Karnataka High Court
Gopalkrishna Varadaraj Acharya vs The Chairman on 8 September, 2023
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
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NC: 2023:KHC-D:10391
WP No. 102049 of 2022
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 8TH DAY OF SEPTEMBER 2023
BEFORE
THE HON'BLE MR JUSTICE M.NAGAPRASANNA
WRIT PETITION NO. 102049 OF 2022 (S-RES)
BETWEEN:
GOPALKRISHNA VARADARAJ ACHARYA,
AGE: 59 YEARS, OCC: RETIRED,
R/O: NO.231, SAIMADHUKRISHNA,
4TH CROSS, 2ND MAIN, NARAYANPUR,
DHARWAD-580008.
... PETITIONER
(BY SRI. SHIVASAI .M. PATIL, ADVOCATE)
AND:
1. THE CHAIRMAN, PHRD DIVISION,
KARNATAKA VIKAS GRAMEEN BANK,
H.O.DHARWAD-580008.
2. THE CENTRAL PUBLIC INFORMATION OFFICE,
NATIONAL BANK FOR AGRICULTURE AND
RURAL DEVELOPMENT (NABARD),
KARNATAKA REGIONAL OFFICE, "NABARD TOWER"
Digitally
signed by
#46, KEMPE GOWDA ROAD,
VISHAL
VISHAL
NINGAPPA P.B. NO. 9944, BENGALURU-560009.
NINGAPPA PATTIHAL
PATTIHAL Date: ...RESPONDENT
2023.09.27
11:22:19
+0530
(BY SRI. CHETAN MUNNOLI, ADVOCATE FOR R1;
SRI. SREENATH V.K., PADMANABHA HOLLA .S. &
SMT. RESHMA MADIWALAR, ADVOCATES FOR R2)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA, PRAYING TO, WHEREFORE THE
PETITIONER RESPECTFULLY PRAYS THAT, THIS HON'BLE COURT BE
PLEASED TO, 1. ISSUE WRIT OF MANDAMUS DIRECTING THE
RESPONDENT BANK TO RELEASE THE PAYMENT OF PREVILEGED
LEAVE ENCASHMENT WHICH IS MORE THAN 270 DAYS IN THE
INTEREST OF JUSTICE AND EQUITY.
THIS PETITION, COMING ON FOR FURTHER HEARING, THIS
DAY, THE COURT MADE THE FOLLOWING:
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NC: 2023:KHC-D:10391
WP No. 102049 of 2022
ORDER
1. The petitioner is before this Court seeking a direction by issuance of a writ in the nature of mandamus directing the first respondent-back to release the encashment of privilege leave, which, according to the petitioner, is 270 days.
2. Heard the learned counsel Sri. Shivasai M. Patil appearing for the petitioner, the learned counsel Sri. Chetan Munnoli appearing for respondent No.1 and Sri. Sreenath V.K. Padmanabha Holla S. appearing for the respondent No.2.
3. Facts in brief germane are as follows.:
The petitioner joins the service of the respondent-Bank on 14.11.1988 and after rendering 33 years of service, seeks voluntary retirement on medical grounds and is granted such voluntary retirement. Pursuant to the acceptance of the application for voluntary retirement, the petitioner ceases to be an employee of the respondent-Bank on 30.06.2021. The -3- NC: 2023:KHC-D:10391 WP No. 102049 of 2022 petitioner is then paid the pension, in terms of pension payment order depicting his service to be 33 years.
The issue in the lis does not concern the pension to be paid to the petitioner. The petitioner submits a representation seeking encashment of privilege leave on 15.09.2021 requesting release of encashment of privilege leave which is accrued to more than 270 days. The representation so submitted went unheeded. The petitioner then again represents on 30th December 2021, seeking the release of encashment of privilege leave. It is then a reply comes about on 03.01.2022, observing that the petitioner has been relieved on voluntary retirement and encashment of privilege leave would be granted only after the NABARD grants approval. It is this, that has driven the petitioner to this Court in the subject petition.
4. The learned counsel appearing for the petitioner submits that in the scheme of the Regulations, the NABARD has no role to play, placing the issue on the table of NABARD and not granting encashment of privilege leave is contrary to law. He would seek to place reliance upon the judgment of -4- NC: 2023:KHC-D:10391 WP No. 102049 of 2022 the Apex Court in the case of Jagadish Prasad Saini and Others v State of Rajasthan and others reported in 2022 SCC Online SC 1298.
5. On the other hand, the learned Counsel representing the Bank Sri.Chetan Munnoli would submit that encashment of privilege leave would have been granted long ago, but for the communication from NABARD to hold their hands. It is therefore, the defence of the Bank that due to NABARD it is not paid.
6. The counsel appearing for NABARD has also filed their statement of objection. He would submit that NABARD has no role to play whatsoever, in the release of encashment of privilege leave, as it is between the bank and the employee. He would submit that he has filed his formal objections to the petition and would again reiterate that NABARD has no role to play with regard to the grant or otherwise of encashment of privilege leave to its employees. -5-
NC: 2023:KHC-D:10391 WP No. 102049 of 2022
7. I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record.
8. They afore narrated facts are not in dispute. They in fact, lie in a narrow compass. What the petitioner seeks by knocking at the doors of this Court is grant of encashment or release of encashment of privilege leave, which, according to the representation and the communication, is 270 days for the 33 years of service that the petitioner has rendered in the respondent bank.
9. Grant of encashment of privileged leave is regulated under the Karnataka Vikas Grameena Bank(Officers and Employees) Service Regulations, 2010. Regulation 61 which deals with Privilege Leave and reads as follows.
"61. Privilege leave :-
(1) An officer or employee shall be eligible for privilege leave computed at one day for every 11 days of service on duty:-6-
NC: 2023:KHC-D:10391 WP No. 102049 of 2022 Provided that no privilege leave shall be availed of before the completion of 11 months of service on duty at the joining of his service.
(2) The period of privilege leave to which an officer or employee is entitled at any time shall be the period which he has earned less the period availed of.
(3) An officer or employee on privilege leave shall be entitled to full emoluments for the period of leave.
(4) Privilege leave may be accumulated upto 31st December, 1989 for an aggregate period upto 180 days and from 1st January 1990, the privilege leave may be accumulated upto not more than 240 days.
(5) An application for privilege leave shall be submitted by an officer or employee one month before the date from which such leave is required.
(6) The application which does not satisfy the requirement of sub-regulation (5) may be refused without assigning any reason:
Provided that if the Competent Authority is satisfied that such requirement was not possible, he may, at his discretion, waive the requirement." An employee is entitled to privilege leave to a maximum of 240 days which is statutorily regulated. Therefore, it cannot be withheld at the sweet will of the -7- NC: 2023:KHC-D:10391 WP No. 102049 of 2022 employer or its whim. It is a statutory benefit that is available to an employee in terms of the regulation. The petitioner retires on seeking retirement on medical grounds. It is not in dispute that he has rendered 33 years of service prior to his retirement and is further not in dispute that he is entitled to encashment of privilege leave at 240 days, as is sought by him. The only impediment that is projected by the respondent-Bank was the communication between the NABARD and the Bank.
10. The counsel for the NABARD has filed his objection, reiterating his submission that NABARD has no role to play with regard to the grant or otherwise of encashment of privilege leave, it is between the employer and the employee.
11. In the light of the aforesaid submissions, a mandamus is to be issued to the first respondent-Bank to forthwith release the encashment of privilege leave that is withheld since 2022. As encashment of privilege leave as observed by the Apex Court in Jagadish Prasad Saini's case -8- NC: 2023:KHC-D:10391 WP No. 102049 of 2022 (supra), is the terminal benefit. If it is the terminal benefit, it cannot be withheld on any ground, except in terms of the Regulation. The Regulation nowhere causes an impediment for the Bank to release the encashment of privilege leave in favor of the petitioner. The Apex Court in Jagadish Prasad Saini (supra) noticing the right of an employee for leave encashment has held us follows:
"20. Evidently, these rules were framed to enable the absorption of employees and teachers of non-government aided institutions. What is relevant for the purposes of this case is that by Rule 5(viii), carry forward of existing privilege leave is denied; likewise, the period of service in aided institutions is not to be reckoned for the purpose of gratuity under Rule 5(ix). Every employee had to furnish an undertaking in the prescribed form to accept the terms and conditions. Ordinarily no public employer can be faulted in imposing pre-conditions before it recruits an employee. However, such conditions cannot be arbitrary, or so onerous as to be unconscionable. In the opinion of this court, the condition in clause (viii) of Rule 5 i.e., carry forward of balance privilege leave, is barred and requiring employees to seek encashment from their previous employer, i.e., aided institutions, is an arbitrary and unconscionable condition, which cannot be enforced. Speaking that such conditions are enforceable, this court, recently, in Pani Ram v. Union of India9 after quoting the observations in Central Inland Water Transport Corporation Limited v. Brojo Nath Ganguly10 held as follows:
23. "....Right to Equality guaranteed Under Article 14 of the Constitution of India would also -9- NC: 2023:KHC-D:10391 WP No. 102049 of 2022 apply to a man who has no choice or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of Rules as part of the contract, however unfair, unreasonable and unconscionable a Clause in that contract or form or Rules may be."
21. This court had categorically ruled, in Senior Higher Secondary School (supra) that leave encashment is part of salary. In the scheme of the 1993 Rules, the assessment of, and determination of the extent of, aid to be granted to any institution, is provided by Rule 13. What forms part of the approved expenditure that would be the content of aid, is provided by Rule 14. In the present case, the management establishment was recipient of 70% aid, in the form of grant. In these circumstances, the State cannot shrug its responsibility to shoulder its part of the responsibility to pay the appellants the share of leave encashment benefits, and hide behind either Rule 5(viii) or the undertaking executed by them. The appellants are held entitled to privilege leave entitlement benefits. Such benefit shall be calculated from the date they entered the service of the establishment till the date of their absorption, by the State, in 2016. The State shall pay the benefits due to the extent of 70%, and the balance 30% shall be payable by the management establishment."
Therefore, the petitioner is entitled to the said benefit, now and was always entitled to.
12. The issue now remains whether the petitioner is entitled to interest on delayed payment of encashment of privilege leave. The objections so filed or the submissions so
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NC: 2023:KHC-D:10391 WP No. 102049 of 2022 made would clearly indicate that no action of the petitioner caused an impediment for release of leave encashment. It is the internal communication between NABARD or the Bank that has led to delay in disbursement of the leave encashment. If the Bank or NABARD has created obfuscation for themselves with regard to the payment of leave encashment or otherwise, the buck cannot be passed upon the petitioner. The leave encashment to the petitioner shall be disbursed according to his entitlement and in terms of Regulation 61 of the Service Regulations (supra). The petitioner would become entitled to interest at 6% per annum from the date it fell due till the date of its payment.
13. For the aforesaid reasons, the following ORDER i. The petition is allowed.
ii. Mandamus issues to the respondent-Bank to release the encashment of privilege leave that has been withheld within eight weeks from the date of receipt of copy of this order.
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NC: 2023:KHC-D:10391 WP No. 102049 of 2022 iii. The release of the amount shall carry interest at 6% per annum from the date on which it fell due till the date of its payment.
iv. In the event of leave encashment would not be paid within eight weeks as directed hereinabove, the petitioner would then become entitled to 18% interest from the date it fell due till the date of its payment.
Sd/-
JUDGE kmv ct:bck