Leave encashment for government servants is limited to a maximum of 300 days upon retirement, and no second encashment is permitted after re-employment.

JUDGMENT :

(J.K. Maheshwari J.)

1. Leave granted.

2. Assailing the order dated 27.04.2023 passed in Writ Appeal No. 8 of 2022 confirming the order dated 08.09.2022 passed in Writ Petition (C) No. 14 of 2022, by High Court of Sikkim at Gangtok, the State of Sikkim (in short ‘State’) has filed these appeals. The discord between the parties is regarding grant of benefit of leave encashment second time for the period of re-employment of respondent after attaining the age of superannuation, in particular beyond the maximum period of 300 days as prescribed.

3. Being aggrieved by the order dated 21.05.2020 cancelling the order dated 31.05.2019 to grant leave encashment and directing payment of sum as sanctioned, the respondent preferred writ petition before the High Court. Learned Single Judge allowed the same relying upon Rule 36 read with Rule 32 of ‘Sikkim Government Services (Leave) Rules, 1982’ (in short ‘Leave Rules’), declaring him entitled for grant of leave encashment again for unutilized leave during the period of re-employment. On filing the Writ Appeal by State, it came to be dismissed by the impugned order. Hence the present appeals by State challenging both orders passed by learned Single Judge and Division Bench.

FACTS IN BRIEF

4. Prequel to the present litigation, the respondent was appointed on deputation in year 1980 in the State services. On attaining the age of superannuation¹[58 years], he retired on 31.01.2005 in terms of Rule 98²[Retirement on superannuation] of Sikkim Government Service Rules, 1974 (in short ‘Service Rules’) from the post of ‘Medical Advisor and Chief Consultant’, working at Sir Thutob Namgyal Memorial (STNM) Hospital, in Health Care, Human Services and Family Welfare Department, Government of Sikkim at Gangtok. Upon his retirement and while settling post retiral benefits, he was paid leave encashment maximum of 300 days unutilized leave as prescribed in Rule 36³[Cash payment in lieu of unutilized earned leave on the date of retirement] of Leave Rules.

5. After retirement, the respondent was re-employed on the same post for a period of 2 years, w.e.f. from 01.02.2005 to 31.05.2005, which was extended time to time upto 28.05.2019, i.e., the date on which he was officially relieved. Vide Office Order No. 710/G/DOP dated 31.05.2019 (in short ‘2019 office order’), he was allowed cash equivalent to leave salary of 300 days of earned leave standing to his credit for the period of re-employment.

6. The controversy was set into motion when the State on scrutiny found that the Leave Rules do not provide for grant of leave encashment to the re-employed employees second time beyond 300 days, which was paid to them once on their retirement. It was noticed that, leave encashment was being paid to the employees after their retirement and ‘again’ after relieving from re- employment, though it was not in conformity to the Leave Rules. The State Government took a decision to correct the perpetual mistake and issued Office Memorandum No. 4528/GEN/DOP, dated 27.02.2020 (the “clarificatory order”), clarifying that maximum of 300 days of leave encashment specified in Rule is inclusive of the period of leave earned during extension of service, re-employment etc. The said clarification is pivotal to the controversy involved, hence, reproduced as under –