{"id":322842,"date":"2024-05-24T10:00:34","date_gmt":"2024-05-24T04:30:34","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=322842"},"modified":"2024-05-28T16:58:13","modified_gmt":"2024-05-28T11:28:13","slug":"bhc-orders-bank-to-pay-leave-encashment-to-former-employees-scc-times","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2024\/05\/24\/bhc-orders-bank-to-pay-leave-encashment-to-former-employees-scc-times\/","title":{"rendered":"\u2018Leave encashment once earned, constitutes employee\u2019s property\u2019; Bombay HC directs bank to pay encashment of privileged leave to its former employees"},"content":{"rendered":"
\n

Bombay High Court:<\/span> In the present case, the question was whether the petitioners had lost their right to encash privilege leave because they resigned from the services of the respondent-Vidharbha Konkan Gramin Bank (‘the Bank’). The Division Bench of Nitin Jamdar*<\/span> and M.M. Sathaye, JJ., opined that any attempt to deprive an employee of pension, gratuity, or leave encashment without a statutory provision, is untenable. Thus, the Court held that the petitioner’s accrued right of encashment of privilege leave could not be rejected by the Bank and therefore, directed the Bank to pay the amount of leave encashment to the petitioners along with interest at 6% per annum.<\/p>\n

Background<\/p>\n

Petitioners 1 and 2 were assistant manager and cashier, respectively in the Bank and they resigned on 02-08-2015 and 01-10-2014, respectively. Their resignations were accepted, and the Bank issued an experience certificate to them certifying that the period they worked with the Bank was satisfactory. The petitioners served the bank for more than 30 years and in that time had accumulated entitlement for encashment of 240 days of privilege leave and 210 days of privilege leave, respectively.<\/p>\n

After tendering resignations, the petitioners requested the Bank for encashment of their privilege leave. The Bank informed the petitioners that the facility for encashment of privilege leave for those who have resigned came into existence on 14-09-2015, i.e., after the petitioners had resigned from service therefore, they were not eligible. Aggrieved by this refusal, the petitioners sought a Writ of Mandamus to direct the Bank to pay the amounts of privilege leave standing to their credit, amounting to Rs.6,57,554 for Petitioner 1 and Rs.4,66,830 for Petitioner 2 with interest at 8% per annum.<\/p>\n

Analysis, Law, and Decision<\/p>\n

The Court analyzed Regulations 61 and 67 of Chapter-VI of the Vidharbha Konkan Gramin Bank (Officers and Employees) Service Regulations, 2013 wherein it is stated that an employee earns one day of privilege leave for every 11 days of duty, with the entitlement being the accumulated days earned and that employees are entitled to full emoluments if they have fulfilled the prescribed duty period. Consequently, the Court stated that the right to leave is a statutory entitlement granted to employees as per the provisions of the law.<\/p>\n

The Court also held that a leave encashment is akin to a salary, which is a property. Depriving a person of his property without any valid statutory provision would violate Article 300-A<\/a> of the Constitution<\/a>. If an employee has chosen to accumulate his earned leave to his credit, then encashment becomes his right. The Court relied on State of Jharkhand v. Jitendra Kumar Srivastava<\/span>, (2013) 12 SCC 210<\/a>, wherein the Supreme Court emphasised that the right to property cannot be infringed upon without due process of law, which is the constitutional mandate enshrined in Article 300-A<\/a> of the Constitution<\/a>. The Court also relied on Karnataka Vikas Grameena Bank v. Chandrashekhar<\/span>, 2021 SCC OnLine Kar 15842<\/a>, wherein the issue of encashment of privilege leave in the case of a resignation was considered and it was held that there was no distinction between the one who retired and the one who resigned since the benefit had already accrued.<\/p>\n

The Court opined that any attempt to deprive an employee of pension, gratuity, or leave encashment without a statutory provision, is untenable and stated that leave encashment which was acquired by the petitioners constituted their property once earned. Deprivation of such property without statutory backing will not be permitted.<\/p>\n

The Court also noted that as there is no such specific regulation that takes away the accrued right to encash privilege leave on resignation, then without there being any specific regulation, the right already accrued cannot be forfeited. The Court stated that though Regulation 67 states that all leave shall lapse, it does not mean that the right already accrued for encashment will also lapse.<\/p>\n

The Court thus held that the petitioners are entitled to succeed as the right of encashment could not have been rejected by the Bank. The Bank was thus directed to calculate the amount payable to the petitioners along with interest at 6% per annum and pay the same within six weeks from the date of the present order.<\/p>\n

[Dattaram Atmaram Sawant v. Vidharbha Konkan Gramin Bank, 2024 SCC OnLine Bom 1253<\/a>, decided on 02-05-2024<\/span>]<\/p>\n

*Judgment authored by: Justice Nitin Jamdar<\/span><\/strong><\/p>\n\n

Advocates who appeared in this case :<\/p>\n

For the Petitioners: Advocate Shailendra S. Kanetkar and Advocate Yash Dhawal.<\/p>\n

For the Respondent: Advocate Bhavesh Wadhwani and Advocate Shrishti Shetty i\/b. M.V. Kini and Co.<\/p>\n

Buy Constitution of India  HERE<\/a><\/h3>\n

\"Constitution<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Bombay High Court held that leave encashment is akin to a salary, which is a property, and depriving a person of his property without any valid statutory provision would violate Article 300-A of the Constitution.<\/p>\n","protected":false},"author":1,"featured_media":314919,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[34216,2569,19471,32385,3043,69062,33972,24654,69061,13551],"class_list":["post-322842","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-article-300-a","tag-Bombay_High_Court","tag-constitution","tag-leave-encashment","tag-Mandamus","tag-privileged-leave","tag-resign","tag-right-to-property","tag-vidharbha-konkan-gramin-bank","tag-writ-petition"],"yoast_head":"\n\u2018Leave encashment once earned, constitutes employee\u2019s property\u2019; 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Facts of the case\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":210412,"url":"https:\/\/www.scconline.com\/blog\/post\/2019\/02\/20\/gau-hc-leave-encashment-benefit-can-be-extended-only-for-maximum-permissible-300-days-under-the-rules-of-gauhati-university\/","url_meta":{"origin":322842,"position":1},"title":"Gau HC | Leave encashment benefit can be extended only for maximum permissible 300 days under the rules of Gauhati University","author":"Bhumika Indulia","date":"February 20, 2019","format":false,"excerpt":"Gauhati High Court: The Bench of Manojit Bhuyan, J. disposed of a writ petition filed for leave encashment benefit with direction to the respondent authority to make an assessment of the number of days standing at the credit of the petitioner towards leave encashment benefits. Petitioner prayed for a direction\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":208030,"url":"https:\/\/www.scconline.com\/blog\/post\/2019\/01\/14\/raj-hc-computation-of-actual-benefits-of-leave-encashment-and-salary-of-summer-vacations-under-ugc-regulations-ordered\/","url_meta":{"origin":322842,"position":2},"title":"Raj HC | Computation of actual benefits of leave encashment and salary of summer vacations under UGC Regulations ordered","author":"Bhumika Indulia","date":"January 14, 2019","format":false,"excerpt":"Rajasthan High Court: A Division Bench comprising of Goverdhan Bardhar\u00a0and Mohammad Rafiq, JJ., upheld the appeal directed against the order passed by the Single Judge questioning the order by which respondents were directed to comply with the mandate of Regulation 13.1 of the University Grants Commission Regulations, 2010 and to\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":274029,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/09\/20\/leaveencashment-retired-reemployedemployee-stategovernment-entitled-leaveencashment-entire-period-served-stategovernment-legal-news-legal-update\/","url_meta":{"origin":322842,"position":3},"title":"Sikkim High Court | Retired Government employee cannot be denied Leave encashment benefits unless re-employment is contractual","author":"Editor","date":"September 20, 2022","format":false,"excerpt":"\u00a0 \u00a0 Sikkim High Court: While deciding the instant writ petition regarding leave encashment of a retired re-employed employee of the State Government, Bhaskar Raj Pradhan, J., held that the petitioner is entitled to leave encashment for the entire period he served the State Government. This petition is preferred by\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/09\/Sikkim-High-Court-1.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/09\/Sikkim-High-Court-1.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/09\/Sikkim-High-Court-1.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/09\/Sikkim-High-Court-1.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/09\/Sikkim-High-Court-1.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":212704,"url":"https:\/\/www.scconline.com\/blog\/post\/2019\/03\/30\/pat-hc-retired-clerk-of-a-minority-school-entitled-to-payment-of-leave-encashment-as-per-his-entitlement\/","url_meta":{"origin":322842,"position":4},"title":"Pat HC | Retired clerk of a minority school entitled to payment of leave encashment as per his entitlement","author":"Bhumika Indulia","date":"March 30, 2019","format":false,"excerpt":"Patna High Court: The Bench of Nilu Agrawal, J. allowed a civil writ petition directing payment of leave encashment to a clerk of a minority school. Petitioner herein, who retired from a minority school from the post of clerk, filed the instant writ application praying for payment of unutilised earned\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":196990,"url":"https:\/\/www.scconline.com\/blog\/post\/2018\/06\/19\/government-entitled-to-withhold-leave-encashment-of-an-employee-pending-criminal-or-departmental-proceedings\/","url_meta":{"origin":322842,"position":5},"title":"Government entitled to withhold leave encashment of an employee pending criminal or departmental proceedings","author":"Bhumika Indulia","date":"June 19, 2018","format":false,"excerpt":"Patna High Court: The Division Bench comprising of Rajendra Menon, CJ, and Ravi Ranjan J., held in a challenge made by the petitioner that withholding his gratuity and encashment of earned leaves was valid if, at the time of superannuation, departmental or criminal proceedings were pending. In a nutshell, the\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/322842","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=322842"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/322842\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/314919"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=322842"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=322842"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=322842"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}