Internal Bank Circulars Cannot Impose Limitations Without Proper Communication to Legal Heirs, Court Directs Reconsideration
In a significant ruling, the Allahabad High Court has set aside the rejection of an Ex-gratia payment application by the Central Bank of India, emphasizing that internal bank circulars cannot impose limitations unless properly communicated to the legal heirs of deceased employees. The judgment came in the case of Rajiv Mishra v. Managing Director, Central Bank of India, where the petitioner challenged the bank's decision to deny Ex-gratia payment on the grounds of a limitation period stated in an internal circular.
The case revolved around the denial of an Ex-gratia payment to Rajiv Mishra, whose mother was an employee of the Central Bank of India and passed away in October 2011. Mishra applied for compassionate appointment, which was denied, but the bank invited applications for Ex-gratia payments instead. However, the application submitted by Mishra's brother in July 2013 was rejected by the bank, citing a six-month limitation period from the date of the employee's death, as per an internal circular dated April 9, 2008.
Justice Vikram D. Chauhan, presiding over the case, noted that the bank's internal circulars are not typically within the knowledge of individuals outside the organization unless widely disseminated. The court found no evidence that the bank had communicated this circular to the deceased employee's legal heirs. Furthermore, the bank's own communication in February 2013, inviting the application for Ex-gratia payment, was deemed the earliest point at which the petitioner could have become aware of the circular's existence.
The court emphasized that Ex-gratia payments are intended for the benefit of all family members of a deceased employee, and each member is entitled to claim such payment. Consequently, the rejection of the application filed by one family member does not preclude others from pursuing the benefit.
In light of these observations, the court quashed the bank's orders dated September 19, 2013, and November 8, 2013, and remanded the matter to the bank for reconsideration. The bank has been directed to process the application for Ex-gratia payment without considering the limitation period, ensuring any required documentation or formalities are communicated to the petitioner promptly.
This ruling underscores the importance of transparent communication by institutions regarding policies that affect the rights and entitlements of individuals, particularly in matters of financial support following the loss of a family member.
Bottom Line:
The internal circular of a bank cannot impose a limitation on applications for Ex-gratia payment unless it is communicated to the legal heirs of the deceased employee.
Statutory provision(s): Compassionate Appointment.
Rajiv Mishra v. Managing Director Central Bank of India, (Allahabad) : Law Finder Doc id # 2849501
