Neutral Citation Number: 2022/DHC/005482
$~50 & 51
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 02nd December, 2022
50
+ W.P.(C) 11146/2019
SH. K.D. SHARMA ..... Petitioner
Through: Mr. Mohammad Sajid,
Mr. Abdullah Bin Masood and Mr. Rahul
Kumar Jha, Advocates.
versus
BANK OF BARODA AND ANR. ..... Respondents
Through: Mr. Arun Aggarwal and
Mr. Shivam Saini, Advocates for R-1.
51
+ W.P.(C) 11148/2019
SH. R.K. BANSAL ..... Petitioner
Through: Mr. Mohammad Sajid,
Mr. Abdullah Bin Masood and Mr. Rahul
Kumar Jha, Advocates.
versus
BANK OF BARODA THORUGH ITS
CHAIRMAN AND MD & ANR. ..... Respondents
Through: Mr. Arun Aggarwal and
Mr. Shivam Saini, Advocates for R-1.
CORAM:
HON'BLE MS. JUSTICE JYOTI SINGH
JUDGEMENT
JYOTI SINGH, J. (ORAL)
1. Both the writ petitions have been filed seeking relief of grant of Leave Encashment and raise a legal issue of entitlement of an employee of a bank to Leave Encashment on compulsory retirement, imposed as a penalty. Due to the similitude of the legal issue in both the writ petitions they have been heard together and are being decided by a common judgment.
Signature Not Verified Digitally Signed W.P.(C) 11146/2019 and connected matter Page 1 of 9 By:KAMAL KUMAR Signing Date:12.12.2022 20:58:09 Neutral Citation Number: 2022/DHC/005482
2. Petitioner in W.P.(C) 11146/2019 joined the erstwhile Dena Bank as a Stenographer on 14.02.1984 and at the time of his retirement in October, 2016 he was working in the capacity of AGM. Pursuant to disciplinary proceedings initiated against the Petitioner, Disciplinary Authority imposed the penalty of compulsory retirement on 05.07.2018 and the Appellate Authority dismissed the appeal, upholding the penalty.
3. Petitioner made several requests to the erstwhile Dena Bank for release of his retirement benefits including Leave Encashment. Not getting any favourable response, Petitioner filed a writ petition in September, 2018 being W.P.(C) 9638/2018 for release of leave encashment. Since Dena Bank had amalgamated in Bank of Baroda in January, 2019, the writ petition was withdrawn and a fresh petition was filed in May, 2019.
4. Vide order dated 06.09.2019, Court disposed of the writ petition directing the Respondent to decide the claim of the Petitioner within four weeks. Respondent rejected the claim of the Petitioner on 03.10.2019, on the ground that there were no approved guidelines for payment of Leave Encashment in the Bank of Baroda and it has no obligation under the terms of Scheme of Amalgamation, to grant any service benefits to employees retired prior to 01.04.2019.
5. Petitioner in W.P.(C) 11148/2019 joined the services of the erstwhile Dena Bank on 24.10.1983 and at the time of his retirement in March, 2017 he was working as a DGM. On 12.02.2018, Disciplinary Authority imposed the penalty of compulsory retirement pursuant to a chargesheet issued on 17.03.2017. Appeal filed against the penalty order was dismissed by the Appellate Authority.
6. In September, 2018 Petitioner filed a writ petition being W.P.(C) 9583/2018, seeking release of Leave Encashment, which was Signature Not Verified Digitally Signed W.P.(C) 11146/2019 and connected matter Page 2 of 9 By:KAMAL KUMAR Signing Date:12.12.2022 20:58:09 Neutral Citation Number: 2022/DHC/005482 withdrawn on account of the amalgamation of Dena Bank in Bank of Baroda.
7. Subsequently, writ petition being W.P.(C) 5112/2019 was filed, which was disposed on 06.06.2019 directing the Respondent Bank to decide the claim of the Petitioner within four weeks. Vide order dated 03.10.2019 Respondent/Bank rejected the claim of the Petitioner on the same ground as in W.P.(C) 11146/2019, aforementioned.
8. The seminal question that arises in the present writ petitions is the entitlement of a compulsorily retired employee of a Bank to the benefit of Leave Encashment.
9. Learned counsel for the Petitioners submits that Regulation 38 of Bank of Baroda Officers Service Regulation, 1979 is pari-materia with Regulation 38 of Punjab National Bank Officers Service Regulation, 1979 and Regulation 38 of Dena Bank Officers Service Regulation, 1979. Regulation 38 provides that all leaves to the credit of an officer shall lapse on resignation, retirement, death, dismissal or termination for any reason. However, Proviso to the Regulation provides that where an officer retires from Bank services, he shall be eligible to be paid a sum equivalent to the emoluments of any period, not exceeding 240 days of privileged leave that he had accumulated. Reliance is also placed on Circular dated 11.05.2015, issued by the Indian Banks' Association and Circular dated 01.06.2015 by the Bank of Baroda, wherein it is stipulated that compulsory retired employees will be entitled to leave encashment even if the same is imposed as a penalty.
10. It is argued that this issue is no longer res integra. In UCO Bank and Others v. Anju Mathur, 2013 SCC OnLine P&H 5014, Full Bench of Punjab and Haryana High Court has, interpreting the Proviso to Regulation 38, held that irrespective of the manner in Signature Not Verified Digitally Signed W.P.(C) 11146/2019 and connected matter Page 3 of 9 By:KAMAL KUMAR Signing Date:12.12.2022 20:58:09 Neutral Citation Number: 2022/DHC/005482 which the officer retires, he is eligible for Leave Encashment. Division Bench of this Court in Deepak Sapra v. Punjab National Bank, 2013 SCC OnLine Del 3724, has observed that no distinction can be made between one class of retirees and another and thus even when an officer retires on compulsory retirement, albeit as a penalty, he is entitled to Leave Encashment. This Judgment was challenged before the Supreme Court in SLP(C) No. 35937/2013 and the SLP was dismissed on 25.08.2015. It is contended that these judgments squarely cover the cases of the Petitioners and therefore benefits of Leave Encashment be released to them.
11. Per contra learned counsel for Respondents/ Bank of Baroda submits that the judgments relied upon by the Petitioners are distinguishable on facts. Circular dated 11.05.2015, issued by Indian Banks' Association is merely advisory and was never adopted by the Board of erstwhile Dena Bank. The only other Circular which deals with Leave Encashment is the Circular dated 01.06.2015, issued by the Bank of Baroda, however, the same is irrelevant in case of the Petitioners as it was issued prior in point of time to the amalgamation of the Respondent in Dena Bank.
12. For the sake of completeness and before proceeding further, it needs to be penned down that on 07.10.2022, when the matter was listed before the Court, Petitioners had relied on the judgment in Deepak Sapra (Supra) and learned counsel for Respondents had sought to contend that the judgment was inapplicable on account of the Regulations of the Respondents to the contrary, whereby a compulsory retired employee is not entitled to Leave Encashment. Time was sought to place on record the applicable Regulations. On 29.11.2022, further time was sought to file the stated Regulations.
Signature Not Verified Digitally Signed W.P.(C) 11146/2019 and connected matter Page 4 of 9 By:KAMAL KUMAR Signing Date:12.12.2022 20:58:09 Neutral Citation Number: 2022/DHC/005482
13. As a matter of record, no such Regulation, as stated by learned counsel for the Respondents has been filed and today it is submitted that none exists.
14. I have heard the learned counsels for the parties and examined their contentions.
15. In Deepak Sapra (Supra), the Division Bench of this Court was in seisin of the issue whether on compulsory retirement the Petitioner was entitled to the benefit of Leave Encashment. Indubitably, in the said case as the facts unfurl, compulsory retirement was imposed as a penalty on the Petitioner, by the Respondent/Bank. Both parties had relied on Regulation 38 of the Punjab National Bank Officers Service Regulation, 1979 framed in terms of Section 19(1) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. Contention of the Bank was that compulsory retirement imposed as a penalty would disqualify an officer from the benefit of Leave Encashment. Learned Single Judge, interpreted Regulation 38 in light of a Circular issued by the Bank and followed the judgment of the Calcutta High Court in Punjab National Bank v. Jyotirmay Roy, 2012 SCC OnLine Cal 12613, wherein the Court has taken a view that compulsory retirement being a punishment cannot be compared with ordinary retirement and disentitles the employee to Leave Encashment.
16. The Division Bench of this Court, interpreting Regulation 38 held that the first Proviso makes no distinction between one class of retirees and another and each one of them is entitled to the Leave Encashment benefit. As aforementioned, the Supreme Court has affirmed the said judgment by dismissing the Special Leave Petition on 25.08.2015 and the judgment has thus attained finality. Relevant part of the judgment is as follows:-
Signature Not Verified Digitally Signed W.P.(C) 11146/2019 and connected matter Page 5 of 9 By:KAMAL KUMAR Signing Date:12.12.2022 20:58:09 Neutral Citation Number: 2022/DHC/005482 "7. As noted previously, the Calcutta High Court was much influenced by the enacting part of Regulation 38 of the 1979 Regulations. What requires to be noticed, however, is that the regulation opens with the expression "Save as provided below". This in turn means that in the eventualities specifically enumerated, i.e. resignation, retirement, death, discharge, dismissal or any other kind of termination, the leave standing to the credit of an officer is to lapse. This rule is further controlled by three provisos. The most important - and to this Court's mind, relevant proviso - is the first one. It states that, "Provided that where an officer retires from the Bank's service", he would be eligible to be paid the extent of accumulated privileged leave. The second proviso preserves the right of legal representative of a deceased officer to receive such benefit. The third proviso provides for a specific contingency of resignation of employee after 01.04.2001 and his entitlement to secure proportionate emoluments in lieu of privileged leave.
8. Thus, in respect of all categories of retirees, the first proviso states that such employees would be eligible to payment of leave encashment benefits. Advisedly, the regulation which was framed after prior consultation with and approval of the Central Government made no distinction between one class of retirees and another. Indeed there is no dispute about the fact that the cessation of service as a result of retirement can be on the occurrence of three contingencies-attainment of superannuation; option by the employee to voluntarily retire from the service, and the third, retirement of an employee upon imposition of a penalty or exercise by the employer upon imposition of a penalty or exercise by the employer of an option to compulsorily retire the employee on this attaining a certain age or having served for a certain number of years, in public interest. The first proviso makes no distinction between one class of retirees and another. In other words, each one of them, in terms of Regulation 38 of the 1979 Regulations is entitled to leave encashment benefit. In the case of those imposed with penalty of compulsory retirement, there is no dispute that pension - as applicable and other terminal benefits are given. In these circumstances, to single-out one class of retirees, i.e. those imposed with compulsory retirement and deny them the benefit of leave encashment would be contrary to plain intent of Regulation 38 of the 1979 Regulations. This Court is clear that the first part of the learned Single Judge's reasoning that he preferred and relied upon the bank's circular of 18.01.2001 is clearly erroneous. That circular flies in the face of the first proviso to Regulation 38 of 1979 Regulations and could not have added words as it sought to, in the present instance. Another reason which persuades us to hold as we do, i.e. to say that compulsory retirees would be entitled to leave encashment benefits is that singling-out such class of employees for denial for one specific type of retirement benefit is also arbitrary and furthers no rationale, having regard to the express terms of Regulation 38 of the 1979 Regulations.
Signature Not Verified Digitally Signed W.P.(C) 11146/2019 and connected matter Page 6 of 9 By:KAMAL KUMAR Signing Date:12.12.2022 20:58:09 Neutral Citation Number: 2022/DHC/005482
9. This Court is, therefore, of the opinion that the reasoning embodied in the Full Bench judgment of the Punjab and Haryana High Court in UCO Bank v. Anju Mathur [LPA 566/2012, decided on 07.03.2013], which specifically dealt with Regulation 38, is the correct one. The effect and purport of the decision in Jitendra Kumar Srivastava (supra) is the same with one superadded reason that leave encashment benefits are property, being vested rights, which cannot be deprived of without authority of law. The conclusion that this Court is reaching is identical to that reached by the Supreme Court, i.e. that in the absence of specific regulation, depriving one class of retirees (such as those imposed with penalty of compulsory retirement) leave encashment benefits is unwarranted and unsupported in law.
10. In the light of the above discussion, the appeal has to succeed and is accordingly allowed. The impugned judgment and order of the learned Single Judge is set aside. The respondent is directed to release leave encashment benefits to the appellant within four weeks from today."
17. It is not disputed by the Respondent Bank that Regulation 38 of Bank of Baroda Officers Service Regulation, 1979, Regulation 38 of Punjab National Bank Officers Service Regulation, 1979 and Regulation 38 of erstwhile Dena Bank Officers Service Regulation, 1979 are pari-materia and applying the ratio decidendi of the aforementioned judgment, this Court cannot accept the contention of the Bank that the Petitioners are disentitled to benefit of Leave Encashment on account the compulsory retirement, imposed as a penalty in the disciplinary proceedings. The Division Bench negated the interpretation that was sought be placed by the Bank in that case and held that no distinction can be drawn between the two class of retirees, i.e those who retire on superannuation and those who are compulsory retired, where compulsory retirement is imposed as a penalty. Any other interpretation would be against the clear intent of Regulation 38.
18. In State of Jharkhand and Others v. Jitendra Kumar Srivastava and Another, (2013) 12 SCC 210, Supreme Court has held that right to receive Leave Encashment is a vested one which cannot Signature Not Verified Digitally Signed W.P.(C) 11146/2019 and connected matter Page 7 of 9 By:KAMAL KUMAR Signing Date:12.12.2022 20:58:09 Neutral Citation Number: 2022/DHC/005482 be taken away without authority of law of specific Rules. In the present case although learned counsel for the Respondents had sought to urge that the Regulation of the Respondent Bank does not permit grant of Leave Encashment on compulsory retirement, however, despite two opportunities, no Regulation has been brought to the notice of the Court, allegedly disentitling the said benefit to the Petitioners, contrary to Regulation 38.
19. Petitioners are also right in placing reliance on the Circulars, as referred to above, which provide for leave encashment even where the employee/officer of the Bank has severed his connection with the Bank on compulsory retirement as a punishment and one of them is issued by the Respondent Bank herein. The contention that the Circular is advisory or not binding does not appeal to this Court. No statutory provision is shown by the Bank to the contrary and the ethos and spirit behind the Circulars is no different from the judgements, aforementioned and reinforces Banks' correct understanding of the law.
20. In my view, the stand of the Bank in the impugned orders is also incorrect. Petitioners have categorically averred in the writ petitions that Government of India had issued a Notification dated 02.01.2019 in the official Gazette regarding the amalgamation of Dena Bank in Bank of Baroda, called the 'Amalgamation of Vijaya Bank and Dena Bank with Bank of Baroda scheme, 2019', which came into effect from 01.04.2019. The Scheme has been placed on record and Clause 4(15) thereof states that 'Any officer or other employee of the Transferor Bank (i.e Dena Bank) who has retired before the commencement of this Scheme from the service of transferor bank and entitled to any benefits, rights or privileges from the transferor bank shall be entitled to receive same benefits, rights or privileges Signature Not Verified Digitally Signed W.P.(C) 11146/2019 and connected matter Page 8 of 9 By:KAMAL KUMAR Signing Date:12.12.2022 20:58:09 Neutral Citation Number: 2022/DHC/005482 from the transferee bank (i.e Bank of Baroda) as would have been admissible to him if the undertaking of the transferor bank had not been transferred to and vested to the transferee bank'.
21. For all the afore-stated reasons, this Court finds merit in the grievance ventilated by the Petitioners and holds that Petitioners are entitled to the Leave Encashment benefits.
22. Accordingly, the writ petitions are allowed. Impugned orders both dated 03.10.2019 are quashed and set aside and Respondents are directed to release the benefits of Leave Encashment to the Petitioners (Rs.9,97,223.44/- in WP(C) 11146/2019 and Rs. 11,06,304/- in WP(C) 11148/2019), within a period of six weeks from today along with interest calculated @ 6% from the date of compulsory retirement till the date of actual realization.
23. Both writ petitions are accordingly disposed of.
JYOTI SINGH, J DECEMBER 02, 2022/rk
Signature Not Verified Digitally Signed W.P.(C) 11146/2019 and connected matter Page 9 of 9 By:KAMAL KUMAR Signing Date:12.12.2022 20:58:09
