[Cites 1, Cited by 0]
Gujarat High Court
Mathai Mampallil Thomas (M T Mathai) vs Chairman And Managing Director on 28 April, 2026
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C/SCA/11238/2015 JUDGMENT DATED: 28/04/2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 11238 of 2015
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE MAULIK J. SHELAT
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Approved for Reporting Yes No
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MATHAI MAMPALLIL THOMAS (M T MATHAI)
Versus
CHAIRMAN AND MANAGING DIRECTOR
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Appearance:
MS TITHI THAKKAR for MR DM THAKKAR(894) for the Petitioner(s) No. 1
MR DG SHUKLA(1998) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE MAULIK J. SHELAT
Date : 28/04/2026
JUDGMENT
1. Heard Ms. Tithi Thakkar, learned Advocate appearing on
behalf of Mr. D. M. Thakkar, learned Advocate for the
petitioner and Mr. D. G. Shukla, learned Advocate for the
respondent.
2. The present writ petition is filed under Article 226 of the
Constitution of India, seeking the following reliefs:
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"a) The Hon'ble Court may be pleased to issue an
appropriate Writ of Mandamus or any other appropriate
Writs or orders and may further be pleased to -
b) Set aside the action of the Respondent in withholding
the amount of encashment of Earned Leave, to which the
petitioner is entitled to on the date of his superannuation,
with effect from 31.12.2009,
c) Declare that the petitioner is entitled to be paid amount
of Rs.2,82,470/- (towards encashment of Earned Leave of
282 days with interest @ 18 per cent, from the date of
superannuation till the date of actual payment),
d) Direct the Respondent to release the amount of
Rs.2,82,470/- (towards encashment of Earned Leave of 282
days with interest @ 18 per cent from the date of
superannuation till the date of actual payment
e) Declare that the Respondent will be entitled for
difference in Leave encashment of 282 days, upon payment
of revision of salary as per Sixth Pay Commission
recommendations.
f) Pending admission and final hearing, by way of an
interim direction direct Respondent to forthwith release
the amount of Rs.2,82,470/- due to the petitioner towards
encashment of leae,
g) Pass such other and further orders as may be deemed
proper in the in the facts and circumstances of the case."
SHORT FACTS:
3. The petitioner was serving with the respondent, namely
National Textile Corporation Ltd. (hereinafter referred to as
"the Corporation") and retired from service as Assistant
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Manager (Administration) on 31.12.2009. Since the petitioner
was facing criminal prosecution as CBI case No. RC 2/1988
was pending against him at the time of retirement, the
Corporation has withheld the amount of gratuity and leave
encashment payable to the petitioner. It is informed to this
Court that, so far as the amount of gratuity is concerned, the
same was deposited with the Controlling Authority and
received by the petitioner. Nonetheless, the amount of leave
encashment is till date not received by the petitioner. The
petitioner appears to have been acquitted from the aforesaid
criminal case vide the judgment and order dated 13.11.2018
passed by the Special Court (CBI) Court No.1, Ahmedabad.
SUBMISSIONS OF THE PETITIONER:
4. Ms. Thakkar, learned Advocate, would submit that the
Corporation cannot withhold the amount of leave encashment
on the pretext that the petitioner was facing a criminal case. It
is submitted that there is no power available under the
Conduct, Disciplinary and Appeal Rules, 2009 (hereinafter
referred to as "Rules, 2009"), whereby, the respondent can
withhold the amount. It is submitted that due to non-receipt of
the leave encashment from the respondent for a quite long
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time, the petitioner is entitled to receive interest on such
amount.
5. Making the above submissions, Ms. Thakkar, learned
Advocate, would request this Court to allow the present writ
petition.
SUBMISSIONS OF THE RESPONDENT:
6. Per contra, Mr. Shukla, learned Advocate for the Corporation,
would only submit that the reason of non-payment of the
amount of leave encashment was due to the pendency of the
CBI case against the petitioner and at the relevant point of
time, while passing the office order dated 31.12.2009, the
competent authority of the Corporation, upon referring the
Rules 2009, decided to withhold the said amount.
6.1. Mr. Shukla, learned Advocate, would further submit that as it
is informed to this Court that the petitioner is already acquitted
from the said criminal case, the necessary steps will be taken by
the Corporation to make the payment of leave encashment to
the petitioner and considering the fact that the Corporation is a
sick unit, this Court may not award any interest.
6.2. Making the above submissions, Mr. Shukla, learned Advocate,
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would request this Court to reject the present writ petition.
7. No other and further submissions are being made.
ANALYSIS:
8. Having heard the learned Advocates appearing for the
respective parties and upon perusal of the petition and the
documents made available on record, prima facie, it appears
that the petitioner was facing the aforesaid criminal case when
he retired from the service of the Corporation on 31.12.2009.
At that time, the petitioner was not paid the amount of
gratuity, leave salary, etc., by the Corporation due to the said
pendency of the criminal case. The competent authority of the
Corporation vide its office order dated 31.12.2009 referred the
Rules 2009 for not granting the said benefit upon retirement of
the petitioner.
9. This Court has called upon Mr. Shukla, learned Advocate for
the respondent, to show any rules or provisions under Rules,
2009 which entitle the Corporation to withhold the retiral dues
of the petitioner. Mr. Shukla, learned Advocate, was unable to
lay his hand on such a rule and candidly submitted that due to
the reason of pendency of the criminal case, the competent
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authority of the Corporation decided to withhold the said
amount.
10. Once, it is undisputed that there are no specific rules or any
provisions under Rules, 2009, which entitle the Corporation to
withhold the amount of retiral dues of the petitioner, merely
because the criminal case was pending against the petitioner at
the time of retirement, the impugned action of the Corporation
withholding such amount is nothing but an arbitrary action on
the part of the Corporation and the same is required to be
interfered with by this Court. It is by now well-settled position
of law that if the employer, being the State, withholds the
amount / retiral dues of the employee without any justifiable
reason and without any authority of law, such employer is
required to pay interest on such amount for delayed payment.
[See: D. D. Tewari (D) Thr. Lrs V/s. Uttar Haryana Bijli Vitran
Nigam Ltd., reported in (2014) 8 SCC 894.]
11. Since the impugned action of the Corporation is found to be
arbitrary and without any authority, merely because the
Corporation is sick by now, it would not be a ground not to
award any interest, because of the fact that the petitioner is
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deprived from enjoyment of the money, which is wrongfully
withheld by the Corporation and enjoyed it for its business or
any other purpose.
12. In light of the aforesaid facts and circumstances and having
found the action of the Corporation to be arbitrary, I am of the
considered view that the petitioner is entitled to receive the
amount / benefit of leave encashment with 7.5% p.a. interest
from 01.02.2010 till its payment.
13. The Corporation is hereby directed to pay the aforesaid
payment to the petitioner on or before 31.07.2026, failing
which, the petitioner shall be entitled to receive such amount
with 9% p.a. interest from 01.08.2026 till its realization.
14. It is also open for the petitioner to initiate contempt
proceedings against the erring officials of the Corporation in
the case of non-compliance of the aforesaid direction.
15. In view of the foregoing reasons, the present writ petition is
partly allowed. Rule is made absolute, to the aforesaid extent.
There shall be no order as to costs. Direct service is permitted.
(MAULIK J. SHELAT, J)
NILESH
