Employer Can't Defeat Compassionate Appointment Claim By Delaying Processing: Supreme Court
The Supreme Court has held that an employer cannot keep an employee's application for voluntary retirement on medical grounds pending until the employee crosses the prescribed age limit and then use that delay to deny compassionate appointment to the employee's dependent. The Court ruled that such an interpretation would allow an employer to "control eligibility through delayed processing" and defeat the purpose of a beneficial scheme.
A Bench of Justice Sanjay Karol and Justice Nongmeikapam Kotiswar Singh directed the New India Assurance Company Limited to grant compassionate appointment to the son of an employee who had sought voluntary retirement on medical grounds before attaining the age of 55 years. The Court set aside the Bombay High Court's judgment which had upheld the rejection of the claim.
Background
The employee, Ramnarayan Madankar, had applied on July 22, 2015 for voluntary retirement on medical grounds after obtaining a Civil Surgeon's certificate declaring him permanently incapacitated for service. At that time, he was below 55 years of age.
Under the Scheme for Compassionate Appointment in Public Sector General Insurance Companies, dependants of employees who retire on medical grounds due to incapacitation before reaching the age of 55 are eligible for compassionate appointment, provided the incapacitation is certified by a duly constituted Medical Board.
Although the employee repeatedly reminded the company to process his application before he turned 55 on December 10, 2015, the company did not inform him that a Medical Board certificate was required until February 3, 2016, after he had crossed the age limit. He obtained the Medical Board certificate within seven days of the communication. Nevertheless, the company rejected his son's claim for compassionate appointment on the ground that the employee had retired after attaining 55 years of age.
The Bombay High Court upheld the rejection, holding that the Medical Board certificate had been obtained only after the employee crossed the age threshold.
Supreme Court's Findings
The Supreme Court accepted that compassionate appointment is an exception to the normal recruitment process and must be governed strictly by the applicable scheme. However, it held that the employer was equally bound to administer the scheme fairly and within a reasonable time.
The Court observed that an employer cannot claim benefit if it is its own default to deny a compassionate appointment to an employee who diligently and continuously proceeded with its claim.
The Court set aside the judgment of the Nagpur Bench of the Bombay High Court, holding that the appellant could not be denied compassionate appointment on account of the employer's own delay, despite the appellant's parent having promptly applied for voluntary retirement on medical grounds.
“Once the appellant No.2 applied for voluntary retirement on medical grounds before attaining 55 years of age and supported the application with a Government medical certificate, the respondent-company was required to scrutinise the application with reasonable promptitude. If the Civil Surgeon's certificate was considered insufficient, the respondent-company had to inform the appellant No.2 so before the age threshold expired. It could not remain silent till the appellant No.2 crossed 55 years and thereafter, rely on the consequence of its own delayed action.”, observed the bench.
Allowing the appeal, the judgment authored by Justice Kotiswar Singh, referring to the scheme, observed that if it required an employee to retire on medical grounds before attaining 55 years and that the incapacity be certified by a duly appointed Medical Board. However, the Court held that the employer could not rely upon its own delay in communicating procedural requirements to defeat an otherwise eligible claim.
Referring to the principle that no person should benefit from their own wrong, the Bench relied on Kusheshwar Prasad Singh v. State of Bihar where it was held:
"It is settled principle of law that a man cannot be permitted to take undue and unfair advantage of his own wrong to gain favourable interpretation of law. It is sound principle that he who prevents a thing from being done shall not avail himself of the non-performance he has occasioned. To put it differently, 'a wrong doer ought not to be permitted to make a profit out of his own wrong.”
Applying the law, the court observed:
“Once the very basis of rejection is found unsustainable, the denial of compassionate appointment cannot be upheld. The claim has remained pending since 2016 and the appellants have been pursuing the matter diligently and continuously. The object of compassionate appointment would be defeated if, after such prolonged delay, the matter is again left at the stage at which the respondent-company ought to have acted years ago. In the peculiar facts of the case, the appropriate relief is to allow the appeal and direct grant of compassionate appointment.”
The Bench explained that the purpose of the age condition was to identify cases where an employee became medically incapacitated before the prescribed age, not to enable the employer to defer scrutiny until the age limit expired and then reject the claim.
The Court further held that the requirement of certification by a Medical Board was intended to verify genuine claims of medical incapacity. If the employer found the initial medical certificate inadequate, it was obliged either to refer the employee to its own nominated medical panel or promptly require him to obtain certification from the appropriate Medical Board.
The Bench said permitting the employer to remain silent and later reject the claim on technical grounds would place the benefit of the scheme "at the mercy of administrative delay" and defeat the fairness inherent in a beneficial welfare scheme.
In terms of the aforesaid, the appeal was allowed.
Cause Title: RAHUL S/o. RAMNARAYAN MADANKAR & ANR. VERSUS THE NEW INDIA ASSURANCE COMPANY LIMITED & ORS.
Citation : 2026 LiveLaw (SC) 693