Ex-Gratia Payments Last Hope Of Dependents; Rules Must Be Considered Liberally: MP High Court

The Madhya Pradesh High Court has directed the Central Madhya Pradesh Gramin Bank to pay the wife of the deceased employee ₹ 7 Lakh, observing that such payments represent the dependent's last hope and therefore must be considered with liberal, rather than strict, interpretation of the rules. The bench of Justice Anand Singh Bahrawat observed; "Ex gratia payment is a last hope of the dependents of the deceased employee who is no more and question of last hope cannot be considered by applying the strict interpretation and same should be considered by applying the rule of liberal interpretation because cases of ex gratia payment remains always on the mercy of employer and prayer of mercy cannot be refused in such a mechanical manner". A petition was filed by the wife of a Cashier working in the Central Madhya Pradesh Gramin Bank. The employee developed cancerous disease and, during the course of treatment, died on September 20, 2009. Thereafter, the wife applied to the Bank requesting payment of gratuity group insurance, leave encashment, and medical claims of her husband. She also applied for a compassionate appointment and further requested a grant of all benefits, including leave encashment, fund amount, insurance amount, financial benefits, arrears of salary, and other admissible dues arising after the death of the deceased.However, the Regional Director of the Bank (respondent no 2) rejected her claim on the ground that the application was not filed within the prescribed time and therefore not liable to be considered. Notably, the petitioner was paid all amounts except the ex gratia amount. The counsel for the petitioner argued that the concept of ex gratia payments was introduced to help the dependents of the deceased employee and that the employer was duty-bound to maintain the dependents of the deceased. It was further argued that the application for ex gratia payments should be considered with a liberal interpretation and should not be refused mechanically. The counsel for the Bank, however, contended that the application for ex gratia payments must be filed within six months from the date of death of the employee. Therefore, in the present case, due to the late submission of the application, the competent authority rejected the application. It was further contended that all actions of the Bank are based on the Scheme/Circular issued by the Bank and therefore, the impugned orders were just and proper. The bench noted that the delay in submitting the application was attributed to the petitioner's circumstances, especially the need to secure a family pension and manage livelihood after the death of her husband. However, the Bank rejected the claim on technical grounds of limitations without considering the aforementioned circumstances. The bench noted that the Bank had failed to communicate to her that she should avail herself of her remedy under the Scheme within six months from the date of the death of her husband. The bench further held that the relief of grant of ex gratia payment should not have been disallowed merely on this technicality that the application was not filed within six months. The limitation of 6 months is a statutory limitation and should not be construed so strictly that after the expiry of the said period, the relief cannot be granted on any ground. The bench observed, "Respondent/Bank ought to have communicated the petitioner that she should collect information and do the needful before the expiry of six months after the demise of her husband. The respondent/Bank has not disclosed as to when such communication had been made to her". The petitioner has an educational qualification of Class 12, and it could not be expected of the petitioner that she understood the policy, scheme and format of the application in English for ex gratia payment. Thus, the bench directed the Bank to pay ₹ 7 Lakh within three months from the date of the order. Case Title: Rekha Jain v Central Madhya Pradesh Gramin Bank [WP. No. 3058 of 2014]Citation: 2026 LiveLaw (MP) 93For Petitioner: Advocate Ramesh Prasad Gupta For Respondent: Advocate Somyadeep Diwvidi Click here to read/download the Order

Ex-Gratia Payments Last Hope Of Dependents; Rules Must Be Considered Liberally: MP High Court

Jayanti Pahwa

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