An employer cannot arbitrarily withhold retiral benefits like leave encashment due to a pending criminal case without specific rules authorizing such action; if withheld without authority, the employee is entitled to the amount with interest regardless of the employer's financial status.

JUDGMENT

1. Heard Ms. Tithi Thakkar, learned Advocate appearing on behalf of Mr. D. M. Thakkar, learned Advocate for the petitioner and Mr. D. G. Shukla, learned Advocate for the respondent.

2. The present writ petition is filed under Article 226 of the Constitution of India, seeking the following reliefs:

“a) The Hon'ble Court may be pleased to issue an appropriate Writ of Mandamus or any other appropriate Writs or orders and may further be pleased to -

b) Set aside the action of the Respondent in withholding the amount of encashment of Earned Leave, to which the petitioner is entitled to on the date of his superannuation, with effect from 31.12.2009,

c) Declare that the petitioner is entitled to be paid amount of Rs.2,82,470/- (towards encashment of Earned Leave of 282 days with interest @ 18 per cent, from the date of superannuation till the date of actual payment),

d) Direct the Respondent to release the amount of Rs.2,82,470/- (towards encashment of Earned Leave of 282 days with interest @ 18 per cent from the date of superannuation till the date of actual payment

e) Declare that the Respondent will be entitled for difference in Leave encashment of 282 days, upon payment of revision of salary as per Sixth Pay Commission recommendations.

f) Pending admission and final hearing, by way of an interim direction direct Respondent to forthwith release the amount of Rs.2,82,470/- due to the petitioner towards encashment of leae,

g) Pass such other and further orders as may be deemed proper in the in the facts and circumstances of the case.”

SHORT FACTS:

3. The petitioner was serving with the respondent, namely National Textile Corporation Ltd. (hereinafter referred to as “the Corporation”) and retired from service as Assistant Manager (Administration) on 31.12.2009. Since the petitioner was facing criminal prosecution as CBI case No. RC 2/1988 was pending against him at the time of retirement, the Corporation has withheld the amount of gratuity and leave encashment payable to the petitioner. It is informed to this Court that, so far as the amount of gratuity is concerned, the same was deposited with the Controlling Authority and received by the petitioner. Nonetheless, the amount of leave encashment is till date not received by the petitioner. The petitioner appears to have been acquitted from the aforesaid criminal case vide the judgment and order dated 13.11.2018 passed by the Special Court (CBI) Court No.1, Ahmedabad.

SUBMISSIONS OF THE PETITIONER:

4. Ms. Thakkar, learned Advocate, would submit that the Corporation cannot withhold the amount of leave encashment on the pretext that the petitioner was facing a criminal case. It is submitted that there is no power available under the Conduct, Disciplinary and Appeal Rules, 2009 (hereinafter referred to as “Rules, 2009”), whereby, the respondent can withhold the amount. It is submitted that due to non-receipt of the leave encashment from the respondent for a quite long time, the petitioner is entitled to receive interest on such amount.

5. Making the above submissions, Ms. Thakkar, learned Advocate, would request this Court to allow the present writ petition.

SUBMISSIONS OF THE RESPONDENT:

6. Per contra, Mr. Shukla, learned Advocate for the Corporation, would only submit that the reason of non-payment of the amount of leave encashment was due to the pendency of the CBI case against the petitioner and at the relevant point of time, while passin