State Government Cannot Take Away A Part Of Pension Or Gratuity Without Any Statutory Provision To That Effect: Orissa High Court

The Court allowed the Writ Petition filed by the Petitioner and quashed the Order issued by the Commerce and Transport Department which rejected the Petitioner’s claim for unutilised leave salary. The Court directed the Opposite Parties to calculate and disburse the cash equivalent of 300 days of unutilised leave salary within two months.

A Single Bench of Justice Aditya Kumar Mohapatra held, “On a careful analysis of the factual background of the present case, further on close scrutiny of the legal provisions governing the field of sanction and disbursement of retiral benefits including cash equivalent of unutilized leave salary, this Court observes that there is no statutory provision either in the shape of an enactment or rules prohibiting payment of such amount to the employee who is found to be involved in a judicial proceeding or a disciplinary proceeding by the time he retires from Government Service.”

Advocate Prasanta Kumar Mishra appeared for the Petitioner, while Additional Standing Counsel Akshaya Pati represented the Opposite Parties.

Brief Facts

The Petitioner, a retired Inspector Motor Vehicles in the OTES Cadre, challenged the rejection of his claim for unutilised leave salary, which was denied on the ground of pending vigilance and disciplinary proceedings against him. The authorities relied on Rule-66 of the O.C.S. (Pension) Rules, 1992 (Rules), and a Finance Department Memorandum which stated that leave encashment shall not be sanctioned if a departmental or judicial proceeding is pending at the time of retirement.

The Petitioner contended that there was no statutory provision under the Rules or the Orissa Leave Rules, 1966, permitting the withholding of leave salary on account of pending proceedings. Relying on State of Jharkhand v. Jitendra Kumar Srivastava (2013), it was argued that executive instructions cannot take away statutory service benefits.

Court’s Reasoning

Regarding the withholding of cash equivalent of unutilised leave salary, the High Court noted that there was no statutory rule or guidelines which specifically prohibited payment of such benefits to an employee involved in any judicial/disciplinary proceeding at the time of their retirement from service.

“So far the applicability of Rule-66 of the OCS (Pension) Rules is concerned, this Court observes that the same has no application to the facts of the present case, as the same does not deal with sanction and disbursal of cash equivalent of unutilized leave salary and that the same specifically relates to payment of gratuity,” the Bench explained.

The Court referred to the Supreme Court's judgment in Jitendra Kumar Srivastava’s case (supra). In the said judgment, the Supreme Court categorically held that “it is not open to the State Government to take away a part of the pension or gratuity or even leave encashment without any statutory provision to that effect.”

The Bench held that the “Opposite Parties have committed an error in withholding the leave encashment of the Petitioner by referring to the executive instruction dated 26.03.2015 under Annexure-A/2 to the counter affidavit.”

Consequently, the Court ordered, “Accordingly, the same is hereby quashed. Further, the Opposite Parties are directed to calculate the cash equivalent of the unutilized leave salary for a period of 300 days as is due and admissible to the Petitioner and the same be sanctioned and disbursed in favour of the Petitioner within a period of two months from the date of communication of a copy of this judgment.”

Accordingly, the High Court allowed the Petition.

Cause Title: Chittaranjan Senapati v. State of Odisha & Anr. (W.P.(C) No.20808 of 2024)

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