Interest Is Not Payable on Delayed Leave Encashment Without Statutory Authority.

The applicant, a retired Additional Superintendent of Police, CBI, superannuated on 30 November 2019. A Rule 14 disciplinary proceeding had been initiated against him, and the respondents withheld his leave encashment and gratuity.

Leave encashment for 286 days was paid on 17 December 2021; the balance for 14 days was paid on 12 June 2023, after regularisation of an unauthorised absence period. In an earlier application, O.A. No. 1789/2021, the Tribunal recorded that the leave salary had been paid and permitted the applicant to make a representation concerning his outstanding claims. He subsequently sought 10% interest on the delayed leave encashment, but the respondents rejected his claim on 14 August 2024. He then filed the present application challenging that decision and the earlier order refusing payment, and seeking interest and other relief.

Whether the applicant was entitled to interest on the delayed payment of leave encashment despite the absence of a provision for interest under the CCS (Leave) Rules, 1972.

Whether the respondents could withhold the applicant’s DCRG while disciplinary proceedings remained pending.

The Tribunal applied the CCS (Leave) Rules, 1972, under which leave encashment is governed as a service benefit, and relied on paragraph 2(f) of O.M. No. 38/64/98-P&PW(F) dated 5 October 1999 and DoPT FAQs dated 25 March 2013, which it understood to confirm that the Rules contain no provision for interest on delayed leave encashment.

It also applied Rule 69(1)(c) of the CCS (Pension) Rules, 1972, replaced by Rule 8(4)(c) of the CCS (Pension) Rules, 2021, which bars payment of gratuity until the conclusion of departmental or judicial proceedings and issuance of final orders; Rule 69(1)(a) provides for provisional pension.

The Tribunal found that the applicant had received the full leave-encashment amount in two instalments. Because neither the CCS (Leave) Rules nor the cited government instructions provided for interest on delayed leave encashment, it concluded that there was no statutory basis to award the claimed interest.

As a major disciplinary proceeding remained pending, the Tribunal held that withholding DCRG was consistent with the applicable pension rules. It noted that the applicant was receiving provisional pension and that release of gratuity could be considered after the proceedings concluded and final orders were issued.

It found no merit in the application and dismissed it without an order as to costs.