Krishna Dayal Gupta vs DEPTT OF POSTS

CAT, Lucknow Bench OA No. 332/00672 of 2024 Krishna Dayal Gupta Vs. UoI & Ors.


CENTRAL ADMINISTRATIVE TRIBUNAL
LUCKNOW BENCH LUCKNOW

Original Application No. 332/00672/2024
th
Dated, this 16 day of October, 2026
Hon’ble Mr. Pankaj Kumar, Member-Administrative

Krishna Dayal Gupta, aged about 63 years, S/o - Late Sri Sheetla
Prasad, R/o - Village - Khetkuri, Post - Dhammour, Sultanpur.
….. Applicant

By Advocate: Shri Praveen Kumar

VERSUS
1. Union of India, through the Chief Post Master General, UP Circle,
Lucknow.
2. The General Manager (Finance) & Postal Accounts, Sector D
Aliganj, Lucknow.

3. The Superintendent of Post Offices, Sultanpur Division, Sultanpur.
…..Respondents
By Advocate: Smt. Prayagmati Gupta

ORDER (ORAL)
Per Hon’ble Mr. Pankaj Kumar, Member-Administrative
In this case relating to interest on delayed payment of leave
encashment, the applicant has sought following reliefs:-
1. To release interest on delayed payment of Leave Encashment
amounting to Rs. 844500/- @12% per annum from the date of due
till the actual date of payment.
2. Any other relief, which this Hon'ble Tribunal may deem fit, just and
proper under the circumstances of the case, may also be passed.
3. Cost of the present case.
2.1 The facts of the case are that the applicant retired from service
on 30.06.2021. Not having received his retirement benefits, he
approached this Tribunal in OA No. 376 of 2021 which was disposed of
vide judgment and order dated 12.01.2024 in the following terms:
“ 7.1 In view of the facts and circumstances above, the OA is
allowed and the respondents are directed to finalize the pension
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CAT, Lucknow Bench OA No. 332/00672 of 2024 Krishna Dayal Gupta Vs. UoI & Ors.


and release retirement benefits, including gratuity, to the
applicant within a period of one month from the date of receipt of
certified copy of this order. Further, interest shall be paid on the
delayed payment at the rate and in the manner applicable to
General Provident Fund under rule 65 of the CCS (Pension) Rules,
2021. For removal of any doubt, it is made clear that this order shall
sustain in case the departmental proceedings are instituted in the interim.”
(emphasis supplied)
2.2 The applicant submitted representations to the respondents and
the respondents released various retirement dues to the applicant,
including payment of leave encashment. Aggrieved by non-payment of
interest on delayed payment of leave encashment, the applicant has
preferred this OA.
3. The applicant’s contention is that the respondents are bound to
pay interest on delayed payment of leave encashment in light of the
judgment and order dated 12.01.2024 and as per the law laid down by
Hon’ble Supreme Court.
4. The respondents state that the applicant was identified as a co-
offender in a case of misappropriation of Rs. 11,48,945 at HAL, Korwa,
Sub-Office and vigilance clearance could not be issued at the time of his
retirement; however, leave encashment was sanctioned vide letter dated
03.10.2022. They contend that there is no provision for payment of
interest on delayed payment of leave encashment in terms of office
memorandum (OM) dated 01.05.2012 issued by the Department of
Pension & Pensioners’ Welfare (DPPW).
5. Heard both the parties.
6.1 Perusal of DPPW’s OM dated 01.05.2012 cited by the
respondents reveals the following provisions relevant to the present
controversy:
“ Subject: Implementation of recommendations contained in Para 61
th
of 44 Report of Parliamentary Standing Committee on Home
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CAT, Lucknow Bench OA No. 332/00672 of 2024 Krishna Dayal Gupta Vs. UoI & Ors.


Affairs – following a time bound schedule for disbursement of
pension.
….
2. Rule 68 CCS (Pension) Rules, 1972 provides for payment of interest on
delayed payment of gratuity and recovery of interest so paid from the
officers responsible for such delay. The recommendations of the Committee
on delayed payment of retirement dues was examined in this Department
in consultation with Department of Personnel and Training and
Department of Expenditure, Ministry of Finance and it was decided to
implement the recommendations as below:
(i) All pensioners’ dues are to be settled by strictly following the procedure
laid down in Rule 56 to 76 of CCS (Pension) Rules, 1972.
….
(vi) In the matter of delayed payment of leave encashment, the
Department of Personnel & Training in their note dated
02.08.1999 had clarified that there was no provision under CCS
(Leave) Rules for payment of interest or for fixing responsibility.
Moreover, encashment of leave is a benefit granted under Leave
Rules and not a pensionary benefit.
….”
(emphasis supplied)
It is evident from the provision quoted above that there is no provision
for payment of interest on delayed payment of leave encashment under
the extant Leave Rules.
6.2 However, it is noted that the proposition of law in regard to the
admissibility of interest on delayed payment of leave encashment has
been expounded by Hon’ble High Court of Delhi in W.P.(C) No.
13129/2019 Narottam Singh Shami vs Govt of NCTD & Ors in light
of Hon’ble Supreme Court’s judgment in S K Dua vs State of Haryana
& Anr 2008 (3) SCC 44 in the following manner:
“ 11. At the outset, we would note that it is now settled law that
Leave Encashment amount is not a bounty but akin to a
fundamental right of the employee. To this effect, we place
reliance on the Judgement of the Supreme Court in S.K. Dua
(supra) and of this Court in Union of India & Ors. v. Vijay Kumar
Gupta, 2025:DHC:6532-DB.
12. Paragraph no. 2(f) of the OM dated 05.10.1999, on which reliance has
been placed by the learned Tribunal, reads as under:
“(f) In the matter of delayed payment of Leave Encashment, the
department of Personnel & Training in their note dated 2.8.99 has
clarified that there is no provision under CCS (Leave) Rules for payment
of interest or for fixing responsibility. Moreover, encashment of leave is a
benefit granted under the leave rules and not a pensionary benefit.”
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CAT, Lucknow Bench OA No. 332/00672 of 2024 Krishna Dayal Gupta Vs. UoI & Ors.


13. Reading of the above would show that by the above OM, it is
only being clarified that there is no provision under the CCS (Leave)
Rules, 1972 for payment of interest or for fixing responsibility for
the late payment of Leave Encashment. It has further being
clarified that the encashment of the leave is a benefit granted
under the Leave Rules and not a pensionary benefit. The said OM,
therefore, does not prohibit grant of interest on the delayed
payment of Leave Encashment but only clarifies that there is no
statutory provision mandating the payment of interest.
14. In absence of any such prohibition and even assuming that
there is no such rule which provides for payment of interest on the
delayed payment of Leave Encashment, the law settled by the
Supreme Court in S.K. Dua (supra) would clearly be applicable, and
we quote the same as under:
“14. In the circumstances, prima facie, we are of the view that the
grievance voiced by the appellant appears to be well founded that he
would be entitled to interest on such benefits. If there are statutory rules
occupying the field, the appellant could claim payment of interest
relying on such rules. If there are administrative instructions, guidelines
or norms prescribed for the purpose, the appellant may claim benefit of
interest on that basis. But even in absence of statutory rules,
administrative instructions or guidelines, an employee can claim
interest under Part III of the Constitution relying on Articles 14,
19 and 21 of the Constitution. The submission of the learned
counsel for the appellant, that retiral benefits are not in the
nature of "bounty" is, in our opinion, well founded and needs no
authority in support thereof. In that view of the matter, in our
considered opinion, the High Court was not right in dismissing the
petition in limine even without issuing notice to the respondents.”
15. Applying the above law to the facts of the present case, the
petitioner was clearly entitled to grant of interest on the delayed
payment of Leave Encashment. ”
(emphasis supplied)
6.3 It is observed that the respondents’ plea in this OA that there is
no provision in the statutory rules for payment of interest on delayed
payment of leave encashment has already been examined and
adjudicated in Narottam Singh Shami (supra) by taking notice of S K
Dua (supra) and it has been held that as the retirement benefits are not
in the nature of ‘bounty’, the Government servant would be entitled to
grant of interest on delayed payment of leave encashment.
6.4 As the controversy in the instant OA is similar to the
controversy adjudicated in Narottam Singh Shami (supra) and in S K
Dua (supra) , there is no reason to take a different view in the matter.
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CAT, Lucknow Bench OA No. 332/00672 of 2024 Krishna Dayal Gupta Vs. UoI & Ors.


7.1 In view of the foregoing, this OA is allowed and the respondents
are directed to make payment of interest on delayed payment of leave
encashment to the applicant as per the Bank rate applicable from the
date the leave encashment became due till the date of its actual
payment within three months of receipt of certified copy of this order.
7.2 Associated MAs also stand disposed of.
7.3 Parties shall bear their own costs.


(Pankaj Kumar)
Digitally
signed by
Warij
Yadav
Warij
Yadav

Member (A)
Warij

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