The Supreme Court has held that an employer cannot reject a dependent’s claim for compassionate appointment by relying on its own delay in processing an employee’s application for voluntary retirement on medical grounds. 

The bench of Justice Sanjay Karol and Justice Nongmeikapam Kotiswar Singh directed the insurer to grant compassionate appointment to the employee’s son within eight weeks. 

The case arose after an employee of The New India Assurance Company sought voluntary retirement on medical grounds before attaining the age of 55 years. The employee, who had joined the company in 1984 and was serving as an Assistant Clerk-cum-Cashier, developed serious neurological ailments that rendered him permanently incapacitated for further service. A Civil Surgeon certified his permanent incapacity on 21 July 2015, and the very next day he submitted an application seeking voluntary retirement on medical grounds under the company’s Compassionate Appointment Scheme. 

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Under the scheme, compassionate appointment is available to a dependent family member where an employee retires on medical grounds due to incapacitation before reaching 55 years of age. The scheme also requires that the incapacitation be certified by a duly constituted Medical Board or another prescribed authority. 

Despite receiving the retirement application and supporting medical certificate well before the employee attained the age of 55 years, the company neither accepted nor rejected the application. It also did not communicate any deficiency in the documents before the employee crossed the prescribed age limit. Instead, it first asked him to obtain a Medical Board certificate only in February 2016—after he had already turned 55. The employee promptly secured the certificate within seven days and submitted it. Nevertheless, the company later accepted his retirement only in June 2016 and rejected his son’s claim for compassionate appointment on the ground that the retirement had taken place after the employee attained 55 years of age. 

The Bombay High Court upheld the company’s decision, holding that the certificate issued by the Civil Surgeon did not satisfy the requirement of certification by a duly appointed Medical Board under the scheme. Since the Medical Board certificate had been obtained after the employee crossed 55 years, the High Court concluded that the conditions for compassionate appointment were not fulfilled. 

The Supreme Court disagreed with this approach, holding that while compassionate appointment schemes must indeed be strictly construed, employers are equally obligated to administer such schemes fairly, reasonably and within a reasonable timeframe. 

The Court noted that the employee had submitted his retirement application before attaining 55 years of age, enclosed a government medical certificate certifying permanent incapacity, and even sent repeated reminders requesting action before crossing the age threshold. Despite having all these documents, the company remained silent and failed to communicate that a Medical Board certificate was required until after the employee became ineligible under the scheme’s age condition. 

According to the Court, if the Civil Surgeon’s certificate was considered inadequate, the employer ought to have informed the employee of the deficiency promptly and, in any event, before the prescribed age limit expired. Instead, by delaying its communication and later relying upon the consequences of that delay, the employer effectively frustrated the operation of the beneficial scheme. 

A central feature of the judgment is the Court’s application of the well-established legal principle that no authority should be permitted to take advantage of its own wrong.

The Bench observed that an employer cannot receive a time-sensitive application, keep it pending until the eligibility condition expires, and thereafter cite that very expiry as the reason for rejecting the claim. Such an interpretation, the Court held, would place the benefits of the compassionate appointment scheme entirely at the mercy of administrative inaction and undermine the scheme’s humanitarian purpose. 

The Court emphasized that the Medical Board certification requirement exists to verify genuine medical incapacity and prevent frivolous claims, not to provide an administrative mechanism for defeating otherwise legitimate applications through delay. 

While reaffirming the settled principles governing compassionate appointments laid down in Umesh Kumar Nagpal v. State of Haryana and Bhawani Prasad Sonkar v. Union of India, the Court clarified that strict adherence to the governing scheme does not absolve authorities from acting fairly and within a reasonable period. 

The Bench also relied upon its earlier decision in Malaya Nanda Sethy v. State of Orissa, where it had held that applicants should not suffer because of administrative delays attributable entirely to government authorities. The Court reiterated that granting a premium to official inaction would defeat the very object of compassionate appointment schemes, which are intended to provide immediate financial relief to families facing hardship. 

Finding the rejection legally unsustainable, the Supreme Court allowed the appeal and set aside both the Bombay High Court’s judgment and the rejection order issued by the insurance company. The Court directed The New India Assurance Company Ltd. to grant compassionate appointment to the employee’s son under the applicable scheme within eight weeks. 

Recognising that prolonged litigation had resulted in the applicant crossing the upper age limit, the Court further directed the company to grant appropriate age relaxation, holding that the delay caused by the employer and subsequent litigation could not prejudice the claimant.

However, the Court clarified that monetary benefits would accrue only from the date of actual appointment. It also upheld the High Court’s direction requiring the company to release any unpaid service dues payable to the retired employee within eight weeks. 

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