The Delhi High Court has set aside Punjab and Sind Bank’s decision denying compassionate appointment to the widow of a deceased employee, holding that the bank could not assume that terminal benefits had been invested and then treat hypothetical interest from those funds as family income.
A Division Bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tejas Karia allowed the appeal filed by Anita and directed the bank to grant her compassionate appointment within two months.
Background
Anita’s husband, Ashok Kumar, had served Punjab and Sind Bank as a Peon from September 18, 1995, until his death on September 23, 2022. Anita, his widow and sole surviving family member, applied for compassionate appointment in February 2023. Her initial application was rejected in December 2023.
After she submitted a revised application, the bank again rejected her claim in September 2024 under its “PSB Jeevan Sahara” scheme. The bank calculated her monthly family income at ₹33,422.37, which was above 60% of her husband’s last drawn net salary, fixed at ₹32,371.86 for the purpose of the scheme.
The calculation included ₹8,337.26 as notional monthly interest on terminal benefits received by Anita. The bank also included family pension and other pensionary benefits while assessing her financial position.
The High Court found that there was no material showing that Anita had actually invested the terminal benefits in a manner capable of generating the assumed monthly return. The Court also noted that the bank’s calculation effectively presumed that the entire corpus would remain untouched throughout her lifetime.
The Bench observed:
“The computation also presumes that the entire corpus and the investments would remain unutilised throughout the Appellant’s lifetime. Such an assumption is without basis, as the Appellant cannot be expected to not utilize the terminal benefits for her needs merely to preserve them as income-generating investments throughout her lifetime.”
The Court held that “notional income” under the scheme could cover income actually received or income capable of being generated from assets actually held by the family. However, it could not extend to hypothetical income attributed to terminal benefits which the family was neither required to invest nor shown to have invested.
After excluding the ₹8,337.26 notional interest, the family income fell to ₹25,780.11 per month, below the applicable threshold of ₹32,371.86. The Court therefore held that Anita fell within the eligibility requirement under Clause 5.1(c) of the scheme.
The Bench further held that family pension and the Welfare Society pension could not, merely because they were received after the employee’s death, operate as a substitute for or bar to compassionate appointment.
The Court consequently set aside the February 13, 2025 order, quashed the bank’s September 10, 2024 rejection order, allowed the appeal, and directed Punjab and Sind Bank to grant Anita compassionate appointment within two months.
Case Details:
Case Title: Anita v. Punjab and Sind Bank
Case Number: LPA 208/2025
Judges: Chief Justice Devendra Kumar Upadhyaya and Justice Tejas Karia
Decision Date: September 8, 2026
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