Masood Ahmad vs State Of U.P. Thru. Prin. Secy., ...
2023 Latest Caselaw 18445 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 


?Neutral Citation No. - 2023:AHC-LKO:47936
 
Court No. - 7
 

 
Case :- WRIT - A No. - 4981 of 2023
 

 
Petitioner :- Masood Ahmad
 
Respondent :- State Of U.P. Thru. Prin. Secy., Public Works Deptt. Lucknow And 4 Others
 
Counsel for Petitioner :- Ritesh Ranjan Chaubey,Ganesh Nath Mishra
 
Counsel for Respondent :- C.S.C.,Shishir Jain
 

 
Hon'ble Abdul Moin,J.

1. Heard learned counsel for the petitioner, learned Standing Counsel for respondent no.1 and Sri Shishir Jain, learned counsel for respondents no.2 to 5.

2. With the consent of learned counsel for the parties the writ petition is being finally decided.

3. The petitioner, a retired employee, who retired on attaining the age of superannuation on 30.06.2016, is before this Court challenging the order dated 29.05.2023, a copy of which is Annexure-14 to the writ petition, whereby the respondents have rejected the claim of the petitioner for payment of leave encashment on the ground that an inquiry in the Vigilance Department is pending against the petitioner for disproportionate assets.

4. The legal ground on which the order impugned has been challenged is that this Court in the case of Madhusudan Agarwal vs. State of U.P. and others passed in Writ-A No.36019 of 2008 decided on 18.04.2015 has held that leave encashment cannot be withheld on the ground of pendency of departmental inquiry or criminal proceedings. It is contended that once the Court in the case of Madhusudan Agarwal (supra) has held to the said effect consequently there cannot be any occasion for the respondents to have withheld the leave encashment and the same is payable to the petitioner along with interest for the delayed payment from the date of his retirement till the date of actual payment. It is also argued that no opportunity of hearing was given to the petitioner prior to withholding the leave encashment.

5. On the other hand, Sri Shishir Jain, learned counsel for the Corporation, argues that the Government order dated 19.08.2016, as has been referred to in the impugned order dated 29.05.2023, empowers the competent authority to withhold the leave encashment on the ground of pendency of the disciplinary proceedings. It is also contended that the petitioner while discharging his duties was found involved in various irregularities and the matter is now engaging the attention of the Vigilance Department and that the petitioner has caused loss of Rs.14.90 lakhs consequently there is no error in the competent authority passing the impugned order dated 29.05.2023 in not paying the leave encashment to the petitioner. It is also contended that the impugned order has also considered the judgment of Madhusudan Agarwal (supra) while rejecting the claim of the petitioner.

6. Having heard learned counsel for the parties and having perused the records, what emerges is that admittedly the petitioner retired on attaining the age of superannuation on 30.06.2016. As his leave encashment was not paid, he approached the respondents for payment of leave encashment which has been rejected by the respondents by means of impugned order dated 29.05.2023. The ground, as emerges from perusal of the impugned order, is that as a vigilance inquiry is pending against the petitioner consequently leave encashment cannot be paid. A perusal of the facts of the instant case would indicate that prior to the respondents proceeding to withhold the leave encashment neither any opportunity of hearing was given to the petitioner nor any departmental inquiry was conducted.

7. This aspect of the matter has been considered by this Court in the case of Madhusudan Agarwal (supra) wherein it has been held as under:-

"It is admitted case that in the present matter no departmental enquiry has taken place. Only on the basis of show cause the department had proceeded into the matter and took final decision and held that the petitioner was liable to pay Rs.5,86,562/-, which is against the principle of natural justice. While in service neither preliminary nor full fledged departmental enquiry has been made in the matter. No adverse material has been brought on record against the petitioner in his career.

The judgments cited by learned counsel for the petitioner fully support his case. It is not in dispute that services of the petitioner were never terminated. The petitioner continued to be in service and retired on attaining the age of superannuation. In the circumstances, the basic pre-condition for the forfeiture of gratuity under Section 4 (6) of the Gratuity Act, 1972 was also not fulfilled.

It has also been held time and again that the retiral benefits like pension, gratuity or leave encashment are not bounty or grace but are earned by the employee through the years of service of a company. They are an employee's security after retirement.

In Dr. Dudh Nath Pandey v. The State of Jharkhand & Ors., 2009 (2) SLJ 105 (Jharkhand), the Division Bench of Jharkhand High Court after scanning various case laws on the subject held that the conditions precedent for imposing penalty of withholding pension is that there should be a finding in departmental enquiry or judicial proceeding that the pensioner committed grave misconduct in the discharge of his duty while in office. The Court held that leave encashment also cannot be withheld since that is paid in lieu of unutilized leave as it partakes the character of salary.

In Dr. Dudh Nath Pandey v. The State of Jharkhand (2007 (2) BLJR 2847), the Full Bench of Jharkhand High Court has held that there is no power for the Government to withhold Gratuity and Pension during the pendency of the departmental proceeding or criminal proceeding. There is no power with the government to withhold Leave Encashment at any stage either prior to the proceeding or after conclusion of the proceeding.

In the matter of leave encashment the Full Bench of Punjab and Haryana High Court in Punjab State Civil Supplies Corporation Ltd. & Ors. v. Pyare Lal (Letters Patent Appeal No.113 of 2012) has held that the amount of leave encashment is payable to the retiring employee notwithstanding the pendency of the departmental enquiry or criminal proceedings.

In the present matter, leave the question of finding, even the proper enquiry was not conducted. Only on the basis of show cause the amount has been withheld from the encashment without giving any opportunity to the petitioner, which is against the principle of natural justice.

In view of the above, the order impugned dated 25.07.2007 cannot be sustained and is hereby set aside. The writ petition is allowed. The petitioner will be entitled for all the retiral benefits, which is due to him. The recovered amount shall be paid to the petitioner alongwith 9% interest calculated from the date, when it is payable till the date of its actual payment. The same shall be given to the petitioner within a period of three months from the date a certified copy of this order is produced before the authority concerned."

8. From perusal of the judgment of this Court in the case of Madhusudan Agarwal (supra) it emerges that this Court was seized of a matter where the leave encashment of the employee had been withheld without conducting of any departmental inquiry and only on the basis of a show cause notice. In that view of the matter this Court had allowed the petition and had directed that the employee concerned would be entitled for payment of all retiral dues.

9. The instant case stands on a better footing inasmuch as neither any departmental inquiry has been conducted nor any show cause notice has been issued to the petitioner prior to respondents proceeding to withhold the leave encashment of the petitioner.

10. Considering the aforesaid, writ petition deserves to be allowed and is allowed. The impugned order dated 29.05.2023, a copy of which is Annexure-14 to the writ petition, is quashed. The respondents are directed to pay the leave encashment to the petitioner in accordance with rules within a period of two months from the date of receipt of a certified copy of this order. Respondents shall also consider payment of interest at admissible rate from the date the leave encashment fell due to the petitioner till the date of actual payment.

11. However, it would be open for the respondents to proceed against the petitioner for recovery of any loss that may have been caused by the petitioner in accordance with law.

Order Date :- 21.7.2023

A. Katiyar