- (1.) The short issue raised in the instant appeal filed under Clause X of the Letters Patent is whether the appellants could deny the benefit of leave encashment to the writ petitioner-respondent, who has been compulsorily retired on the basis of findings recorded in an enquiry. The learned Single Judge has allowed the writ petition because it has been found that Regulation 38 of the Canara Bank (Officers Service) Regulation, 1979 (for brevity 'the 1979 Regulation) has not been found applicable to deny the aforesaid benefit. After referring to Regulation 38 of the 1979 Regulation, the learned Single Judge has placed reliance on his earlier judgment rendered in the case of Ashwani Kumar Sharma v. UCO Bank and others, 2006 4 SCT 171, where similar Regulation applicable to UCO Bank was cited and the argument was rejected. Against the aforesaid judgment, LPA No. 191 of 2006 was filed, which has been dismissed on 01.02.2010. It would be profitable to read Regulation 38 of the 1979 Regulation, which reads thus :- "38. Lapse of Leave - Save as provided below, all leave to the credit of an officer shall lapse on resignation, retirement, death, discharge, dismissal or termination for any reason. Provided that where an officer retires from the service of the bank, he shall be eligible to be paid a sum equivalent to the emoluments of any period, not exceeding 240 days of privilege leaves that he had accumulated."
(2.) A perusal of the aforesaid Regulation would show that the leave is to lapse except to the extent when an officer retired from the Bank, he would be eligible to be paid a sum equivalent to the emoluments of any period, not exceeding 240 days of the privilege leave that he had accumulated. The true import of the Regulation is that if an employee has earned more than 240 days leave then only to the extent of 240 days, the leave could be encashed. In such circumstances, the compulsory retirement cannot be regarded anything else than retirement. Even otherwise, the earned leave is always construed deferred payment because an employee have worked on those days when he could have availed leave. In that regard reliance may be placed in para 7 and 8 of the judgment of Hon'ble the Supreme Court rendered in the case of Union of India v. Gurnam Singh, 1982 AIR(SC) 1265, which reads thus :- "7. It is not disputed that R. 20-B applies to a member of the Indian Administrative Service of the rank of Joint Secretary to the Government of India stationed at New Delhi. The rule entitles him on retirement from service to the cash equivalent of leave salary in respect of the period of unutilised earned leave subject to a maximum of 180 days, inclusive of dearness allowance. It is apparent that by virtue of Rule 2 of the High Court Judges Rules, 1956 this benefit must be read as a condition of service enjoyed by a Judge of the High Court. It may be observed that although R. 20-B of the All India Services (Leave) Rules, 1955 is a provision of a scheme applicable to members of the All India Services, there is nothing in its nature and content which makes it inapplicable mutatis mutandis to the statutory scheme pertaining to leave enacted in the High Court Judges (Conditions of Service) Act, 1954. There is also nothing in the constitutional position of a Judge of a High Court which precludes Rule 20-B from inclusion in that scheme. It is true that Rule 20-B revolves around the concept of earned leave, and the expression "earned leave" has been specifically defined by Clause (d) of Rule 2 of the All India Services (Leave) Rules, 1955 as "leave earned under Rule 10". But R. 10 merely lays down the rate and amount of earned leave. The principle in which "earned leave" is rooted must be discovered from R. 4, which provides that "except as otherwise provided in these rules leave shall be earned by duty only". The performance of duty is the basis of earning leave. That concept is also embedded in the High Court Judges (Conditions of Service) Act, 1954. Under that Act, the time spent by a Judge on duty constitutes the primary ingredient in the concept of " actual service", (clause (c), sub-section (1) of Section 2), which is the reason for crediting leave in the leave account of a Judge (Sec. 4). Although the expression "earned leave" is not employed in the Act, the fundamental premise for the grant of leave to a Judge is that he has earned it. He has earned it by virtue of the time spent by him on actual service. That a Judge earns the leave which is credited to his leave account is borne out by the proviso to Section 6 of the Act, which declares that the grant under Section 6of leave not due will not be made "if the Judge is not expected to return to duty at the end of such leave and earn the leave granted" . The concept then on which Rule 20-B proceeds is familiar to and underlies the statutory scheme relating to leave formulated in the Act. It bears a logical and reasonable relationship to the essential content of that scheme. On that, it must be regarded as a provision absorbed by R. 2 of the High Court Judges Rules, 1956 into the statutory structure defining the conditions of service of a Judge of a High Court. We may observe that even as a right to receive pension, although accruing on retirement, is a condition of service, so also the right to the payment of the cash equivalent of leave salary for the period of unutilised leave accruing on the date of retirement must be considered as a condition of service. 8. In our judgment, the High Court is right in upholding the claim of the respondent to the payment of the cash equivalent of the leave salary in respect of the period of earned leave at his credit on the date of retirement in accordance with the provisions of Rule 20-B of the All India Services (Leave) Rules, 1955 read with R. 2 of the High Court Judges Rules, 1956."
(3.) Moreover, the judgment in Ashwani Kumar Sharma's has been affirmed by the Letters Patent Bench in LPA No. 191 of 2007 decided on 01.02.2010 holding that there is nothing in the Regulation 38 of the Regulation 1979 to show that it would not apply to the case of the compulsory retirement.;