Case Note & Summary
The petitioner, Smt. A. Alice, a former Senior Assistant at Karnataka Transmission Corporation Limited, retired on 30.04.2013. Prior to retirement, the competent authority had sanctioned 90 days of encashment of privileged leave. However, by an endorsement dated 22.01.2014 (Annexure-E), the respondent-Corporation forfeited this encashment from her terminal benefits. The petitioner challenged this endorsement by filing a writ petition under Article 226 of the Constitution of India, seeking quashing of the endorsement and a direction to pay the 90 days leave encashment with interest at 18% per annum from 01.05.2013. The court heard both sides. The petitioner argued that the forfeiture was without any authority of law and that the sanctioned leave encashment was a vested right. The respondent contended that the forfeiture was justified under some internal rules, but failed to produce any statutory rule or regulation authorizing such forfeiture. The court analyzed that the Corporation, being a government-controlled entity, cannot act arbitrarily and must have legal backing for any deduction from terminal benefits. Since the leave encashment was already sanctioned by the competent authority, it became a vested right of the petitioner upon retirement. The court found that the respondent had no authority to forfeit the same. Consequently, the court allowed the writ petition, quashed the impugned endorsement, and directed the respondent to pay the 90 days leave encashment amount with interest at 6% per annum from the date of retirement (01.05.2013) till the date of payment, within a period of three months.
Headnote
A) Service Law - Leave Encashment - Forfeiture - Sanctioned Privileged Leave - The respondent-Corporation forfeited 90 days of encashment of privileged leave earlier sanctioned by the competent authority from the terminal benefits of the petitioner. The court held that the Corporation cannot forfeit the encashment of privileged leave which was already sanctioned by the competent authority without any authority of law. The impugned endorsement was quashed and the respondent was directed to pay the amount with interest at 6% per annum from the date of retirement till payment. (Paras 1-5) B) Service Law - Interest - Delayed Payment - Retirement Benefits - The court held that the petitioner is entitled to interest at 6% per annum on the amount of leave encashment from the date of retirement (01.05.2013) till the date of payment, as the forfeiture was without authority of law and the amount was wrongly withheld. (Para 5)
Issue of Consideration
Whether the respondent-Corporation could forfeit 90 days of encashment of privileged leave already sanctioned by the competent authority from the terminal benefits of the petitioner without any authority of law.
Final Decision
The writ petition is allowed. The impugned endorsement dated 22.01.2014 (Annexure-E) is quashed. The respondent is directed to pay the 90 days leave encashment amount with interest at 6% per annum from the date of retirement (01.05.2013) till the date of payment, within a period of three months.
Law Points
- Forfeiture of leave encashment without statutory authority is illegal
- Right to leave encashment is a vested right upon retirement
- Corporation cannot unilaterally forfeit sanctioned benefits
