IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. C.W.P. No. 3143 of 2008 DATE OF DECISION : 05.08.2009 Jai Bhagwan Sharma .... PETITIONER Versus State of Haryana and another ..... RESPONDENTS CORAM :- HON'BLE MR. JUSTICE SATISH KUMAR MITTAL Present: Petitioner in person. Mr. S.P. Singh, Advocate, for respondent No.2. * * * SATISH KUMAR MITTAL , J. The petitioner has filed the instant petition under Article 226 of the Constitution of India for quashing the order dated 29.3.2007 (Annexure P-8), passed by the Managing Director of the Haryana Seeds Development Corporation Limited – respondent No.2 (hereinafter referred to as `the respondent Corporation'), whereby the claim of the petitioner for making payment of encashment of unutilized earned leave of 94 days has been declined. A further direction to pay the said amount with interest has also been sought. In the present case, vide order dated 1.8.1983, the petitioner was appointed as Accounts Clerk on regular basis in the respondent CWP No. 3143 of 2008 -2- Corporation. He joined the said post on 5.8.1983. After completing more than 20 years of service, due to unavoidable family circumstances, the petitioner, in terms of his appointment letter, voluntarily resigned from the services of the respondent Corporation, after giving three months notice. Vide letter dated 1.9.2003 (Annexure P-1), he submitted three months prior notice of resignation. Vide order dated 12.9.2003, his resignation was accepted by the respondent Corporation with effect from 30.11.2003. The services of the employees of the respondent Corporation are governed by the Haryana Seeds Development Corporation Employees Service Regulations, 1989 (hereinafter referred to as `the Service Regulations'). Under these Service Regulations, there is no provision of pension. However, the employees, after their resignation or retirement, are entitled for payment of Provident Fund, Gratuity, Group Insurance and encashment of unutilized earned leave. At the time of submission of the resignation by the petitioner, he had 188 days earned leave to his credit. Undisputedly, after the acceptance of the resignation of the petitioner, he was paid Provident Fund, Group Insurance, Gratuity and the payment of leave encashment of 94 days i.e. 50% of 188 days earned leave to his credit. In the impugned order dated 29.3.2007 (Annexure P-8), it has been stated that out of 188 days earned leave to the credit of the petitioner, he was paid leave encashment of 94 days, in terms of clause (x) of the instructions dated 28.12.2008. It is the case of the petitioner that he has been illegally denied the encashment of full unutilized earned leave, as the CWP No. 3143 of 2008 -3- above said clause (x) of the instructions will not apply in the facts and circumstances of the case. I have heard counsel for the parties. It is the undisputed position that the petitioner had put in more than 20 years of service. Due to some unavoidable family circumstances, he tendered his resignation after giving three months notice vide letter dated 1.9.2003 (Annexure P-1). Vide order dated 12.9.2003 (Annexure P-2), the respondent Corporation accepted his resignation with effect from 30.11.2003. It is also not disputed that after his resignation, the petitioner was entitled for leave encashment, but the only dispute raised by the respondent Corporation is that he was not entitled for the encashment of the full unutilized earned leave, but in terms of clause (x) of the Instructions dated 28.12.2008, he was entitled to encashment of 50% of the earned leave to his credit. The said instructions dated 28.12.2008, copy of which has been annexed as Annexure P-7, are re-produced below for ready reference : “I am directed to invite a reference to Haryana Government, Finance department Circular letter No. 1/50/87-IFR-II dated 29.4.87 wherein it was decided to grant benefit of leave encashment to Haryana Government Employees, on retirement upto 240 days. The question of raising the limit of this benefit has been consideration of State Govt. for some time past. After carefully consideration, it has now been decided to raise the maximum limit of leave encashment from 240 days to 300 days to the following categories w.e.f. 1.7.97 i) Retirement on attaining the age of superannuation. CWP No. 3143 of 2008 -4- ii) Cases where the service of Government servant has been extended in the interest of public service, beyond the date of retirement on superannuation. iii) Voluntary/pre-mature retirement. iv) Where the services of a Government servant are terminated by notice or by payment of pay & allowances in lieu of notice, or otherwise in accordance with the terms and conditions of his appointment. v) In the case of termination of re-employment after retirement. vi) In the case of death of a Government Servant while in service, to the family of the deceased. vii) In the case of leave preparatory to retirement. viii) In the case of transfer of Government Servant to an industrial establishment. ix) On absorption of a government servant in the Central Public Sector Undertaking/autonomous body wholly or substantially owned or controlled by the Central/State Government. x) A government servant who resign or quit service shall be entitled to cash equivalent in respect of earned leave at credit on the date of cessation of service, to the extent of half of such at his credit, subject to a maximum of 150 days. After going through the aforesaid instructions, I am of the opinion that in the instant case, clauses (iii) and (iv) are applicable and not clause (x), as has been relied upon by the respondent Corporation. Clause (iii) provides that the employee seeking voluntary/pre-mature retirement shall be entitled for leave encashment upto 300 days of earned leave. Clause (iv) provides CWP No. 3143 of 2008 -5- that where the services of a Government servant are terminated by notice or by payment of pay and allowances in lieu of notice, or otherwise in accordance with the terms and conditions of his appointment, such employee shall be entitled for leave encashment upto 300 days of earned leave. In the instant case, the petitioner submitted his resignation in accordance with the terms and conditions of his appointment letter, by giving three months notice. The said resignation was accepted by the respondent Corporation, without any condition that he will not be entitled to any particular benefit, and he was permitted to resign in terms of his appointment letter. Thus, by accepting the resignation of the petitioner, after expiry of the notice period, the appointing authority has permitted the petitioner to retire from service. It will amount to voluntary retirement of the petitioner, which is covered by clause (iii) of the instructions. Therefore, in this case, clause (x) of the instructions (Annexure P-7) will not be applicable. In my opinion, this clause will be applicable, if the employee resigns or quits service without giving three months notice. Though, there is no provision under the Service Regulations for voluntary retirement, but when the appointing authority accepts the resignation of an employee, after expiry of three months notice period, the employee is deemed to have been permitted to retire from service. In such a situation, denial of the encashment of full unutilized earned leave, will be unreasonable and arbitrary. As per clause (iii) of the aforesaid instructions, when services of a Government servant are terminated by notice or by payment of pay and CWP No. 3143 of 2008 -6- allowances in lieu of notice, or otherwise in accordance with the terms and conditions of his appointment letter, such employee is entitled for leave encashment of the full unutilized earned leave upto 300 days. Therefore, an employee, who gets his services terminated by submitting resignation after giving three months notice in accordance with the terms and condition of his appointment letter, cannot be denied the benefit of leave encashment of the full unutilized earned leave upto 300 days, only on the ground that he submitted resignation. Even otherwise, leave encashment is not a concession granted to an employee. It is the earning of the employee, while working on the days, when he could have been on leave. Such an amount cannot be withheld or declined to be paid on the ground that the employee himself has resigned from service after giving three months notice. Learned counsel for the respondent Corporation, while relying upon a judgment of this Court in Ghanshyam Dass Relhan v. State of Haryana and others, 2007 (1) Services Law Reporter 159, argued that when the petitioner submitted resignation, then the entire service rendered by him stood forfeited. Therefore, he cannot be given the benefit of leave encashment. This contention is not acceptable. Firstly, the aforesaid decision pertains to the grant of pensionary benefits, which is not the issue in the instant case. In the said case, the employee had 18 years 2 months and 3 days qualifying service to his credit and he tendered resignation without putting the minimum qualifying service of 30 years for grant of pensionary benefits, therefore, he was held to be not entitled for any pension. Secondly, CWP No. 3143 of 2008 -7- in the instant case, the respondent Corporation itself has granted leave encashment to the petitioner to the extent of 94 days i.e. 50% of the earned leave to his credit. If by tendering the resignation, the entire service of the petitioner stood forfeited, then why the leave encashment to the extent of 94 days was granted to the petitioner. Thus, the aforesaid judgment, relied upon by learned counsel for respondent Corporation, has no relevancy to the facts and circumstances of this case. In view of the above, the instant petition is allowed with costs. The order dated 29.3.2007 (Annexure P-8), passed by the Managing Director of the respondent Corporation is set aside and the respondent Corporation is directed to pay the leave encashment of unutilized earned leave of 94 days to the petitioner, with interest at the rate of 6% per annum. Costs are assessed at Rs. 5,000/-. August 05, 2009 ( SATISH KUMAR MITTAL ) ndj JUDGE