Holding

The NCWA V settlement is binding under s.18(3) of the Industrial Disputes Act, and the non‑statutory limitation periods in the circulars cannot defeat the appellant’s right to a compassionate appointment; the respondent must appoint him.

Summary

A workman employed by Central Coal Field Ltd. died in harness on 23‑02‑1997. His son, Mohan Mahto, applied for a compassionate appointment under sub‑clause (iii) of Clause 9.5.0 of the National Coal Wage Agreement (NCWA V), which required that a male dependent aged 15 or above be kept on a live roster and appointed upon attaining 18 years. The company rejected the applications, first on the ground that the son was a minor and later citing a six‑month limitation period prescribed in a 1995 circular (later replaced by a one‑year limit in 2000). The High Court’s single judge allowed the writ petition, but the division bench reversed, relying on K.R. Vishwanath. The Supreme Court held that the NCWA V settlement, being a binding settlement under s.18(3) of the Industrial Disputes Act, overrides any non‑statutory limitation, and that a public sector undertaking, as a ‘State’ under Art.12, must act fairly, reasonably and bona‑fide. Consequently, the company was directed to appoint the appellant on compassionate grounds.

Issues considered

The circulars prescribing limitation periods are statutory and can be used to deny a compassionate appointment.
Whether the NCWA V settlement is binding on the parties and overrides the limitation periods.
Whether a public sector undertaking, as a 'State' under Article 12, must act fairly, reasonably and bona‑fide in granting compassionate appointments.
The applicability of the K.R. Vishwanath decision to the present case.
The existence of a right to compassionate appointment for the appellant under the settlement.

Legislation cited

Constitution of Indias. Article 12, s. Article 16
Industrial Disputes Act, 1947s. 18(3), s. 2(p), s. 2(s)

Subjects

compassionate appointmentsettlementIndustrial Disputes Actpublic sector undertakinglimitation periodlive rosterArticle 12fairnessbona fidelabour law

Judgment

A MOHANMAHTO
v.
M/S. CENTRAL COAL FIELD LTD. & ORS.

SEPTEMBER 18, 2007

B [S.B. SINHA AND HARJJT SINGH BEDI, JJ.)

Labour Law:

Compassionate appointment-Workman died in harness-National Coal
C Wage Agreement, V-Providingfor compassionate appointment to dependent
of workman-Application of son of deceased workman filed under sub-clause
(iii) of Clause 9.5.0 of NCWA,V-Rejected by Management-HELD: A
'settlement' within the meaning of s.I8(3) of the Industrial Disputes Act is
binding on both the parties unless the same is modified or substituted by
D another settlement-No period of limitation was provided in settlement-
Period of limitation provided in Circular was not statutory nor is it imperative
in character-On facts, action of the Company declining appointment on
compassionate ground to applicant being contrary to 'settlement' is neither 'f

fair nor reasonable nor bona fide-Company directed to offer appointment
to the applicant-Industrial Disputes Act, I947-ss. I8(3)-Constitution of
E India-Article I 2.

Constitution of India, I950:

Article I 2- 'State '-HELD: A public sector undertaking which is 'state'
within the meaning of Article 12 is expected not only to act fairly but also
F reasonably and bona fide-Administrative Law- 'State' authorities.
.\.,

A workman in the service of the respondent, a Public Sector
Undertaking, died in harness on 23.2.1997. His son, the appellant, who at
that time was minor but above 15 years of age, filed an application for
G appointment on compassionate ground on 25.10.1997. The terms and
conditions of service of the workman of the respondent-Company were
governed, inter alia, by a 'settlement' known as National Coal Wage
Agreement, V (NSWA,V). Sub-clause (iii) of clause 9.5.0 Qfthe said settlement
provided, inter alia, that a minor male dependent, if he be 15 years of age, of
a deceased be provided employment on his attaining 18 years of age and
H 1142
/' .

MOHAN MAHTO v. CENTRAL COAL FIELD LTD. 1143

meanwhile his name be kept on the live roster. The application of the appellant A
was rejected by the respondent-Company on the ground that he was a minor
at that time. He later filed another application on attaining majority on
26.9.1999. He was again declined the appointment statingJhat he was under
age and also his name was not kept in the live roster. On the basis of the
Circular dated 12.12.1995, providing for six months' limitation for filing the B
application for appointment on compassionate ground from the date of death
of the deceased-workman, the respondent held that there was considerable
delay in applying for appointment The writ petition filed by the applicant was
allowed by the single Judge of the High Court. However, the Division Bench
of the High Court allowed the writ appeal filed by the Company. The Division
Bench relying on the decision in K.P. Viswanath 's case* held that the Court C
had no jurisdiction to extend the period of limitation. Aggrieved, the writ
petitioner filed the instant appeal.

Allowing the appeal, the Court

HELD: 1.1. A settlement within the meaning of sub-section (3) of Section D
18 of the Industrial Disputes Act, 1947 is binding on both the parties and
continues to remain in force unless the same is altered, modified or
substituted by another settlement. No period of limitation was provided in the
settlement. The respondent might have jurisdiction to issue the circular
prescribing a period of limitation for filing application for grant of appointment ·
on compassionate ground, but, such circular was not only required to be E
strictly complied with but also was required to be read keeping in view the
settlement entered into by and between the parties. (Para 10] (1148-F, G)

1.2. The right to obtain appointment on compassionate grounds, in the
instant case, emanates from the settlement i.e. NCWA,V. The expanding F
definition of workman as contained in Section 2(s) of the Industrial Disputes
Act, 1947 would confer a right upon the appellant to obtain appointment on
compassionate ground, subject, of course, to compliance of the conditions
precedent contained therein. The case for grant of compassionate appointment
of a minor was undisputedly required to be considered in terms of sub-clause
(iii) of Clause 9.5.0 of the N.C.W.A.V. In terms of the said provision, the name G
of the appellant was to be kept on a live roster. He was to remain on the live
roster till he attained the age of 18 years. Respondents did not perform their
duties cast on them thereunder. It took an unilateral stand that an application
has been filed in the year 1999 in the prescribed form. For complying with
the provisions of a settlement which is binding on the parties, bona fide or H
...<,
'

1144 SUPREME COURT REPORTS [2007] 9 S.C.R.

A otherwise of the respondent must be judged from the fact as to whether it had
discharged its duties thereunder or not In this case, not only the respondent
failed and/or neglected to do so, but it took an unholy stand that the elder
brother of the appellant being employed, he was not entitled to appointment
on compassionate ground.
[Paras 10, 11 and 16] (1148-G, H; 1149-A; 1151-A, B, CJ
B
LG. (Karmik) and Ors. v. Prahalad Mani Tripathi, (2007) 6 SCALE 370
and State Bank of India and Anr. v. Somvir Singh, (2007) 4 SCC 778.

1.3. A public sector undertaking which is a 'State' within the meaning
of Article 12 of the Constitution of India is expected not only to act fairly but
C also reasonably and bona fide. While so acting, it must provide for a period
of limitation which is reasonable. The period of six months' limitation
prescribed in the circular letter dated 12.12.1995 was not statutory. It is also
. not imperative in character. Besides, the circular was a unilateral one. Further,
the matter should also be considered keeping in view the subsequent conduct
of the respondent insofar as it issued another circular letter in the year 2000
D providing for filing of an application for appointment on compassionate ground
within a period of one year. In this case, the action of the respondent is neither
fair nor reasonable nor bona fide.
tparas 15 and 17] (1151-C, E; 1150-F; 1151-Fl

1.4. Furthermore, in the letter dated 2/3.08.2000, expiry of the period
E of limitation was not taken as a ground for rejecting the application of the
applicant. Under-age and non-placement of his name in live roster are stated
to be the reasons. It is, therefore, unfair on the part of the respondent to raise
such a plea for the first time in its counter-affidavit to the writ petition. If he
was under-age, definitely, it was obligatory on the part of the respondent to
keep his name in the live roster. It was not done. Reliance placed by the High
F Court on KR Vishwanath*, is misplaced. The impugned judgment cannot be
sustained which is set aside. Respondent is directed to offer appointment to
the appellant on a suitable post.
[Para 17 and 18] [1151-G; 1152-A, E, F)

Umesh Kumar Nagpal v. State of Haryana and Ors., (1994) 4 SCC 138
G and *Commissioner ofPublic Instructions and Ors. v. KR. Vishwanath, (20051
7 sec 206, held inapplicable.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4339 of2007.

From the Judgment and Order dated 20.02.2006 of the High Court of
H Jharkhand at Ranchi in L.P.A. No. 142 of2004.
MOHAN MAHTO v. CENTRAL COAL FIELD LTD. [SINHA, J.) 1145

)
Rajesh Kumar and D.B. Vohra for the Appellant. A
A.M. Singhvi and Sunil Roy for the Respondents.

The Judgment of the Court was delivered by

S.B. SINHA, J. 1. Leave granted. B
2. Appellant's father Rameshwar Mahto was employed as a Fitter,
Category IV, in a coal mine belonging to the respondent known as Kuju
Colliery. He died in harness on 23.02.1997. The terms and conditions of the
service of the workmen working in coal mines are inter alia governed by a
'Settlement' known as National Coal Wage Agreement (N.C.W.A.) V. C
Indisputably, the said settlement, in terms of Sub-section (3) of Section 18 of
the Industrial Disputes Act, 1947 is binriing on the parties. Clause 9.3.2 of
N.C. W.A. V refers to appointment of dependants of the deceased employees
working in the coal mines; sub-clause (iii) of Clause 9.5.0 whereof reads as
under:
D
"(iii) In case of death either in mine accident or for other reasons or
medical unfitness under clause 9.4.0, if no employment has been
offered and the male dependent of the concerned worker is 15
years and above in age he will be kept on a live roster and would
be provided employment commensurate with his skill and E
qualifications when he attains the age of 18 years. During the
period the male dependant is on live roster, the female dependant
will be paid monetary compensation as per rates at paras (I) and
(ii) above."

3. Appellant filed an application for appointment on compassionate F
ground on 25.10.1997. The same was denied to him inter a/ia on the premise
that he was a minor at the relevant time. He filed an application in prescribed
form upon attaining majority on 26.09.1999 which was rejected by an order
dated 3.08.2000 stating:

"With reference to the Jetter No. GM(K)/PD-9.3.2/2000/749 dated Nil G
of Staff Officer (P), Kuju Area this is to inform you that the proposal
has not been agreed by the competent authority since the dependent
was not eligible for employment as he was under age and also his
name was not kept in live roaster. Also there was considerable delay
in applying for employment by the dependent."
H
1146 SUPREME COURT REPORTS [2007] 9 S.C.R.

A 4. Respondent purported to have' issued a circular letter on 12.12.1995
providing for six months' limitation for filing such an application for
appointment on compassionate ground from the date of death of the concerned
employees in the following terms:

"It has been observed from the details of the statements prepared and
B submitted by the Area for Placement Interview under para 9.4.2 of
NCWA-IV, that cases pertaining to the period beyond 6 months are
also entertained without any reasoning. Considering this situation
also in order to streamline the activities of the manpower and to have
effective control over it, it has been decided that the cases falling
c beyond 6 months from the date,of death of the concerned employees,
the dependent of the deceased employees will not be entertained,
unless express permission is given by Hqtrs. after thorough scrutiny
of the case. Now as action will be taken against those who fail to
complete the work within stipulated time.

Therefore, all the Staff Officers (Pers.) should discuss this matter
D
with the Personnel Executives of the Unit/Establishments and advise
them accordingly."

5. It was replaced by another circular letter issued in the year 2000
stating:
E "It has been observed from the case files received from areas for
appointment of dependants of ex-employees under para 9.3.2 of NC WA
V/VI that the cases pertaining to the period beyond six months are
also entertained and sent without any reasoning. Therefore, vide
circular No. PD/MP/9.4.2/9511151 dated 12.12.95 all areas were advised
F that the cases falling beyond six months from the date of death of the
concerned employee will not be entertained unless express permission
is given by Hqtrs. after thorough scrutiny of the case.

Now in view of the persistent demands of unions relaxation was
granted for one year from Feb. 2000 which was subsequently discussed
G anJ reviewed in the meeting held with unions at Corporate Level. It
was decided that henceforth application submitted under clause 9.3.2.
within one year after demise of an employee will not be treated as
belated case. Thus the application submitted by dependant concerned
after expiry of one year from the date of death of ex-employee will not
be considered for employment."
H
MOHAN MAHTO v. CENTRAL COAL FIELD LTD. [SINHA, J.] 1147
6. A writ petition was filed by the appellant before the High Court of A
Jharkhand, Ranchi which was marked as WPS No. 471 of2003 questioning the
order declining him the grant of appointment on compassionate ground by
the respondent. Before the High Court, the respondent took a stand that as
the elder brother of the appellant has already been in employment, he was not
entitled thereto. The said contention has since been given up. A learned
Single Judge of the High Court took notice of the aforementioned circulars B
vis-a-vis the relevant provisions ofN.C.W.A. V holding:

"From the scheme quoted herein above, it is clear that if on the
date of death of the deceased employee, the male dependant is 15
years and above in age then he will be kept on a Jive roster and would C
be provided employment commensurate with his skill and qualification
when he attains the age of 18 years. During the period the male
dependant is on Jive roster, the female dependant will be paid monetary
compensation. Admittedly, in 1997 petitioner was more than 15 years
of age and an application was filed by the petitioner in 1997 but
neither the petitioner was kept in Jive roster nor the widow of the D
deceased_ employee was paid monetary compensation. After attaining
I 8 years of age petitioner as per the aforesaid clause applied for
compassionate appointment in 1999 which has been arbitrarily rejected
by the respondents on the ground of delay. While the petitioner
approached this court by filing instant writ application third case has E
been made out by the respondents that petitioner's appointment was
refused on the ground of his elder brother, having been in employment
of the subsidiary company. This fact was subsequently falsified in the
manner discussed herein above.

For the aforesaid reasons, this writ application is allowed and the _F
impugned letters are quashed. Respondents are directed to give benefit
of National Coal Wage Agreement - VI to the petitioner by appointing
him in place of his deceased father, who died in harness, as regular
employee of the Company."

7. An intra-court appeal was preferred thereagainst by the respondent G
herein which by reason of the impugned judgment was allowed by a Division
Bench stating:

"In the case of Commissioner of Public Instructions v. K.R.
Vishwanath, reported in [2005] 7 SCC 206, the Supreme Court held
that the Court has no jurisdiction to extend the period of limitation H
1148 SUPREME COURT REPORTS [2007] 9 S.C.R.

A and so was of the view of the Division Bench of this Court in the case
of Sushi! Kumar Vengra v. Union ofIndia, reported in (2005) (1) JCR
282 (Jhr.)"

8. Mr. Rajesh Kumar, learned counsel appearing on behalf of the
appellant, inter alia submitted:
B
(i) the Division Bench of the High Court committed a serious error
in relying upon the judgment of this Court in Commissioner of
Public Instructions and Ors. v. K.R. Vishwanath, [2005] 7 SCC 206
as therein a statutory rule was made providing for a ,limitation of
one year for filing an application for appointment on compassionate
c ground fro~ the date of death of the employee;
(ii) The period of six months envisaged under the circular letter dated
12.12.1995 will have no application as: (a) it is directory in nature
and (b) the same was substituted by another circular of 2000.

D 9. Dr. A.M.Singhvi, learned senior counsel appearing on behalf of the
·respondents, on the other hand, urged:

(i) Respondent as an employer is entitled to take a policy deci8ion
in regard to implementation of the settlement. ':

(ii) Grant of appointment on compassionate ground, being an exception
E to Article 16 of the Constitution of India, should be strictly
construed.
(iii) As the circular letter issued in 2000 is prospective in nature, the
same will have no application in the instant case.

p I 0. A settlement within the meaning of Sub-section (3) of Section 18 of
the Industrial Disputes Act is binding on both the parties and continues to
remain in force unless the same is altered, modified or sub::.tituted by another
settlement. No period oflimitation was provided in the settlement. We would
assume that the respondent had jurisdiction to issue such circular prescribing
a period of limitation for filing application for grant of appointment on
G compassionate ground. But, such circular was not only required to be strictly
complied with but also was required to be read keeping in view the settlement
entered into by and between the parties. The expanding definition of workman
as contained in Section 2(s) of the Industrial Disputes Act would confer a
right upon the appellant to obtain appointment on compassionate ground,
H subject, of course, to compliance of the conditions precedent contained
''-'

MOHAN MAHTO v. CENTRAL COAL FIELD LTD. [SINHA, J.] 1149
therein. A
11. The right to obtain appointment on compassionate grounds emanates
from the settlement. Settlement is defined in Section 2(p) of the Industrial
Disputes Act to mean 'a settlement arrived at in the course of conciliation
proceeding and includes a written agreement between the employer and
workmen arrived at otherwise than in the course of conciliation proceeding B
where such agreement has been signed by the parties thereto in such manner
as _may be prescribed and a copy thereof has been sent to an officer authorized
in this behalf by the appropriate Government and the conciliation officer'.

12. Even in regard to prescription of a period of limitation, the respondent
ought to have kept in view the spirit thereof. C
13. We are not oblivious that grant of appointment on compassionate
ground is an exception to Article 16(1) of the Constitution of India.

In J.G. (Karmik) and Ors. v. Prahalad Mani Tripathi, (2007) 6 SCALE D
370, this Court observed:

"An employee of a State enjoys a status. Recruitment of employees
of the State is governed by the rules framed under a statute or the
proviso appended to Article 309 of the Constitution of India. In the
matter of appointment, the State is obligated to give effect to the E
constitutional scheme of equality as adumbrated under Articles 14
and 16 of the Constitution oflndia. All appointments, therefore, must
conform to the said constitutional scheme. This Court, however, while
laying emphasis on the said proposition carved out an exception in
favour of the children or other relatives of the officer who dies or who
becomes incapacitated while rendering services in the police F
department. See Yogender Pal Singh and Ors. v. Union of India and
Ors., A.LR. (1987) SC 1015.

Public employment is considered to be a wealth. It in terms of the
constitutional scheme cannot be given on descent. When such an
exception has been carved out by this Court, the same must be strictly G
complied with. Appointment on compassionate ground is given only
for meeting the immediate hardship which is faced by the family by
reason of the death of the bread earner. When an appointment is made
on compassionate ground, it should be kept confined only to the
purpose it seeks to achieve, the idea being not to provide for endless H
1150 SUPREME COURT REPORTS [2007] 9 S.C.R.

A compassion.

In National Institute of Technology & Ors. v. Niraj Kumar Singh,
(2007) 2 SCALE 525, this Court has stated the law in the following
tenns:-

"16. All public appointments must be in consonance with Article
B 16 of the Constitution of India. Exceptions carved out therefore
are the cases where appointments are to be given to the widow
or the dependent children of the employee who died in harness.
Such an exception is carved out with a view to see that the family
of the deceased employee who has died in harness does not
c a
become destitute. No appointment, therefore, on c.omp_assionate
ground can be granted to a person other than those for whose
benefit the exception has been carved out. Other family members
of the deceased employee would not derive any benefit thereunder."

14. In State Bank ofIndia and Anr. v. Somvir Singh, [2007] 4 SCC 778,
D this Court held:

"I 0. There is no dispute whatsoever that the appellant-Bank is required
to consider the request for compassionate appointment only in
accordance with the scheme framed by it and no discretion as such
left with any of the authorities to make compassionate appointment
E de hors the scheme. In our considered opinion the claim for
compassionate appointment and the right, if any, is traceable only to
the scheme, executive instructions, rules etc. framed by the employer
in the matter of providing employment on compassionate grounds.
There is no right of whatsoever nature to claim compassiona_te
appointment on any ground other than the one, if any, conferred by
F
the employer by way of scheme or instructions as the case may be."

i 5. The period of six months' limitation prescribed in the circular letter
dated 12.12.1995 was not statutory. It is also not imperative in character. Even
for entertaining such an application beyond the period of six months, the
G Headquarters of the Central Coal Field Limited is entitled to consider the facts
and circumstances of each case. Admittedly, Appellant filed an application for
grant of appointment on compassionate ground when he was a minor. His
application was rejected on that premise at the first instance but even at that
point of time the respondent did no~ take a stand that the same had not been
entertained on the ground that the same wa~ filed after expiry of the period
H of six months.
MOHAN MAHTO v. CENTRAL COAL FIELD LTD. [SINHA, J.] 1151
16. It is neither in doubt nor in dispute that the case for grant of A
compassionate appointment of a minor was required to be considered in terms
of Sub-clause (iii) of Clause 9.5.0 of the N.C.W.A.V. In terms of the said
provision, the name of the appellant was to be kept on a live roster. He was
to remain on the live roster till he attained the age of 18 years. Respondents
did not perform their duties cast on them thereunder. It took an unilateral B
stand that an application has been filed in the year 1999 in the prescribed
form. For complying with the provisions of a settlement which is binding on
the parties, bona fide or otherwise of the respondent must be judged from
.•. the fact as to whether it had discharged his duties thereunder or not. In this
·case, not only it failed and/ or neglected to do so, but as indicated hereinbefore
it took an unholy stand that the elder brother of the appellant being employed, C
he was not entitled to appointment on the compassionate ground. Thus, what
really impelled the respondent in denying the benefit of compassionate
appointment to the appellant is, therefore, open to guess. We expect a public
sector undertaking which is a 'State' within the meaning of Article ..12 of the
<.~ . Constitution of India not only to act fairly but also reasonably and bona fide.
In this case, we are satisfied that the action of the respondent is neither fair D
nor reasonable nor bona fide.

17. We have indicated hereinbefore, that it is not necessary for us to
go into the question as to whether on the teeth of the provision ofN.C.W.A.V.,
the respondent at all had any power to fix a time limit and thereby curtailing
the right of the workman concerned. We would assume that even in such a
E
matter, it had a right. But, even for the said purpose, keeping in view the fact
that a beneficial provision is made under a settlement, the 'State' was expected
to act reasonably. While so acting, it must provide for a period 0f limitation
which is reasonable. Apart from the fact that the period of limitation provided
for in the circular letter with a power of relaxation can never be held to be F
imperative in character, the matter ·should also be considered from the
subsequent conduct of the respondent insofar as it had issued another
circular letter in the year 2000 providing for filing of an application for
appointment on compassionate ground within a period of one year. It may be
that the said circular lettc;r has prospective operation but even in relation G
thereto we may notice that whereas the said circular letter was issued upon
holding discussion with the Unions, the circular letter of the year 1995 was
an unilateral one. Furthermore, in its letter dated 2/3.08.2000, it will bear
repetition to state, expiry of the period of limitation was nortaken as a ground
for rejecting his application. Under-age and non-placement of his name in live
H
1152 SUPREME COURT REPORTS [2007] 9 S.C.R.

A roster are stated to be the reasons. It is, therefore, unfair on the part of the
respondent to raise such a plea for the first time in its counter-affidavit to the
writ petition. If he was under-age, definitely, it was obligatory on the part of
the respondent to keep his name in the live roster. It was not done.

18. Reliance placed by the High ·Court on K.R. Vishwanath (supra), with
B respect, is misplaced. Therein, the terms and conditions of the parties were
governed by a statute known as 'Kamataka Civil Services (Appointment on
Compassionate Grounds) Rules, 1996'. Rule 5 of the said Rules provided for
a period of limitation. The said decision, therefore, cannot be said to have any
application whatsoever in the instant case.

c 19. In Umesh Kumar Nagpalv. State ofHaryana and Ors., [1994] 4 SCC
138 whereupon reliance has been placed by Dr. Singhvi, this Court held:

"6. For these very reasons, the compassionate employment cannot be
granted after a lapse of a reasonable period which must be specified
in the rules. The consideration for such employment is not a vested
D right which can be exercised at any time in future. The object being
to enable the family to get over the financial crisis which· it faces at
the time of the death of the sole breadwinner, the compassionate
employment cannot be claimed and offered whatever the lapse of time
and after the crisis is over."
E
What should be a reasonable period would depend upon the _rufos
operating in the field.

20. For the reasons aforementioned, the impugned judgment cannot be
sustained which is set aside accordingly. The appeal is allowed. Respondent
F is hereby directed to offer appointment to the appellant on a suitable post
within eight weeks from date. As the appellant is not in employment for a long
time, he is entitled to costs throughout. Counsel's fee assessed at
Rs. 25,000/-..

R.P. Appeal allowed.