ORDER

Petitioner who is a retired employee of Karnataka Gramin Bank has filed this captioned petition assailing the endorsement issued by respondent No.2 as per Annexure- K thereby indicating that the petitioner's representation requesting privilege leave encashment cannot be considered as NABARD has sought clarification vide letter dated 15.05.2023.

2. Heard the learned counsel for the petitioner, learned counsel for respondent Nos.1 and 2 and learned counsel for respondent No.3.

3. Learned counsel for petitioner has placed reliance on the judgment rendered by the Co-ordinate Bench of this Court, which relates to Karnataka Vikas Grameen Bank. The Co-ordinate Bench while examining an identical issue as to whether the bank could have withheld encashment of privilege leave, rejected the contention raised by the respondent-Bank and mandamus came to be issued to the respondent-Bank to release the encashment of privilege leave. Para 11 of the judgment rendered in W.P.No.102049/2019 is relevant. The same is extracted as under:

In the light of the aforesaid submissions, a mandamus is to be issued to the first respondent-Bank to forthwith release the encashment of privilege leave that is withheld since 2022. As encashment of privilege leave as observed by the Apex Court in Jagadish Prasad Saini's case (supra), is the terminal benefit. If it is the terminal benefit, it cannot be withheld on any ground, except in terms of the Regulation. The Regulation nowhere causes an impediment for the Bank to release the encashment of privilege leave in favour of the petitioner. The Apex Court in Jagadish Prasad Saini (supra) noticing the right of an employee for leave encashment has held as follows:

“20. Evidently, these rules were framed to enable the absorption of employees and teachers of non-government aided institutions. What is relevant for the purposes of this case is that by Rule 5(viii), carry forward of existing privilege leave is denied; likewise, the period of service in aided institutions is not to be reckoned for the purpose of gratuity under Rule 5(ix). Every employee had to furnish an undertaking in the prescribed form to accept the terms and conditions. Ordinarily no public employer can be faulted in imposing pre- conditions before it recruits an employee. However, such conditions cannot be arbitrary, or so onerous as to be unconscionable. In the opinion of this court, the condition in clause (viii) of Rule 5 i.e., carry forward of balance privilege leave, is barred and requiring employees to seek encashment from their previous employer, i.e., aided institutions, is an arbitrary and unconscionable condition, which cannot be enforced. Speaking that such conditions are enforceable, this court, recently, in Pani Ram v. Union of India9 after quoting the observations in Central Inland Water Transport Corporation Limited v. Brojo Nath Ganguly10 held as follows:

23. “….Right to Equality guaranteed Under Article 14 of the Constitution of India would also apply to a man who has no choice or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of Rules as part of the contract, however unfair, unreasonable and unconscionable a Clause in that contract or form or Rules may be.”

21. This court had categorically ruled, in Senior Higher Secondary School (supra) that leave encashment is part of salary. In the scheme of the 1993 Rules, the assessment of, and determination of the extent of, aid to be granted to any institution, is provided by Rule 13. What forms part of the approved expenditure that would be the content of aid, is provided by Rule 14. In the present case, the management establishment was recipient of 70% aid, in the form of grant. In these circumstances, the State cannot shrug its responsibility to shoulder its part of the responsibility to pay the appellants the share of leave encashment benefits, and hide behind either Rule 5(viii) or the unde