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2025 Supreme(Chh) 352

HIGH COURT OF CHHATTISGARH AT BILASPUR
AMITENDRA KISHORE PRASAD, J.
Smt. Basant Kumari Yadav, W/o. Late Shri Amrit Lal Yadav – Petitioner 
Versus
State Of Chhattisgarh, Through The Secretary, Department Of Urban Administration And Development – Respondent
WPS No. 2875 of 2023
Decided On : 19-11-2025

Advocates Appeared:
For the Petitioner:Mr. Deepak Kumar Singh, Advocate
For the State :Mr. Sakib Ahmed, Panel Lawyer, Mr. Lalit Jangde, Advocate

Retired employees are entitled to leave encashment as a matter of legal right, and undue delays in payment due to pending inquiries are not justified.

Headnote:(A) Statutory entitlements - Leave encashment - Government employees - The petitioner retired on 31.07.2020 and claimed leave encashment of Rs. 4,26,496/-; this was confirmed in response to an RTI request - The respondents' failure to release payment was cited due to a pending departmental inquiry concerning allegations of financial irregularities during service. The court emphasized that entitlements must be settled promptly, irrespective of departmental proceedings, to avoid undue financial hardship. (Paras 6 and 11)

(B) Legal rights of employees - The court underscored that retiral benefits are a matter of right, not a bounty, emphasizing the principle that employees are entitled to encashment of unused leave at retirement. Delays in disbursement can lead to significant hardship, warranting immediate payment unless legally justifiable circumstances exist. (Paras 9 and 10)

Facts of the case:
The petitioner, employed as Assistant Grade II, retired and claimed leave encashment but faced delays due to allegations of financial misconduct tied to a departmental inquiry. While her clear service record justified her claim, the inquiry's pending status was cited by the respondents as a reason for withholding payment.

Findings of Court:
The court ruled that the petitioner is entitled to her leave encashment and directed its payment within four weeks, while allowing for subsequent recovery proceedings as determined by the departmental inquiry. The court also awarded interest on the delayed amount.

Issues: Whether the withholding of leave encashment due to a pending departmental inquiry is justified against the clear entitlements of the retired employee.

Ratio Decidendi: The court held that entitlement to leave encashment is a right grounded in equity, and the continued withholding of such entitlements, absent lawful justification, is untenable. Prompt payment of dues is essential to uphold the financial security of employees.

Result: Petition allowed. Respondents directed to pay dues with interest.

Table of Content
1. petitioner's claim for leave encashment. (Para 1 , 2)
2. petitioner's arguments on entitlement. (Para 3)
3. respondents' defense based on inquiry. (Para 4)
4. court's observations on delay and entitlement. (Para 5 , 6)
5. legal principles on leave encashment. (Para 7 , 8 , 9)
6. court's final orders and conclusions. (Para 10 , 11 , 12 , 13)

Order :

Amitendra Kishore Prasad, J.

1. By way of this petition, the petitioner has prayed for following reliefs :

“10.1 That, this Hon'ble Court may kindly be pleased to call for the entire records in relates to the case of the petitioner from the possession of respondents for its kind perusal. 10.2 That, this Hon'ble Court may kindly be pleased to direct the respondent's authority to consider the case of the petitioner for payment of leave encashment.

10.3 That, this Hon'ble Court may kindly be pleased to direct the respondent's authority to consider the case of the petitioner for payment of leave encashment of Rs. 04,26,496/- with 12% annual interest from 31.07.2020 to till date.

10.4 That, the Hon'ble Court may kindly be pleased to direct the respondents to consider and decide the representation of the petitioners within the period of 4 weeks.

10.5 That, this Hon'ble Court may kindly be pleased to grant any other relief/relief's in favour of the petitioner, which the Hon'ble Court deemed fit & just in the facts and circumstances of the case.”

2. Facts of the case, in a nutshell, are that the petitioner was employed as an Assistant Grade II in the Department of Urban Administration and Development at Nagar Palika Parisad Sakti, District Sakti (Chhattisgarh). She retired from her position on 31.07.2020, as per the retirement order dated 30.05.2020. Throughout her service, the petitioner discharged her duties with utmost sincerity and to the satisfaction of her superiors. There have been no complaints or inquiries against her during her tenure, and her entire service record is clear and unblemished. After her retirement, the petitioner has not received the payment for leave encashment, which is a statutory entitlement for Government employees upon retirement. In this regard, the petitioner has made several requests and representations to the respondent authorities for the release of her due leave encashment. However, despite her repeated efforts, no action has been taken to process her claim for leave encashment. To further ascertain the status of her entitlement, the petitioner filed an application under the Right to Information (RTI) Act. In response, the respondents confirmed that the petitioner is entitled to a leave encashment amount of Rs. 4,26,496/-. Despite the clear entitlement and the information provided under the RTI Act, the respondents have failed to take any action to pay the petitioner her due leave encashment. This inaction on the part of the respondents is not only illegal and erroneous but also contrary to the established laws governing the payment of such entitlements. The petitioner has suffered significant financial hardship due to the non-payment, and continues to face irreparable loss, which cannot be compensated at a later stage. The petitioner, therefore, seeks appropriate legal remedy to ensure the payment of her rightful leave encashment, along with any consequential relief that may be deemed fit by this Court.

3. Learned counsel for the petitioner would submit that the actions of the respondents in failing to pay the petitioner her entitled leave encashment after her retirement are both illegal and erroneous. It is submitted that, despite multiple representations and requests made by the petitioner, no action has been taken by the respondents to settle her claim for leave encashment. This inaction is contrary to the established laws and procedures that govern the payment of such entitlements to Government employees upon their retirement. The petitioner, having retired on 31.07.2020, is rightfully entitled to the payment of her leave encashment, which amoun

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