A) ABSTRACT / HEADNOTE

Canara Bank v. Ajithkumar G.K., [2025] 2 S.C.R. 963 : 2025 INSC 184, concerns a long-running claim for appointment on compassionate grounds made by the son of a bank employee who died in service in December 2001. The Bank’s 1993 Scheme governed applications at the time of death; a 2005 circular later replaced compassionate appointment with a lump-sum ex-gratia option.

The respondent applied within one month of death but was refused on two primary grounds:

(i) the family was receiving family pension and substantial terminal benefits; and

(ii) the respondent exceeded the upper age limit for the post (26 years) and was not given discretionary age relaxation.

After protracted litigation and reconsideration, the High Court granted relief and directed appointment; a Division Bench later ordered appointment and exemplary costs. The Supreme Court examined settled principles governing compassionate appointment (including need/indigence, suitability, timing, and applicability of earlier v. later schemes), analysed whether lapse of time or receipt of pension/terminal benefits could bar relief, and evaluated whether the Bank had reasonably assessed the family’s finances and the respondent’s suitability.

The Court held that:

(a) lapse of judicial delay cannot be visited upon a diligent claimant;

(b) compassionate appointment is intended only in hand-to-mouth cases where immediate sustenance is absent;

(c) terminal benefits/family pension are relevant to the financial assessment under the 1993 Scheme and cannot be simply ignored;

(d) suitability must be tested before imposing appointment; and

(e) age-relaxation is a later, conditional step which arises only after eligibility and suitability are established.

Ultimately, the Court found the Bank’s refusal on financial assessment grounds sustainable but awarded compassionate monetary relief under Article 142 and directed a lumpsum payment to the respondent.

Keywords: Compassionate Appointment; Lapse of Time; Assessment of Financial Condition; Age Relaxation; Suitability; Canara Bank Scheme 1993.

B) CASE DETAILS 

i) Judgment Case Title: Canara Bank v. Ajithkumar G.K. (Appellant: Canara Bank; Respondent: Ajithkumar G.K.)
ii) Case Number: Civil Appeal No. 255 of 2025.
iii) Judgment Date: 11 February 2025.
iv) Court: Supreme Court of India.
v) Quorum: Dipankar Datta and Prashant Kumar Mishra, JJ.
vi) Author: Dipankar Datta, J.
vii) Citation: [2025] 2 S.C.R. 963 : 2025 INSC 184.
viii) Legal Provisions Involved: Article 142, Constitution of India; Order XLI R.33 CPC (power of appellate courts); internal Canara Bank Circular No.154/93 (Scheme of 1993); Circular No.35/2005 (Scheme of 2005).
ix) Judgments overruled by the Case (if any): None expressly overruled; the Court discussed and distinguished earlier coordinate bench decisions and the reference pending to a larger bench.
x) Related Law Subjects: Service Law; Administrative Law; Constitutional Law; Employment Policy (compassionate appointment).

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The respondent’s father died in service on 20 December 2001, with about four months left to superannuation. Within a month the respondent applied (15 January 2002) under the Canara Bank Scheme 1993 for compassionate appointment. The Bank rejected the application on 30 October 2002 citing the existence of family pension and substantial terminal benefits (net terminal benefits ~Rs. 3.09 lakh) and that the respondent was over the maximum age for clerical/sub-staff posts (26 years).

The respondent sought reconsideration; administrative avenues failed and he filed writ proceedings in 2003. During pendency the Bank introduced a 2005 circular substituting compassionate appointment with a lump-sum ex-gratia scheme. The High Court (Single Judge) allowed the writ in 2015, directing reconsideration under the 1993 Scheme; the Bank again refused and the Single Judge later directed appointment and compensation. A Division Bench sustained that relief and ordered immediate appointment with costs. The Bank appealed to the Supreme Court.

The Supreme Court was called upon to resolve multiple core questions: which scheme governs, whether delay defeats the claim, the relevance of pension/terminal benefits to the financial assessment, whether suitability and age-relaxation were rightly ignored, and the permissible scope of appellate directions to appoint without suitability testing. The judgment undertakes careful synthesis of precedent, the Scheme’s text, and factual financial figures supplied in Bank orders.

D) FACTS OF THE CASE

The deceased employee (V C Gopalakrishna Pillai) died on 20.12.2001 while in the service of Canara Bank with approximately four months to superannuation. He left behind his spouse, one unmarried son (respondent), and three married daughters. The respondent applied for compassionate appointment on 15.01.2002. The Bank rejected the application on 30.10.2002 citing that the family received family pension (then Rs. 4,637.92) and had net terminal benefits of Rs. 3.09 lakh, and that the respondent exceeded the age ceiling for the post. Administrative reconsideration requests by the respondent and his mother were refused in early 2003.

The respondent initiated Writ Petition No.38363/2003 under Article 226. During pendency the Bank issued Circular No.35/2005 (14.02.2005) replacing compassionate appointment by a lump sum scheme. The High Court took over a decade to decide; in June 2015 it quashed the Bank’s refusal and directed reconsideration under the 1993 Scheme. The MD & CEO again rejected the claim (8.9.2015) after financial assessment; the High Court (Single Judge) in 2016 directed appointment and Rs.5 lakh compensation; a Division Bench in 2019 upheld appointment and exemplary costs. The Bank approached the Supreme Court challenging the High Court’s approach to financial assessment, age-relaxation, and the Division Bench’s direction to appoint without suitability testing.

E) LEGAL ISSUES RAISED

i. Whether the Division Bench of the High Court was justified in directing compassionate appointment when the respondent was well over forty-four years at the time of decision?
ii. Whether lapse of time (two decades) disentitles a claimant who applied within the Scheme’s time limit, but whose litigation was prolonged, from compassionate appointment?
iii. Whether payment of family pension and net terminal benefits can be treated as irrelevant while assessing indigence under the Scheme of 1993?
iv. Whether the Bank was bound to test the respondent’s suitability and consider age-relaxation before directing appointment?
v. Which scheme (1993 or 2005) governs consideration of the claim — the scheme at death or at the time of consideration?

F) PETITIONER / APPELLANT’S ARGUMENTS

The Bank contended that its rejection was lawful because the family had substantial terminal benefits and family pension, which legitimately demonstrated absence of indigence; that age-bar disqualified the respondent for clerk/sub-staff posts and age-relaxation is a discretionary and subsequent step which only arises after eligibility and suitability; that the High Court misread Canara Bank v. M. Mahesh Kumar and other precedents; and that the Division Bench exceeded appellate limits by directing appointment without conducting a suitability assessment as mandated by the 1993 Scheme.

G) RESPONDENT’S ARGUMENTS

The respondent argued that paragraph 19 of Canara Bank (Mahesh Kumar) precludes treating terminal benefits/pension as conclusive against compassionate appointment; that the Bank did not properly exercise discretion or test suitability; that initial denial on age grounds was set aside earlier (res judicata), and that prolonged pendency should not penalize a litigant who pursued remedies diligently; finally, he urged that the spirit of the 1993 Scheme required compassionate relief irrespective of retirement benefits.

H) RELATED LEGAL PROVISIONS

i. Canara Bank Circular No.154/93 (Scheme of 1993): Objectives; Para 3.1 (2½ years application period); Para 5 (age norms and Para 5.1 discretionary relaxation); Paras 11–12 (application formats and restriction to one dependent).
ii. Circular No.35/2005 (Scheme of 2005) — introduces lump-sum ex-gratia and discontinues compassionate appointment.
iii. Order XLI Rule 33, CPC — appellate powers (discussed as circumscribed).
iv. Article 142, Constitution — used to mould relief (lumpsum payment awarded).

I) JUDGEMENT

The Court proceeded by reaffirming settled principles: compassionate appointment is an exceptional, humanitarian concession intended to meet immediate, hand-to-mouth distress arising on sudden death/incapacitation; eligibility, suitability, and indigence are threshold requirements; rules must be strictly followed. On lapse of time the Court held that delay caused by judicial process should not prejudice a diligent claimant a distinction between litigational delay (excusable) and belated, unexplained application (not).

Given that the respondent applied within a month of death and pursued remedies diligently, his present age could not be used as a standalone bar. On which scheme applies, the Court acknowledged the conflict in precedent (three-Judge benches giving divergent views) and noted the pending larger bench reference; but, refusing further delay, the Court decided the present matter on merits.

On financial assessment, the Court examined the Bank’s figures (last drawn salary, expected pension ~Rs.6,398, family pension Rs.4,637.92 in 2002 and net terminal benefits Rs.3.09 lakh) and observed these figures were undisputed. The Court concluded that the family was not left in utter financial distress that only an appointment could remedy; receipt of pension and terminal benefits were relevant to the 1993 Scheme’s objective and could not be disregarded. Therefore the Bank’s denial on financial assessment ground was not arbitrary.

On suitability and age-relaxation the Court held that suitability testing is an essential step and the Division Bench erred in ordering appointment without it. Age-relaxation is relevant only after eligibility and suitability are established; in the present case the family failed the first threshold (indigence), making age-relaxation a futile exercise. Regarding the Division Bench’s exercise of appellate power to appoint directly, the Court emphasised appellate courts are circumscribed and should not normally substitute their own decision for the prescribed procedural steps (Order XLI R.33 analogy); the Division Bench’s order to appoint without suitability testing was therefore infirm.

However, recognising the long delay and the respondent’s plight, the Court exercised power under Article 142 to award equitable monetary relief. The Bank’s order refusing appointment was held to be unexceptionable on merits; but in the exercise of equitable jurisdiction the Court directed the Bank to pay the respondent a lumpsum of Rs. 2.5 lakh. The Court thereby balanced strict legal correctness with equitable relief arising from prolonged litigation.

a. RATIO DECIDENDI

The ratio is threefold:

(i) Compassionate appointment is a remedial, exceptional measure aimed only at families in immediate indigence; its application depends on a fact-sensitive inquiry into financial condition, including terminal benefits and pension;

(ii) Delay caused by courts is not a valid ground to reject an otherwise timely application claimants pursuing remedies diligently should not be penalised;

(iii) Suitability testing and procedural compliance under the relevant scheme are mandatory steps before ordering appointment, and appellate courts should ordinarily not bypass them.

Where legal entitlement is absent but hardship flows from protracted litigation, the Court may, in equity, award monetary relief under Article 142.

b. OBITER DICTA

The judgment contains observations on the unresolved conflict about whether the scheme at death or scheme at consideration governs noting divergent coordinates and the need for larger-bench resolution. The Court’s remarks stress that paragraph 3.2 of the 1993 Scheme does not render terminal benefits irrelevant and that obiter dicta of coordinate benches are not always binding where larger-bench authority differs. The Court reiterated that compassionate appointment must not become a quasi-reservation.

c. GUIDELINES 

The Court clarified procedural and substantive pointers:

(i) treat applications made within prescribed time as live notwithstanding judicial delay;

(ii) the threshold inquiry must evaluate terminal benefits, family pension, assets and other income sources to ascertain indigence;

(iii) suitability testing must precede any age-relaxation or appointment order;

(iv) appellate courts should not direct appointment sans procedural steps except in truly exceptional cases;

(v) where strict legal relief is unavailable but prolonged litigation has caused hardship, courts may award appropriate monetary compensation under Article 142.

J) CONCLUSION & COMMENTS

Canara Bank v. Ajithkumar G.K. reaffirms the narrow, remedial nature of compassionate appointment and insists on faithful adherence to scheme provisions: eligibility, timely application, careful financial assessment (including terminal benefits/pension), and suitability testing. The decision pragmatically protects litigants from penalisation due to judicial delay while ensuring that compassionate appointment does not become an entitlement divorced from the hardship it seeks to remedy.

The Court’s use of Article 142 to grant monetary relief demonstrates judicial sensitivity where equitable justice demands amelioration despite a strict legal outcome. The judgment will guide employers, tribunals and courts in balancing procedural fidelity with humane outcomes in long-running compassionate appointment disputes.

K) REFERENCES

a) Important Cases Referred:

1. Canara Bank v. M. Mahesh Kumar, (2015) 7 SCC 412.
2. Umesh Kumar Nagpal v. State of Haryana, (1994) 4 SCC 138.
3. Union of India v. B. Kishore, (2011) 13 SCC 131.
4. General Manager (D & PB) v. Kunti Tiwary, (2004) 7 SCC 271.
5. State Bank of India v. Somveer Singh, (2007) 4 SCC 778.
6. Haryana State Electricity Board v. Hakim Singh, (1997) 8 SCC 85.
7. V. Sivamurthy v. Union of India, (2008) 13 SCC 730.
8. Sushma Gosain v. Union of India, (1989) 4 SCC 468.
9. Eastern Coalfields Ltd. v. Anil Badyakar, (2009) 13 SCC 112.
10. N.C. Santhosh v. State of Karnataka, (2020) 7 SCC 617.
11. State of Madhya Pradesh v. Amit Shrivas, (2020) 10 SCC 496.

b) Important Statutes Referred:

1. Constitution of India (Article 142);
2. Code of Civil Procedure, 1908 (Order XLI Rule 33).