Allowed¶10

Vishram Prasad Sonkar v. Union of India Thru. Secy. Deptt. of Telecommunication New Delhi and 2 Others

Allahabad HC8 Nov 2024/10288/2024

Case brief

AI extract

What is this about?

Leave encashment; delayed payment of retirement dues; interest on delayed leave encashment; 7% per annum; not a statutory payment; circular by respondent no.2; Union of India; Department of Telecommunication; interest is a natural accreditation of capital; flavour of statutory enactment; Nand Lal v. Indian Telephone Industries Limited; WRIT - A No. 10288 of 2024; High Court of Judicature at Allahabad, Lucknow Bench; Abdul Moin, J.; SLP(C) No.004379 of 2019 pending before Supreme Court; Writ Petition No.20927 (SS) of 2021.

What did the court decide?

Interest at 7% per annum on the leave encashment for the period 30.06.2014 till 30.12.2019, to be paid to the petitioner within four months. ¶10

Vishram Prasad Sonkar Vs Union of India Thru. Secy. Deptt. of Telecommunication New Delhi and 2 Others — Allahabad HC (2024) — LawSathi Research

What the court decided

AI extract

Outcome

Interest at 7% per annum on the leave encashment for the period 30.06.2014 till 30.12.2019, to be paid to the petitioner within four months.

¶10

Issue for consideration

Whether the petitioner, who retired on 30.06.2014 and whose leave encashment was paid only on 30.12.2019, is entitled to interest on the delayed payment, notwithstanding the respondents' stand per the circular of respondent no.2 that leave encashment is not a statutory payment and hence no interest is payable.

¶5

Court's answer

The decision denying interest solely on the ground that leave encashment dues are not statutory dues is liable to be rejected, since interest is a natural accreditation of capital.

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Ratio / Principle

Payment of leave encashment flows out of the decisions taken and cannot be said to have no flavour of statutory enactment.

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Key takeaways

Following Nand Lal (supra), the writ petition is allowed; respondents are directed to pay interest at 7% per annum on the leave encashment for the period 30.06.2014 to 30.12.2019, such interest to be paid within four months.ratio¶11

Detailed headnote1 paragraphs

Allahabad High Court, Lucknow Bench (Abdul Moin, J.) allowed a writ petition by a retired employee (retirement 30.06.2014) whose leave encashment was paid only on 30.12.2019, claiming interest on the delay. The respondents resisted, relying on a circular of respondent no.2 that no interest is payable on delayed leave encashment as it is not a statutory payment. Held: interest is a natural accreditation of capital, and payment of leave encashment flows out of decisions taken so it cannot be said to have no flavour of statutory enactment. Following Nand Lal v. Indian Telephone Industries Limited and 2 Ors. (Writ-A No.31490 of 2016, decided 09.03.2018), the Court directed the respondents to pay interest at 7% per annum on the leave encashment for the period 30.06.2014 till 30.12.2019, within four months. The Court noted that in a similar case (Writ Petition No.20927 (SS) of 2021) a counter affidavit has been called, and SLP(C) No.004379 of 2019 against a similar order of this Court is pending before the Supreme Court.

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Court No. - 5 Case :- WRIT - A No. - 10288 of 2024 Petitioner :- Vishram Prasad Sonkar Respondent :- Union Of India Thru. Secy. Deptt. Of Telecommunication New Delhi And 2 Others

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Counsel for Petitioner :- Akshay Kumar Singh,Arun Singh,Palak Jawa Counsel for Respondent :- A.S.G.I.,Nidhi Singh

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Hon'ble Abdul Moin,J.

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Heard Ms. Palak Jawa, learned counsel for the petitioner, Shri Anand Dwivedi, learned counsel appearing for respondent no.1/Union of India and Ms. Nidhi Singh, learned counsel appearing for respondent no.3.

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Contention of learned counsel for the petitioner is that although the petitioner has been paid the leave encashment, the interest on delay has not been paid and thus, he is entitled to interest from the date of retirement i.e. 30.06.2014 till actual payment on 30.12.2019 Learned counsel for the respondent argues that a circular has been issued by respondent no.2 saying that no interest shall be paid on the delayed payment of leave encashment as it is not a statutory payment.

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In the light of the said, learned counsel for the respondent argues that no interest is payable as demanded by the petitioner.

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Learned counsel for the petitioner places reliance on the judgment of this Court in the case of Nand Lal v. Indian Telephone Industries Limited and 2 Ors. (Writ - A No.31490 of 2016) decided on 09.03.2018 wherein a similar issue was considered and decided by this Court and the interest was held to be payable on account of delay.

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It is informed by learned counsel for the respondent that in a similar case, this Court in Writ Petition No.20927 (SS) of 2021 has called for a counter affidavit. It is further informed that SLP(C) No.004379 of 2019 against a similar order passed by this Court, is pending before the Hon'ble Supreme Court.

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Considering the fact that the decision has been taken only on the ground that the dues of leave encashment are not statutory dues, as such, no interest is payable, the same is liable to be rejected on the simple analogy that interest is a natural accreditation of capital. Even otherwise, the payment of leave encashment flows out of the decisions taken and thus, cannot be said that it has no flavour of statutory enactment.

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Thus, following the judgment in the case of Nand Lal (Supra), the writ petition is allowed.

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Respondents are directed to ensure payment of interest at the rate of 7% per annum on the leave encashment for the period 30.06.2014 till 30.12.2019.

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The said interest shall be paid to the petitioner within a period of four months.

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Order Date :- 8.11.2024/Pachhere/-

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Digitally signed by :- SATYENDRA SINGH PACHHERE High Court of Judicature at Allahabad, Lucknow Bench

Vishram Prasad Sonkar v. Union of India Thru. Secy. Deptt. of Telecommunication New Delhi and 2 Others

Case brief

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What did the court decide?

Vishram Prasad Sonkar v. Union of India Thru. Secy. Deptt. of Telecommunication New Delhi and 2 Others

Case brief

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