Rajesh Kumar Gupta vs Madhya Pradesh Vidyut Vitran Co. Ltd & Ors.

Petitioner has filed this petition under Article 226 of Constitution of India challenging order dated 28/02/2025 contained in Annexure P-7. By said order prayer of petitioner for encashment of earned leave was rejected on ground that revision filed by petitioner against conviction and sentence is pending before High Court. Prayer for encashment of earned leave was rejected in aid with Rule 64(1)(c) of M.P. Civil Services (Pension) Rules, 1976 on grounds that payment is to be made on conclusion of proceedings. Final retiral benefits are to be paid after adjustment of provisional pension gratuity paid under Rule 64(1)(c) of M.P. Civil Services (Pension) Rules, 1976 on conclusion of proceedings. Proceedings include departmental enquiry or judicial proceedings.

Counsel appearing for petitioner submitted that respondents had committed an error in passing impugned order and same is not in consonance with law. There is no specific provision which aids withholding of leave encashment of petitioner. In Writ Appeal No.772/2019 (Sevaram Khandegar Vs. State of M.P. & Others) Division Bench of this Court vide order dated 04/02/2019 held that there is no provision, which disentitles petitioner during pendency of criminal case from encashing leave in his account. Writ Appeal filed was allowed and respondents were directed to release 50% of gratuity as directed by learned Single Judge as well as amount which is in account of petitioner under leave encashment head. In support of his contention counsel also placed reliance on orders passed by this Court in Writ Petition No.18341/2023 (Badelal Pathak Vs. State of M.P. & Others) decided on 05/09/2023 and also order dated 10/02/2023 passed in Writ Petition No.17844/2020 (Bhuvansingh Waskel Vs. State of M.P. & Others). In view of aforesaid, counsel for petitioner prays for quashing of impugned order and allowing Writ Petition.

Counsel appearing for respondents submitted that leave encashment was rejected placing reliance on Rule 64(1)(c) of M.P. Civil Services (Pension) Rules, 1976, which authorises withholding of pensionary benefit during pendency of judicial proceedings. There is no illegality in the order. If petitioner is finally acquitted, shall be adjusted against final retiral benefits. In view of same, Writ Petition be dismissed.

Heard counsel for the parties.

Question before this Court is whether State Government is at liberty to withhold leave encashment if departmental proceeding or judicial proceeding against an employee is pending in aid of Section 64(1)(c) of Civil Services Pension Rules, 1976.

A Government servant under Rule 25(1)(a) of M.P. Civil Services (Leave) Rules, 1977 shall be entitled to 30 days earned leave in every calendar year. Every Government servant has a leave account, which is prepared in accordance with Rule 14 of aforesaid Rules. Leave of every Government servant is credited into leave account in two installments of 15 days each on first January and first July every year. As per Rule 25(1)(c) of M.P. Civil Services (Leave) Rules, 1977 maximum earned leave credited into account shall not exceed limit of 300 days. Maximum earned leave which can be granted to Government servant under Rule 25(2) of M.P. Civil Services (Leave) Rules, 1977 is 120 days. As per Rule 36 of M.P. Civil Services (Leave) Rules, 1977 Government servant who proceeds on earned leave is entitled to leave salary equivalent to the pay drawn immediately before proceeding on earned leave. Rule 36 of M.P. Civil Services (Leave) Rules, 1977 further lays down that on retirement or resignation of a Government servant, it is to be seen whether he has availed more leave then permissible to him and in such cases adjustment shall be made in respect of leave salary if leave is overdrawn. As per Rule 8 of M.P. Civil Services (Leave) Rules, 1977 any claim to leave to credit of a Government servant, who is dismissed or removed or resigned from Government service, ceases from the date of such dismissal or removal or resignation. Rule 8 of M.P. Civil Services (Leave) Rules, 1977 is quoted as under :-

Rule 64 of M.P. Civil Services (Pension) Rules, 1976 lays down that in cases where departmental enquiry, proceedings or judicial proceedings (criminal case) is pending against a retiring Government servant, then provisional pension not exceeding maximum pension and 50% of gratuity is to be paid if a Government servant is eligible for same on basis of qualifying service up to date of retirement or if he is on suspension on date of retirement. Words used in Rule 64(1)(a) of M.P. Civil Services (Pension) Rules, 1976 is pension and gratuity. However, Rule 64(1)(c) of M.P. Civil Services (Pension) Rules, 1976 lays down that provisional pension paid to Government servant is to be adjusted at the time of making payment of final retiral benefits to a Government servant after conclusion of departmental enquiry or judicial proceedings against him. Further, there is rider in Rule 64(1)(c) of M.P. Civil Services (Pension) Rules, 1976 that adjustment has also to be made from gratuity in respect of contribution towards contributory family pension if applicable, Government dues which has been ascertained and assessed.

Rule 64 of M.P. Pension Rules 1976 read with Rule 60 of aforesaid Rules do not provide for withholding of leave encashment of Government servant during pendency of departmental enquiry or judicial proceedings. Aforesaid Rules only talks about adjustment in respect of contribution towards family pension and Government dues which are ascertainable. Earned leave is not a Government due, but salary for period of leave to which a Government servant is entitled, therefore, same will not fall within definition of ascertainable Government dues and leave encashment cannot be withheld by Government in aid of Section 64(1)(c) of Civil Services (Pension) Rules 1976.

However, Rule 8 of Civil Services (Leave) Rules, 1977 cannot be ignored. Interplay of Rule 8 is also to be considered while making payment for leave encashment at the time of retirement. Rule 8 says that claim of a Government servant to leave on his credit will cease from date of dismissal, removal or resignation. If a Government servant is terminated from service or dismissed in departmental enquiry or his services are removed after his conviction in criminal case, then claim of a Government servant for leave encashment will cease from date of termination, dismissal or resignation from service.

Rule 8(3) of M.P. Civil Services (Leave) Rules, 1977 further provides that a Government servant who is dismissed or removed from service and is reinstated on appeal or revision shall be entitled to count for leave his service prior to dismissal or removal. Since judicial proceedings against petitioner in a criminal case for misappropriation by a public servant is pending in High Court and when such proceedings are finalized and petitioner is acquitted, only then petitioner can make a claim for leave encashment. If State Government takes a decision after conviction for removal of petitioner from Government job, then his right to leave encashment will cease and petitioner will not be paid leave encashment. Leave standing to the credit of a Government servant, who retires or resigns, is to be adjusted at the time of retirement, if same is overdrawn. However, no leave encashment is to be made if he resigns from service or is terminated. In cases where departmental enquiry and judicial proceedings are pending, which may result termination of Government servant, will disentitle him for payment of leave encashment, therefore, leave encashment cannot be paid to a Government servant against whom judicial proceeding or departmental enquiry is pending. Leave encashment is not a Government due, but right of Government employee to get his leave encashed, but said right will cease to exist on conditions mentioned in Rule 8 of M.P. Civil Services (Leave) Rules, 1977.

Said Rules are not taken into consideration when orders in Writ Appeal No.772/2019, Writ Petition No.18341/2023 and Writ Petition No.17844/2020 were passed because it was not brought to knowledge of Court that benefit of leave encashment owing to a Government servant under Rule will cease if there is resignation or termination or dismissal of Government servant. Departmental enquiry or judicial proceedings may lead to termination or dismissal from service, therefore, said benefits can only be given to a Government servant when proceedings had attained finality.

There is no enabling provisions under M.P. Civil Services (Leave) Rules, 1977 that provisional leave encashment is to be given during pendency of departmental enquiry or criminal proceedings. Rule 64 of M.P. Civil Services (Pension) Rules, 1976 provides for provisional pension and gratuity. In absence of any provision in M.P. Civil Services (Leave) Rules, 1977, no provisional leave encashment can be granted and employee has to wait for the final outcome of departmental enquiry or judicial proceedings. Petitioner is at liberty to apply for leave encashment, if he is finally acquitted in criminal case.

Accordingly, Writ Petition is dismissed.