer's Contribution) Rs. 97,019.38 b. Gratuity Rs. 95,369.00 c. Benevolent Fund Rs. 40,000.00 d. Leave Encashment Rs. 61,080.64 e. Ex-Gratia Rs. 15,000.00 f. Others Rs. 5,000.00 g. Details of LIC. Rs. 15,352.00

    6. Besides the above, it is also indicated in the record that petitioner was having a self-occupied residential house the cost of which has been assessed to the extent of Rs. two lacs. The report further spells out that there was no source of income to fall back upon. Indisputably, no member of the family has been in employment which fact is impelled from the word ‘Nil’ in the column ‘family pension payable’.

    7. Though all these materials are available on record, impugned order. Annexure 5 to the writ petition, it appears, has been passed mechanically sans application of mind by the authority to the most material and vital aspects and the application was rejected without assigning any reason. The order is quoted below:

    ‘The matter has been examined by Head Office and the request made by the widow for employment to her in the bank on compassionate grounds has not found favour with the authorities.”

    8. It is obvious from the perusal of letter submitted by Smt. Padma Pathak petitioner to the authorities for compassionate appointment that husband of petitioner was afflicted with cancer and he succembed to the dreaded disease on 6-4-1999 and further that the treatment of the deceased entailed huge expenses which led the petitioner to seek loan both from relatives and from outside i.e money-lenders on heavy interest and in the circumstances most of the terminal benefits were used up in repayment of loan and interest and she was hardly left with any where-withal to sustain herself and her family out of the terminal dues disbursed to her.

    9. This question as involved in this petition, received most careful attention of this Court in Writ Petition No. 35344 of 2001 Smt. Kanti Srivastava v. State Bank of India and this Court in which it was held that it was a well settled position in law that family pension scheme in any way could not be equated with the compassionate appointment and in holding this view, the Court relied on Balbir Kaur v. Steel Authority of India Ltd., 2000 (3) ESC 1618 : ((2000) 6 SCC 493 : AIR 2000 SC 1596) (SC). The Apex Court was of the view that if at this juncture some lump sum amount is made available with a compassionate appointment, the grief stricken family may find solace to the mental agony and manage its affairs in the normal course of events. It further observed that it was not that monetary benefit would be replacement of the bread earner but that would undoubtedly bring some solace to the situation. It bears no repudiation that the deceased was suffering from cancer and huge amount was spent on his treatment. At the risk of repetition it may be stated here that according to the petitioner, repayment of loan taken for treatment of the deceased took toll of huge amount coupled with the fact that according to the own report of the Bank, she had no source of earning to fall back upon and that none of the member of the family was in employment. In the circumstances merely because the petitioner had a self-occupied residential house the cost of which was stated to be Rs. 2 lacs cannot be a ground in vindication of rejection of application for compassionate appointment.

    10. The question that falls for consideration is whether a paltry amount of Rs. 3093/- being received as pension per month was sufficient to meet the need and necessity of family consisting of four minor children and a widow. From a bare perusal of the scheme particularly paragraph 10 thereof which has been filed by the Bank along with counter-affidavit. It is not susceptible of any doubt that financial condition of a deceased family has to be taken into reckoning in order to arrive at a conclusion whether the family has sufficient means of livelihood. Paragraph 10 of the scheme is excerpted below for ready reference.

    11. Financial Condition of the family: The dependents of an employee dying in harness be considered for compassionate appointment provided the family is without sufficient means of livelihood, specifically keeping in view following

    a. Family Pension.

    b. Gratuity amount received.

    c. Employee's/Employer's contribution to PF.

    d. Any compensation paid by the bank or its Welfare Fund.

    e. Proceeds of LIC Policy and other in vestments of the deceased employee.

    f. Income for family from other sources.

    g. Employment of other family members,

    h. Size of the family and liabilities, if any etc.

    12. The benefit of employment by way of compassionate appointment under dying in harness Rules should flow liberally unless there be clinching evidence to demonstrate that the family of the deceased had sufficient means to fall back upon. The scheme for appointment on compassionate ground is a scheme in the nature of beneficial legislation to those on whom the destiny has in flicted the unkindness cut. The underlying object of this beneficial legislation is to alleviate the suffering and to wipe tears to the extent possible off the grief stricken family. During this cataclysmic period, if the family is left to fend on their own and is not extended the fruits of this beneficial legisla tion, it would be a negation of social protection and in consequence, the social justice, the very sheet-anchor conceived in our Constitution as a welfare State.

    13. In the instant case, the Bank authorities appear to be more concerned with precise details and seemed not to have seen the wood for the trees. They proceeded oblivious of the consideration whether widow would be able to sustain herself and her four minor children with the meagre amount of Rs. 3093/- blissfully unconcerned with the fact on record that the deceased employee was suffering from a dreaded disease and that a big chunk of the amount was used up in repaying the loan taken out of wifely devotion by the petitioner in a bid to save the life of her husband at all costs and also without having regard to the fact that there will be diminution and not in any increase in future of the amount being received by the petitioner. The word ‘Livelihood’ means the money people need to pay for food a place to live, clothing etc. according to the dictionary meaning. The underlying object behind the beneficial legislation is to ensure that the pot of the family keeps boiling and the family is able to maintain itself in a condition like the one prevailing at the time when bread earner was alive. Livelihood/maintenance implies a kind of permanent character. These were the factors, which the Bank authorities were required to reckon with. It brooks no dispute that catena of decision both by the Apex Court and this Court converge to the settled position that person cannot claim appointment on compassionate ground under the scheme as a matter of right but authorities at the same time were bound to apply liberally the object of beneficial legislation and to traverse upon all the relevant aspects in order to determine whether the applicant was entitled to get appointment on compassionate ground. In these matters, the decision tempered with compassion is the requirement and not the blinkered approach unconcerned with fair play, compassion and justice. The recording of reason is yet another aspect constituting an essential component of natural justice, which all the authorities exercising power under the scheme or rules are required to do. As stated supra, a laconic order has been passed and no reasons have been assigned. The laconic order cannot be upgraded to the pedestal of an order based on reasons. The basic principle of Constitution makes it imperative for administrative authorities clothed with the duty to decide something on consideration of policy or scheme, to act judicially as a hedge against arbitrariness. It is in this conspectus that reasons are the imperative requirements for an administrative authority and in the instant case, the authorities having not assigned any reason, have acted in antagonism of the basic principles of the Constitution and as such the order cannot be sustained. As a result of the foregoing discussion, the writ petition succeeds and is allowed and the competent authority is directed to consider the case of the petitioner in accordance with the scheme and the observation made in the body of this judgment.

    14. Petition allowed.

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    Smt. Padma Pathak v. Managing Director, Punjab National Bank And Another
    (Mar 3, 2003)