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HIGH COURT OF DELHI
Date of Decision: 16.09.2025
SHRI NAROTTAM SINGH SHAMI .....Petitioner
Through: Mr. Sachin Chauhan, Adv.
Through: Mrs.Avnish Ahlawat, SC, GNCTD (Services)
HON'BLE MS. JUSTICE MADHU JAIN NAVIN CHAWLA, J. (ORAL)
JUDGMENT
1. This petition has been filed, challenging the Order dated 27.08.2019 passed by the learned Central Administrative Tribunal, Principal Bench, New Delhi (hereinafter referred to as, ‘Tribunal’) in O.A. No. 3400/2016, titled Shri Narottam Singh Shami v. Govt. of NCTD & Ors., whereby the learned Tribunal has denied the claim of interest on the delayed payment of the Leave Encashment amount to the petitioner.
2. The petitioner, who was appointed to the post of Section Officer on 10.04.1973 in the Irrigation & Flood Control Department, Govt. of NCTD, had retired at the rank of Executive Engineer (Civil) on 30.06.2010. He was denied his retiral benefits as a Charge Memorandum dated 30.06.2010 was served on him, purporting to hold an inquiry under Rule 14 of the Central Civil Services (Classification, Control and Appeal) Rules, 1965. Only provisional pension was released in his favour.
3. The contemplated Departmental Inquiry was, however, not initiated against him, and the alleged charges were eventually dropped in the year 2016.
4. The petitioner made various representations thereafter for release of Gratuity and Leave Encashment amounts that had been withheld.
5. Vide cheques dated 23.09.2016, the Gratuity and the Leave Encashment amounts were released to the petitioner. The petitioner then requested for the payment of interest on the same, and having failed to receive a response, filed the above O.A. praying for the following reliefs: “(i) To direct the respondents that applicant be granted the 18% interest on the delayed retiral benefits i.e. 12,34,609/- (Rs.4, 65, 890- Leave Encashment and Rs. 7,68,719/- towards gratuity) from the date of retirement i.e. 30.06.2010 to the date of actual payment i.e. 23.09.2016.
(ii) That the applicant be further awarded the cost of
6. During the pendency of the above O.A., interest on the Gratuity amount was released to the petitioner, however, interest on the Leave Encashment remained pending adjudication before the learned Tribunal.
7. The learned Tribunal, by its Impugned Order, placing reliance on the Office Memorandum No.38/64/98-P&PW(F) dated 05.10.1999 issued by the Department of Pension & Pensioners’ Welfare, Ministry of Personnel, Public grievances & Pensions, Government of India, has rejected the said prayer observing as under:
8. The learned counsel for the petitioner submits that the OM dated 05.10.1999 does not prohibit grant of interest on the Leave Encashment amount, which is a retiral due. He submits that, in fact, the Judgment of the Supreme Court in S.K. Dua v. State of Haryana & Another, (2008) 3 SCC 44, clearly stipulates that even in absence of any provision governing the release of the interest on the retiral dues, in terms of Articles 14, 19 and 21 of the Constitution of India, the employee can claim interest on the same as the retiral dues are not a bounty. He submits that the reliance of the learned Tribunal on the OM dated 05.10.1999 was, therefore, unfounded.
9. On the other hand, the learned counsel for the respondents reiterates that the Government of India, by its OM dated 05.10.1999, has clarified that there is no provision for payment of interest on the Leave Encashment amount as it is not a pensionary benefit. He submits that the learned Tribunal has, therefore, rightly rejected such claim of the petitioner.
10. We have considered the submissions made by the learned counsels for the parties.
11. At the outset, we would note that it is now settled law that Leave Encashment amount is not a bounty but akin to a fundamental right of the employee. To this effect, we place reliance on the Judgement of the Supreme Court in S.K. Dua (supra) and of this Court in Union of India & Ors. v. Vijay Kumar Gupta, 2025:DHC:6532- DB.
12. Paragraph no.2(f) of the OM dated 05.10.1999, on which reliance has been placed by the learned Tribunal, reads as under: “(f) In the matter of delayed payment of Leave Encashment, the department of Personnel & Training in their note dated 2.8.99 has clarified that there is no provision under CCS (Leave) Rules for payment of interest or for fixing responsibility. Moreover, encashment of leave is a benefit granted under the leave rules and not a pensionary benefit.”
13. Reading of the above would show that by the above OM, it is only being clarified that there is no provision under the CCS (Leave) Rules, 1972 for payment of interest or for fixing responsibility for the late payment of Leave Encashment. It has further being clarified that the encashment of the leave is a benefit granted under the Leave Rules and not a pensionary benefit. The said OM, therefore, does not prohibit grant of interest on the delayed payment of Leave Encashment but only clarifies that there is no statutory provision mandating the payment of interest.
14. In absence of any such prohibition and even assuming that there is no such rule which provides for payment of interest on the delayed payment of Leave Encashment, the law settled by the Supreme Court in S.K. Dua (supra) would clearly be applicable, and we quote the same as under:
learned counsel for the appellant, that retiral benefits are not in the nature of "bounty" is, in our opinion, well founded and needs no authority in support thereof. In that view of the matter, in our considered opinion, the High Court was not right in dismissing the petition in limine even without issuing notice to the respondents.” (Emphasis supplied)
15. Applying the above law to the facts of the present case, the petitioner was clearly entitled to grant of interest on the delayed payment of Leave Encashment.
16. Accordingly, the Impugned Order dated 27.08.2019 of the learned Tribunal is set aside.
17. The respondents are directed to pay interest at the rate of 6% p.a. to the petitioner for the delayed payment from the date when the amount under the Leave Encashment became due to the petitioner till the date of actual release of the same. The amount shall be released by the respondents to the petitioner along with the calculation thereof, within a period of four weeks from today. In case of any grievance, the petitioner may take appropriate remedies in that regard.
18. The petition is disposed of in the above terms.
NAVIN CHAWLA, J MADHU JAIN, J SEPTEMBER 16, 2025/ns/ik