Bank Cannot Deny Ex Gratia Payment On Mere Technicalities: Madhya Pradesh High Court Grants Relief To Deceased Employee's Widow

The Court found that the petitioner, the widow of a Bank cashier who died of cancer, was legitimately occupied with settling terminal benefits and pension claims, which were necessary to complete the ex-gratia application.

Consequently, the Court condoned the two-year delay, holding that the Bank's mechanical rejection violated the petitioner's legal rights, and directed the Central Madhya Pradesh Gramin Bank to pay ₹7,00,000 to the family.

The Bench of Justice Anand Singh Bahrawat observed, “Learned counsel for respondent/Bank is unable to give any plausible reason for fixing the time for filing an application within six months only. If the steps have not been taken by the widow of a deceased employee within six months, that may not be strictly taken into consideration in accordance with Scheme. The relief of grant of ex gratia payment should not have been disallowed merely on this technicality that the application requesting grant of ex gratia payment was not filed within six months under the scheme of ex gratia. The limitation of six months is also not a statutory limitation to be construed so strictly that after the expiry of that period the relief cannot be granted on any ground. 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.”

Advocate Prasad Gupta appeared for the Petitioner, whereas Advocate Somyadeep Dwividi appeared for the Respondents.

Facts of the Case

The husband of petitioner no. 1 served as a Cashier at the Central Madhya Pradesh Gramin Bank in Dabra. He suffered from cancer and passed away during treatment on September 30, 2009. Following his death, the Petitioners submitted applications in October 2009 requesting terminal benefits, medical claims, and compassionate appointment. While the Bank released payments for gratuity, leave encashment, and group insurance, it rejected the claim for ex-gratia payment through orders dated August 31, 2012, and May 27, 2013. The Bank based this rejection on the grounds that the application for ex-gratia was submitted more than two years after the employee's death, exceeding the six-month limitation period prescribed in the Bank's policy.

Contention of Parties

The petitioners contended that ex-gratia payments were introduced to provide financial help to the dependents of deceased employees who devoted their lives to their employer. They argued that the Bank acted in a mechanical and technical manner by rejecting the claim solely on the basis of delay. The petitioners explained that the delay occurred because the widow was occupied with settling family pension claims and securing her livelihood while caring for her children. They urged the court to apply a liberal interpretation rather than a strict one, as such payments were a "last hope" for the family.

The Respondent (Bank) contended that according to the Policy dated August 21, 2008, an ex gratia request had to be made within six months from the date of the employee's death. They pointed out that the employee died on September 30, 2009, but the petitioner only applied for ex-gratia on July 9, 2012. The Bank argued that its actions were strictly in accordance with the established Scheme and Circulars. They further relied on judicial precedents stating that if a claim was not laid within the prescribed six-month period, the petitioner was not entitled to the payment.

Observations

The High Court observed that the respondents released other dues like gratuity and leave encashment but rejected the ex-gratia claim on technical grounds of limitation. The Court noted that the ex-gratia scheme was intended to assist families in indigent or penurious circumstances. The Court found that the delay of approximately two years in filing the application was not intentional, as the petitioner was pursuing a compassionate appointment and managing her livelihood after her husband's death.

“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. The format of the application which had been filed by petitioner has columns regarding amounts received by petitioner as Pension, Provident Fund, Gratuity, Leave Encashment amount etc. It is not disputed that these amounts were given by respondent/Bank. The respondent/Bank has given the dates when these amounts were given to petitioner i.e on 18.11.2010 and 23.6.2011. Without receiving the amount of Provident Fund, Pension, Gratuity etc, the petitioner could not claim the ex gratia amount under the scheme and could not fill the the form completely. Therefore, even if there was some delay in filing proper application on the format prescribed under the Scheme, it should have been condoned by respondent/Bank”, the Court observed.

The Court further observed that the judicial precedent cited by the Bank was not applicable as the facts were different. Consequently, the Court held that the delay should be condoned and that denying the ex-gratia compensation was a violation of the Petitioners' legal rights.

The Court concluded that, as a legal heir and dependent, the Petitioners were entitled to receive the ex-gratia compensation.

Accordingly, the petition was disposed of with a direction to the Respondent/Bank to pay Rs.7,00,000/-  to the Petitioners within a period of three months from the date of order, failing which the Petitioners will be entitled to the interest @ 18% per annum on the said amount additionally from the date of filing of the petition till realization of the amount.

Cause Title: Smt. Rekha Jain & Ors. v. Central Madhya Pradesh Gramin Bank & Ors. [Neutral Citation: 2026:MPHC-GWL:10260]

Appearances:

Petitioner: Advocate Prasad Gupta

Respondents: Advocate Somyadeep Dwividi

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