Computation Of Family’s Income Including Notional Income From Terminal Benefits Valid For Considering Ex-Gratia Payment: Delhi High Court
The petitioner had filed the petition before the Delhi High Court seeking ex-gratia payment in lieu of compassionate appointment, following the death of her husband.
Justice Prateek Jalan, Delhi High Court
While dismissing a petition of a wife seeking ex-gratia payment following the death of her husband, who was a bank employee, the Delhi High Court has held that the provision in the Bank’s policy on ex-gratia payment, for computation of the family’s income, including notional income from terminal benefits, was valid.
The petitioner had filed the petition before the High Court seeking ex-gratia payment in lieu of compassionate appointment, following the death of her husband, who was employed as a Daftari in the respondent Bank of Maharashtra , when he died in the year 2014.
The Single Bench of Justice Prateek Jalan held, “Applying these principles to the facts of the present case, I am of the view that there is no illegality in the Bank’s proceeding on the basis of notional interest income which the family would have derived from its investments and from the terminal benefits of the deceased employee.”
“For the aforesaid reasons, I am of the view that the provision in the policy in question, for computation of the family’s income, including notional income from terminal benefits, is valid”, it added.
Advocate Ranjit Sharma represented the Petitioner while Advocate V.K. Gupta represented the Respondent.
Factual Background
The petitioner applied for compassionate appointment on April 16, 2015. Upon rejection of her application, she sought ex-gratia payment in terms of a policy of the Bank dated October 10, 2007. This policy is in terms of a scheme of the Indian Banks’ Association, and applies to cases where compassionate appointment is not provided to the family members of deceased employees. As her application did not meet with favourable consideration, she approached the High Court under Article 226 of the Constitution.
Arguments
It was the petitioner’s case that the Bank ought not to have taken into account, notional interest upon terminal benefits and investments, as part of the family’s income. It was submitted that such a computation could not be used to deprive the family of a deceased employee of ex-gratia payment, without any factual analysis as to whether the amounts received by the family, either on account of the deceased’s terminal benefit or the family investments, in fact yielded any interest.
Reasoning
Explaining the principles governing a scheme for ex-gratia payment, the Bench stated that such a scheme is analogous to a scheme for compassionate appointment. The Bench noted that the ground upon which the petitioner’s entitlement to ex-gratia payment was rejected was that the monthly income of the petitioner’s family exceeded 60% of the last drawn salary of her late husband. “A scheme for compassionate appointment, as held by the Supreme Court, is required to be implemented strictly on its own terms. The same principle must be applied to schemes for ex-gratia payment, which are analogous to compassionate appointment policies. The policy in the present case expressly provides for consideration of interest on terminal benefits on a notional basis. There is no challenge to the terms of the policy itself in the writ petition”, it said while also holding that there was no illegality in the Bank’s proceeding based on notional interest income which the family would have derived from its investments and from the terminal benefits of the deceased employee.
It was further noticed that the objective of the scheme is to provide immediate relief from indigence, without constituting a right or entitlement. This requires a comprehensive analysis of the family’s financial situation in the immediate aftermath of the death of the employee. “The exclusion of a notional calculation, and insistence upon consideration only on actual interest income also, in my view, lacks objectivity. Different families, with varying needs and desires, may have expended the terminal benefits received or their accumulated investments. It is not possible to identify the classes of expenditures, or the quantum thereof, which would be regarded as legitimate, for example marriage or the education of children, as against those which the employer considers unnecessary or unduly profligate”, it added.
Thus, concluding that the petitioner was not eligible for the grant of ex-gratia payment, the Bench dismissed the writ petition.
Cause Title: Omwati v. The Bank of Maharashtra (Neutral Citation: 2025:DHC:8676)