Reportable

          IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

 CIVIL APPEAL NO. 1641 OF 2010    [Arising out of SLP(C) No.28370 of 2008]

STATE BANK OF INDIA & ANR. … APPELLANTS

VS.

RAJ KUMAR … RESPNDENT  

O R D E R

R.V.RAVEENDRAN, J.

Leave granted.  Heard the parties.

2. The respondent's father employed as a Messenger in  

the Appellant Bank, died on 1.10.2004. Respondent’s mother  

made applications dated 6.6.2005 and 14.6.2005 requesting  

for  his  appointment  on  compassionate  grounds.  When  the  

applications  were  being  processed  and  verified,  the  

compassionate  appointment  scheme  was  substituted  by  the  

“SBI Scheme for payment of ex-gratia Lumpsum Amount” with  

effect from 4.8.2005. The new scheme abolished the old

scheme for compassionate appointments and instead provided  

for payment of an ex gratia lumpsum amount as per its  

terms. Clauses 14 and 15 of the new scheme relevant for  

our purpose are extracted below:

“14. Date of effect of the  Scheme and disposal of pending applications:

……….Applications  pending  under  the  Compassionate  Appointment  Scheme  as  on  the  date on which this new Scheme is approved by  the Executive Committee of the Central Board  will be dealt with in accordance with the  new Scheme for payment of ex-gratia lumpsum  amount provided they fulfill all the terms  and conditions of this Scheme.  

15. Miscellaneous provisions of the Scheme   

x x x     x x x    x x x

vi.  With  effect  from  the  date  the  “SBI  Scheme  for  Payment  of  Ex-gratia  Lumpsum  Amount” comes into force the Bank’s scheme  of  compassionate  appointments  shall  be  deemed  abolished/withdrawn  and  no  request  for  compassionate  appointment  shall  be  entertained or considered by the Bank under  any circumstance.”

3. As  the  old  scheme  came  to  be  abolished  and  

compassionate appointment was no longer permissible after  

the  new  scheme  came  into  force,  the  Bank  on  31.1.2006  

advised the family of the deceased to make an application  

under  the  new  scheme  for  ex-gratia  payment.  Feeling  

aggrieved, the respondent filed a writ petition before the  

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Allahabad High Court. A learned single Judge of the High  

Court by order dated 8.5.2008 directed the appellant to  

reconsider the case of the respondent for appointment on  

compassionate grounds, holding that the old scheme applied  

and the new scheme was only prospective in operation. The  

said order was affirmed by the Division Bench by order  

dated 1.9.2008, which is under challenge in this appeal by  

special leave.

4. Learned  counsel  for  the  Bank  submitted  that  even  

though  the  respondent's  father  died  on  1.10.2004,  the  

application for compassionate appointment was made only in  

June 2005; that before the application could be processed,  

the compassionate appointment scheme was abolished and was  

replaced by a new scheme on 4.8.2005; and that therefore,  

the Bank was justified in calling upon the respondent to  

apply under the new ex-gratia scheme.

5. On  the  other  hand,  learned  counsel  for  the  

respondent submitted that on the date of death of his  

father and on the date of making the application, the  

compassionate  appointment  scheme  was  in  force  and  

therefore,  he  was  entitled  to  be  considered  for  

compassionate appointment under the said scheme.   

6. It  is  now  well  settled  that  appointment  on  

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compassionate grounds is not a source of recruitment. On  

the other hand it is an exception to the general rule that  

recruitment to public services should be on the basis of  

merit, by an open invitation providing equal opportunity  

to all eligible persons to participate in the selection  

process. The dependants of employees, who die in harness,  

do  not  have  any  special  claim  or  right  to  employment,  

except by way of the concession that may be extended by  

the employer under the Rules or by a separate scheme, to  

enable the family of the deceased to get over the sudden  

financial crisis. The claim for compassionate appointment  

is therefore traceable only to the scheme framed by the  

employer  for  such  employment  and  there  is  no  right  

whatsoever outside such scheme. An appointment under the  

scheme can be made only if the scheme is in force and not  

after it is abolished/withdrawn. It follows therefore that  

when  a  scheme  is  abolished,  any  pending  application  

seeking appointment under the scheme will also cease to  

exist, unless saved. The mere fact that an application was  

made when the scheme was in force, will not by itself  

create a right in favour of the applicant.

7. Normally  the  three  basic  requirements  to  claim  

appointment under any scheme for compassionate appointment  

are: (i) an application by a dependent family member of  

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the deceased employee; (ii) fulfillment of the eligibility  

criteria  prescribed  under  the  scheme,  for  compassionate  

appointment; and (iii) availability of posts, for making  

such  appointment.  If  a  scheme  provides  for  automatic  

appointment to a specified family member, on the death of  

any employee, without any of the aforesaid requirements,  

it can be said that the scheme creates a right in favour  

of the family member for appointment on the date of death  

of the employee. In such an event the scheme in force at  

the time of death would apply. On the other hand if a  

scheme provides that on the death of an employee, if a  

dependent family member is entitled to appointment merely  

on making of an application, whether any vacancy exists or  

not,  and  without  the  need  to  fulfill  any  eligibility  

criteria, then the scheme creates a right in favour of the  

applicant, on making the application and the scheme that  

was  in  force  at  the  time  when  the  application  for  

compassionate appointment was filed, will apply. But such  

schemes are rare and in fact, virtually nil.   

8. Normal schemes contemplate compassionate appointment on  

an application by a dependent family member, subject to  

the  applicant  fulfilling  the  prescribed  eligibility  

requirements, and subject to availability of a vacancy for  

making the appointment. Under many schemes, the applicant  

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has only a right to be considered for appointment against  

a specified quota, even if he fulfils all the eligibility  

criteria; and the selection is made of the most deserving  

among  the  several  competing  applicants,  to  the  limited  

quota of posts available. In all these schemes there is a  

need  to  verify  the  eligibility  and  antecedents  of  the  

applicant or the financial capacity of the family. There  

is also a need for the applicant to wait in a queue for a  

vacancy to arise, or for a selection committee to assess  

the comparative need of a large number of applicants so as  

to  fill  a  limited  number  of  earmarked  vacancies.  

Obviously,  therefore,  there  can  be  no  immediate  or  

automatic  appointment  merely  on  an  application.  Several  

circumstances  having  a  bearing  on  eligibility,  and  

financial condition, upto the date of consideration may  

have to be taken into account. As none of the applicants  

under the scheme has a vested right, the scheme that is in  

force when the application is actually considered, and not  

the scheme that was in force earlier when the application  

was made, will be applicable. Further where the earlier  

scheme is abolished and the new scheme which replaces it  

specifically provides that all pending applications will  

be considered only in terms of the new scheme, then the  

new scheme alone will apply. As compassionate appointment  

is a concession and not a right, the employer may wind up  

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the scheme or modify the scheme at any time depending upon  

its  policies,  financial  capacity  and  availability  of  

posts.

9. In this context we may usefully refer to the decision  

of this Court in Union of India vs. R. Padmanabhan – 2003  

(7) SCC 270, wherein this Court observed :  

“That apart, being ex gratia, no right accrues to  any sum as such till it is determined and awarded  and, in such cases, normally it should not only be  in terms of the Guidelines and Policy, in force,  as on the date of consideration and actual grant  but has to be necessarily with reference to any  indications contained in this regard in the Scheme  itself. The line of decisions relation to vested  rights accrued being protected from any subsequent  amendments  may  not  be  relevant  for  such  a  situation and it would be apposite to advert to  the decision of this Court reported in  State of  Tamil Nadu vs. Hind Stone and Ors. – 1981 (2) SCC  205. That was a case wherein this Court had to  consider  the  claims  of  lessees  for  renewal  of  their leases or for grant of fresh leases under  the  Tamil  Nadu  Minor  Mineral  Concession  Rules,  1959. The High Court was of the view that it was  not  open  to  the  State  Government  to  keep  the  applications filed for lease or renewal for a long  time and then dispose them of on the basis of a  rule which had come into force later. This Court,  while reversing such view taken by the High Court,  held that in the absence of any vested rights in  anyone, an application for a lease has necessarily  to be dealt with according to the rules in force  on the date of the disposal of the application,  despite the delay, if any, involved although it is  desirable  to  dispose  of  the  applications,  expeditiously.”

We may also refer to the decision of this Court in Kuldeep  

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Singh v. Govt. of NCT of Delhi [2006 (5) SCC 702] which  

considered the question of grant of liquor vend licences.  

This  Court  held  that  where  applications  required  

processing  and  verification  the  policy  which  should  be  

applicable is the one which is prevalent on the date of  

grant  and  not  the  one  which  was  prevalent  when  the  

application  was  filed.  This  Court  clarified  that  the  

exception to the said rule is where a right had already  

accrued or vested in the applicant, before the change of  

policy.

10. In this case the employee died in October, 2004, the  

application was made only in June, 2005. The application  

was  not  even  by  the  respondent,  but  by  his  mother.  

Therefore,  it  was  necessary  to  ascertain  whether  

respondent  really  wanted  the  appointment,  whether  he  

possessed  the  eligibility,  and  whether  any  post  was  

available. Within two months of the application, the new  

scheme came into force and the old scheme was abolished.  

The  new  scheme  specifically  provided  that  all  pending  

applications  will  be  considered  under  the  new  scheme.  

Therefore it has to be held that the new scheme which came  

into force on 4.8.2005 alone will apply even in respect of  

pending applications.

11. The respondent relied upon the following observations  

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in State Bank of India v. Jaspal Kaur - 2007 (9) SCC 571  

to contend that he was entitled to be considered under the  

old  scheme  which  was  in  force  at  the  time  of  the  

application by his mother:

“Finally in the fact situation of this case,  Sri.  Sukhbir  Inder  Singh  (late),  Record  Assistant (Cash & Accounts) on 01.08.1999, in  the  Dhab  Wasti  Ram,  Amritsar  branch,  passed  away.  The  respondent,  widow  of  Sri.  Sukhbir  Inder  Singh  applied  for  compassionate  appointment in the appellant Bank on 05.02.2000  under the scheme which was formulated in 2005.  The  High  Court  also  erred  in  deciding  the  matter in favour of the respondent applying the  scheme  formulated  on  04.08.2005,  when  her  application was made in 2000. A dispute arising  in 2000 cannot be decided on the basis of a  scheme  that  came  into  place  much  after  the  dispute arose, in the present matter in 2005.  Therefore, the claim of the respondent that the  income of the family of deceased is Rs. 5855/-  only, which is less than 40% of the salary last  drawn  by  Late  Shri.  Sukhbir  Inder  Singh,  in  contradiction to the 2005 scheme does not hold  water”.

The  said  observations  are  read  out  of  context  by  the  

respondent.  In  that  case  the  Bank  employee  died  on  

1.8.1999. Application was filed by the widow on 5.2.2000.  

The case of the widow was considered twice and the request  

for appointment on compassionate grounds was declined by  

taking into consideration the financial position/capacity  

of the family. The High Court allowed the writ petition  

filed by the widow in 2004 on the ground that the terminal  

benefits of Rs.4,57,607/- received by the family were not  

sufficient for the sustenance of the family. In an appeal  

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by the Bank, it was contended before this Court that in  

addition to Rs.4,57,607/- paid as terminal benefits, the  

widow was getting Rs.2055/- per month as family pension  

and that was not considered by the High Court. During the  

hearing before this court, the widow relied upon the new  

scheme  dated  4.8.2005  and  sought  additional  payment  in  

terms of the scheme. The above observations were made in  

the  context  of  rejecting  the  widow’s  request  for  

additional payment under the 2005 scheme. In fact, this  

court allowed the Bank’s appeal and dismissed the writ  

petition filed by the widow for additional benefits. The  

said observations, cannot therefore be of any assistance  

to  consider  the  applicability  of  the  old  scheme  for  

compassionate appointment vis-à-vis the new scheme for ex-

gratia payment.  

12. The respondent was not entitled to be considered for  

compassionate  appointment.  The  High  Court  was  not  

justified in quashing the communication dated 31.1.2006 or  

in directing reconsideration of the case of the respondent  

for compassionate appointment.  

13. We therefore allow this appeal in part as follows:  

(i) The  orders of  the learned  Single Judge  and  

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Division Bench are set aside.

(ii) The respondent and/or his family may file a  

fresh  application  under  the  new  scheme,  as  

directed  by  the  Bank  in  its  letter  dated  

31.1.2006.

(iii) The appellant Bank is directed to process such  

application under the new scheme, if and when  

made, and pay the lump sum  ex gratia amount  

due  in  terms  of  that  scheme,  to  the  

beneficiaries,  within  four  months  of  the  

receipt of the application.

____________________J.     (R.V. RAVEENDRAN)

____________________J.           (K. S. RADHAKRISHNAN)

New Delhi; February 08, 2010.

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