Employer Cannot Delay Medical Retirement Until the Employee Crosses the Age Limit and Then Deny Compassionate Appointment: Supreme Court

Case Name: Rahul S/o Ramnarayan Madankar & Another v. The New India Assurance Company Limited & Others

Date of Judgment: 16 July 2026

Citation: 2026 INSC 710

Bench: Justice Sanjay Karol and Justice Nongmeikapam Kotiswar Singh

Held: The Supreme Court held that an employer cannot receive an application for medical retirement before the prescribed age limit, keep it pending, communicate a documentary deficiency only after the employee crosses that limit and then rely upon its own delay to reject the dependent’s claim for compassionate appointment. Although compassionate appointment must be granted strictly under the governing scheme, the employer is equally bound to administer that scheme fairly, promptly and within a reasonable time. Administrative inaction cannot be used to defeat an otherwise eligible claim.

Summary: The employee of New India Assurance Company applied for voluntary retirement on medical grounds on 22 July 2015, before attaining 55 years of age. His application was supported by a Civil Surgeon’s certificate declaring him permanently incapacitated for further service. Despite repeated reminders submitted before he crossed the age threshold, the company neither decided the application nor informed him that certification by a duly constituted Medical Board was required.

The company first demanded the Medical Board certificate in February 2016, after the employee had already completed 55 years. He obtained the certificate within seven days of the demand. The company subsequently accepted his medical retirement but rejected his son’s compassionate appointment claim on the ground that the employee had retired after attaining 55 years. The Bombay High Court upheld the rejection.

The Supreme Court found that the employee had acted diligently, while the delay was entirely attributable to the company. If the Civil Surgeon’s certificate was considered insufficient, the company was required to communicate the deficiency before the age threshold expired. It could not remain silent and later take advantage of the consequence created by its own inaction.

The Court observed that the age condition under the scheme was intended to identify employees who became medically incapacitated before 55 years. It was not designed to permit an employer to control eligibility by delaying scrutiny until the employee crossed the prescribed age. Such a technical interpretation would place the benefit of a compassionate appointment scheme at the mercy of administrative delay and defeat the fairness inherent in a beneficial policy.

Decision: The Supreme Court set aside the Bombay High Court judgment and the company’s rejection order. New India Assurance Company was directed to grant compassionate appointment to the appellant within eight weeks. Necessary age relaxation was also directed if the appellant had crossed the upper age limit during the pendency of the proceedings. Monetary benefits would accrue only from the date of actual appointment.