Compassionate Appointment Denied Arbitrarily: Madhya Pradesh High Court Imposes Costs On Union Bank

The Madhya Pradesh High Court has set aside the rejection of a compassionate appointment claim by Union Bank of India, holding that authorities cannot import “alien” grounds like an employee’s alleged unsatisfactory service record when such a criterion is not part of the governing scheme.

In a strongly worded order, Justice Jai Kumar Pillai emphasized that mechanical and unsupported refusals defeat the very purpose of compassionate appointment, which is to provide immediate relief to families facing financial distress after the death of a breadwinner.

The case arose from a writ petition filed by Nikhil Kol, whose father, late Shankar Prasad Kol, had served as a Daftary in the bank for over 22 years before his sudden death in August 2016.

Left without any earning member, the petitioner, then a young and unemployed dependent, sought appointment on compassionate grounds under the bank’s scheme. His application was recommended at the local level and forwarded for approval, but was ultimately rejected in January 2018 through a brief, non-speaking order citing the deceased employee’s “unsatisfactory service record.”

Challenging this rejection, the petitioner argued that the denial was arbitrary and contrary to the scheme, which does not recognize service record as a disqualifying factor. He further highlighted the acute financial hardship faced by his family, including the responsibility of supporting multiple dependents. The respondents, despite being served notice, did not appear before the Court or file any reply, leading the matter to proceed ex parte.

The Court noted that the law on compassionate appointment is well settled and reiterated that such appointments are not a matter of right but are intended to alleviate immediate financial crisis.

However, it stressed that authorities must strictly adhere to the policy governing such appointments and cannot introduce extraneous considerations. Referring to settled principles, the Court observed that “appointment on compassionate grounds is an exception… meant to enable the family of the deceased to get over sudden financial crisis,” and must be processed without undue delay.

Examining the impugned order, the Court found it to be legally unsustainable. It recorded that the rejection did not cite any provision in the scheme permitting denial on the basis of service record. “The respondents have completely failed to demonstrate how this alien criterion was imported,” the Court noted, adding that such reasoning reflects non-application of mind.

The Court expressed surprise at how the service record of the deceased was “weaponized” to deny relief, particularly when the family’s financial distress was undisputed.

The judgment also took strong exception to the conduct of the bank in delaying the decision and then rejecting the claim on vague grounds. It held that such “mechanical and apathetic rejections” undermine the object of welfare schemes and inflict unnecessary hardship on vulnerable families.

The Court observed that the petitioner had applied promptly after his father’s death, yet was forced to endure years of financial difficulty due to administrative inaction and arbitrary decision-making.

Allowing the petition, the Court quashed the rejection order and directed the bank to reconsider the petitioner’s claim afresh in accordance with the scheme, without being influenced by extraneous factors. It further directed that a reasoned order be passed within 60 days. While clarifying that any appointment, if granted, would be prospective, the Court underscored the need for timely and fair consideration of such claims.

In a notable direction, the Court imposed costs of Rs. 50,000 on the respondents for the hardship caused to the petitioner, terming their conduct as “glaringly arbitrary.” It also issued a caution to authorities to ensure that decisions in compassionate appointment cases are reasoned, policy-based, and free from irrelevant considerations.

Case Title: Nikhil Kol v. Union Bank of India and Others

Date of Order: April 24, 2026

Bench: Justice Jai Kumar Pillai