Distt. Ranchi, Jharkhand v. Baijnath Prasad Son of Late Baliram Prasad resident of Q.No. E
Case Details
2025:JHHC:37804-DB IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P. (S) No. 7445 of 2025 (1) Union of India through the Chief Labour Commissioner (Central), Ministry of Labour and Employment, Shram Shakti Bhawan, Rafi Marg, PO & P.S - New Delhi, New Delhi. (2) The Deputy Chief Labour Commissioner (Central), Bungalow No. 5, Doctors Colony, Shram Bhawan, New Colony, PO & PS Jagjeevan Nagar - 826003 and District: Dhanbad, Jharkhand. (3) The Accounts Officer, Pay & Accounts Office (DGMS) Dhabad, PO & PS- Dhanbad-826001. District- Dhanbad, Jharkhand. (4) The Regional Labour Commissioner (Central), E-191, Sector-IL HEC Colony, PO & PS - Dhurwa, Ranchi-834004, Distt. Ranchi, Jharkhand. Petitioners ... Versus Baijnath Prasad Son of Late Baliram Prasad resident of Q.No. E-262, Sector-II, HEC Colony, P.O. Dhurwa, P.S. Jagarnathpur, District Ranchi. Respondent ... CORAM: HON’BLE THE CHIEF JUSTICE --------- HON’BLE MR. JUSTICE RAJESH SHANKAR For the Petitioners --------- : Mr. Prashant Pallav, ASGI Mrs. Niki Sinha, CGC. --------- 02/Dated: 16.12.2025 Per Tarlok Singh Chauhan, C.J. Aggrieved by the order passed by the learned Central Administrative Tribunal, whereby and whereunder the petitioners have been directed to pay interest at the applicable GPF rates to the respondent for the delayed payment of leave encashment for the period from the date of his retirement to the payment of such dues, the Union of India has filed the instant writ petition. 2. 3. The facts are not in dispute. The respondent worked with the petitioners as driver and superannuated on 31.03.2018. -1 of 6- 2025:JHHC:37804-DB 4. Prior to that, a disciplinary proceeding under Rule 14 of the CCS (CCA) Rules, 1965 was initiated against him and even judicial proceedings were also pending against him. 5. Due to non-payment of the amounts of leave encashment and CGEGIS, the respondent submitted several representations to the petitioners and was informed that “your leave encashment and CGEGIS have been held up as per Rule 39 (3) of the CCS (Leave) Rules, 1972”. 6. The case of the respondent before the Tribunal was that the charge memo dated 31.08.2016 was not related to misappropriation of Government property, money or stores and the case was also not related to recovery of pecuniary losses caused to the government by negligence or breach of order by the respondent. Further, the judicial proceedings were also on the same set of facts therefore, the act of the petitioners in withholding the payment of leave encashment and CGEGIS was against Rule 39 (3) of the CCS (Leave) Rules, 1972 and the GoI decision (6) & 2 (VII) under Rule 68 of the CCS (Pension) Rules, 1977. 7. The petitioners had contested the claim of the respondent primarily on the ground that the inquiry was concluded and order was submitted by the then Disciplinary Authority. Thereafter, the pension of the respondent was regularized and all dues paid to him for which he was entitled. The amount of discontinued value of CGEGIS and encashment of leave was sanctioned on 22/29.06.2021. 8. In the rejoinder, the claim of the respondent was that he had superannuated on 31.03.2018 whereas, the leave encashment and -2 of 6- 2025:JHHC:37804-DB CGEGIS was sanctioned only on 29.06.2021 and therefore, he was entitled to the interest for a period of 3 years and 3 months. 9. The learned Tribunal, as observed above, allowed the petition and aggrieved thereby, the Union of India has filed the instant writ petition. 10.
Legal Reasoning
It is vehemently contended by Mr. Prashant Pallav, learned ASGI appearing for the petitioners that the learned Tribunal failed to consider the instructions issued by the Government of India as also the applicable Rules and thereby erred in allowing the petition. 11. At the outset, it shall be relevant to quote Rule 39 (3) of the CCS (Leave) Rules, 1972 which is extracted hereunder for ready reference:- “Leave/Cash payment in lieu of the leave beyond the date of retirement, compulsory retirement or quitting of service: (3) The authority competent to grant leave may withhold whole or part of cash equivalent of earned leave in the case of a Government 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 the view of such authority there is a possibility of some money becoming recoverable from him on conclusion of the proceedings against him. On conclusion of the proceedings, he will become eligible to the amount so withheld after adjustment of Government dues, if any”. 12. A bare perusal of Rule 39 (3) of the CCS (Leave) Rules, 1972, leaves no doubt that the leave encashment can be withheld by the competent authority, wholly or partly, with respect to a Government servant, who retires on superannuation, while under suspension or -3 of 6- 2025:JHHC:37804-DB while undergoing disciplinary or criminal proceedings. However, the exercise of this power is clearly subject to a claim that the competent authority is of the view that there is a possibility of some money becoming recoverable from the delinquent employee on conclusion of the proceedings against him. The Rule therefore, envisages and contemplates a conscious decision by the competent authority to withhold the leave encashment for the reasons provided in the Rule itself. 13. However, there is no such conscious decision, placed on record by the petitioners and therefore, the petitioners could not have withheld the leave encashment and the amount ought to have been released to the respondent at the time of retirement or soon thereafter. 14. In S.K. Dua vs. State of Haryana & Anr., (2008) 3 SCC 44, the Hon’ble Supreme Court held that if there are statutory rules or administrative instructions, an employee could claim payment of interest relying on such Rule, but even in the absence of any statutory rule or administrative instructions or guidelines, an employee can claim interest under Part III of the Constitution relying on Articles 14, 19 and 21 of the Constitution of India. 15. The Hon’ble Supreme Court in State of Jharkhand & Ors. vs. Jitendra Kumar Srivastava & Anr., (2013) 12 SCC 210 has explicitly held that terminal benefits which have been created in favour of the employees by statute partakes the character of emoluments protected as a right to property of the concerned employee under Article 300-A of the Constitution, which cannot be arbitrarily taken away without any authority of law. Since the withholding of such terminal benefits would -4 of 6- 2025:JHHC:37804-DB amount to depriving the employee of his legitimate right to make use of his property at the time when he ought to have been paid the same on attaining the age of superannuation, he would have to be compensated for such delay by awarding interest. 16. At this juncture, it would be useful to refer to the decision of the Hon’ble Supreme Court in the case of State of Kerala & Ors. vs. M. Padmanabhan Nair, (1985) 1 SCC 429, wherein, it was stated as follows:- “Pension and gratuity are no longer any bounty to be distributed by the Government to its employees on their retirement but have become, under the decisions of this Court, valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be visited with the penalty of payment of interest at the current market rate till actual payment.” 17. The Hon’ble Supreme Court in Vijay L. Malhotra vs. State of U.P. & Ors. (2001) 9 SCC 687 held as under: - “3. In case of an employee retiring after having rendered service, it is expected that all the payment of the retiral benefits should be paid on the date of retirement or soon thereafter if for some unforeseen circumstances the payments could not be made on the date of retirement. 4. In this case, there is absolutely no reason or justification for not making the payments for months together. We, therefore, direct the respondent to pay to the appellant within 12 weeks from today simple interest at the rate of 18 per cent with effect from the date of her retirement, i.e., 31-8-1997 till the date of payments”. -5 of 6- 2025:JHHC:37804-DB 18. In Shashi Lata Verma vs. State of Bihar & Ors., (2005) 12 SCC 197, the Hon’ble Supreme Court granted 10 per cent interest on delayed payment of amount of leave encashment. 19. Admittedly, the amount of leave encashment and CGEGIS have been sanctioned to the respondent on 29.06.2021 i.e. after three years and three months of his retirement i.e. on 31.03.2018. The provisions of Rule 39 (3) of the CCS Leave Rules, 1972, as observed above were not at all attracted or applicable to the case of the respondent and could not have been invoked against the petitioner as the criminal proceedings as also the judicial proceedings did not involve recovery of public money due to embezzlement or recovery of loss due to the negligence of the respondent and therefore, pendency of criminal proceedings and disciplinary proceedings, could not have been taken as a ground to withhold the leave encashment and CGEGIS. 20. In view of the aforesaid discussions and for the reasons stated above, we see no reason to interfere with the order passed by the learned Tribunal. Consequently, there is no merit in this writ petition. The same is dismissed in limine.
Decision
21. Pending Interlocutory Application, if any, stands disposed of. (Tarlok Singh Chauhan, C.J.) (Rajesh Shankar, J.) 16.12.2025 N.A.F.R. APK Uploaded on 17.12.2025 -6 of 6-