2010 (2) TMI 1311 - SC - Indian Laws

Eligibility for compassionate appointment based on scheme in force at time of consideration

State Bank of India and Ors. Versus Raj Kumar

The Court held that the Respondent was not entitled to compassionate appointment under the old scheme as the new scheme had replaced it. The judgment ... - ISSUES PRESENTED AND CONSIDERED 1. Whether an application for compassionate appointment filed while an employer's compassionate appointment scheme is in force creates any vested right in the applicant such that subsequent abolition of the scheme does not affect the application. 2. Whether the scheme in force at the time of the employee's death, or the scheme in force at the time of disposal/consideration of the application, governs the claim for compassionate appointment where the employer revises/abolishes the earlier scheme before disposal of the pending application. 3. Whether a scheme which expressly provides that pending applications will be disposed of under the new scheme can be applied to pending applications for compassionate appointment. 4. What are the essential legal requirements/conditions that must be satisfied for a claim to compassionate appointment to arise under an employer's scheme? ISSUE-WISE DETAILED ANALYSIS Issue 1 - Vested Right on Filing an Application for Compassionate Appointment Legal framework: Compassionate appointment is a concession, not a source of recruitment; rights, if any, arise only under the employer's scheme. Applications for benefits trace their legal basis to the terms of the applicable scheme. Precedent Treatment: The Court applied and followed the principle in Union of India v. R. Padmanabhan and related authorities that ex gratia/concessional claims do not ordinarily vest until determination/grant; it also relied upon the logic in State of T.N. v. Hind Stone and Kuldeep Singh v. Govt. of NCT of Delhi which hold that applications are to be dealt with according to rules in force at the time of disposal unless a vested right had earlier arisen. Interpretation and reasoning: The Court reasoned that mere filing of an application while a compassionate appointment scheme is in force does not, by itself, create a vested right in the applicant. Because compassionate appointment is an exception to merit-based recruitment and is granted by administrative concession, applications remain subject to verification of eligibility, availability of posts, and other conditions up to the date of consideration. Consequently, in the absence of express terms creating an immediate right on filing, no vested right accrues on mere filing. Ratio vs. Obiter: Ratio - an application alone does not vest a right; dispositional rights depend on scheme terms and state of facts at time of consideration. Obiter - ancillary comments on policy reasons for treating compassionate appointment as concession. Conclusions: No vested right arises solely from filing an application; the scheme operative at time of disposal generally governs. Issue 2 - Applicable Scheme: Date of Death vs. Date of Disposal/Application Legal framework: Three basic requirements typically govern claims under compassionate appointment schemes: (i) an application by a dependent, (ii) fulfillment of eligibility criteria, and (iii) availability of posts. If a scheme confers immediate automatic entitlement on death without these prerequisites, the scheme at the date of death would apply; if entitlement arises on making an application irrespective of other conditions, the scheme at the date of application would apply; otherwise, the scheme at the date of disposal applies. Precedent Treatment: The Court applied precedents (Padmanabhan; Kuldeep Singh) that direct application of the scheme in force at the time of disposal where processing/verification is required and no vested right has accrued earlier. The Court distinguished instances where a scheme creates an automatic/absolute right on death or on filing such that the right vests immediately. Interpretation and reasoning: The Court classified types of schemes: (a) schemes creating immediate automatic appointment on death (rare) - governed by the scheme at death; (b) schemes creating right on filing irrespective of eligibility/vacancy (virtually nil) - governed by scheme at filing; (c) normal schemes requiring verification and vacancies - governed by scheme at disposal. Given the usual need for verification and possible queuing for vacancies, it is rational to apply the rules and policy in force at the time of consideration. Ratio vs. Obiter: Ratio - where no vested right is created by the scheme, the scheme in force at the time of disposal governs. Obiter - classification of hypothetical scheme types (automatic entitlement or entitlement on filing) as rare or virtually nil is explanatory. Conclusions: In ordinary compassionate appointment schemes requiring verification and vacancy assessment, the scheme in force on the date of consideration/disposal applies; only in exceptional schemes creating immediate vested rights will an earlier scheme govern. Issue 3 - Effect of Express Saving Clause Putting Pending Applications Under the New Scheme Legal framework: An employer modifying or abolishing a concessionary scheme may do so, subject to any express saving provision. Where the replacing scheme expressly provides that pending applications will be dealt with under the new scheme, that express provision governs pending applications. Precedent Treatment: Followed Padmanabhan and Kuldeep Singh principles that administrative policy in force at disposal governs unless vested rights or specific saving clauses dictate otherwise. Interpretation and reasoning: The new scheme expressly provided that all pending applications would be considered under the new ex gratia scheme and explicitly abolished the compassionate appointment scheme. Given compassionate appointment is a concession, the employer is entitled to wind up or modify the scheme; an express clause applying the new scheme to pending applications is effective to bring pending cases within the new regime. Ratio vs. Obiter: Ratio - an express provision in the new scheme that pending applications will be decided under the new scheme is operative and binding; it displaces the prior scheme for pending applications. Obiter - policy commentary on employer's freedom to withdraw concessions. Conclusions: Where a successor scheme expressly provides that pending applications will be governed by it, the new scheme applies to pending applications; abolition of the old scheme operates to terminate the availability of compassionate appointment unless explicitly saved. Issue 4 - Essential Legal Requirements for Claiming Compassionate Appointment Legal framework: Normal/commercial practice and scheme-text define three basic preconditions: application by dependent, fulfillment of eligibility criteria prescribed by the scheme, and availability of posts; sometimes only a right to be considered for a limited quota exists. Precedent Treatment: The Court relied on established administrative-law principles and prior decisions affirming that compassionate appointment is a concession framed by schemes and subject to their terms. Interpretation and reasoning: Because schemes often require verification (eligibility, antecedents, financial condition) and selection among multiple applicants for limited posts, entitlement is contingent and the scheme operative at consideration governs. Only schemes creating automatic entitlement bypass these requirements, and these are exceptional. Ratio vs. Obiter: Ratio - the three basic requirements constitute the normal conditions precedent to any claim under a compassionate appointment scheme; failure to satisfy these conditions leaves no entitlement. Obiter - elaboration of variations in scheme design (automatic appointment, entitlement on filing) as uncommon. Conclusions: Claims for compassionate appointment arise only if the scheme's stipulated conditions are satisfied at the time of consideration; applicants typically have a right only to be considered and not to automatic appointment. APPLICATION OF PRINCIPLES TO THE PRESENT FACTS AND DISPOSITION Interpretation and reasoning: The scheme in force when the application was filed was subsequently abolished by a new scheme which expressly directed that pending applications would be disposed of under the new scheme. The application was filed by the deceased employee's mother (not by the applicant himself), necessitating verification of the applicant's willingness, eligibility and vacancy availability. No vested right had accrued on filing. The Court distinguished prior authority relied upon by the applicant as being inapposite on facts and context. Conclusions: The old compassionate appointment scheme did not entitle the respondent to compassionate appointment; the new scheme applied to pending applications; the High Court's orders directing reconsideration under the old scheme were set aside. The respondent/family may file a fresh application under the new scheme, and the employer must process it and pay the ex gratia lump sum, if due, within a stipulated period.