JUSTICE v. NARASINGH Date of final hearing
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK WP(C) No.22599 of 2015 In the matter of an application under Article 226 and 227 of the Constitution of India Mohd. Sharif Khan …. Petitioner -versus- …. Opposite Parties 1. CMD, Power Grid Corporation of India Ltd 2. Executive Director, (Human Resources) Corporate Center, Power Grid Corporation of India Ltd, ‘Saudamini’, Plot No.2, Sector-29, Gurgaon, Haryana 3. Director (Personnel), Power Grid Corporation of India Ltd,‘Saudamini’, Plot No.2, Sector-29, Gurgaon, Haryana 4. Executive Director, Power Grid Corporation of India Ltd, Plot N o.27, Saheed Nagar, BBSR 5. Executive Director, Power Grid Corporation of India Ltd., Eastern Region Transmission System-II, Sector-V,J-1- 15, Salt Lake, Kolkata For Petitioner : Mr. L. Pangari, Sr. Advocate For Opposite Parties : Mr. A.N. Das, Advocate Page 1 of 13 CORAM: JUSTICE V. NARASINGH Date of final hearing : 19.10.2023 Date of judgment : 15.04.2024 V. Narasingh, J. Heard learned Senior counsel for the Petitioner Mr. Pangari, and learned counsel for the Opposite Party-Corporation, Mr. A.N. Das. 1. The Petitioner was working as a Senior Assistant under the Opposite Party-Corporation. He retired from service on attaining the age of superannuation with effect from 31st August,2013. 2. He assails the rejection of his representation at Annexure-13 basing upon the letter dated 27.08.2013 of the Opposite Party- Corporation(Annexure-6) by which the Opposite Party-Corporation restricted the leave encashment both Earned leave (EL) and the Half Pay Leave (HPL) clubbed together to the overall ceiling limit of 300 days and with the further prayer to direct the Opposite Party-Corporation and its Authorities to encash the Half Pay Leave as accumulated to the tune of 375 days with an interest of 15 % per annum. For convenience of ready reference letter dated 27.08.2013 at Annexure-6 is extracted hereunder: xxx xxx xxx Sub: Limit of Leave encashment-Restriction to 300 days. 1.0 In view of clarification issued by the Department of Public Enterprise on the above subject, It is clarified that on retirement/separation on account of death, the encashment of leave will be allowed subject to overall ceiling limit of 300 days(both Earned leave & Hal-Pay leave clubbed together). Further, to make up the shortfall in Earned Leave, no commutation of Half-Pay Leave will be permissible. To illustrate: If an employee has 100 days of Earned Leave and Page 2 of 13 300 days of HPL then encashment of HPL is restricted to 200 days. 2.0 The same shall come into force with immediate effect. This issues with the approval of Competent Authority. xxx xxx xxx 3. It is urged with vehemence by the learned Senior counsel for
Legal Reasoning
the Petitioner, Mr. Pangari that encashment of Half Pay Leave being an accrued right cannot be taken away by an amended provision. It is submitted that Rule 27 of Power Grid Leave rules dealing with procedure and amount of encashment more particularly Rule 27(IV) and Rule 29 thereof which evidently were incorporated pursuant to the corporate HR circular No.3II of 2013 dated 27.08.2013 cannot have any retrospective application, in case of the Petitioner who admittedly was on the rolls of the corporation w.e.f 19.11.1991. For convenience of ready reference Rule 27(IV) and 29 of the Leave Rules are extracted hereunder; xxx xxx xxx “27.0 Procedure and amount of Encashment (i) xxx xxx xxx (ii) xxx xxx xxx (iii) xxx xxx xxx (iv) In case of retirement and separation on account of death, encashment of leave will be allowed subject to overall ceiling limit of 300 days (both Earned Leave and Half Pay Leave clubbed together.) Further, to make up the shortfall in Earned Leave, no commutation of Half- Pay leave will be permissible. Illustration: If an employee has 100 days of EL and 300 days of HPL then encashment of HPL is restricted to 200 days. In case of death, the encashment shall be allowed to the the employee, as nominated by him for the purpose of CPF. legal heirs/nominee of Page 3 of 13 the case of employees who In their appointment, the total amount of Earned Leave at their credit worked out as on the date of resignation shall be allowed to be encashed. xxx xxx xxx xxx xxx xxx resign 29.0 Encashment of Half Pay Leave The encashment of Half-Pay Leave will be allowed subject to a maximum of 300 days (HPL and El taken together) standing at the credit of the employee in the following events: i) Separation from the Company on attaining the age of superannuation or ii) Death while in service or iii) Cessation of service, other than on grounds of disciplinary action, after attaining the age of 50 years provided that the concerned employee has completed a minimum of 10 years continuous in Central/State Government/PSUs out of which a minimum of 5 years is in POWERGRID or service iv) On completion of the tenure of Board Level appointees. xxx xxx xxx 4. It is contended by the petitioner that at the time of his retirement on 31st August 2013 as per the Power Grid Leave Rules Policy Manual he is entitled to encash his own leave as accumulated in leave account and as regards half pay leave he was entitled to avail his leave as much as credited to his leave account in the case at hand, for a period of 365 days, having no ceiling limit. The petitioner has further contended by relying upon various provisions available in power grid leave rules policy manual more particularly in paragraph No. 8.2 and 9 which are at
Decision
Annexure-4 to the writ petition that there is no ceiling limit for EL and the half pay leave which are already credited to his leave account. Therefore, Petitioner claims that he is entitled to encash such half pay leave to the tune of 365 days being accumulated at the time of his superannuation and credited to his leave account as a matter of right which, has accrued in his Page 4 of 13 favour, for discharging his duties continuously under the opposite parties till his retirement. 5. The decision of the Executive Director Human Resources of Power Grid Corporation of India limited notified through circular on 27th August 2013 i.e. just 3 days before the retirement of the petitioner is cause of action, for the petitioner to move this Court, where for the first time a restriction to the tune of 300 days for leave encashment was introduced that too clubbing both Earned leave and half pay leave with the further stipulation that to make up the shortfall in EL, no accumulation of half pay leave will be permissible. 6. Being aggrieved with such decision of the authorities the petitioner represented to the Chairman and Managing Director ofPower Grid Corporation of India limited on 30th August 2013 and also made several correspondences thereafter. In the meantime pending consideration of the representation submitted by the petitioner the corporation notified an amendment in power grid leave rule as per notification dated 26 November 2013 indicating therein the employees EL maintained in 2 sections i.e. encashable and nonencashable will be merged and will be maintained in one section including existing leave balance. 7. The petitioner also approached this court in WP(C) No. 19411 of 2014 assailing the decision of authorities relating to ceiling of EL which was disposed of on 15th October 2014 without expressing any opinion on the merit of the case but directing the opposite party number 2 to dispose the pending representations filed by the petitioner within a period of 2 months. 7-A. Complying the above direction of this court, the opposite party number 2 decided the grievance of the petitioner by rejecting the same as per impugned order dated 30th April 2015 is at annexure 13. 8. It is also contended by the petitioner that the Leave Rule annexed as Annexure 3 to the writ petition more particularly Rule 4 deals with “Amendments To And Interpretation Of The Leave Rules” which Page 5 of 13 makes it clear that these leave rules may be amended or modified from time to time by the Corporation and the same shall take effect in accordance with the orders issued by the Corporation. 8-A. It is also reflected in the said rule that so far half pay leave is concerned there is no ceiling limit. 8-B. By means of annexure 6 the authorities have decided to introduce ceiling, restricting the leave encashment only to the tune of 300 days as per letter dated 27th August 2013(Annexure-6) wherein, in the guise of clarification, it is stated that in terms of the decision of Department of Public enterprises, the encashment of leave on retirement or separation on account of death, the same will be allowed, subject to overall ceiling limit of 300 days both EL and HPL clubbed together making it effective with immediate effect. 8-C. By way of introducing such provision in the guise of clarification, the authorities have taken away the accrued right of the Petitioner which is not permissible since a clarification cannot supersede override or set at naught the original provision. Therefore the said decision being treated as an amendment to the provision cannot have retrospective effect and therefore, the decision of the authority at Annexure 15 is wrong and liable to be interfered with. 9. The issue involved in this case is whether withdrawal of certain benefits accrued in favour of employees in shape of encashment of leave as well as half pay leave in their leave account in terms of the existing leave rules can be affected by putting a ceiling on the maximum days of such leave and thereby depriving the employee from the financial benefits for the periods beyond the ceiling limit by changing the existing rules and regulations governing the field of encashment of leave in the guise of clarification. 9-A. It is stated by the Opposite Parties that the Circular No.311 dated 27.08.2013 has been issued by the Competent Authority taking into Page 6 of 13 consideration the related Govt. guidelines and circulars in vogue and no such binding. 9-B. Such circular was issued only to avoid any ambiguity as well as correct the irregularity by ensuring proper implementation of leave encashment Rules uniformly in all public sector undertakings and to obviate the objections in the Audit paras. 9-C. In this context the attention of this Court was drawn to the letters dated 17.07.2012 and 07.02.2014, Department of the Public Enterprises, Govt. of India limiting the ceiling of encashment of leave to a maximum of 300 days. 9-D. It is apt to note here that the letter dated 17.07.2012 was enclosed to the Office Memorandum dated 07.02.2014. For convenience of ready reference the Office Memorandum dated 07.02.2014 and the Clarificatory letter issued by the Department of Public Enterprises, Govt. of India dated 17.07.2012 are at Annexure-A/1, annexed to the counter affidavit filed by the Corporation, is extracted hereunder. Letter Dated 17.07.2012 (Clarificatory Letter)- Page 7 of 13 Letter Dated 07.02.2014 (Office Memorandum)- 10. It is also the stand of the opposite parties that the circular has been issued by taking into consideration the clarification issued by the Department of Public Enterprises, Union of India after considering the request of various similar PSUs with respect to interpretation of encashment of Leave Rules. So far the power to amend the rule, in terms of Clause-4.1 of the Leave Rule, it asserted that the circular dated 27.08.2013 is not an amendment rather a clarificatory order and nothing but a compliance to audit objections. (Emphasized) 11. Extending similar benefit to others as a ground for the Petitioner to assert his claim was resisted by the Opposite Parties on the principle that negative equality cannot confer any right. Page 8 of 13 12. In resisting such submission, the petitioner has relied upon the decision of Apex court in State of Madhya Pradesh & others Vs. Jogendra Sribastav reported in 2010 (12) SCC 538. xxx xxx xxx “That rights and benefits which have already been earned or accrued under the existing rules cannot be taken away by amending the rules with retrospective effect.” xxx xxx xxx 13. Per contra the Opp. Parties placed reliance upon the decision Punjab and Haryana High Court in the matter of Ex-Sub-Inspector, Mahinder Singh Vs. State of Haryana & others reported in 2013 SCC online P & H 3812. It has been urged that even if more EL were accumulated, the encashment would be as per applicable rules and as per Govt. instruction as on the date of superannuation. 13-A. On a close scrutiny of the above decision of Punjab and Haryana High Court it reveals that it is a decision under a special circumstance wherein no principle has been decided rather basing upon the rules and regulations in force governing the field the decision of the Single Bench dismissing the writ petition was affirmed. 13-B. It is only expressed that even if there is no provision for leave encashment of unutilized leave in the rules, the benefits, if any, could only flow from the instruction, as it is a concession which depends upon the policy of the Govt. As such, the Judgment of Punjab and Haryana High Court cannot be of any assistance to the Opposite Party Corporation in the factual matrix of this case. 14. There is no doubt that any financial benefit accrued within the tenure of service or after retirement can only be granted as per the rules and regulations in force governing the field. But when the leave in terms of EL as well as HPL were already credited in the leave account as per the Page 9 of 13 prevailing Rules whether that can be affected by means of introducing a circular, without having any retrospective effect or retrospective operation needs to be addressed in this Writ Petition. 15. Accordingly it is required to be determined whether the Annexure-6 dated 27.08.2013 was a clarification or a substantive amendment in order to arrive at the consequential effect thereof whether it would be applicable retrospectively or not. 15-A. Referring to a catena of cases, on the similar issues, Apex Court in the matter of Sankaracharya University of Sanskrit vrs. Manu reported in 2023 SCC OnLine SC 640 held thus:- xxx xxx xxx “9.The proposition of law that a clarificatory provision may be made applicable retrospectively is so well established that we do not wish to burden this judgment by referring to rulings in the same vein. However, it is necessary to dilate on the role of a clarification/explanation to a statute and how the same may be identified and distinguished from a substantive amendment. 9.1. An explanation/clarification may not expand or alter the scope of the original provision, vide Bihta Cooperative Development Cane Marketing Union Ltd. v. Bank of Bihar, A.I.R. 1967 SC 389. Merely describing a provision as an "Explanation" or a "clarification" is not decisive of its true meaning and import. On this aspect, this Court in Virtual Soft Systems Ltd. v. Commissioner of Income Tax, Delhi, (2007) 289 ITR 83 (SC) observed as under: Even if the statute does contain a statement to the effect that the amendment is declaratory or clarificatory, that is not the end of the matter. The Court will not regard itself Page 10 of 13 as being bound by the said statement in the statute itself, but will proceed to analyse the nature of the amendment and then conclude whether it is in reality a clarificatory or declaratory provision or whether it is an amendment which is intended to change the law and which applies to future periods. This position of the law has also been subscribed to in Union of India v. Martin Lottery Agencies Ltd., (2009) 12 SCC 209 wherein it was stated that when a new concept of tax is introduced so as to widen the net, the same cannot be said to be only clarificatory or declaratory and therefore be made applicable retrospectively, even though such a tax was introduced by way of an explanation to an existing provision. It was further held that even though an explanation begins with the expression "for removal of doubts," so long as there was no vagueness or ambiguity in the law prior to introduction of the explanation, the explanation could not be applied retrospectively by stating that it was only clarificatory. 9.2. From the aforesaid authorities, the following principles could be culled out: i) If a statute is curative or merely clarificatory of the previous law, retrospective operation thereof may be permitted. ii) In order for a subsequent order/provision/amendment to be considered as clarificatory of the previous law, the pre-amended law ought to have been vague or ambiguous. It is only when it would be impossible to reasonably interpret a provision unless an amendment is read into it, that the amendment is considered to be a Page 11 of 13 clarification or a declaration of the previous law and therefore applied retrospectively. iii) An explanation/clarification may not expand or alter the scope of the original provision. iv) Merely because a provision is described as a clarification/explanation, the Court is not bound by the said statement in the statute itself, but must proceed to analyse the nature of the amendment and then conclude whether it is in reality a clarificatory or declaratory provision or whether it is a substantive amendment which is intended to change the law and which would apply prospectively.” (Emphasized) xxx xxx xxx 16. There is no dispute to the effect that the leave Rules in operation prior to issuance of Annexure 6 dated 27.08.2013 had no ceiling and the employees who retired prior to the said date had availed the benefit accrued in favor of them. It is the stand of the Opp. Parties that after it was objected by Audit team declaring the said type of encashment to be illegal the decision was taken on 27.08.2023 by fixing a ‘cap’ at certain days of leave that too clubbing both EL and HPL. 17. Applying the law as discussed hereinabove to the facts of the present case, this court is of the view that the subsequent order dated 27.08.2023 cannot be treated as a clarification and therefore cannot be made applicable retrospectively. 17-A. The order dated 27.08.2023 has substantively modified the leave Rule relating to leave encashment of EL & HPL without any ceiling. (Emphasized) 18. As noted above, the law provides that a clarification must not have the effect of saddling any party with an unanticipated burden or withdrawing an anticipated benefit. Accordingly this court is of the Page 12 of 13 considered view that the leave encashment in terms of the Rules at Annexure 3 cannot be circumscribed by the circular dated 27.08.2013 at Annexure-6 having no retrospective effect taking into consideration the language and intent of such circular. 19. Thus the decision of the authorities in rejecting the representation of the petitioner at Annexure 13 is not sustainable in the eyes of law and accordingly Annexure 13 dtd.30.04.2015 is quashed. 20. The petitioner is held to be entitled for his leave encashment sans ceiling in terms of the pre amended Rule at Annexure 3 without being interjected by Annexure 6 & 10. And, the same be released in favour of the petitioner after adjustment of the leave already encashed, if any, within a period of four months from the date of receipt of a copy of the Judgment. Failing which, the same will entail interest @8% per annum from the date of entitlement, till actual disbursal. 21. Accordingly the writ petition is disposed of. No costs. (V. NARASINGH) Judge Orissa High Court, Cuttack Dated the 15th April, 2024/ Soumya Signature Not Verified Digitally Signed Signed by: SOUMYA RANJAN SAMAL Designation: Jr. Stenographer Reason: Authentication Location: High Court of Orissa Date: 16-May-2024 10:53:43 Page 13 of 13