Mr. A.K. Sikri, C.J.: - The factual matrix of this appeal is in a narrow compass, but it gives rise to an important question of law which needs to be decided in this LPA. The question is as to whether retiral benefits of an employee, who at the time of his superannuation was facing departmental action, can be withheld and, if so, which of those retiral benefits, the employer is entitled to withhold. We may point out, at the outset, that the parties are unanimous and accept the position that insofar as gratuity of such an employee is concerned that can be withheld during the pendency of the disciplinary proceedings. In the present case, we are concerned with encashment of earned leave and the question is as to whether this benefit can also be withheld or it is the right of the employee to get his earned leave encashed on the date of his superannuation, as retiral benefit, notwithstanding the disciplinary action which he is facing.

2. When this appeal came up before the Division Bench in the normal course on October 05, 2012, after hearing counsel for the parties, the Division Bench was of the opinion that the matter needs to be considered by a larger Bench. That is the reason present Full Bench has been constituted to decide the appeal. Reasons for consideration of the matter by the Full Bench are given in the said order. Before we refer to the same, for clear understanding of the matter, facts of the present appeal, which lie within a narrow compass and on which there is no dispute, need to be noted.

3. The respondent herein was the employee of the appellant M/s Punjab State Civil Supplies Corporation Limited. He was served with two charge-sheets during his employment with the appellant. However, when the enquiry proceedings relating to these chargesheets were still in progress, the respondent attained age of 58 years on 30.4.2006, which is the retirement age as per the service rules of the appellant and orders dated 13/20th April, 2006 were passed allowing the respondent to retire from service on attaining the age of superannuation with effect from 30.4.2006. This order also stipulated that the retiral benefits of the respondent be withheld as per the rules till the decision of the pending charge-sheets. These enquiries are still pending. The appellant decided to withhold all the retiral benefits of the respondent. The respondent submitted that his retiral benefits cannot be withheld and, therefore, preferred departmental appeal against the aforesaid decision contained in order dated 13/20.4.2006. His appeal was, however, dismissed. Respondent filed writ petition in this Court and the learned single Judge has directed the appellants to release payment of retiral benefits with the exception of gratuity alone. Against this order, present appeal is preferred. While giving these directions, the learned single Judge relied upon the Full Bench judgment of this Court in Dr. Ishar Singh vs. State of Punjab and another, 1994(2) RSJ 543, and also referred to Division Bench judgment in Gurdial Singh vs. Punjab State Civil Supplies Corporation Limited and others, CWP-7041-2007, decided on 26.8.2008.

4. In the case of Dr.Ishar Singh (supra), certain issues were referred to the Full Bench for its consideration, which are as under:-

“(i) Whether withholding or postponing the payment of pension or gratuity amount due to account of commutation of pension is permissible in law?

(ii) Whether the authorities could withhold or postpone the payment of retiral benefits?

(iii) Whether the Government can initiate or continue with the departmental enquiry long after the date of alleged lapse in spite of the fact that the officer had retired from service many years back?

(iv) Should the enquiry proceedings be quashed on the ground of long pendency alone?”

5. When this appeal came up for hearing before the Division Bench on 5.10.2012, submission of the learned counsel for the appellants was that in addition to gratuity, appellant could also wit