Citation : 2026 Latest Caselaw 1734 P&H
Judgement Date : 23 February, 2026
CWP Nos.26546 & 36344 of 2025 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
1. CWP-26546-2025 (O&M)
Charanjit Singh
....Petitioner
Versus
State of Punjab and another
....Respondents
2. CWP-36344-2025 (O&M)
Charanjit Singh
....Petitioner
Versus
State of Punjab and another
....Respondents
1. Date when judgment was reserved 28.01.2026
2. Date of pronouncement of 23.02.2026
judgment
3. Date of uploading judgment 23.02.2026
4. Whether operative part or full Full
judgment is pronounced
5. Delay, if any, in pronouncing of Not Applicable
full judgment and reasons thereof
CORAM: HON'BLE MR. JUSTICE HARPREET SINGH BRAR
Present: Mr. Himanshu Sharma, Advocate
for the petitioner in both the cases.
Mr. Vikas Arora, DAG, Punjab.
Mr. Animesh Sharma, Advocate
for respondent No.2 in CWP-26546-2025.
Mr. Sanjeev Sharma, Advocate
for respondent No.2 in CWP-36344-2025.
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CWP Nos.26546 & 36344 of 2025 2
HARPREET SINGH BRAR J. (Oral)
1. This common order shall dispose of the aforementioned
two writ petitions, as they arise from a similar factual matrix. CWP-
26546-2025 has been filed under Articles 226/227 of the Constitution of
India seeking a writ in the nature of mandamus directing the
respondents to set aside the speaking order dated 23.04.2025 (Annexure
P-7) insofar as it denies the petitioner's claim for leave encashment, and
to direct the respondents to release the petitioner's retiral benefits, i.e.,
Leave Encashment, and interest @ 18% per annum on the delayed
payment of Gratuity. The petitioner further seeks the release of ex
gratia/bonus amount for the year 2022-23 which was due on
01.07.2023.
2. The writ petition i.e. CWP-36344-2025 has been filed
seeking a writ of certiorari for quashing the charge-sheet dated
10.10.2025 (Annexure P-3 in CWP-36344-2025) issued by respondent-
Corporation after the petitioner's retirement. Further prayer has been
made for restraining respondent-Corporation from proceeding further
with the impugned charge-sheet dated 10.10.2025 qua the petitioner.
CONTENTIONS
3. Learned counsel for the petitioner inter alia contended that
the petitioner retired as Deputy Manager from the respondent-
Corporation on 31.01.2024 (Annexure P-1 in CWP-26546-2025) upon
attaining the age of superannuation. It is submitted that the petitioner's
service record was unblemished and his conduct was appreciated
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throughout his career. Despite an office order dated 22.12.2023
(Annexure P-4) directing the release of Gratuity and Leave Encashment
on the day of retirement, the respondents failed to disburse these
benefits to the petitioner.
4. It is submitted that the respondents issued a show-cause
notice dated 10.04.2023 (Annexure P-2) to the petitioner stating that a
sum of ₹76,80,000/- was outstanding against M/s Punjab Wires,
Nangal-Bhur, Pathankot as on 30.09.2020. Of this amount,
₹40,98,579.23 had been recovered, while a further sum of
₹35,81,420.23, along with interest at the rate of 15%, remained
recoverable. It is alleged that the petitioner failed to take timely and
appropriate steps to recover the said outstanding amount. The petitioner
submitted a detailed reply on 27.04.2023 (Annexure P-3), explaining
that the default occurred due to the party's account becoming a NPA and
that the petitioner had actually recovered over ₹40 lakhs from the same
party. The respondents had instituted a recovery suit against M/s Punjab
Wires, Pathankot for the outstanding amount, which is presently
pending adjudication.
5. Since the retiral benefits were not released, the petitioner
issued a legal notice dated 12.11.2024 (Annexure P-5) to the
respondents. The notice was duly received but it was neither replied to
nor were the retiral benefits released. Consequently, the petitioner
approached this Court by filing CWP No.33194 of 2024, which was
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disposed of on 10.12.2024 (Annexure P-6) with a direction to the
respondents to consider and decide the legal notice dated 12.11.2024.
6. In compliance with the directions of this Court, the
respondents passed a speaking order dated 23.04.2025 (Annexure P-7).
Vide the said order, the respondents ordered to release the gratuity
amount in favour of the petitioner. However, no interest on the gratuity
amount was paid to the petitioner. Furthermore, the respondents did not
release the leave encashment and other amounts due to the petitioner.
The speaking order records that a show-cause notice dated 10.04.2023
was served upon the petitioner and is likely to be decided shortly. It
further notes that, since the possibility of recovery from the petitioner
subsists, the petitioner's leave encashment has been withheld at this
stage in accordance with the Punjab Small Industries & Export
Corporation Employees Service Bye-laws, 2016 (hereinafter, "Service
Bye-laws") read with Rule 8.21(aa) of the Punjab Civil Services Rules,
Volume I, Part I. Furthermore, it is argued that the petitioner was
entitled to get the ex-gratia/bonus amount (Diwali bonus) for the year
2022-23 but the same was not paid. Aggrieved by the aforesaid speaking
order dated 23.04.2025 (Annexure P-7), the petitioner has approached
this Court by filing CWP-26546-2025.
7. Learned counsel for the petitioner argued that Rule 8.21(aa)
of Punjab CSR Vol.1 Part-1 would not apply in the present case. Under
the aforesaid Rule, Leave Encashment can be withheld only if the
concerned employee retired from service on superannuation while under
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suspension or while disciplinary or criminal proceedings were pending
against him. Reliance is placed on the judgment of the Hon'ble Supreme
Court in Union of India v. K.V. Jankiraman, 1991 (3) SCT 317 to
contend that departmental proceedings can only be termed as pending in
case a charge-sheet is served. In the present case, neither was there a
charge-sheet pending against the petitioner on the date of his retirement,
nor were there any criminal proceedings pending before any competent
court of law so as to entitle the respondents to withhold the retiral
benefits of the petitioner.
8. Further reliance is placed on the judgment of the Full
Bench of this Court in A.S. Randhawa v. State of Punjab and others,
1997 (3) SCT 468, wherein it has been held that delay in the release of
retiral benefits entitles the employee to the grant of interest on the
delayed payment. Therefore, it is argued that the petitioner is entitled to
interest on delayed payment of the gratuity amount.
9. Learned counsel for the petitioner submitted that while
CWP-26546-2025 was pending before this Court, the respondent-
Corporation issued a charge-sheet dated 10.10.2025 (Annexure P-3 in
CWP No.36344 of 2025) qua the petitioner. In this regard, it is argued
that the impugned charge-sheet is illegal, vague, vindictive, bereft of
material particulars, and issued as an afterthought solely to wrongly
justify the withholding of the retiral benefits accrued and due to the
petitioner upon his retirement.
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10. It is argued that the impugned charge-sheet stands vitiated
by an inordinate, unexplained, and wholly unjustifiable delay. The event
forming the basis of the allegations pertains to more than four years
prior to the issuance of the charge-sheet. Learned counsel placed
reliance on the judgment in State of Punjab v. Chaman Lal Goyal,
1995(2) SCT 343, wherein it has been held that disciplinary proceedings
must be conducted soon after the irregularities are committed or soon
after discovering the irregularities. They cannot be initiated after a
considerable time as that would not be fair to the delinquent officer.
Reliance is also placed on Prem Nath Bali Versus Registrar, High
Court of Delhi and another, 2016(1) SCT 603.
11. Learned counsel contended that though the Punjab Civil
Services Rules are not applicable to the service conditions of the
petitioner, even if a reference is made to the said Rules, the charge-sheet
will not survive against the petitioner. As per Rule 2.2(b) of the Punjab
Civil Services Rules (Volume II), departmental proceedings, if not
instituted while the officer was in service, shall not be instituted save
with the sanction of the Government and shall not be in respect of any
event which took place more than four years before such institution. In
the present case, the event took place more than 4 years before the
issuance of the charge-sheet. Furthermore, while referring to the Service
Bye-Laws of the respondent-Corporation, it is argued that upon
retirement of the petitioner, the relationship of master and servant or
employer and employee came to an end. As such, no disciplinary
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proceedings can be initiated against him under the aforesaid Service
bye-laws.
12. Per contra, learned counsel for respondents submitted that
withholding of Leave Encashment of the petitioner was justified under
the PSIEC Service Bye-laws, read with Rule 8.21(aa) of Punjab Civil
Services Rules, Volume I, Part I. It is contended that the petitioner was
served with a Show-Cause Notice on 10.04.2023 (Annexure P-2), i.e.,
prior to his superannuation on 31.01.2024, and therefore, it can be said
that disciplinary proceedings were pending against the petitioner before
his retirement.
13. It is further argued that the charge-sheet dated 10.10.2025
(Annexure P-3 in CWP No.36344 of 2025) is in respect of an event that
took place within four years of the institution of disciplinary
proceedings against the petitioner. Therefore, the aforesaid charge-sheet
is in consonance with Rule 2.2(b) of Punjab Civil Services Rules
(Volume II).
14. Learned counsel submitted that the competent authority, in
compliance with the directions of this Court in CWP No.33194 of 2024,
passed a speaking order dated 23.04.2025 (Annexure P-7) and released
the gratuity in favour of the petitioner. However, there was no direction
by this Court to pay interest on gratuity. Moreover, the ex-gratia/bonus
for the year 2022-23 was not released to the petitioner as a Show-Cause
Notice dated 10.04.2023 had been issued to him. It is contended that the
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judgments relied upon by the petitioner are distinguishable on both facts
and law.
OBSERVATION & ANALYSIS
15. I have heard the learned counsel for the parties and have
perused the record with their able assistance. At this stage, this Court
finds it apposite to note that Clause 3.8(f) of the Service Bye-laws, 2016
of the respondent-Corporation provides that, in the absence of a
corresponding provision in the Service Bye-laws, the rules and
instructions of the Punjab Government shall continue to apply.
Consequently, the Punjab Civil Services Rules would govern the service
conditions of the employees of the respondent-Corporation in matters
where the Service Bye-laws are silent. Clause 3.8(f) of the Service Bye-
laws, 2016 is reproduced hereunder:
"3.8 GENERAL xx xx xx xx
(f) Apropos of the Punjab Govt. Rules/instructions which are and be continued to be followed on any point for which there is no corresponding provisions in the Service Bye-
Laws of the Corporation."
16. Rule 8.21(aa) of the Punjab Civil Services Rules, Volume I,
Part I governs the payment and withholding of leave encashment to an
employee and is reproduced hereunder:
"8.21. (a) Leave at the credit of a Government employee in his leave account shall lapse on the date of his retirement:
Provided that the Government employee, -
(A) retiring on superannuation; or
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(B) retiring prematurely, voluntarily or on invalidation; or (C) retiring compulsorily as a measure of punishment and in whose case cut in the amount of pension has not been ordered by the competent authority;
shall, subject to the provisions of sub-rule (c), be entitled to cash payment in lieu of the unutilised earned leave due as leave preparatory to retirement as under :-
xx xx xx xx (aa) Notwithstanding anything contained in sub-rule (a), the authority competent to grant leave may withhold whole or part of cash equivalent of earned leave in the case of Government employee, who retires from service on superannuation while under suspension or while disciplinary or criminal proceedings are pending against him, if in the opinion of such authority, there is a possibility of some money becoming recoverable from him on conclusion of the proceedings against him and on conclusion of the proceedings, he shall become eligible to the amount so withheld after adjustment of Government dues, if any."
(Emphasis added)
17. In view of the above, it is evident that leave encashment
may be withheld only in cases where an employee retires on
superannuation while under suspension or while disciplinary or criminal
proceedings are pending against him, and the competent authority forms
the opinion that some amount may become recoverable from him upon
conclusion of such proceedings. It is settled law that disciplinary
proceedings are initiated only when a charge-sheet is issued against the
delinquent employee. A two-judge Bench of the Hon'ble Supreme Court
in Girijan Cooperative Corporation Limited, Andhra Pradesh v. K.
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Satyanarayana Rao, 2010(15) SCC 322 has held as follows in this
regard:
"14. There cannot be any doubt or dispute that an employer can initiate a departmental proceedings and/or continue the same only in terms of the rules framed by it. It is also a well settled law that the disciplinary proceedings are initiated only when a charge-sheet is issued. See: Union of India v. K.V. Jankiraman (sic), (1993) 23 ATC
322.
15. This Court in UCO Bank & Anr. v. Rajinder Lal Capoor, 2007 (6) SCC 694., has held as under:
"21. The aforementioned Regulation, however, could be invoked only when the disciplinary proceedings had clearly been initiated prior to the respondent's ceasing to be in service. The terminologies used therein are of seminal importance. Only when a disciplinary proceeding has been initiated against an officer of the bank despite his attaining the age of superannuation, can the disciplinary proceeding be allowed on the basis of the legal fiction created thereunder i.e. continue 'as if he was in service'. Thus, only when a valid departmental proceeding is initiated by reason of the legal fiction raised in terms of the said provision, the delinquent officer would be deemed to be in service although he has reached his age of superannuation. The departmental proceedings, it is trite law, is not initiated merely by issuance of a show-cause notice. It is initiated only when a charge-sheet is issued (See Union of India v. K.V. Jankiraman, (1993) 23 ATC 322. This aspect of the matter has also been considered by this Court recently in Goal India Ltd. v. Saroj Kumar Mishra, 2007 (9) SCC 625., wherein it was held that date of application of mind on the allegations levelled against an officer by the competent authority as a result whereof a charge-sheet is issued would be the date on which the disciplinary proceedings are said to have been initiated and not prior thereto. Pendency of a preliminary enquiry, therefore, by
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itself cannot be a ground for invoking Clause 20 of the Regulations."
(See also Ramesh Chandra Sharma v. Punjab National Bank and Anr., (2008) 3 SCC 494 ."
(Emphasis added)
18. Adverting to the facts of the present case, it is undisputed
that the petitioner retired from the respondent-Corporation on
31.01.2024. While a show-cause notice dated 10.04.2023 (Annexure P-
2) had been served upon the petitioner prior to his retirement, the formal
charge-sheet was only issued on 10.10.2025 (Annexure P-3 in CWP
No.36344 of 2025), i.e., after his retirement. In view of the settled law
as noted above, disciplinary proceedings are legally deemed to be
initiated and pending only when a charge-sheet is served upon the
delinquent employee. Since no charge-sheet was served to the petitioner
at the time of his retirement, it cannot be said that any disciplinary
proceedings were pending against him so as to trigger Rule 8.21(aa) of
the Punjab Civil Services Rules, Volume I, Part I. Therefore, this Court
is of the considered opinion that the respondent-Corporation was not
justified in withholding the leave encashment of the petitioner while
relying on Rule 8.21(aa). The essential prerequisite for invoking the said
rule, namely, that the employee must retire while disciplinary
proceedings are pending, is conspicuously absent in the present case.
19. This Court vide order dated 10.12.2024 (Annexure P-6) in
CWP 33194-2024 had directed the respondent-Corporation to consider
and decide the claim of the petitioner by passing a speaking order. In
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compliance with the aforesaid order, the respondent-Corporation passed
the order dated 23.04.2025 (Annexure P-7), wherein gratuity was
directed to be released in favour of the petitioner. However, there was
no direction by the respondent-Corporation regarding interest on
delayed payment of gratuity. As per the stand taken by the learned
counsel for the respondents, interest on delayed payment was not paid
since there was no direction by this Court in this regard. This Court does
not find merit in the aforesaid argument of the learned counsel for the
respondents. Vide order dated 10.12.2024 (Annexure P-6), this Court
had merely directed the respondent-Corporation to consider and decide
the claim made by the petitioner in the legal notice by passing a
speaking order. The Court had also directed that in case the petitioner is
found entitled, necessary benefits shall be released to him. Thus, the
respondent-Corporation cannot use the aforesaid order dated 10.12.2024
as a justification to deny interest on delayed payment of gratuity.
20. Furthermore, as noted above, no disciplinary proceedings
were pending against the petitioner on the date of his retirement. As
such, there is no justification in denying interest to the petitioner on
account of the significantly delayed disbursement of the said retiral
dues. At this juncture, a gainful reference can be made to the judgment
rendered by a Full Bench of this Court in A.S. Randhawa vs. State of
Punjab and others 1997 (3) SCT 468, wherein it was opined that
disbursement of pension and other benefits payable at retirement must
be done in a timely manner. Any delay over a period of two months, qua
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the said disbursement would entitle the retired employee to claim
interest on the amount due. Speaking through Justice N.K. Sodhi, the
following was held:
"9. Since a Government employee on his retirement becomes immediately entitled to pension and other benefits in terms of the Pension Rules, a duty is simultaneously cast on the State to ensure the disbursement of pension and other benefits to the retiree in proper time. As to what is proper time will depend on the facts and circumstances of each case but normally it would not exceed two months from the date of retirement which time limit has been laid down by the Apex Court in M. Padmanabhan Nair's case (supra). If the State commits any default in the performance of its duty thereby denying to the retiree the benefit of the immediate use of his money, there is no gain saying the fact that he gets a right to be compensated and, in our opinion, the only way to compensate him is to pay him interest for the period of delay on the amount as was due to him on the date of his retirement. Again, as to what should be the rate of interest, it should, in our view, be generally 12% unless the circumstances of a particular case warrant the payment of a higher rate which may extend to even 18%."
(Emphasis added)
Reliance in this regard may also be placed on the
judgments rendered by the Hon'ble Supreme Court in S.K. Dua vs.
State of Haryana, (2008) 3 SCC 44 and State of Kerala vs. M.
Padmanabhan Nair, (1985) 1 SCC 429.
21. With regards to the non-payment of the ex gratia/festive
(Diwali) bonus, learned counsel for the petitioner was unable to point
out any specific statutory rule or provision under which such bonus can
be claimed as a matter of right. On the contrary, Clause 4.2 of the
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Service Bye-laws of the respondent-Corporation provides that the
appointing authority may, in recognition of exceptional service, grant an
award not exceeding one month's pay or one or two increments in the
time scale of the employee's post. Such payment is purely discretionary
and not a vested entitlement. Accordingly, this Court is of the
considered view that the petitioner cannot claim the ex gratia/Diwali
bonus as a matter of right, and the respondent-Corporation cannot be
faulted for exercising its discretion in declining to grant the same.
Clause 4.2 of the Service Bye-laws is reproduced as under:
"4.2 The appointing authority may in recognition of exceptional good service of an employee/ officer working in commercial/ operational unit, grant to him:-
i) An award not exceeding one month's Pay of the employee/ officer.
ii) One or two increments in the time scale of his/her post.
Provided that the benefit shall be given to an employee/officer subject to following conditions:-
a) The above benefit shall only be available to the employee(s)/officer(s) working in commercial/operational units of the Corporation
b) The benefit/profit earned by the employee(s)/officer(s) to the corporation should be quantifiable.
Provided that payment of incentive under the incentive scheme may be made to the sales and other staff, including class-IV, employees working under regular pay scales in the various emporiums being run by the Corporation.
c) M.D. may grant incentives upto Rs.1000/- per employee in a particular year to those employees working in non- commercial Sections."
(Emphasis added)
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22. Adverting to the challenge against the impugned charge-
sheet dated 10.10.2025 (Annexure P-3 in CWP No.36344 of 2025), the
learned counsel for the petitioner has contended that the same is hit by
the limitation prescribed under Rule 2.2(b) of the Punjab Civil Services
Rules (Volume II), which prohibits the institution of departmental
proceedings after the retirement of the concerned employee in respect of
any event that took place more than four years prior to such institution.
However, a perusal of the charge-sheet reveals that the allegations
against the petitioner pertain to his failure to take timely steps to recover
an outstanding amount of ₹35,81,420.23 including 15% interest from
M/s Punjab Wires, which was recoverable from them as of 31.03.2022.
Further, the specific allegation regarding the negligence in depositing
the cheque for the said amount relates to a cheque dated 23.12.2022,
which was deposited in the bank account of Suranassi Depot on
11.01.2023 and was subsequently returned by the bank on 12.01.2023
with a memo stating that the party's bank account had become an NPA.
Given that the formal charge-sheet was issued on 10.10.2025, the events
forming the basis of the charges clearly fall within the four-year window
prior to the institution of the disciplinary proceedings. Consequently, the
contention that the charge-sheet is barred by the four-year rule under
Rule 2.2(b) is factually unsustainable and is hereby rejected.
23. Furthermore, it is settled law that ordinarily, a writ petition
should not be entertained against a mere show-cause notice or charge-
sheet as the same does not give rise to any cause of action and at that
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stage, the writ petition may be held to be pre-mature. A two-Judge
Bench of the Hon'ble Supreme Court in Union of India v. Kunisetty
Satyanarayana, (2006) 12 SCC 28, speaking through Justice
Markandey Katju has observed as follows:
"13. The reason why ordinarily a writ petition should not be entertained against a mere show-cause notice or charge-sheet is that at that stage the writ petition may be held to be premature. A mere charge-sheet or show-cause notice does not give rise to any cause of action, because it does not amount to an adverse order which affects the rights of any party unless the same has been issued by a person having no jurisdiction to do so. It is quite possible that after considering the reply to the show-cause notice or after holding an enquiry the authority concerned may drop the proceedings and/or hold that the charges are not established. It is well settled that a writ lies when some right of any party is infringed. A mere show-cause notice or charge-sheet does not infringe the right of any one. It is only when a final order imposing some punishment or otherwise adversely affecting a party is passed, that the said party can be said to have any grievance.
14. Writ jurisdiction is discretionary jurisdiction and hence such discretion under Article 226 should not ordinarily be exercised by quashing a show-cause notice or charge- sheet.
15. No doubt, in some very rare and exceptional cases the High Court can quash a charge-sheet or show-cause notice if it is found to be wholly without jurisdiction or for some other reason if it is wholly illegal. However, ordinarily the High Court should not interfere in such a matter."
(Emphasis supplied)
24. Similarly, in Secretary, Ministry of Defence v. Prabhash
Chandra Mirdha, (2012) 11 SCC 565, another two-Judge Bench of the
Hon'ble Supreme Court has held as follows:
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"13. Thus, the law on the issue can be summarised to the effect that charge-sheet cannot generally be a subject matter of challenge as it does not adversely affect the rights of the delinquent unless it is established that the same has been issued by an authority not competent to initiate the disciplinary proceedings. Neither the disciplinary proceedings nor the charge-sheet be quashed at an initial stage as it would be a premature stage to deal with the issues. Proceedings are not liable to be quashed on the grounds that proceedings had been initiated at a belated stage or could not be concluded in a reasonable period unless the delay creates prejudice to the delinquent employee. Gravity of alleged misconduct is a relevant factor to be taken into consideration while quashing the proceedings."
(Emphasis supplied)
CONCLUSION
25. In view of the foregoing discussions, the writ petition i.e.
CWP-36344-2025 stands dismissed as no ground has been made out to
warrant interference with the charge-sheet dated 10.10.2025 (Annexure
P-3 in CWP-36344-2025) at this stage. However, the respondent-
Corporation shall proceed further with respect to the said charge-sheet
strictly in accordance with law, while affording the petitioner a fair and
reasonable opportunity of hearing and ensuring due compliance with the
principles of natural justice. The respondent-Corporation is directed to
conclude the disciplinary proceedings against the petitioner
expeditiously and without any unnecessary delay in terms of the
directions issued by this Court in CWP-9606-2022, titled as 'Khairati
Lal v. State of Haryana and others.'
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26. The writ petition i.e. CWP-26546-2025 is disposed of in
the following terms:
a. The impugned speaking order dated 23.04.2025 (Annexure P-7 in CWP-26546-2025) hereby stands quashed insofar as it denies the petitioner's claim for leave encashment. The respondent-Corporation is directed to release the petitioner's leave encashment along with interest at the rate of 6% per annum, calculated from the expiry of two months from the date of his retirement, i.e., 31.01.2024, until the date of actual payment.
b. The respondent-Corporation is further directed to pay interest at the rate of 6% per annum on the delayed payment of gratuity, to be calculated from the expiry of two months from the date of the petitioner's retirement until the date of actual disbursement of the gratuity amount.
c. The petitioner cannot claim the amount of ex gratia/Diwali bonus as a matter of right.
Accordingly, the respondent-Corporation cannot be faulted for exercising its discretion in declining to grant the same.
27. Pending miscellaneous applications, if any, shall also stand
disposed of.
28. A photocopy of this order be placed on the file of the
connected case.
(HARPREET SINGH BRAR)
JUDGE
23.02.2026
yakub Whether speaking/reasoned: Yes/No
Whether reportable: Yes/No
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