Punjab-Haryana High Court
Ram Kumar Ranga vs State Of Haryana And Ors on 15 July, 2019
Author: Harsimran Singh Sethi
Bench: Harsimran Singh Sethi
CWP-3843-2019 -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH.
(105) CWP-3843-2019
Date of Decision: July 15, 2019
Ram Kumar Ranga .. Petitioner
Versus
State of Haryana and others .. Respondents
CORAM: HON'BLE MR. JUSTICE HARSIMRAN SINGH SETHI
Present: Mr. Saurabh Garg, Advocate, for the petitioner.
HARSIMRAN SINGH SETHI, J.(ORAL)
In the present writ petition, the challenge is to the letter dated 11.02.2016/26.02.2016 (Annexure P-3) whereby, in reply to the legal notice served by the petitioner claiming the benefit of leave encashment has been declined on the ground that the petitioner was convicted by the competent Court of law on the charges involving moral turpitude in the case titled CBI Vs. Vidhya Dhar etc., and in pursuance to the said conviction, petitioner was dismissed from service vide order dated 21.03.2013 and was relieved w.e.f. 05.04.2013 and therefore, an employee, who has been dismissed from service on the charges involving moral turpitude, is not entitled for the grant of leave encashment.
As per the facts mentioned in the writ petition, petitioner was employed as a Block Education Officer in the Department of Education Haryana. Petitioner was convicted in the infamous JBT scam, which was enquired into by the Central Bureau of Investigation (CC No.37 of 2010), under the Prevention of Courruption Act, 1988. The said conviction is still maintained against the petitioner even as of now as the same has already been upheld upto the Hon'ble Supreme Court of India. Petitioner has already 1 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -2- undergone the sentence.
Keeping in view the conviction of the petitioner in a criminal case which also included the charges under the Prevention of Corruption Act, 1988, the respondent-Department dismissed the petitioner from service as the charges on which the petitioner was convicted, involved moral turpitude.
As the dismissal of the petitioner from service has also attained finality, the petitioner served upon the respondents a legal notice on 28.01.2016 (Annexure P-1). In the said legal notice, the demand of the petitioner was for the release of the leave encashment alongwith interest @ 18%. The said request of the petitioner was rejected by the respondents while replying to the legal notice vide letter dated 11/26.02.2016. In the said letter, the respondents informed the counsel who served legal notice on behalf of the petitioner that keeping in view the fact that the petitioner was dismissed from service, as per the instructions issued by the Department of Finance, Government of Haryana dated 12.08.1998, no leave encashment can be extended in favour of the petitioner, who is a dismissed employee. In the present writ petition, the said communication dated 11.02.2016- 26.02.2016 is under challenge.
Learned counsel for the petitioner very fairly states that he has not been able to find any rule which grants an employee, the benefit of leave encashment, prior to his/her retirement or to a dismissed employee but argues that there is also no rule, which prohibits the grant of the same as well. In the alternative, learned counsel for the petitioner argues that the dismissal of the petitioner from service will only amount to termination of his services and therefore, even otherwise, the case of the petitioner is 2 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -3- covered for the grant of benefit of leave encashment under the instructions, which have been issued by the Government of Haryana from time to time especially the instructions dated 12.08.1998. Further, a reliance has been placed by the counsel for the petitioner in support of his prayer for the grant of leave encashment on a decision rendered by this Court in CWP No.27383 of 2013 titled as Dhir Chand Vs. State of Haryana and others, decided on 19.11.2018. Counsel for the petitioner argues that by the said order, it has been held by a Coordinate Bench of this Court while examining the question of the grant of leave encashment to an employee who has been dismissed from service, that an employee, though dismissed from service, will be entitled for cash value of the leaves available for encashment on the day when the employee employer relationship end.
Learned counsel for the petitioner argues that the case of the petitioner for the grant of leave encashment is squarely covered by the settled principle of law, settled in Dhir Chand's case (supra) hence the rejection of his case by the respondents-State for extending the benefit of leave encashment by the impugned letter dated 26.02.2016 (Annexure P-3) is liable to be set aside and a direction needs to be issued to the respondents to grant the petitioner the benefit of leave encashment.
In order to appreciate the controversy, Mr. D.S. Nalwa, Additional Advocate General, Haryana, who is present in the Court, was requested to assist this Court so as to find out what are the provisions which exist in the service rules or the instructions issued by the Government of Haryana relating to the grant of leave encashment and whether, an employee who has been dismissed from service, is also entitled for the grant of the said benefit of leave encashment under those rules/instructions governing the 3 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -4- service relating to the grant of leave encashment even if the employee has been dismissed from service on account of misconduct, which involves the moral turpitude including the dismissal of an employee under the provisions of Prevention of Corruption Act, 1988. In Dhir Chand's case (supra), the benefit of grant of leave encashment to an employee who has been dismissed from service has been granted on the ground that no provision was brought to the notice of the Hon'ble Court, which debars an employee, who has been dismissed from service, to be granted the benefit of leave encashment.
Learned Additional Advocate General, Haryana argues that the leave encashment is available to an employee under Rule 8.21 Volume I Part I of the Punjab Civil Services Rules as applicable to Haryana. In the said Rule, it has been stated that the leave at the credit of the Government employee in his leave account shall lapse on the date of compulsory retirement. Learned counsel for the respondents argues that if an employee has been compulsorily retired, the leave which was already pending in the credit of the said employee will also lapse and therefore, the entitlement of an employee for the grant of leave encashment is to be seen on the day of his retirement and not prior to the said date. Learned counsel for the respondents-State argues that if on compulsory retirement, leave available to an employee for encashment will lapse then an employee who is dismissed from service on the ground of moral turpitude, cannot be placed on a better footing. Learned counsel for the respondents has brought to the notice of this Court various instructions, which have been issued by the Government of Haryana from time to time starting from February, 1978. Learned State counsel argues that right from the year 1978, it is the intention of the Government of Haryana that the unutilized earned leave will only turn into 4 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -5- cash payment upon retirement/superannuation of the employee and not before the said date. None of the instructions, which have been issued by the Government of Haryana grants the benefit of leave encashment prior to retirement/superannuation. Counsel for the respondents states that initially, while issuing the instructions in February, 1978, the leave encashment was denied even to the employees who were compulsorily retired by way of punishment and therefore, it clearly implies that an employee, who is dismissed from service has never been held entitled for the grant of leave encashment by the Government of Haryana either under the Rules or under the instructions, which have been issued from time to time in that regard.
Learned Additional Advocate General, Haryana argues that in respect of the arguments raised by counsel for the petitioner by relying upon Dhir Chand's case (supra), the same will not be applicable as the same has been rendered without noticing the actual Rules governing the service and the instructions issued by the Government of Haryana from time to time for the grant of leave encashment as due assistance was not extended at the time of the decision of Dhir Chand's case (supra), hence the same cannot be made applicable for all times to come keeping in view the provisions of Rules and instructions, which already existed on the date of the decision in Dhir Chand's case (supra).
I have heard learned counsel for the parties and have gone through the record with their able assistance.
Before an employee becomes entitled for the grant of leave encashment, there has to be a provision under the relevant Statute governing the service for extending the said benefits to an employee. An employee will become entitled for grant of leave encashment in case the same is 5 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -6- envisaged under the Rules and employee concerned is eligible for the grant of the same.
It is admitted by the parties at the time of hearing that only Rule for the grant of leave encashment is Rule 8.21 of Punjab Civil Services Rules, as applicable to the State of Haryana. The relevant Rule 8.21 of the Punjab Civil Services Rules is as under:-
" 8.21. (a) Leave at the credit of a Government employee in his leave account shall lapse on the date of compulsory retirement: Provided that if in sufficient time before that date he has-
(1) formally applied for leave due as preparatory to retirement and the same has been refused; or (2) Ascertained in writing from the sanctioning authority that such leave if applied for would not be granted, in either case the ground of refusal being the requirements of the public service, then the Govt. employee may be granted, after the date of compulsory retirement, the amount of earned leave so refused subject to a maximum of 120 days.
(b) A Govt employee retained in service after the date of compulsory retirement shall earn earned leave, at the rate of 1/2th of duty performed after that date and shall be allowed to add thereto any amount on leave which could have been granted to him under clause (a) had he retired on that date.
The total period of leave which he may take on each occasion shall not exceed 180 days earned leave. When his duties finally cease, the Govt. employee may be granted leave preparatory to retirement up to a maximum of 180 days or earned leave, as the case may be, as follows:-
(i) The balance after deducting the amount of leave, if any, taken during the period of extension, from the amount of leave which could have been granted to him under clause (a) had he retired on the date of compulsory retirement, plus
(ii) The amount of leave earned under this clause which
6 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -7- is due to the Govt. employee and which he has, in sufficient time during the period of extension-
1. Formally applied for a preparatory to final cessation of his duties and has been refused; or
2. ascertained in writing from the sanctioning authority that such leave would not be granted if applied for in either case, the ground of refusal being the requirements of public service.
The leave taken during the period of extension should be debited first against the credit of leave earned during that period, until it is exhausted; and then against any credit of leave refused under clause (a) and carried forward under clause (b).
Explanation 1.- For the purpose of this rule an officer may be deemed to have been denied leave only if, in sufficient time before the date on which he must compulsorily retire or the date on which his duties finally cease, he has either formally applied for leave as leave preparatory to retirement and has been refused it on the ground of exigencies of public service or has ascertained in writing from the sanctioning authority that such leave if applied for would not be granted on the aforesaid ground.
Explanation 2.- Where a spell of extension of service is followed by a further period of extension, the entire period commencing from the date of compulsory retirement and ending on the date of final cessation of duties shall be treated as constituting the period of extension for the purpose of clause
(b) of this rule and accordingly only the leave applied for during the last spell of extension as preparatory to final cessation of duties, and formally refused in the interests of public service should be treated as refused leave under clause
(b) (ii) of this rule.
Note 1. Regarding the date of compulsory retirement, see rule 2.5.
Note 2. When a Government employee who is already on 7 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -8- an extension of service applies for leave during the period of his extended service the conditions for the grant of such leave should be the same as for the grant of leave in an ordinary case after the age of compulsory retirement.
Note 3. A Government employee retained in service after the age of compulsory retirement is entitled to earn leave under clause (b) of this rule and a debit balance, if any, on the date he attained that age should be considered as wiped off.
Note 4. The period of 180 days mentioned in this rule includes any period of vacation with which leave is combined.
Note 5. See also note 4 under clause (b) of rule 3.26. Note 6. A deduction under rule 8.117 on account of vacation enjoyed should also be made in the case of Government employees whose leave is regulated under clause
(b) of this rule.
Note 7. (1) Two classes of cases are provided for in this rule:-
a) Govt. employee who are not required to be on active duty by Govt. after the date of compulsory retirement.
b) Govt. employees who are required to be on active duty after the date of compulsory retirement.
In the case of the former the condition in clause (a) and in the latter, the condition in both clauses (a) and (b) of this rule must be fulfilled before leave can be granted after the date of compulsory retirement. When acting under clauses (a) (2) and (b) (ii) (2) the amount of leave which would have been refused should invariable by indicated. The leave refused cannot, of course, be such as would extend beyond the date of compulsory retirement.
(2) The refusal of leave does not automatically establish a Govt. employee's claim to what is a very rare privilege i.e., grant of leave after retirement and a recommendation for the grant of leave under this rule should only be made when the refusal to grant leave has been on very strong grounds of interest; of the public service.
8 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -9- (3) A Govt. employee applying for leave must do so in sufficient time to enable a competent authority to decide whether leave should be granted from the date it is asked for, and where necessary to arrange for a special substitute. Such authority has full discretion to grant or refuse leave, but should not hesitate to refuse where it considers that (I) leave is unnecessary, or (2) where the grant may cause some administrative inconvenience, leave could have been asked for and granted earlier, or (3) leave has been asked for only in an endeavour to establish a claim under this rule. When leave has been refused on any of the above conditions should be clearly indicated to the applicant that leave under this rule will not be granted.
Note 8. The leave earned by the period of duty intervening between the refusal of leave pending retirement and the date of compulsory retirement is merged in the common pool in the leave account and forms an indistinguishable part of the total leave at credit the whole of which with the exception only of the net amount of leave refused lapses under clause (a) of this rule on the date of compulsory retirement. The grant of any leave between the date from which the refusal of leave took effect and the date of superannuation should, therefore be held to be a grant of leave against the amount originally refused. The amount of leave admissible under clause (a) after superannuation in such a case is, therefore, the amount of leave originally refused minus the amount of the 'post refusal' leave enjoyed, and this difference is subject to a maximum of 180 days. This principle applies equally to leave available under clause (b), including that earned in respect of duty during a period of refused leave.
Note 9- While the amount of leave refused under clause
(a) or (b) of this rule is fixed the quality of the leave (i.e. on full pay or half pay) whether it is taken before or after the date of compulsory retirement or, as the case may be, the date of final cessation of duties, may be varied to the advantage of the Govt.
9 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -10- employee concerned within the normal leave rules by the leave earned and standing to his credit on the date he proceeds on leave, and no second application for leave in sufficient time and its refusal are necessary merely to ensure this variation.
Note 10.- Compulsory recall from leave preparatory to retirement should be deemed to be a constructive refusal of the balance of leave unenjoyed for the purpose of this rule.
Note 11.- The Govt. employee who is granted refused leave under rule 8.21 extending beyond the date of compulsory retirement or the expiry of extension of service shall be deemed, for purposes of pensionary benefit to have retired from service on the date of his compulsory retirement or on the expiry of the extension of service, as the case may be, and shall become eligible for all pensionary benefits from such date. The leave salary admissible if such cases during the period of refused leave will be the same as admissible in the normal course but reduced by the amount of pension and pension equivalent of other retirement benefits. The calculation of pension equivalent of death-cum-retirement gratuity, by which the leave salary is required to be reduced, should be based on the full admissible amount of such gratuity and not on the amount of gratuity reduced as a result of the provision contained in paragraph 5 of the Family Pension Scheme, 1964 as reproduced in Appendix I of Volume II of these rules.
Note 12.- A Govt. employee who was due to retire on superannuation pension on 16th September, applied for earned leave for 120 days from 10th February which was refused by Govt. in exigencies of public service. He again applied for ninety-eight days earned leave from 10th June, which was again refused by Govt. in the exigencies of public service except 15 days. The employee again applied for leave for 16th September. The employee can be granted after the age of Superannuation only for leave preparatory to retirement that was refused viz. 98 days less 15 days is availed of by him. 120 days earned leave applied for by him was not preparatory to retirement and 10 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -11- hence its refusal by Govt. in the interest of public service does not entitle him to the protection of rule 8.21 after the date of superannuation."
A bare perusal of the above Rule would show that the entitlement of the Government employee for crediting the leave will lapse on the date of compulsory retirement. The lapse of the leave credit has been made synonymous with the retirement of an employee. There is no provision under the Rules governing the service that an employee is entitled to credit his leave upon the cessation of the relationship between the employee and employer at any stage. Only on the date of retirement, if an employee has leave to his credit, he will be entitled for encashment of the same. In order to appreciate the same, we have to go through the various instructions, which have been issued by the Government of Haryana from time to time in respect of grant of leave encashment. The history shows that the intention of the Government of Haryana, which will be clear from the wordings of the following instructions, is that the employee will only be entitled for the encashment of the leave at the time of retirement/superannuation.
The first instructions issued by the Government of Haryana in this regard, were issued on 13.02.1978. The instructions are as under:-
"Cash Payment in lieu of Unutilised earned leave on the date of retirement.
(Copy of F.D. Hr. No.11/5/78-FRII dt. 13-2-1978) I am directed to say that Haryana Govt. have considered the decision taken by the Govt. of India, in respect of grant of cash payment in lieu of unutilized earned leave at the credit of Govt. employee at the time of retirement on superannuation & it has decided that the Haryana Govt. employee retiring on "superannuation" on or after 31st January, 1978 will be paid cash Equivalent of leave salary in respect of the period of
11 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -12- earned leave at their credit at the time of retirement. This concession will be subject to the following conditions:-
(a) The payment of cash equivalent of leave salary shall be limited to a maximum of 180 days (now 300 days w.e.f. 01.7.97*) earned leave.
(b) The cash equivalent of leave salary thus admissible will become payable on retirement & will be paid in one lump- sum as a one time settlement.
(c) Cash payment under this order will, subject to (d) below, be equal to leave salary & dearness allowance admissible on that leave salary at the rates in force on the date of retirement. No city compensatory allowance and/or house rent allowance shall be payable.
(d) From the cash amount worked out in accordance with (c) above will be deducted the pension & pension equivalent of other retirement benefits for the period for which cash equivalent of earned leave is payable.
(Para (d) deleted vide letter dated 21.08.1978)
(e) The authority competent to grant leave shall suo- moto issue order granting cash equivalent of earned leave at credit on the date of retirement.
2. These orders shall not apply to cases of premature voluntary retirement or persons who are compulsory retired as a measure of punishment. (As per letters dt. 21.4.79, 9.3.88 and 30.01.1990 leave encashment also allowed in voluntary, compulsory retirement and retirement on invalid pension respectively.)
3. A Govt. employee already on leave preparatory to retirement who has been allowed to return to duty shall also be entitled to this benefit on the date of retirement.
4. The Govt. employees who attain the age of retirement on or after 31st January, 1978 & are granted extension of service after that date shall also be benefited by these orders. In such cases, the benefit shall be granted on the date of final retirement on the expiry of extension to the 12 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -13- extent of earned leave at credit on the age of superannuation plus the earned leave during the period of extension reduced by the earned leave availed during such period. Subject to a maximum of 180 days. This benefit will not, however, be available to those who attained the age of retirement before 31st January, 1978 and were on extension of service thereafter (30.9.77 vide circular dated 27.2.79)
5. Consequent on the issue of these orders, refusal of earned leave as preparatory to retirement, embodied in Rule 8.21 of the Pb. C.S.R. Vol. I, Part I, will no longer necessary. A Govt. employee can also avail of, as leave preparatory to retirement, a part of earned leave at his credit. In that case, he will be allowed benefits of these orders for the earned leave that remain at credit on the date of retirement in accordance with the terms & conditions stipulated in this letter.
6. Necessary amendment to the Pb. C.S.R. Vol I Part I, will be issued in due course."
A bare perusal of the above instructions would show that the Government of Haryana decided that cash payment in lieu of the unutilized earned leave at the credit of Government employee will be paid, at the time of retirement or on superannuation, and the maximum limit of the leave to be encashed was for 180 days.
A bare perusal of clause 2 of these instructions would show that the employees seeking premature voluntarily retirement and the employees who were compulsorily retired as a matter of punishment, were declined the benefit of leave encashment, meaning thereby that the leave encashment only became available at the time of retirement, on attaining the age of superannuation and not before that.
Thereafter, the instructions were issued by the Government of Haryana on 21.08.1978. The said instructions are as under:-
13 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -14- "Cash payment in lieu of unutilized earned leave on the date of retirement.
(Copy of F.D. Hr. No.11/5/78-IFRII dt. 21-8-78) I am directed to invite a reference to the instructions contained in Haryana Govt. letter No.11/5/78-IFRII dt. 13.2.78 and to say that some Departments have sought clarification as to whether a Govt. employee is entitled to get cash payment in lieu of unutilized earned leave on the date of retirement, even if he has availed of L.P.R upto 180 days. It is clarified that the cash payment is to be made in lieu of L.P.R which is upto 180 days only provided that the Govt. employee retires on superannuation. This means that a Govt. employee who avails of full L.P.R of 180 days is not entitled to this concession, but he will be at liberty to avail L.P.R. and get cash payment in lieu or unutilized L.P.R. on the date of retirement subject to the condition that the total period of L.P.R. plus unutilized earned leave does not exceed 180 days (now 300 days)
2. Attention is also invited to Para 1 (d) of the letter referred to above, which lays down that from the cash amount, so worked out, will be deducted the pension and pensionary equivalent of other retirement benefits for the period of which cash equivalent is payable. The State Govt. have reconsidered this matter and have decided on the pattern of Central Govt. instruction that no deduction on account of pension and pension equivalent of other retirement benefits need be made from the cash payment made in lieu of unutilized earned leave on the date of retirement on superannuation; para 1 (d) of Finance Department letter No. 11/5/78-IFRII dated 13-2-1978 may accordingly be deemed to have been deleted." A bare perusal of these instructions would show that the leave encashment in respect of the unutilized earned leave was only available at the time of superannuation.
Thereafter, vide instructions dated 07.04.1979, the benefit of 14 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -15- leave encashment was extended to the family of the employees, who dies while in service. The same are reproduced as under:-
"Cash equivalent of leave salary to be paid to the family of a Govt. employees who dies while in service.
(Copy of F.D. Hr. No.11/5/(2)-79-IFRII, dt. 7.4.1979) I am directed to invite a reference to Finance Department Notification No. 882-IFRII-77/31823, dated the 7th December, 1977, on the subject noted above and to say that it has been decided further that in case of death in service of a Govt. employee, the cash equivalent of leave salary in respect of earned leave admissible shall be paid to his family under Rule 8.122 (5) of Punjab Civil Services Rules, Volume I, Part I, subject to a maximum of 180 days. Further such cash equivalent shall no longer be subject to reduction on account of pension equivalent of death-cum-retirement gratuity.
2. Necessary amendment to the relevant rules will be issued in due course.
These orders will take effect from 30th September, 1977."
A bare perusal of the above would show that the family members of employee, who dies while in service, were made eligible for grant of the leave encashment. Had the leave encashment to be made available as and when relationship of employer and employee ceases, these instructions need not to have been issued that where an employee dies, prior to the date of his retirement, he will also be entitled for the same.
Thereafter, the instructions in this regard were further amended on 01.07.1982 and in these instructions also, the lumpsum one time settlement was to be given at the time of retirement.
Thereafter, these instructions were further modified on 16.08.1982, wherein for the very first time, the employees seeking voluntarily retirement were also made eligible for the grant of leave 15 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -16- encashment. The same are reproduced hereunder:-
" Cash payment in lieu of unutilized earned leave on the date of retirement revision of the method of calculation of cash payment.
(Copy of F.D. Hr. No.11/5(13)-IFR II-82 dt. 16.8.82) I am directed to invite a reference to Finance Department letter No.11/5/78-IFRII dt. 13.2.78 as modified from time to time on the above subject according to which cash equivalent of leave salary in respect of the earned leave at their credit at the time of retirement, subject to the maximum of 180 days (now 300 days w.e.f. 1.7.97) earned leave is payable to Govt. employees in case of retirements on superannuation and voluntary/premature retirements. It has been brought to the notice of Govt., that no uniform formula for calculating such cash equivalent has been adopted by the various departments. After careful consideration it has been decided that cash payment for un-utilised earned leave shall henceforth be made in the manner indicated below:-
Cash payment Pay+ D.A. Admissible on Number of un-utilised days date of retirement of earned leave at credit subject to a maximum of 180 days (now 300 days 30 X w.e.f. 1.7.97 These instructions remained in force when for the very first time, on 04.07.1984, the Government of Haryana issued instructions that in case at the time of retirement, an employee is under suspension or facing disciplinary/criminal proceedings, the leave encashment can be withheld.
The same are as under:-
" Cash payment in lieu of unutilised earned leave on the date of retirement.
(Copy of F.D. Hr. No. 11/95/83-I FR-II dt. 4-7-84) I am directed to invite a reference to the instructions contained in Haryana Govt. F.D. Letter No. 11/5/78-IFR-II dt. 13/2/78 on the basis of decision taken by the Govt. of India, the
16 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -17- State Govt. has decided that the authority competent to grant leave may withhold whole or part of cash equivalent of earned leave in the case of a Govt. servant who retires from service on attaining the age of retirement while under suspension or while disciplinary or criminal proceedings are pending against him. If in view of such authority there is a possibility of some money becoming recoverable from him on the conclusion of the proceedings against him. On the conclusion of the proceedings he will become eligible to the amount so withheld after adjustment of Government dues, if any.
Necessary amendments to the relevant rules will be issued in due course."
Thereafter, on 29.04.1987, for the very first time, the limit of leave to be encashed was enhanced from 180 days to 240 days. While doing so, it was recorded that earlier, the employees upon their retirement were entitled for the grant of leave encashment upto 180 days which was enhanced to 240 days. The said instructions are as under:-
"Cash payment in lieu of unutilized earned leave on the date of retirement.
(Copy of F.D. Hr. No. 11/50/87-1 FRII Dt. 29.4.87) I am directed to invite a reference to Haryana Government Finance Department circular letter No. 5/4/(2)- 82-IFR-II, dated 13.2.1978, as amended from time to time, wherein it was decided to grant benefit of leave encashment to Haryana Government employees, on retirement, up to 180 days. The question of raising the limit of this benefit has been under consideration of the State Government for some time past. After careful consideration it has been decided to raise the maximum limit of leave encashment from 180 days to 240 days w.e.f. 1st July, 1986 i.e. in the case of the employees retiring on or after the 1st July, 1986. There will, however, be no change in the existing terms and conditions for the grant of this benefit.
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2. Necessary amendment to the relevant rules will be issued in due course."
A bare perusal of the above would show that the Government of Haryana at every juncture ensured to reiterate that the leave encashment will only be given at the time of retirement and not prior to the same unless, and until, an employee dies while in service or seeks voluntary retirement as permissible under the Rules.
For the first time on 09.03.1988, even the employees, who are compulsorily retired prematurely, were held to be entitled for the grant of leave encashment. The reasons given in these instructions are that in case an employee gets pension, he shall also be extended the benefit of leave encashment. The said instructions are as under:-
" Cash payment in lieu of unutilized earned leave on the, date of retirement.
(Copy of F.D. Hr. No. 1/24/88-IFRII dt. 9.3.88) I am directed to invite a reference to Finance Deptt. Letter No.11/5/78 I FRII, dated 21.4.79, where in it has inter alia been laid down that facility of cash payment in lieu of unutilized earned leave on the date of retirement would not be admissible to those Govt. servants who are compulsorily retired prematurely by the Govt. and to say that after careful consideration the Govt. has now decided to allow the benefit of leave encashment to those government servants who are retired compulsorily premature on the basis of review of record or as a measure of punishment provided no cut in pension has been imposed. This will be subject to such other general conditions as are laid down in respect of leave encashment.
These instruction will take effect from the date of issue of this letter."
Vide instructions dated 10.06.1988, the limit for the leave encashment was also enhanced from 180 days to 240 days, to be given to the 18 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -19- family of the employees who dies while in service. The said instructions are as under:-
" Cash equivalent of leave salary to be paid to the family of Govt. Employee who dies while in service.
(Copy of F.D. Hr. No. 11/47/88-I FR II dt. 10.6.88) I am directed to invite a reference to Haryana Govt. Finance Deptt. circular Letter No.11/5(2)-79-I FRII dt. 7.4.79, on the subject noted above and to clarify that the decision regarding increase in the maximum limit of leave encashment from 180 days to 240 days w.e.f. 1st July, 1986 will also be admissible to the families of employees who die in service. Other conditions will remain unchanged.
2. The receipt of this letter may kindly be acknowledged."
A further clarification given by the Government of Haryana while issuing instructions dated 30.01.1990 to the effect that in case a person has been retired and given the invalid pension, employee will also be entitled for the leave encashment as being paid to the other retirees. The said instructions are as under:-
" Cash payment in lieu of unutilised earned leave on the date of Invalid retirement.
(Copy of F.D. Hr. No. 11/50/88-1 FR. II (12/1990) dt. 30.1.90) I am directed to invite a reference to Finance Deptt. Letter No. 11/5/78-1 F.R.II. Dated the 13th February, 1978 on the subject noted above & susbequent instructions on the subject and to state that it has decided to extend the benefit of leave encashment to those Govt. servants also who are retired on invalid pension on the same conditions as are applicable to other retirees.
2. These instructions will take effect from the date of issue of this letter."
19 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -20- These instructions continued to remain in operation till the same were revised by the Government of Haryana vide instructions dated 12.08.1998. By the said instructions, ten categories were culled out as to who will be entitled for the leave encashment. For the very first time, ten categories of the employees were made eligible for the grant of leave encashment and further, the leave encashment was enhanced from 240 days to 300 days. The relevant instructions dated 12.08.1998 are as under:-
" Encashment of unutilized earned leave.
(Copy of F.D. Hr. No. 11/12/98-4 FR-II dt. 12.8.98) I am directed to invite a reference to Haryana Government, Finance Department Circular letter No. 1/50/87
-1 FR-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 under consideration of the State Govt. for some time past. After careful 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.
ii) Cases where the service of a 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 a Government servant to 20 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -21- 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 resigns or quits 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.
There will, however, be no change in the existing terms and conditions for the grant of this benefit.
2. Necessary amendments to the relevant rules will be issued in due course."
These instructions remained in force till the respondents amended the rules in the year 2016. By a notification issued by the Government of Haryana dated 19.07.2016, Haryana Civil Services Rules were framed and in those Rules, it was categorically stated by the Government of Haryana as to who will be entitled for the encashment of leave. Rule 65 of the Haryana Civil Services (Leave) Rules 2016 (for short '2016 Rules'), deals with the same wherein, ten categories were made eligible for the grant of leave encashment. Rule 65 of '2016 Rules' is as under:-
"65. Leave encashment on the date of retirement or quitting service.--
(1) A Government employee, in addition to leave preparatory to retirement, is entitled to benefit of leave encashment of unutilized earned leave standing at his credit on the date of retirement or quitting service subject to maximum of 300 days, in any one or more of the following circumstances :-
1. retirement on superannuation;
2. compulsorily retirement as a measure of punishment;
3. voluntary retirement;
21 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -22-
4. premature retirement;
5. retirement on grounds of invalidation advised by a competent medical authority;
6. on completion of term of service of re-employment after retirement in a prescribed pay structure;
7. termination due to retrenchment or abolition of the post, provided the Government employee is not adjusted against any vacancy in any department of Haryana Government;
8. absorption/adjustment of a Government employee in an organization under any Government including Haryana Government;
9. subsequent appointment in a department under any Government other than Haryana;
10. death or disappearance while in service, to the family of the deceased or disappeared Government employee.
Note.─ The total benefit of leave encashment availed from any department or organization under any Government including Haryana Government at one or more of the above said occasions shall not exceed 300 days or upto the limit prescribed from time to time.
(2) In case of resignation from service, leave encashment shall be restricted to the extent of half of earned leave at the credit of Government employee or half of the maximum limit prescribed from time to time, whichever is less."
Rule 68 of '2016 Rules' clearly envisage that an employee, who is dismissed or removed from the Government service shall not be entitled for the leave encashment. The said Rule 68 is as under:-
" Leave encashment not admissible.-
A Government employee dismissed or removed from Government service, shall not be entitled to leave encashment."
A bare perusal of the facts and instructions noted above, clearly shows that there is no Rule or instructions, which entitles an employee to 22 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -23- leave encashment prior to his retirement. Rules/instructions reproduced herein before clearly envisage that leave encashment benefit is only available at the time of retirement and not as and when the relationship of employee and employer comes to an end.
Learned counsel for the petitioner further argues that once there is no Rule denying the benefit to a dismissed employee, the petitioner should be held entitled for the same because an employee is entitled to get a particular benefit till the same is taken away by an express rule.
The argument, which has been raised on behalf of learned counsel for the petitioner is misplaced.
In order to claim a particular benefit, there has to be a Rule, entitling the said employee for the grant of the said benefit. Without there being any express Rule extending a particular benefit by the employer to its employees, the said benefit cannot be claimed as a matter of right. In the present case, there is no rule/instructions issued by the State of Haryana entitling an employee for the grant of leave encashment prior to his/her date of superannuation except in the case where an employee dies while in service or has been compulsorily retired but still remains entitled for the benefit of pension in public interest under the service regulations. No rule has been cited by counsel for the petitioner, where an employee who is not entitled for the grant of pensionary benefits, has been held entitled for the grant of leave encashment, which benefit has been treated as a part of pensionary benefits. Under these circumstances, in order to claim the leave encashment, nothing has been brought to the notice of this Court by the learned counsel for the petitioner that under any rule/instructions, a dismissed employee has been made entitled for the grant of leave encashment. An employee has to show 23 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -24- his entitlement under the rules and in the absence of rule, instruction on the said issue should be unambiguous extending the said benefit. Instructions issued by the State of Haryana are very clear that leave encashment is a part of pensionary benefits and will only be available at the time of retirement and not before except in the case when an employee dies while in service.
It is a settled principle of law that the State is competent to supplement Rules by way of issuance of instructions on the same issue. If a rule needs any clarification, the State can clarify the same by issuing instructions. In the present case, the State has clarified the grant of leave encashment and the employees who are entitled to receive the same by issuing instructions starting from the year 1978 onwards. As per the instructions which have been issued by Government of Haryana, as reproduced hereinbefore, an employee only becomes entitled for the grant of leave encashment at the time of his/her retirement. The leave encashment has been made synonymous to the grant of pensionary benefits. No employee, except in the case of an employee who dies while in service, who might not be entitled for the pension, has been made entitled for the grant of leave encashment. Therefore, in order to find as to whether, an employee will be entitled for the grant of leave encashment or not, the same has to be seen in accordance with the Rule 8.21 of Punjab Civil Services Rules as applicable to State of Haryana read with instructions, which have been issued by the Government of Haryana from time to time. Once, ten categories were laid down by the respondents-State in the instructions, which were issued on 12.08.1998, no employee, who is not included in those categories, can claim the benefit of leave encashment. The said instructions are not under challenge. Therefore, the State is well within its right to decide the claim of 24 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -25- an employee for the grant of leave encashment keeping in view the said instructions dated 12.08.1998. Under the Rule 8.21 of Punjab Civil Services Rules as applicable to Haryana read with instructions issued from time to time, a dismissed employee is not entitled for the grant of leave encashment.
Counsel for the petitioner has not been able to bring to the notice of this Court any rule, which specifically grant the petitioner, who is a dismissed employee, the benefit of leave encashment. As no rule has been cited before this Court, where a dismissed employee has been held entitled for the grant of leave encashment, in the absence of any entitlement of a dismissed employee for the grant of leave encashment, under any provision of law/Rule/instructions issued by the State of Haryana, no claim can be made by the petitioner in this regard.
It is a settled principle of law that in the absence of rules, instructions issued by the Government will govern the service. Hon'ble Supreme Court of India in Civil Appeal No.879 of 2000 titled Bimlesh Tanwar Vs. State of Haryana and others, 2003 (2) S.C.T 361 decided on 10.03.2003, held as under:-
"It is also well settled that in the absence of rules governing seniority an executive order may be issued to fill up the gap. Only in the absence of a rule or executive instructions, the court may have to evolve a fair and just principle which could be applied in the facts and circumstances of the case."
The above said law was again reiterated by the Hon'ble Supreme Court of India while deciding Civil Appeal No.7002 of 2004 titled as D.P. Das Vs. Union of India and others, 2011 (4) S.C.T. 13 decided on 09.08.2011. The relevant portion of the said judgment is as under:-
"26. Another three-Judge Bench of this Court in Bimlesh Tanwar v. State of Haryana & others, (2003) 5 25 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -26- SCC 604, while dealing with the question of absence of a rule governing seniority held that an executive order may be issued to fill up the gap. Only in the absence of a rule or executive instructions, the court may have to evolve a fair and just principle of seniority, which could be applied in the facts and circumstances of the case.
27. xxx xxx xxx xxx
28. xxx xxx xxx xxx
29. As in this case there is no rule prescribed for the determination of seniority, this Court is left with only the guideline flowing from the executive instruction of 1946, in order to evolve a just policy, for determination of seniority.
30.From the analysis of the executive instructions referred to hereinabove, it is clear that the 1946 instruction has not been superseded and the same refers to the acceptance of the age of the candidate as the determining factor for seniority. Such a basis is not fortuitous and is otherwise just and reasonable."
Further, Hon'ble Supreme Court of India while deciding Civil Appeal No. 6166 of 1999, titled as Union of India Vs. Rakesh Kumar, 2001 (2) S.C.T. 1085 decided on 30.03.2001 held that if rules are silent at any particular time, the Government can fill up gaps and supplement the rules by issuing instructions not inconsistent with the rules. The relevant paragraph of the said judgment is as under:-
"18. In our view, there cannot be any doubt that Government cannot amend or substitute statutory rules by administrative instructions, but if the rules are silent on any particular point, the Government can fill up the gaps and supplement the rules by issuing instructions not inconsistent with the rules. Government also can confer certain benefits on its employees by administrative order."
In the present case, no rule has been shown to this Court which 26 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -27- provides the grant of leave encashment to a dismissed employee rather the instructions, which have been reproduced hereinbefore, clearly envisage that the leave encashment is to be granted only at the time of superannuation and not at any given point of time when the services of an employee comes to an end.
In view of the settled principle of law cited above, the instructions which have been issued by the Government of Haryana wherein, the grant of leave encashment has been regulated, have force of law and the employees can only claim the said benefit if they are entitled to the same under the said instructions and not otherwise.
Admittedly, petitioner does not fulfil the criteria which has been prescribed by the Government of Haryana for the grant of leave encashment especially as per the instructions dated 12.08.1998 and therefore, no grievance can be made by the petitioner against the impugned letter (Annexure P-3) by which the claim of the petitioner has been rejected.
Next arguments raised by the learned counsel for the petitioner for the grant of leave encashment is by relying upon the judgment in Dhir Chand's case (supra). In Dhir Chand's case (supra), Coordinate Bench relied upon Full Bench in LPA No.113 of 2012 titled as Punjab State Civil Supplies Corporation Ltd and others Vs. Pyare Lal, decided on 09.11.2012 to hold that as the leave encashment is a right in property and the same cannot be withheld notwithstanding pendency of a departmental enquiry or criminal proceedings and therefore, an employee who has been dismissed from service is entitled for the grant of leave encashment. The relevant portion of the order passed by the Coordinate Bench while deciding Dhir Chand's case (supra) is as under:-
27 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -28- "4. The legal position regarding leave encashment has been subject matter of attention of the Full Bench decision of this Court in case titled Punjab State Civil Supplies Corporation Ltd. & others Vs. Pyare Lal, 2014(4) SCT 711. The Court specifically dealt with the issue of leave encashment in the background of criminal and disciplinary proceedings. Agreeing with the opinions expressed by the Allahabad and Jharkhand High Courts in their Full Bench decisions in cause titled Bengali Babu Misra Vs. State of U.P. & others reported as 2003 3 AWC 1760 and MANU/UP/1042/2002 decided on 05.12.2002 and Dr. Dudh Nath Pandey Vs. The State of Jharkhand & others, 2009 (2) SLJ 105 both the Courts were of one mind in holding that leave encashment is a right in property, withholding of which, in the absence of statutory rule would mean depriving a person from his property without the procedure established by law. The action would be rendered in violation of Article 300-A of the Constitution of India. The result of dismissal would be only deprivation of pension and gratuity. But this is not true of leave encashment as it is part and parcel of salary.
5. The Full Bench in Pyare Lal case ruled that leave encashment is payable to a retiring employee notwithstanding pendency of departmental inquiry or criminal proceedings. The only distinction in this case is that it is not one of a retiring employee as this is a case of dismissal from service. However, this difference, to my mind, will not tilt the balance in favour of the State as still the settled legal position remains that leave encashment is part of salary and salary, like credit in General Provident Fund account of an employee, cannot be withheld in the event of dismissal because it represents money saved/earned for unutilized leave as a matter of right for work performed and duties discharged while in service." No doubt while deciding LPA No.113 of 2012 decided on 09.11.2012, the Full Bench of this Court held that the amount of leave 28 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -29- encashment which is payable to a retiring employee, cannot be withheld notwithstanding pendency of departmental enquiry or criminal proceedings against an employee. Coordinate Bench, while deciding Dhir Chand's case (supra) was not informed that against the order dated 09.11.2012 passed by the Full Bench in LPA No.113 of 2012, a review petition was preferred pointing out the provisions under Rule 8.21 (aa), the Government has right to withhold the benefit of leave encashment to an employee during the pendency of the departmental enquiry or the criminal proceedings. Review petition came to be decided by the Full Bench on 11.08.2014 and by accepting the arguments of the State that the State is well within its right to withhold the grant of leave encashment during the pendency of departmental enquiry and criminal proceedings, the Full Bench held that the benefit of leave encashment cannot be extended under the Punjab Civil Services Rules if the proceedings are pending against an employee and only the 100% provisional pension at the time of retirement is to be paid alongwith commutation of the pension. The relevant paragraph of the Full Bench judgment passed in review dated 11.08.2014 is as under:-
"Earlier, the Full Bench of this Court in the judgment dated 9.11.2012, agreed with the view taken by the Division Bench in B.S. Gupta's case (supra), holding that the amount of leave encashment is payable to the retiring employees and cannot be withheld notwithstanding the departmental inquiry or criminal proceedings pending against an employee. However, a review application was filed by the appellant pointing out that Rule 8.21(aa) of the Punjab Civil Service Rules, Volume-I, Part-I, Chapter- VIII, adopted by the appellant, provides for withholding of leave encashment, but such Rule was not brought to the notice of the Court. Considering the aforesaid fact, the order dated 9.11.2012 was
29 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -30- recalled on 1.8.2014 and the matter was ordered to be placed for hearing before the Full Bench and that is how we are seized of the present matter.
In Dr. Ishar Singh's case, the entire controversy was in respect of withholding or postponing of payment of pension and gratuity amount, during the pendency of the departmental inquiry. The Court considered Rule 2.2 and 9.9 of the Punjab Civil Service Rules Volume-II to hold that the gratuity can be withheld but State cannot withhold or postpone the payment of pension in anticipation of an enquiry nor can refuse to commute the pension, permissible under law. It concluded as under:-
"68. In view of the observations made above, I am of the considered view that though the State has preserved its right of withholding or withdrawing compensation of affecting it as a whole partly, permanently or temporarily, yet the State cannot withhold or postpone the payment of pension in anticipation of an enquiry nor can refuse to commute the pension permissible under the law, of course, gratuity can be withheld."
xxx xxx xxx
81. As a result of the above discussion, I would conclude as under:-
(i) The Government has no right to withhold or postpone pension or the payment on account of commutation of pension.The State is bound to release 100 per cent pension at the time of superannuation, may be provisionally.
(ii) The Government can withhold the gratuity or other retiral benefits except pension or postpone payment of the same during pendency of an enquiry.
(iii) Pension cannot be adversely affected before a finding of guilt is returned.
(iv) The Government can initiate departmental enquiry after long lapse before retirement, rather there is no limitation for initiating departmental enquiry from the date of incident before retirement. The delay and the explanation for the same
30 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -31- may reasonable be taken note of keeping in view its likelihood to cause prejudice to the delinquent if the enquiry is challenged in appropriate proceedings.
(v) The enquiry proceedings cannot be quashed solely on the ground of long pendency.
(vi) There is no effect of superannuation on the pendency of the enquiry proceedings.
(vii) The recovery of the Government dues can be made from gratuity or other retiral benefits only."
The conclusions (ii) and (vii), was the subject matter of interpretation in the earlier judgments. In some of the judgments, it is held that the amount of leave encashment cannot be withheld whereas, in another judgment, it has been held that the amount of leave encashment can be withheld during the pendency of departmental or criminal proceedings. The question to be examined is whether the leave encashment is the retiral benefits from which recovery can be effected in terms of the applicable Rules such as Rule 8.21(aa) inserted on 11.2.1987 in Punjab. The said Rule reads as under:-
"8.21(a) Leave at the credit of a Government employee in his leave account shall lapse on the date of his retirement:
Provided that the Government employee;-
xxx xxx xxx (aa) Notwithstanding anything contained in sub-rule (a) the authority competent to grant leave may withhold whole or part of cash equivalent of earned leave in the case of Government employee who retires from service on superannuation while under suspension or while disciplinary or criminal proceedings are pending against him, if in the opinion of such authority, there is a possibility of some money becoming recoverable from him on conclusion of the proceedings against him and on conclusion of the proceedings, he will become eligible to the amount so withheld after adjustment of Government dues, if any."
Since Rule 8.21(aa) provides withholding the amount of 31 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -32- leave encashment when disciplinary and/ or criminal proceedings are pending against an employee, therefore, the amount of leave encashment can be withheld to meet out the possibility of recovery from such amount.
In B.S. Gupta's case (supra), the petitioner was paid 75% of the pension pending criminal proceedings and was denied the benefit of leave encashment. While relying upon the Full Bench judgment in Dr. Ishar Singh's case, it was held as under:-
"3. For the reasons mentioned above, this petition succeeds. The respondents are directed to release 100% provisional pension to the petitioner and also the amount of leave encashment in accordance with law within a period of three months from the date a certified copy of this order is provided before them. The petitioner shall also be entitled to interest at the rate of 8% per annum on the arrears of pension with effect from the date it was payable till the time of its payment. Copy of the order be furnished dasti on payment of usual charges."
It is the said judgment, which was followed later in Gurdial Singh's case (supra) and by a Single Bench in Dayal Singh's case (supra). However, in Harbhajan Singh Riar's case (supra), the learned Single Bench examined Rule 8.21(aa) of the Punjab Civil Services Rule, Volume-I, Part-I, Chapter- VIII and held as under:-
"11. So far as the claim of the petitioner for payment of leave encashment is concerned, Rule 8.21(aa) of Punjab Civil Services Rules, Volume-I, Part-I, Chapter VIII provides that the same may be withheld wholly or in part while disciplinary proceedings are pending against an employee. If in the opinion of the authority, there is a possibility of some money becoming recoverable from the employee on the conclusion of the proceedings against him, the respondents have a right to withhold the payment of leave encashment. Under the circumstances, at this stage, the petitioner as a matter of right
32 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -33- cannot claim payment of leave encashment.
Prayer in this regard is therefore rejected."
In B.S. Gupta's case (supra) and Dayal Singh's case (supra), the employee was of an undertaking, an instrumentality of State of Haryana, governed by separate set of Rules. No Rule analogous to Rule 8.21 (aa) was brought to the notice of the Court in those cases. Similarly, in Gurdial Singh's case (supra), the Rule 8.21(aa) was not brought to the notice of the Court.
In view of thereof, we find that the ratio laid down in the said judgments cannot be extended in respect of the claim of leave encashment governed by the Punjab Civil Service Rules or the analogous Rules. In fact, in terms of the conclusion (i) in para No.81 of the judgment in Dr. Ishar Singh's case (supra), the State Government has no right to withhold or postpone pension or the payment on account of commutation of pension. The State is bound to release 100% pension at the time of superannuation. It is conclusion No. (ii) which permits the Government to withhold gratuity or other rerital benefits. The pension is to be paid, may be provisionally, during the pendency of the enquiry. Similarly, conclusion (vii) provides recovery of Government dues from gratuity and other retiral dues. Therefore, the judgment in Dr. Ishar Singh's case (supra), is applicable only in respect of payment of provisional pension pending disciplinary or criminal proceedings and has no applicability in respect of withholding of other retrial benefits. The payment or withholding of other retrial benefits is subject matter of applicable Rules, if any. Since in the present case, Rule 8.21(aa) provides for withholding of leave encashment, the same cannot be released to an employee, as the amount, if any, could be recovered from such benefits." A bare perusal of the above reproduction would show that the Full Bench vide order passed in review petition on 11.08.2014 held that an employee who though is entitled for the leave encashment at the time of his 33 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -34- retirement, will not get the same in case there are proceedings pending against him/her till the decision of those proceedings and employer is well within his right to withhold the same. The earlier judgment of the Full Bench dated 09.11.2012 holding that the leave encashment cannot be withheld, was reviewed and therefore, as per the settled principle of law, the leave encashment of an employee, who is facing departmental proceedings or criminal proceedings, at the time of his/her retirement, can be withheld and the employee has not been held entitled for the release of the same till the conclusion of those proceedings.
Therefore, Coordinate Bench while deciding Dhir Chand's case (supra) was not informed about the order passed in review petition by the Full Bench on 11.08.2014 in respect of the jurisdiction of the State on withholding the benefit of leave encashment of an employee at the time of his retirement in case the proceedings either departmental or criminal are pending against him. Therefore, the findings, which were recorded by the Coordinate Bench in Dhir Chand's case (supra) that an employee becomes entitled for the grant of leave encashment even if any proceedings are pending as Coordinate Bench by relying upon the order passed by the Full Bench on 09.11.2012 were contrary to order dated 11.08.2014 passed in review petition by the Full Bench judgment in Pyare Lal's case (supra) wherein it was held that the leave encashment can be withheld where the departmental proceedings were pending. Therefore, no benefit of the order passed by this Court in Dhir Chand's case (supra) can be extended in favour of the petitioner, in view of the above.
Counsel for the respondents-State has argued that once, the relevant rules/instructions were not brought to the notice of the Hon'ble 34 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -35- Court at the time of deciding Dhir Chand's case (supra), the said judgment need not be followed in view of the settled principle of law. Counsel for the respondents has further argued that even the review of order passed by the Full Bench in Pyare Lal's case (supra) wherein, it has been held that the Government has the power to withhold the leave encashment during the pendency of enquiry proceedings, was not brought to the notice of the Bench and therefore, the order passed by the Coordinate Bench in Dhir Chand's case (supra) was passed in the absence of relevant rules/instructions issued by the State of Haryana and is also contrary to the settled principle of law.
Hon'ble Supreme Court of India has held that a decision which has been rendered in ignorance of a binding precedent or in ignorance of constitutional provision would be held as per incuriam. Hon'ble Supreme Court of India while deciding Civil Appeal No. 5092 of 2009 titled as Subhash Chandra and another Vs. Delhi Subordinate Services Selection Board and others, 2009 (3) S.C.T. 827 decided on 04.08.2009 held as under:-
44. The only question which survives is as to whether S. Pushpa (supra) constitutes a binding precedent. A decision, as is well known, is an authority for what it decides and not what can logically be deduced therefrom.
In S. Pushpa (supra), decisions of the Constitution Benches of this Court in Milind (supra) had not been taken into consideration. Although the case of Chinnaiah (supra) was decided later on, we are bound by the same. It is now a well settled principle of law that a division bench, in case of conflict between a decision of a Division Bench of two Judges and a decision of a larger Bench and in particular Constitution Bench, would be bound by the latter. [See M/s Sardar Associates v. Punjab & Sind Bank, CAs @ SLP (C) Nos. 5249- 5250 of 2008 decided on 31st July, 2009] 35 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -36- This Court in Marri Chandra Shekhar Rao (supra) categorically held that when a person is held to be a member of scheduled caste for one State, he cannot be treated as such in another. In Milind (supra), it was categorically held that the High Court, in exercise of its supervisory jurisdiction, under Article 227 of the Constitution of India, cannot make any roving inquiry for the purpose of finding out as to whether a person belonging to one caste would, for one reason or the other, can be held to be belonging to another caste or tribe which had been notified as scheduled caste or scheduled tribe. It is also well known that a decision rendered in ignorance of a binding precedent and/or in ignorance of a constitutional provision, would be held to have been rendered per incuriam. In Harminder Kaur & Ors. v. Union of India & Ors. [2009 (7) SCALE 204], this Court held:
"16. A judgment of a Constitution Bench of this Court laying down the law within the meaning of Article 141 of the Constitution of India must be read in its entirely for the purpose of finding out the ratio laid down therein. The Constitution Bench, in no uncertain terms, based its decision on the touchstone of the `equality clause' contained in Articles 14 and 16 of the Constitution of India. Emphasis has been laid at more than one place for making appointments only upon giving an opportunity to all concerned. Appointment through side-door has been held to be constitutionally impermissible."
[See also Oriental Insurance Company Limited v. Mohd. Nasir and Another (2009) 6 SCC 280] In Black's Law Dictionary, 8th edition, 2004, it is stated:
"There is at least one exception to the rule of stare decisis. I refer to judgments rendered per incuriam. A judgment per incuriam is one which has been rendered inadvertently. Two examples come to mind: first, where the judge has forgotten to take account of a previous decision to which the doctrine of stare decisis applies. For all the care with which attorneys and judges may comb the case law, errare
36 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -37- humanum est, and sometimes a judgment which clarifies a point to be settled is somehow not indexed, and is forgotten. It is in cases such as these that a judgment rendered in contradiction to a previous judgment that should have been considered binding, and in ignorance of that judgment, with no mention of it, must be deemed rendered per incuriam; thus, it has no authority.... The same applies to judgments rendered in ignorance of legislation of which they should have taken account. For a judgment to be deemed per incuriam, that judgment must show that the legislation was not invoked." Louis-
Philippe Pigeon, Drafting and Interpreting Legislation 60 (1988) "As a general rule the only cases in which decisions should be held to have been given per incuriam are those of decisions given in ignorance or forgetfulness of some inconsistent statutory provision or of some authority binding on the court concerned, so that in such cases some features of the decision or some step in the reasoning on which it is based is found on that account to be demonstrably wrong. This definition is not necessarily exhaustive, but cases not strictly within it which can properly be held to have been decided per incuriam, must in our judgment, consistently with the stare decisis rule which is an essential part of our law, be of the rarest occurrence." Rupert Cross & J.W. Harris, Precedent in English Law 149 (4th ed. 1991)"
In an article "Final Appellate Courts Overruling Their Own "Wrong" Precedents: The Ongoing Search For Principle" by B.V. Harris published in (2002) 112 LQR 408-427, it is stated:
"A decision may be held to be per incuriam where relevant statutory provisions, or binding case law authority, have been overlooked or misinterpreted in arriving at the holding in the precedent....
Considerations Relevant To Deciding whether to Defer to or Overrule Precedent:
The first consideration for a final appellate court called upon, in the exercise of its discretion, to overrule an allegedly wrong precedent of its own, will be whether the precedent can be
37 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -38- distinguished on the facts, including changing social and other contexts, or distinguished on the law. If the precedent can be distinguished, overruling will not be necessary. The subsequent appellate court will rather be free to choose not to follow the precedent which can be distinguished.
Second, the precedent should be considered closely to determine whether the decision was reached per incuriam. A per incuriam precedent may be overruled.
Third, the workability of the precedent should be assessed. Evidence of lack of workability may justify overruling. The fourth consideration will be whether any reasons have been advanced in the appeal which were not considered in deciding the precedent.
This category could arguably be included in many circumstances, either in the first category as a form of distinguishing, or in the second category if the omission is sufficiently serious to cause the precedent to be per incuriam. All of the first four considerations have traditionally been accepted as exempting subsequent appellate courts from the obligation to follow precedent."
In the context of overruling the two leading precedents {de Freitas v.Benny [1976] AC 239 and Reckley v. Minister of Public Safety and Immigration (No. 2) [1996] A.C.527} which had held the exercise of the prerogative of mercy to be non- justiciable, Lord Slynn of Hadley in Lewis v. Att. Gen. Of Jamaica [2001] 2 AC 50 at p. 75, stated:
"The need for legal certainty demands that they should be very reluctant to depart from recent fully reasoned decisions unless there are strong grounds to do so. But no less should they be prepared to do so when a man's life is at stake, where the death penalty is involved, if they are satisfied that the earlier cases adopted a wrong approach. In such a case rigid adherence to a rule of stare decisis is not justified."
38 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -39- The case of Attorney General v. Blake [(1997) Ch D; (1998) Ch 439 CA; and (2001) 1 A.C.268 HL] has been referred by SIR Richard Buxob in his article How the Common Law Gets Made: Hedley Byrne and Other Cautionary Tales" [(2009) 125 L.Q.R. 60], as decision given per incuriam. Prof.A.W.Brain has prepared a memorandum on the said note. In the particular case in 1961 Blake pleaded guilty to five offences against Official Secrets Act 1911. He had communicated information which he has come to pssess as a member of the Secret Intelligence Service (SIS). He was sentenced o term of 42 years imprisonment. The House of Lords decision stated that Blake wasa member of the security and intelligence. However it is stated by the author that there is no practice of describing the SIS as a security service; it is not concerned with security but with foreign intelliegence, including the sponsorship of espionage and was "an offshoot of some sort of the Foreign Office, possibly also being associated with the Cabinet Office or the Prime Minister's Personal Office." Thus there was no details explained as regards to the employment of Blake and it was not clear. The author states that it was a well settled in 1940s that the relationship between a member of the armed services and the crown was non-contractual. However it is stressed that if the nature of employment of Blake was in civil capacity then the application of above observation needs to be considered. But more importantly, what needs to be addressed is that "to treat incidental undertakings by members of the armed services as actionable contracts would lead to absurdity". It is also pointed out that "the relationship between the Crown and members of the armed services is and long has been regulated by disciplinary proceedings, by failure to promote, or by retirement, not by the private law of contract or tort. If this position is to be changed by a judicial decision then the court surely needs to attend to the radical nature of such a change." Also it is noted that the "signing the Official Secrets Acts" created a binding contract relating just to one aspect of 39 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -40- Blake's duties, is something which is problematic. Thus author states that "the supposed contract case was decided without any careful investigation of the very existence of a binding contract, or of its scope and character, assuming there to have been one. It does not seem to be a good idea to proceed in this way, and at end of day there is therefore a strong case for regarding the decision as having been given per incuriam in their Lordships' attention had never been adequately directed to either the relevant facts or the relevant law." [See A Decision Per Incuriam? -Prof.A.W.Brian Simpson, The Law Quarterly Review, volume 125, July 2009, p.433] We have noticed hereinbefore that the premise on which S. Pushpa (supra) was rendered, namely, Marri Chandra Shekhar Rao (supra), had no application to union territories was not correct."
A bare perusal of the facts recorded above clearly go to show that while deciding Dhir Chand's case (supra), the instructions regarding grant of leave encashment as well as review order dated 11.08.2014 passed by the Full Bench in Pyare Lal's case (supra) were not brought to the notice of the Court. Rather it can be said that this Court was misled in passing the order in Dhir Chand's case (supra) by not providing due assistance and concealing the instructions on the grant of leave encashment issued by the Government of Haryana from time to time as well as the review order passed in Pyare Lal's case (supra) by the Full Bench and therefore, no reliance can be placed by the petitioner on the said judgment to claim the benefit of leave encashment, though not eligible under the rules governing the service as well as instructions issued by the Government of Haryana from time to time in this regard.
Counsel for the petitioner has also placed reliance to seek the benefit of leave encashment on the instructions dated 12.08.1998. Counsel 40 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -41- for the petitioner argues that dismissal is a form of termination of services and therefore, petitioner is entitled for the grant of said benefit under the instructions dated 12.08.1998. The dismissal and termination of services are entirely different concepts having different consequences. Termination is simplicitor disengaging an employee from service but dismissal has to be awarded as a matter of punishment after an employee has been found guilty of a misconduct. Therefore, comparing a simple termination with dismissal by the counsel for the petitioner is totally misplaced and hence, cannot be accepted.
Further Rule 3.17-A (d) of the Punjab Civil Services Rules, Volume-II as applicable to Haryana envisages that the resignation from the public service or dismissal or removal from service for misconduct, insolvency, inefficiency, not due to the age, or failure to pass a prescribed examination, will entail forfeiture of past service in terms of Rule 4.19 (a) of Punjab Civil Service Rules Volume-II. The said Rule 3.17-A (d) is as under:-
"(d) Resignation from the public service or dismissal or removal from it for misconduct, insolvency, inefficiency, not due to the age, or failure to pass a prescribed examination will entail forfeiture of past service in terms of Rule 4.19 (a) of Punjab Civil Service Rules Volume-II."
Further Rule 4.19 (a) which deals with the resignation and dismissal is also as under:-
"4.19. (a) Resignation from public service, dismissal or removal from it, either under proviso (c) to Article 311 (2) of the Constitution for over anti-national activities such as sabotage, espionage etc. or for misconduct, insolvancy, inefficiency not due to age or failure to pass a prescribed examination, entails forfeiture of past service and no pension
41 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -42- shall be granted in the aforementioned circumstances:
Provided that in the cases of those Government employees whose removal or dismissal results from participation in other objectionable activities affecting or endangering the security of the State, such proportionate pension may be granted as may be recommended by the Committee of the Advisors constituted under the Haryana Civil Services (Safe-guarding of National Security) Rules, 1971]"
A bare perusal of the above would show that even resignation entails forfeiture of past service and therefore no employee gets any benefit upon resignation.
If the argument of the learned counsel for the petitioner is accepted that an employee, who is dismissed from service after being held guilty under the provisions of the Prevention of Corruption Act, is entitled for the leave encashment, will lead to an anomalous situation. An employee, who has discharged his duties honestly and according to the Rules but due to any circumstances could not continue in service and resigns, will not get any benefit as his past service stand forfeited whereas an employee, who has been held guilty and sentenced to imprisonment after being convicted under the Prevention of Corruption Act, will get all the benefits.
If the resignation entails forfeiture of past service, the same is in case of dismissal from service as well. Once, the past service stand forfeited, no benefit of the said service, which stood forfeited, can be extended to an employee in any manner unless any exception is made out by the Government in this regard in the rule/instructions. Therefore, the claim of the petitioner for the grant of leave encashment in respect of the service, which stood forfeited upon his dismissal from service, is even otherwise not maintainable and is liable to be rejected.
42 of 43 ::: Downloaded on - 28-10-2019 07:14:29 ::: CWP-3843-2019 -43- No further arguments have been raised on behalf of counsel for the petitioner.
Before parting, this Court expresses gratitude to Mr. D.S. Nalwa, Additional Advocate General, Haryana, who assisted this Court on behalf of the respondents-State so as to decide the question of law raised in this petition.
In view of the above, no ground is made out to interfere with the impugned letter dated 11.02.2016/26.02.2016 (Annexure P-3) issued by the respondents declining the benefit of leave encashment to the petitioner keeping in view the instructions dated 12.08.1998 and the writ petition is accordingly dismissed.
(HARSIMRAN SINGH SETHI)
July 15, 2019 JUDGE
harsha
Whether speaking/reasoned: Yes/No
Whether reportable: Yes/No
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