Withholding Leave Encashment During Pending Criminal Proceedings Without Statutory Backing is Unjustified.

The Applicant, a Joint General Manager (Civil) at NPCC, retired on superannuation on 31.08.2019.

Following retirement, the Respondent Corporation withheld his leave encashment for 300 days.

The Respondents justified this withholding on the grounds that a CBI criminal case (RC No. CEINE ACAI 2019 A 0003) involving allegations of criminal conspiracy and illegal gratification was pending trial against the Applicant.

The Applicant seeks the release of the withheld amount claiming there is no statutory provision allowing the Respondents to withhold leave encashment due to pending judicial proceedings.

1. Whether the Respondent Corporation has the legal authority under the NPCC (CC&A) Rules or any other law to withhold the leave encashment of a retired employee due to the pendency of a criminal trial.

2. Whether the Applicant is entitled to interest on the delayed payment of leave encashment.

Article 300-A of the Constitution of India, which mandates that no person shall be deprived of their property save by authority of law, establishing that leave encashment is "property" and not a bounty.

The precedent from State of Jharkhand v. Jitendra Kumar Srivastava, which held that executive instructions cannot withhold retiral benefits absent specific statutory rules.

Rule 14(A)(ii) of the NPCC (CC&A) Rules, noting it specifically permits withholding "gratuity"—not leave encashment—during pending proceedings.

S.K. Dua v. State of Haryana, affirming that interest on delayed retiral benefits is a fundamental right under Articles 14 and 21 of the Constitution.

The Tribunal found that while the Respondents cited pending CBI proceedings as the basis for withholding dues, they failed to produce any statutory rule specifically authorizing the withholding of leave encashment.

The Tribunal noted that Rule 14(A)(ii) of the NPCC (CC&A) Rules is restricted to the withholding of gratuity to cover pecuniary losses and cannot be extended by implication to leave encashment.

Citing its own recent precedent in Ram Kumar Sharma v. NPCC Ltd. (OA No. 1066/2022), the Tribunal reasoned that since leave encashment constitutes property under Article 300-A, any deprivation without express legal sanction is arbitrary.

Because the Respondents had no specific "law" or "rule" to authorize the hold, the delay was deemed unjustified.

It directed the Respondents to release the 300 days of leave encashment to the Applicant within eight weeks.

The Tribunal ordered the payment of interest at the prevailing GPF rate (7.1% per annum) from the date the payment became due until the actual date of payment.