Supreme Court in the case of S.K. Dua v. State of Haryana and another

: Vijay Kumar Srivastava : C.S.C. Court No. - 7 HON'BLE MANISH MATHUR, J.

1. Heard Mr. V.K. Srivastava learned counsel for petitioner and learned State counsel for opposite parties.

2. Petition has been filed challenging order dated 13 November 2024 with a further being made for direction to opposite parties to pay interest @ 10% per annum on the amount of leave encashment Rs. 8,09,842/- for the delayed period from 1st December, 2021 till the date of actual payment i.e. 29th November, 2024.

3. Learned counsel for petitioner submits that petitioner was initially appointed as a Junior Engineer (civil) in the District Rural Development Agency on 25th July 1985 and subsequently superannuated on 30th November 2021 from the post of Assistant Engineer. It is submitted that due to non-payment of leave encashment of 165 days, he filed writ A No. 9711 of 2024 in which apart from seeking payment of leave encashment of 165 days, interest on delayed payment was also sought. The said petition was disposed of vide order dated 22nd October 2024 directing the authorities concerned to decide representation. It is submitted that in pursuance thereof impugned order has been passed but without any mention pertaining to the amount of interest claimed. It is submitted that as per impugned order itself, once it is admitted that the aforesaid benefit of leave encashment was actually granted to petitioner in the year 2024, the petitioner is thus entitled to interest thereupon in terms of principles of restitution. Learned counsel has placed reliance on judgment rendered by 2 WRIA No. 7184 of 2025 Supreme Court in the case of S.K. Dua vs. State of Haryana and another, 2008(3) SCC 44 and by this Court in writ A No. 12721 of 2024 (Ganesh Prasad Tiwari vs. State of U.P. and others).

4. Learned State counsel on the basis of counter affidavit has refuted submissions advanced by learned counsel for petitioner with submission that although the impugned order does not refer to grievance pertaining to payment of interest but it is submitted that delay in payment of leave encashment occurred due to Project Director in the District Rural Development Agency, Gautam Budh Nagar who did not provide relevant records by rectifying errors with regard to payment to be made to petitioner. It is submitted that subsequently all the relevant documents were submitted on 19th October 2024 where after vide order dated 4th November 2024, petitioner has been granted an amount equivalent to remaining earned leave of 165 days in terms of the Government order dated 28th November 2017. It is further submitted that since there is no provision for payment of interest in the service rules applicable upon petitioner, the same cannot be allowed.

5. Upon consideration of submissions advanced by learned counsel for parties and perusal of material on record, particularly paragraph 17 of the counter affidavit, it is evident that despite superannuation of petitioner in the year 2021, the aforesaid benefit could not be paid to him on account of report not being submitted by the Project Director of the District Rural Development Agency and such payment after removal of anomalies has thereafter been made on 4th November 2024.

6. In the considered opinion of this court, the delay in payment of leave encashment to petitioner has occurred not on account of any complicity of petitioner for such delay but on account of internal issues of opposite parties themselves thereby depriving petitioner of benefits of the aforesaid leave encashment.

7. In view of the principles of restitution, the petitioner thus would be entitled to interest on the delayed payment of leave encashment.

8. The Hon'ble Supreme Court in the case of Poornima Advani v. State (NCT of Delhi), (2025) 7 SCC 269 has already adverted to the aspect of 3 WRIA No. 7184 of 2025 restitution and for providing interest on delayed pensionary benefits of employees. Relevant portion of the aforesaid judgment is as follows:- "14. The concept of awarding interest on delayed payment has been explained by this Court in Karnataka Bank v. RMS Granites (P) Ltd. [Karnataka Bank v. RMS Granites (P) Ltd., 2024 SCC OnLine SC 4695] , we quote the following observations: (SCC OnLine SC para 16) “16. It may be mentioned that there is misconception about interest. Interest is not a penalty or punishment at all, but it is the normal accretion on capital. For example if A had to pay B a certain amount, say ten years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount. Had A paid that amount to B ten years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period. Hence equity demands that A should not only pay back the principal amount but also the interest thereon to B. [See: Alok Shanker Pandey v. Union of India [Alok Shanker Pandey v. Union of India, (2007) 3 SCC 545 : (2007) 136 Comp Cas 258] .]” "Interest is normal accretion on capital

23. If on facts of a case, the doctrine of restitution is attracted, interest should follow. Restitution in its etymological sense means restoring to a party on the modification, variation or reversal of a decree or order what has been lost to him in execution of decree or order of the court or in direct consequence of a decree or order. The term “restitution” is used in three senses, firstly, return or restoration of some specific thing to its rightful owner or status, secondly, the compensation for benefits derived from wrong done to another and, thirdly, compensation or reparation for the loss caused to another." In view of discussion made herein, since the impugned order dated 13th November 2024 does not accept or deny the aspect of payment of interest, without quashing the same, the opposite parties are directed are directed to pay interest to petitioner at the rate of 7% per annum in terms of Interest Act 1978 on delayed payment with effect from Ist December 2021 till the date of actual payment. Compliance of this order shall be made by the opposite parties with payment of actual benefits to credit of account of the petitioner within a period of four weeks from the date a certified copy of this order is served upon the concerned authority. 4 WRIA No. 7184 of 2025

9. Resultantly the petition succeeds and is allowed. Parties to bear their own costs. December 10, 2025 prabhat (Manish Mathur,J.) PRABHAT KUMAR PRABHAT KUMAR High Court of Judicature at Allahabad, High Court of Judicature at Allahabad, Lucknow Bench Lucknow Bench

: Vijay Kumar Srivastava : C.S.C. Court No. - 7 HON'BLE MANISH MATHUR, J.

1. Heard Mr. V.K. Srivastava learned counsel for petitioner and learned State counsel for opposite parties.

2. Petition has been filed challenging order dated 13 November 2024 with a further being made for direction to opposite parties to pay interest @ 10% per annum on the amount of leave encashment Rs. 8,09,842/- for the delayed period from 1st December, 2021 till the date of actual payment i.e. 29th November, 2024.

3. Learned counsel for petitioner submits that petitioner was initially appointed as a Junior Engineer (civil) in the District Rural Development Agency on 25th July 1985 and subsequently superannuated on 30th November 2021 from the post of Assistant Engineer. It is submitted that due to non-payment of leave encashment of 165 days, he filed writ A No. 9711 of 2024 in which apart from seeking payment of leave encashment of 165 days, interest on delayed payment was also sought. The said petition was disposed of vide order dated 22nd October 2024 directing the authorities concerned to decide representation. It is submitted that in pursuance thereof impugned order has been passed but without any mention pertaining to the amount of interest claimed. It is submitted that as per impugned order itself, once it is admitted that the aforesaid benefit of leave encashment was actually granted to petitioner in the year 2024, the petitioner is thus entitled to interest thereupon in terms of principles of restitution. Learned counsel has placed reliance on judgment rendered by 2 WRIA No. 7184 of 2025 Supreme Court in the case of S.K. Dua vs. State of Haryana and another, 2008(3) SCC 44 and by this Court in writ A No. 12721 of 2024 (Ganesh Prasad Tiwari vs. State of U.P. and others).

4. Learned State counsel on the basis of counter affidavit has refuted submissions advanced by learned counsel for petitioner with submission that although the impugned order does not refer to grievance pertaining to payment of interest but it is submitted that delay in payment of leave encashment occurred due to Project Director in the District Rural Development Agency, Gautam Budh Nagar who did not provide relevant records by rectifying errors with regard to payment to be made to petitioner. It is submitted that subsequently all the relevant documents were submitted on 19th October 2024 where after vide order dated 4th November 2024, petitioner has been granted an amount equivalent to remaining earned leave of 165 days in terms of the Government order dated 28th November 2017. It is further submitted that since there is no provision for payment of interest in the service rules applicable upon petitioner, the same cannot be allowed.

5. Upon consideration of submissions advanced by learned counsel for parties and perusal of material on record, particularly paragraph 17 of the counter affidavit, it is evident that despite superannuation of petitioner in the year 2021, the aforesaid benefit could not be paid to him on account of report not being submitted by the Project Director of the District Rural Development Agency and such payment after removal of anomalies has thereafter been made on 4th November 2024.

6. In the considered opinion of this court, the delay in payment of leave encashment to petitioner has occurred not on account of any complicity of petitioner for such delay but on account of internal issues of opposite parties themselves thereby depriving petitioner of benefits of the aforesaid leave encashment.

7. In view of the principles of restitution, the petitioner thus would be entitled to interest on the delayed payment of leave encashment.

8. The Hon'ble Supreme Court in the case of Poornima Advani v. State (NCT of Delhi), (2025) 7 SCC 269 has already adverted to the aspect of 3 WRIA No. 7184 of 2025 restitution and for providing interest on delayed pensionary benefits of employees. Relevant portion of the aforesaid judgment is as follows:- "14. The concept of awarding interest on delayed payment has been explained by this Court in Karnataka Bank v. RMS Granites (P) Ltd. [Karnataka Bank v. RMS Granites (P) Ltd., 2024 SCC OnLine SC 4695] , we quote the following observations: (SCC OnLine SC para 16) “16. It may be mentioned that there is misconception about interest. Interest is not a penalty or punishment at all, but it is the normal accretion on capital. For example if A had to pay B a certain amount, say ten years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount. Had A paid that amount to B ten years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period. Hence equity demands that A should not only pay back the principal amount but also the interest thereon to B. [See: Alok Shanker Pandey v. Union of India [Alok Shanker Pandey v. Union of India, (2007) 3 SCC 545 : (2007) 136 Comp Cas 258] .]” "Interest is normal accretion on capital

23. If on facts of a case, the doctrine of restitution is attracted, interest should follow. Restitution in its etymological sense means restoring to a party on the modification, variation or reversal of a decree or order what has been lost to him in execution of decree or order of the court or in direct consequence of a decree or order. The term “restitution” is used in three senses, firstly, return or restoration of some specific thing to its rightful owner or status, secondly, the compensation for benefits derived from wrong done to another and, thirdly, compensation or reparation for the loss caused to another." In view of discussion made herein, since the impugned order dated 13th November 2024 does not accept or deny the aspect of payment of interest, without quashing the same, the opposite parties are directed are directed to pay interest to petitioner at the rate of 7% per annum in terms of Interest Act 1978 on delayed payment with effect from Ist December 2021 till the date of actual payment. Compliance of this order shall be made by the opposite parties with payment of actual benefits to credit of account of the petitioner within a period of four weeks from the date a certified copy of this order is served upon the concerned authority. 4 WRIA No. 7184 of 2025

9. Resultantly the petition succeeds and is allowed. Parties to bear their own costs. December 10, 2025 prabhat (Manish Mathur,J.) PRABHAT KUMAR PRABHAT KUMAR High Court of Judicature at Allahabad, High Court of Judicature at Allahabad, Lucknow Bench Lucknow Bench