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2026 Supreme(Online)(J&K) 601
HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT SRINAGAR
Sanjay Dhar, J
M. NASEER U ZAMAN – Appellant
Versus
MANAGING DIRECTION J&K AND LADASKH FINANCIAL CORPN. & ORS. – Respondent
WP(C) No.2973/2022
For the Appellants/Petitioners: S. A. Makroo, Irfan Rasool
For the Respondents: Ilyas Laway, Furqan Yaqub
The parent organization is liable for the payment of gratuity, while the borrowing organization must first pay the leave salary to the deputed employee and subsequently seek reimbursement from the parent organization.
Headnote:(A) Deputation - Retiral Benefits - Liability for Gratuity - The parent organization is responsible for the payment of gratuity to an employee upon resignation or retirement, regardless of the period served on deputation to another body. (Para 12)
(B) Deputation - Leave Salary - Disbursement and Reimbursement - In cases of deputation to a Corporation or Autonomous Body, the borrowing organization is required to sanction and pay the leave salary, subsequently claiming reimbursement from the parent organization. (Para 15, 16)
(C) Payment of Gratuity Act - Delay in Payment - Interest - Failure to pay gratuity within thirty days of it becoming payable attracts simple interest at the rate notified by the Central Government. (Para 13)
Issues: Whether the parent organization or the borrowing organization is liable to pay the gratuity and leave salary to an employee who served on deputation.
| Table of Content |
|---|
| 1. factual background of the petitioner's appointment, deputation, and subsequent resignation. (Para 1 , 2 , 3 , 8) |
| 2. conflicting contentions between parent and borrowing organizations regarding liability for retiral dues. (Para 4 , 5 , 6) |
| 3. parent organization's absolute liability for gratuity and the application of interest for delayed payment. (Para 9 , 10 , 11 , 12 , 13) |
| 4. procedure for leave salary payment where borrowing organization pays and seeks reimbursement from the parent organization. (Para 14 , 15 , 16) |
| 5. final directions for payment of gratuity and leave salary with prescribed interest. (Para 17) |
JUDGMENT
1) The petitioner through the medium of present petition has sought a direction upon respondents No.1 and 2 to make payment of the amount due to him on account of gratuity and leave salary with a further direction that interest be awarded in his favour on the unpaid amount due.
2) Briefly stated, the facts emanating from the pleadings of the parties are that the petitioner was appointed as Techno Economic Analyst with Jammu & Kashmir and Ladakh Financial Corporation (JKLFC) in terms of order No.PS/26/10-701 dated 20.12.2010. Vide Government Order No.470-GAD of 2013 dated 19.03.2013, the petitioner was deputed to the Jammu and Kashmir Power Development Corporation (JKPDC). The petitioner’s service with the borrowing corporation was initially for a period of 15 months from 01.01.2012 to 25.03.2013 and thereafter for about 84 months from 25.03.2013 to 31.03.2020. The petitioner is stated to have tendered his resignation which was accepted by his parent organization on 20.02.2020, whereafter he joined State Bank of India, Mumbai, on 21.02.2020.
3) It seems that after the resignation of the petitioner, whole of the leave encashment salary and gratuity has not been released by the respondents in his favour by the respondents which has compelled him to invoke writ jurisdiction of this Court.
4) The stand of the parent organization of the petitioner, namely, JKLFC, is that provident fund in the amount of Rs.6,52,798/ has already been released in favour of the petitioner. With regard to leave encashment salary and gratuity amount, it is the stand of respondent No.1 that the same has been considered for release by the management but its release got delayed for the reason that the petitioner has served with respondent No.2-JKPDC for a significant period of time. It has been submitted that case of the petitioner in this regard was referred to the Administrative Department (Finance Department) seeking its advice/opinion and in response thereto, the Finance Department vide communication 11.01.2024 has conveyed that post-retirement benefits of the petitioner should be released after seeking necessary contribution from JKPDC for the period he was employed with the said organization.
5) It has been submitted that in view of the opinion of the Finance Department, the matter has been taken up with respondent No.2 requesting them to release proportionate quantum of leave encashment salary and admissible gratuity amount for the period for which the petitioner has served with the said organization. A calculation sheet along with communication dated 23.04.2024 has been forwarded to respondent No.2. It has been further contended that the delay does not stem from negligence or malafides of respondent No.1 but it stems from the necessity of inter-departmental coordination to ensure that the petitioner receives his rightful entitlements.
6) Respondent No.2-JKPDC, in its reply to the writ petition, has submitted that claim of the petitioner was examined pursuant to interim direction passed by this Court and the same was found to be without force. It has been submitted that as per Rule 12(a) of Schedule XVIII to J&K Civil Service Regulations, which relates to standard terms of deputation, it is the parent organization which has to decide the claim of the petitioner. It has been contend
