IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 10.11.2010 CORAM: THE HONOURABLE MR.JUSTICE P.JYOTHIMANI W.P.No.16076 of 2008 K.Unnikrishnan .. Petitioner Vs. 1. The Government of Tamil Nadu rep. by its Secretary to Government Animal Husbandry & Fisheries Department Fort St.George, Chennai – 600 009. 2. The Tamil Nadu Co-operative Milk Producer's Federation Limited, rep. by its Managing Director, Aavin Illam, Madhavarm Milk Colony Chennai – 600 051. .. Respondents PRAYER: Petition under Article 226 of the Constitution of India for issue of a writ of Certiorarified Mandamus as stated therein. For Petitioner : Mr.Balan Haridas For Respondents: Mr.P.Gurunathan Government Advocate for 1st respondent Mr.T.D.K.Govindarajan for 2nd respondent ORDER The writ petition is directed against the order of the first respondent dated 29.5.2008, by which the Government has rejected the representation of the petitioner dated 14.12.2007 claiming encashment of leave on retirement and also for a consequential direction against the respondents to settle the claim for the remaining earned leave wages of 83 days with interest at the rate of 18% per annum from the date it became due. 2.1. The brief facts leading to the filing of the writ petition are that the petitioner has joined in the service of the Dairy Development Department on 1.8.1969 as Office Assistant. When https://hcservices.ecourts.gov.in/hcservices/ the Government has created the Tamil Nadu Dairy Development Corporation Limited as an independent Government undertaking, the petitioner was sent on deputation to the Corporation on 1.7.1972. The Government thereafter has decided, as a matter of policy, to convert the Tamil Nadu Dairy Development Corporation Limited as a Co-operative Federation and the services of the employees were transferred on deputation to the second respondent/Federation. 2.2. The Government issued G.O.Ms.No.1921, Agriculture (MP.I) Department, dated 8.11.1983 for absorption of employees to the second respondent/Federation. While absorbing the Corporation employees into the Federation, under the scheme contemplated under the Government Order, in respect of the Earned Leave, under Clause 3(d), it was stated as follows: "3(d) Earned leave – The employee will be paid by Government cash equivalent of 50 percent of the quantum of earned leave at his credit as on the date of absorption. The balance of credit will be transferred to the accounts of the individual under the Tamil Nadu Co-operative Milk Producers' Federation with full leave liability thereof being paid to the undertaking by the Government to meet the leave salary payable to the employees absorbed in the undertaking." 2.3. The petitioner has exercised his option to become the employee of the second respondent/Federation in terms of the Government Order, which was accepted by the second respondent on 5.6.1991 with retrospective effect from 1.2.1981. 2.4. It is the case of the petitioner that he had to his credit 166 days of Earned Leave as on 31.1.1981 for the services rendered in the Dairy Development Department for the period from 1.8.1969 to 31.1.1981. According to him, by exercising the option as per the government order, he is entitled to the credit of 50% of the leave to his account under the second respondent/Federation as on 1.2.1981 as an opening balance and the same will have to be paid by the second respondent on the date of his superannuation, by taking into account the accumulated leave for the service rendered in the second respondent/Federation from 1.2.1981 till 31.5.2007. 2.5. The petitioner has attained age of superannuation and was allowed to retire on 31.5.2007 as an employee of the second respondent/ Federation. He had to his credit more than 240 days of earned leave for the service rendered to the second respondent/Federation as on the date of his retirement. The grievance of the petitioner is that the second https://hcservices.ecourts.gov.in/hcservices/ respondent/Federation has not paid the maximum admissible 240 days of earned leave credited to his account, but only made payment for 157 days, after deducting 83 days of earned leave, which was retained by the Dairy Development Department as on 31.1.1981. 2.6. Therefore, it is the case of the petitioner that as per the G.O.Ms.No.1921, Agriculture (MP.I) Department, dated 8.11.1983 when he was absorbed in the second respondent/Federation, the 50% of the earned leave which stood in his credit, namely to the extent of 83 days for the service rendered by him in the parent department, namely Dairy Development Department should be retained as it is and for the service rendered by him in the second respondent/Federation between 1.2.1981 and 31.5.2007, he will be entitled to the maximum 240 days earned leave. 3.1. On the other hand, it is the case of the second respondent that when the 50% of the quantum of earned leave that stood in the name of the petitioner to his credit for the service rendered in the Dairy Development Department is 83 days, it is from 83 days the benefits of earned leave under the second respondent/Federation should continue and taking that into consideration, even if the petitioner had the benefit of earned leave for the services rendered in the second respondent/ Federation for more than 240 days, he will be entitled to the benefit only up to 157 days, so that the total encashment comes to the maximum limit of 240 days. 3.2. It is not in dispute that as on the date of absorption of the petitioner under the second respondent/Federation, viz., on 31.1.1981, he was entitled to 166 days earned leave and by virtue of G.O.Ms.No.1921, Agriculture (MP.I) Department, dated 8.11.1983, he was allowed to encash the 50% of the earned leave, viz., 83 days and the remaining 83 days remained to his credit in the account of the second respondent/Federation. The question is whether those 83 days which remained in the account of the second respondent/Federation is to be adjusted towards the earned leave encashment of the services rendered in the second respondent/ Federation. 3.3. It is the case of the second respondent, as it is seen in the counter affidavit, that the remaining 83 days after encashment of 50% of the earned leave for the services rendered by the petitioner in the Dairy Development Department as on 31.1.1981 was taken as an opening balance to the credit of the petitioner's leave account in the second respondent/Federation and finally encashment for 157 days of privilege leave was made to the petitioner so that the total encashment comes to the maximum limit of 240 days. https://hcservices.ecourts.gov.in/hcservices/ 3.4. The respondents have, however, admitted that the petitioner has opted to become the employee of the second respondent/Federation with effect from 1.2.1981 and that the petitioner was specifically asked for option in the year 1991 and after getting his option to work under the second respondent/Federation, the absorption was accepted with effect from 1.2.1981. 3.5. It is also stated that as per the G.O.Ms.No.999, Personnel and Administrative Reforms (FR.III) Department, dated 30.10.1987 the total leave encashment on retirement being 240 days and the petitioner having opted to come to the second respondent/Federation, cannot get more than the benefits conferred under the said government order and therefore, the 240 days is included with the 50% of earned leave transferred from the Dairy Development Department. It is stated that the Department has sanctioned 83 days of earned leave encashment vide proceedings dated 13.2.2008 and the remaining 157 days was encashed by the Federation. 3.6. It is stated that the petitioner after receiving the payment for 157 days sanctioned by the second respondent/Federation has made a representation for additional sanction of 83 days of earned leave, for which the petitioner was replied on 21.11.2007 stating that the encashment was sanctioned as per the circular of the Federation dated 4.1.1993, which contemplates the modalities for such sanction. The circular which has been referred to by the second respondent/Federation explaining the modalities for settling the claim relating to the leave encashment, viz., Circular No.20320/Accts.I-1/91, dated 4.1.1993, is as follows: "The actual earned leave at their credit as on 31.1.1981 computed in Government pattern shall be arrived. The employee will be paid by Government in cash for the 50% of the quantum of EL at their credit as on 1.2.1981. The Federation shall have the balance 50% of quantum of EL as on 31.1.1981 as opening balance in the leave account of the respective employee. From 1.2.1981 till the date of retirement/death of the employee the leave account shall be computed for recast as per rules/ regulations in the Federation for the duty rendered by them in the Federation. This leave so computed has to be added to the opening balance. While computing/recasting the leave account from 1.2.1981, the commencement of duty for this purpose https://hcservices.ecourts.gov.in/hcservices/ is to be taken as 1.2.1981 and the question of period of probation does not arise. The total leave actually availed by them under Federation service from 1.2.1981 has to be deducted from the leave so computed and the actual leave at credit as on the date of retirement/death shall be arrived at. They are eligible to draw the encashment of balance leave at their credit. The PL at credit as on the date of retirement/death so calculated/arrived at plus the 50% of the earned leave retained by the Government should not exceed the maximum limit of 240 days as per the rules." 3.7. It is also admitted that the petitioner was in continuous service from 1.7.1972 to 31.5.2007 without any break, initially as a Government employee on deputation and subsequently as an employee of the Federation. It is the case of the second respondent that when a government employee is entitled to earned leave benefit to the extent of 240 days as per G.O.Ms.No.999, Personnel and Administrative Reforms (FR.III) Department, dated 30.10.1987, by absorbing into the second respondent/Federation, the petitioner cannot get any better benefit, especially when G.O.Ms.No.1921, Agriculture (MP.I) Department, dated 8.11.1983, based on which the option has been exercised by the petitioner to be absorbed in the second respondent/Federation, and the subsequent circular of the second respondent dated 4.1.1993 are very clear in this regard. 3.8. It is also the stand of the second respondent that the second respondent being the Federation is not an instrumentality of the State and therefore, the writ petition is not maintainable. 4. I have heard the elaborate submissions made by the learned counsel for the petitioner and the respondents. 5. By G.O.Ms.No.999, Personnel and Administrative Reforms (FR.III) Department, dated 30.10.1987, based on the orders of the Government of India increasing the maximum of accumulation of earned leave from 180 days to 240 days based on the recommendation of the IV Pay Commission, the State Government had enhanced the earned leave to 240 days. As per the Tamil Nadu Leave Rules, 1933 in existence, a Government servant in superior service can accumulate 180 days of earned leave at the maximum. It was following the pattern of the Government of India, the State Government has modified the Tamil Nadu Leave Rules, 1933 with the following contents: https://hcservices.ecourts.gov.in/hcservices/ "3. After careful consideration, Government have decided that the existing provisions in Tamil Nadu Leave Rules, 1933 may be modified as follows:- (a) The existing maximum limit of 180 days on accumulation of Earned Leave provided in rule 8 shall be enhanced to 240 days. (b) The existing ceiling of 180 days for availing the benefit of encashment of unutilised earned leave shall be increased to 240 days in respect of following categories:- (i)retirement on attaining the age of superannuation; (ii)cases where the service of a Government servant has been extended, in the interest of Public service beyond the date of superannuation: (iii)Voluntary/premature retirement: (iv)Where the service 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: (v)in the case of death of a Government servant while in service, to the family of the deceased, and (vi)in the case of leave preparatory to retirement." 6. While the proposal for permanent absorption of Government servants into the second respondent/Federation was finalized, the Government issued G.O.Ms.No.1921, Agriculture (MP.I) Department, dated 8.11.1983, by which a comprehensive scheme has been framed regarding the benefits to be given to the Government employees who opt for permanent absorption in the second respondent/Federation. The scheme contemplated various benefits like terminal benefits, compensation in case of retirement, family pension, etc. It is in Clause 3(d) of the scheme framed under the said Government Order, the benefit of earned leave is stated as follows: "3(d) Earned leave – The employee will be paid by Government cash equivalent of 50 percent of the quantum of earned leave at his credit as on the date of absorption. The balance of credit will be transferred to the accounts of the individual under the Tamil Nadu Co-operative Milk Producers' Federation with full leave liability thereof being paid to the undertaking by the Government to meet the https://hcservices.ecourts.gov.in/hcservices/ leave salary payable to the employees absorbed in the undertaking." Therefore, under the said Government Order which forms a comprehensive scheme, based on which the petitioner has opted and was ultimately inducted into the second respondent/Federation, the Government has clearly stated that whatever is in the credit of earned leave of the Government servant as on the said date of option, out of the same after encashment of 50%, the balance 50% will be transferred in the account of the individual under the Federation with full leave liability thereof to be paid by the undertaking of the Government. On the facts of the present case, at the time when the petitioner has exercised his option to be absorbed in the second respondent/ Federation, it is not in dispute that he had to his credit 166 days of earned leave, out of which admittedly he had encashed 83 days. Therefore, the balance 83 days, as per the said Government Order, stood transferred to the second respondent/Federation. 7. The second respondent/Federation in the circular dated 4.1.1993, elicited above, has in accordance with and in implementation of G.O.Ms.No.1921, Agriculture (MP.I) Department, dated 8.11.1983 has prescribed the procedure stating that the remaining 50% of earned leave should be treated as opening balance in the leave account of the respective employee in the second respondent/Federation and stated in the scheme that by adding the 50% of the remaining earned leave as on 31.1.1981, which stood transferred to the credit of the employee with the Federation on the date of option, till the date of retirement in the service of the Federation totally put together the employee of the second respondent shall be entitled to the maximum limit of 240 days. This rule is in accordance with G.O.Ms.No.999, Personnel and Administrative Reforms (FR.III) Department, dated 30.10.1987, which cannot be found fault with. 8. The contention of the learned counsel for the petitioner as if the 50% of the balance earned leave benefit earned as on 31.1.1981 in the service of the petitioner with the Dairy Development Department has to be independently taken and after deputation and absorption in the second respondent/Federation, the privilege leave as it is called in the second respondent/Federation should have been started afresh from number one has absolutely no meaning. Such a reading would be anti- thesis to the very term "earned leave" contemplated under G.O.Ms.No.1921, Agriculture (MP.I) Department, dated 8.11.1983, which is the main source of the benefit to the petitioner himself. 9. As long as the procedure followed by the second respondent/ Federation, as it is seen in the circular dated https://hcservices.ecourts.gov.in/hcservices/ 4.1.1993, is not against either G.O.Ms.No.999, Personnel and Administrative Reforms (FR.III) Department, dated 30.10.1987 or more particularly G.O.Ms.No.1921, Agriculture (MP.I) Department, dated 8.11.1983, it cannot be said that the impugned order of the first respondent is bad in law. The Government order in G.O.Ms.No.1921, Agriculture (MP.I) Department, dated 8.11.1983 is unambiguous and can never be said to be either perverse or arbitrary and in my considered view, there is no scope for a different interpretation as it is propounded by the petitioner. 10. Even if the second respondent/Federation is an instrumentality of the State as contemplated under Article 12 of the Constitution of India, as it is held by the Hon'ble Apex Court in Madhya Pradesh State Co-operative Dairy Federation Limited and another v. Rajnesh Kumar Jamindar and others, [2009] 15 SCC 221, inasmuch there is absolutely no perversity or arbitrariness in the impugned order of the first respondent, which is in consonance with G.O.Ms.No.1921, Agriculture (MP.I) Department, dated 8.11.1983, apart from G.O.Ms.No.999, Personnel and Administrative Reforms (FR.III) Department, dated 30.10.1987, there is no need to interfere with the same. Further, the circular issued by the second respondent dated 4.1.1993, as stated above, is in consonance with the said government orders. 11. In State of Tamil Nadu and others v. V.S.Balakrishnan and others (C.A.Nos.1387 to 1404 of 1993), the Hon'ble Apex Court, by judgment dated 18.7.1994 relating to the second respondent/Federation, has considered the purport of G.O.Ms.No.1921, Agriculture (MP.I) Department, dated 8.11.1983. While striking down Clause 3(f) of the said government order which stipulates as under: "3(f) Any further liberalisation of pension rules decided upon by Government for Government employees after the permanent absorption of a Government's servant in Tamilnadu Cooperative Milk Producers' Federation would not be extended to them." the Hon'ble Apex Court has held that even after the permanent absorption, an employee of the Federation shall be entitled to the liberalised pension rules which may be propounded by the Government in future. The Apex Court has ultimately held as follows: "We make it clear that all those employees who have retired after February 1, 1981 they shall be deemed to have opted to join the service of the Federation permanently and, as such, they would be entitled to the terminal benefits in terms of GO 1921." Even though the said judgment may not have any bearing on the present issue regard earned leave, the Hon'ble Apex Court has https://hcservices.ecourts.gov.in/hcservices/ taken note of the entire scheme while striking down the clause relating to pension. For the above said reasons, I do not see any reason to interfere with the impugned order of the first respondent. The writ petition fails and the same is dismissed. No costs. Sd/- Asst.Registrar. /true copy/ Sub Asst.Registrar. sasi To: 1. The Secretary to Government Government of Tamil Nadu Animal Husbandry & Fisheries Department Fort St.George, Chennai – 600 009. 2. The Managing Director, The Tamil Nadu Co-operative Milk Producer's Federation Limited, Aavin Illam, Madhavarm Milk Colony Chennai – 600 051. 1 cc to Mr.K. tamilvendar, Advocate, Sr. 80464 W.P.No.16076 of 2008 VD (CO) kk 19/11 https://hcservices.ecourts.gov.in/hcservices/