Compassionate appointment and gratuity protection: policy withdrawal defeated the appointment claim, but gratuity could not be set off against loan dues.

Compassionate appointment was held to be a welfare measure, not a statutory right, so once the employer discontinued the scheme by policy and no rule compelled its continuance, the claim for appointment failed. Statutory gratuity, however, was treated as a protected terminal benefit that cannot be waived, attached, or adjusted against the deceased employee's loan liabilities before payment. The adjustment of gratuity was therefore impermissible, and payment of gratuity was directed, while the compassionate appointment request was rejected.

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Issues: (i) Whether the petitioner was entitled to compassionate appointment after the employer had discontinued the scheme; (ii) whether gratuity payable on the death of the employee could be adjusted towards the employee's loan liabilities.

Issue (i): Whether the petitioner was entitled to compassionate appointment after the employer had discontinued the scheme.

Analysis: Compassionate appointment is not a statutory entitlement but a welfare measure evolved to relieve immediate hardship. Where the employer has taken a policy decision to discontinue the scheme, and no statutory rule compels its continuance, no individual can insist on appointment as of right. The Court also noticed that the employer had undertaken workforce reduction measures, which reinforced the policy decision to withdraw the scheme.

Conclusion: The claim for compassionate appointment was rejected.

Issue (ii): Whether gratuity payable on the death of the employee could be adjusted towards the employee's loan liabilities.

Analysis: Gratuity is a statutory terminal benefit that becomes payable only on cessation of employment by retirement, death, or removal. Until it accrues, the employee cannot waive it or authorise its attachment or adjustment. The law and the relevant provisions protecting gratuity from attachment or similar adjustments prevent the employer from setting off gratuity against loan dues, though other terminal amounts not so protected may be differently treated.

Conclusion: The adjustment of gratuity towards loan liabilities was impermissible, and the petitioner was entitled to receive the gratuity amount.

Final Conclusion: The writ petition succeeded only to the extent of directing payment of gratuity, while the request for compassionate appointment failed.

Ratio Decidendi: Compassionate appointment can be withdrawn by policy where no statute confers it as a right, and statutory gratuity, being protected from attachment or adjustment, cannot be set off against the deceased employee's liabilities before payment.

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