JUDGMENT

Rajiv Narain Raina, J. (Oral) - Heard counsel for the parties on the issue of leave encashment following the petitioner's dismissal from service upon conviction by the trial court on a criminal charge of corruption with sentence to serve imprisonment. Also perused the file.

2. The right to cash value of leave encashment partakes of the character of salary as it is paid in lieu of unutilized leave or earned leave due to an employee every year of service for leave foregone and unspent. It is payable on cessation from service and the sum is exempt from tax. The benefit is a privilege given to encourage employees to desist from truancy. It carries a ceiling of 300 days at the rate of last drawn salary. Once it is part of salary, it cannot be legally withheld except in accordance with rules made in this behalf. Rule 2.5 of the Punjab Civil Services Rules, Volume II, relied upon by the police department to deny benefit of leave encashment to the petitioner does not apply to the facts of this case. Rule 2.5 covers cases of pension and reads as follows:-

"No pension may be granted to a govt. employee dismissed or removed for misconduct, insolvency or inefficiency, but to government