Employees are entitled to gratuity upon resignation after completing 5 years of service, and limitations on encashable earned leave for resigned employees are arbitrary and unconstitutional.

M.S. SANKLECHA, J.

1. These group of three petitions filed under Article 226 of the Constitution of India challenges the refusal of the State of Maharashtra in granting to its employees i.e. the petitioner who have resigned after over 10 years of service, the benefit of gratuity as well as the benefit of earned leave standing to their credit in excess of half of such leave beyond the period of 150 days. This refusal of the State Government to grant gratuity is on the basis of Rule 46(1) of the Maharashtra Civil Service (Pension) Rules 1982 (Pension Rules 1982) which entails forfeiture of past services on resignation. So far as the benefit of accumulated leave is concerned, the State Government has relied upon Rule 67(3) of the Maharashtra Civil Services (Leave) Rules 1981 (Leave Rules 1981) which allows encashment of accumulated leave to the extent of half of such leave subject to a cap of 150 days. Writ Petition Nos.2668 of 2002 and 1541 of 2008 have been filed directly in this Court by petitioner's who had resigned from the Judicial Services while W.P. No.2346 of 2011 has been filed by petitioner from the order dated 6 May 2011 of Maharashtra Administrative Tribunal refusing to grant gratuity on the petitioner's resignation from the Sales Tax Department of State Government.

2. All the three petitions challenge the Constitutional validity of Rule 46(1) of Pension Rules 1982 and Rule 67(3) of Leave Rules 1981.

3. As the issue arising in all these petitions are common, we shall refer to the facts stated in Writ Petition No.2668 of 2002 for the purpose of this order. The bare facts necessary for the disposal of these petitions are as under:

(a) On 1 October 1981, the petitioner joined Judicial Service in the State of Maharashtra as Civil Judge, Junior Division;

(b) After working for more than 17 years, by letter dated 17 October 1998, the petitioner tendered his resignation from Judicial Services;

(c) The petitioner's resignation was accepted on 11 December 1998. However, as the petitioner was not granted benefit of gratuity, the petitioner requested for grant of the same having completed in excess of 17 years of service. However, by communication dated 24 August 2002, the petitioner was informed that in view of Rule 46 (1) of the Pension Rules, 1982, the petitioner was not entitled to gratuity as his past services stand forfeited on resignation.

(d) The petitions as originally filed only challenged the denial of gratuity by the State Government. However during the pendency of the petitions, the petitioners by amendment also challenged the encashment being restricted to half of such leave subject to a cap of 150 days as provided in Rule 67(3) of the Leave Rules, 1981 to the encashment/enjoyment of earned leave standing to the credit of employee who resigns from services.

4. Before considering the submission made by the parties to these group of petitions, it may be convenient to extract the relevant Rules of the Pension Rules and Leave Rules which have been challenged. Rule 46(1) of Pension Rules 1982 which reads as under:

Rule 46: Forfeiture of service on resignation (1) Resignation from a service or a post entails forfeiture of past service.

Rule 67 of Leave Rules 1981 as amended in 2001 and applicable reads as under:

Rule 67 Leave beyond the date of compulsory retirement or quitting of service

(1)….….….

(2)….….….

(3) A government servant who resigns or quits service shall be entitled cash equivalent in respect of earned leave at credit on the date of cessation of service, to the extent of half of such leave at his credit subject to a maximum of 150 days.

5. Mr. V.P. Patil and Mr. Piyush Shah, learned Counsel in support of these petitions submit as under:

(I) Rule 46 (1) of Pension Rules, 1982:

(a) Resignation from service is the same as voluntary retirement from service. In such a case, the benefit of gratuity which is given to a person who retires from service must also be extended to a person who resigns from service. Thus, it