Leave encashment issue

K.Muthu (Querist) 25 April 2020 This query is : Resolved
I am an ex-employee of NLC India Ltd. I retired from my services in NLC on 30.04.2016 and I have a daughter at the age of marriage.
My elder daughter died in a road accident in Sydney, Australia in 2014 leaving her 5 year old child motherless. I urgently rushed from Neyveli to Australia on receiving the phone call conveying her death. At that time, I had to spend lakhs of rupees towards obtaining Australia Visa, flight tickets at exorbitant rate, cremation and funeral expenses. To meet out these expenses, I availed special Leave encashment stipulated under clause 19.5.1(b) of the NLC Personnel Manual Rules.
Under Clause 19.5.1(b) of the NLC Personnel Manual Rules, employees who completed 30 years of service as on the date of application will be permitted to encash Earned Leave (EL) upto a maximum of 200 days in any one of the calendar years during remainder of his service.
As I completed 30 years of service in 2014, I encashed my EL accumulations to meet out the expenses incurred due to my daughter’s death. At that time I was in grief and depressed state of mind due to the unforeseen death of my daughter and I relied upon my subordinates to fill up the application form for leave encashment. I did not notice the application form was filled up for 100 days leave encashment instead of 200 days. Because of this inadvertent error, I have lost 100 days of my EL/HPL accumulations which works out to approximately INR2,50,000/-.
Before retirement, I represented to the NLC management for granting permission to encash the remaining 100 days EL under clause 19.5.1(b) but I did not receive any response to my representation.
After retirement, in 2017, I filed a writ petition in Madras High Court praying to direct the respondents (NLC India Ltd) to permit me to encash the 100 days leave and pay the monetary benefit for the 100 days leave. The court directed NLC management to consider and dispose of my representation dated 28.03.2016 on merits and in accordance with law and pass orders within a period of 8 weeks and communicate the decision taken to me (the petitioner). Accordingly, NLC management informed that my request for permission to enhance the leave encashment in 2014 from 100 days to 200 days as a special case is not possible of compliance.
I was a loyal servant of NLC working sincerely and honestly during my 32 years of service in this esteemed organization. During my service, I contributed to the company to the best of my ability. The error in leave encashment happened when I was in grief and depressed state of mind due to the unforeseen death of my daughter.
I am a senior citizen and I have no source of income. If the unclaimed 100 days of EL encashment is allowed to me, it will be much helpful to me and my wife in our old age.
In this situation, I seek your advice if I file a suit against NLC India Ltd for claiming the 100 days leave encashment, can I succeed? Please advise me.

K. Muthu

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Guest (Expert) 25 April 2020
Dear Shri Muthu,

I have every sympathy with you, but unlike others, I won't like to keep you in dark and to recommend you waste your time and money by filing another case against the organization.

I don't know, what your lawyer would have told you about the judgment of your the previous case. In fact, the judgment, though seemingly was in your favour, but was totally neutral, when the court directed NLC management to consider and dispose of my representation dated 28.03.2016 on merits and in accordance with law and pass orders within a period of 8 weeks and communicate the decision taken to the petitioner.

In fact that order did not direct the NLC to grant you leave encashment by relaxation of the NLC rules. The requirement of the order was to simply DISPOSE OF your representation on merits, but not by relaxation of rules. Mistake, may be in good faith by your subordinates, was treated by the NLC as your final requirement of one time encashment of merely 100 days instead of 200 days.

Since rules do not provide the benefit for the 2nd time, your case was lost, as the court takes note of only the reliefs sought by the applicant through the petition. So, the judge having not found any supportive argument in your favour prefered to issue such a neutral judgment that may not look negative.

However, had your lawyer sought relief by relaxation of rules, the court would have considered the case on some other angle, but by providing adequate opportunity to the NLC to submit whether they would like to relax rules or not for consideration of your application.

Even now, if you file a case against the NLC with the request to allow you leave encashment after relaxation of NLC rules, nobody of the organization would like to lose the case already won by them. The court do not enjoy any power to direct the NLC to essentially relax the rules in your favour, unless found in violation of any law of the land.

So, since I have already discussed the pros and cons of your proposal in a frank manner, now it is up to you to decide,, whether filing another case against the organization can in any way provide you any benefit.

But, I can well say, if you go to any local lawyer, simply due to lust of earning fee from you, he won't discourage you from filing a 2nd case against NLC. He may give you false promise to win your case, but won't provide you guaranteed success of your case. If you file the proposed case, again there would again be similar order of the court to consider your case on merits, but with the same final result that you could see on your previous court case.

Best of luck.

KISHAN DUTT KALASKAR (Expert) 25 April 2020
Dear Sir
I agree with the opinion of Expert Dhingra P.S

Guest (Expert) 25 April 2020
Kishan Dutt ji,
Thanks for agreeing with my opinion.

K.Muthu (Querist) 25 April 2020
Thank you Dhingraji for your proper guidance.

Rajendra K Goyal (Expert) 25 April 2020
It seems only one time leaves encashment facility was available in NLC and by mistake only 50% of eligibility was availed.
The reconsideration orders from court were there and on reconsideration in accordance to court orders was also rejected by NLC.

Legally, you stand on weak footings, you can represent to NLC for reconsideration as a special case giving full particulars and condition.

Try to find out any instance, where two times leave encashment was paid / allowed by NLC to any employee and if such example exist, refer the same in your representation.

K.Muthu (Querist) 25 April 2020
Thank you RK Goyal ji for your guidance.

Raj Kumar Makkad (Expert) 25 April 2020
With due regard with the expert and wise advice of Ld. expert Dhingra Sir, I use my right to slightly differ. As per the facts told by the author, as per Clause 19.5.1 (b) of NLC Personnel Manual Rules, the leave encashment is available for 200 days whereas the form was containing only 100 days when it was filled in 2016 by author which later on has been denied by the management. If Rules provide for 200 days then the said relief cannot be denied merely on the ground that the form was containing 100 days if there is no other restriction in releasing the due benefit.

Disposal of the wirt petition on the ground to direct the respondent to decide the said representation within a stipulated time ipso facto do not conclude that the relief is not maintainable and the same is liable to be dismised. Generally when the representation still remains undecided by the management/respondent/competent authortity then the High Courts dispose of the writs on the same ground.

Once the representation stands rejected by the competent authority, the author has every right to knock the door of the high court again against the said order of rejection on all available grounds. I strongly recommend the authro to file writ before High Court and if he not having sufficient means then he may avail the facility of Free legal Aid from the same high court inserting the fact of his old age.

K.Muthu (Querist) 25 April 2020
Dear Raj Kumar Makkad Sir,
Thank you for your guidance.

Rajendra K Goyal (Expert) 25 April 2020
You are welcome. May revert in case of further question / supplement.

Guest (Expert) 25 April 2020
Dear Shri Makkad,
You are well within your right to differ with me. However, please provide your interpretation to the following sentence of the quoted rule, as the querist himself mentioned in his query:

"employees who completed 30 years of service as on the date of application will be permitted to encash Earned Leave (EL) upto a maximum of 200 days IN ANY ONE OF THE CALENDAR YEARS during remainder of his service."

After making proper interpretation, please do correct me, if I am wrong in my opinion.

Raj Kumar Makkad (Expert) 26 April 2020
Respected Dhingra Sir!

In response to your question raised qua the relevant rule, I humbly submit that neither I nor Your goodself have quoted the relevant rule so its interpretation has no further scope to mention. I have believed upon the fats as posted and accordingly have understood that the leave encashment up to 200 daysin a calender year accumulated for 30 or above years can be utilized by the employee, however, the author utilized only 100 as per typographic eror or the author.

Though he had not used remaining accrued leaves but those cannot be brushed aside or say department has no right to forfiet the same even if those had not been utilized at one go.

Raj Kumar Makkad (Expert) 26 April 2020
Mr. Muthu is always welcome in need of any legal advice. I have tried to understand the issue as per my own way strictly in accordance of the facts mentioned by you without leaving my reply on assumptions and presumptions.

Guest (Expert) 26 April 2020
Dear Shri Makkad,

With reference to your response to my post, I am of the firm opinion that you have missed reading of some important part of the description of the query. You have stated that I have not quoted the relevant rules so its interpretation has no further scope to mention.

But, when the author of the query has already quoted the relevant rule, I was not supposed to quote or even repeat that rule. As per description of the author, "UNDER CLAUSE 19.5.1(b) OF THE NLC PERSONNEL MANUAL RULES, employees who completed 30 years of service as on the date of application will be permitted to encash Earned Leave (EL) upto a maximum of 200 days IN ANY ONE OF THE CALENDAR YEARS DURING REMAINDER OF HIS SERVICE."

Rest assured, I do not reply on presumptions. My replies are based strictly with reference to the information or facts supplied by the querists.

So, the scope of interpretation cannot be set aside merely on the basis of my response to your post, but was required to be made, as per the description of the author of the query.

You may very kindly like to recheck from the descriptive query of the author.

However, I firmly stand by my opinion, expressed earlier in reply to the query of the author.

Rajendra K Goyal (Expert) 26 April 2020
Since NLC has fulfilled its responsibility of reconsidering the decision and again rejecting the same, departmental representation may work.

Take help of employee / officers association. sometime they have good negotiation power with the senior officers.

P. Venu (Expert) 26 April 2020
There is something amiss in the facts posted and/or the issues that have been made out. Firstly, there is no Rule 19.5.1(b) as could be found from the corresponding pages of NLC Personnel Manual as accessed at https://www.nlcindia.com/new_website/rti-model/manuals/HR-2.pdf
`

19.5. EXTENT OF LEAVE ENCASHABLE:
19.5.1. The leave encashable is thirty days per year or 50% of the earned leave at credit, on
the first date of the month of encashment, whichever is less.
(Proc.No.CORP/P&A/WR/800/2001-2/Dt.16.7.2001)
19.5.2. Encashment of leave will be allowed to an employee/workman only once in a
calendar year.
19.5.3. Encashment of leave will be admissible only in whole number of days commencing
from the first day of the month in which payment for encashment is made.
19.5.4. Leave not encashed in a calendar year shall not be permitted to be carried over for
encashment in the next calendar year.
19.5.5. For the period of leave encashed, an amount equal to the total of the following
elements of emoluments admissible on the first date of the month in which the
payment for encashment of E.Lis made will be paid:-
Basic pay including special pay and personal pay, if any, Dearness Allowance and
Non-Practicing Allowance.
For the purpose of calculation of the amount the number of days in a month will be
assumed as 30 days irrespective of the number of days in the particular calendar
month.

Further more, it is the common rule that unavailed leave could be encashed, subject to conditions, at the time of retirement or leaving the service. The author has mentioned of those conditions.

In my understanding, it could be that the author had availed of encashment at the earlier occasions as well, and 100 days is all that remained to be availed of. It is impossible to believe that a mere mistake in filling up the form could have led to such a huge loss, as made out.

Moreover, there would have been some grounds cited in the Order denying the request Please inform of them.

Guest (Expert) 26 April 2020
A childish advice, as made by RKG !!!

Of course, for time pass activity, as a retired executive, there is no harm in experimenting the advice of Mr. Rajendra K Goyal. But still the condition of duration of "REMAINDER OF SERVICE" may not be fulfilled by you, provided the case be true, as against the observation of Mr. P.Venu.

Further, even if on negotiation of employees/ officers association. the management agrees to amend the existing rule and relax the sevice condition, that would not be applicable in your case from retrospective effect, i.e. from the date 6 years back. Any amendment in rules apply from the date of issue of order, unless specifcally mentioned to take effect from retrospective date.

Apparently, no HR personnel would like to invite a serious vigilance case against him by getting the rule relaxed from a date that go 6 year back, and get a major penalty charge sheet (that may lead to dismissal also) for extending favor to Mr. Muthu. Most of the advisors, not knowing the exact implications of rules, often render vague and misleading advice, like Mr. RKG's.

Although I stated earlier that any local lawyer would not discourage you from filing a 2nd case for the lust of fee. But on this forum also, you can find plenty of quacks, who pose to be experts, but render any rubbish and misleading advice. One of his associates, who disappeared since long, was also accustomed to render such type of advice.

However, I do not have any specific interest whether you win or lose, by applying your own mind, you can feel free to act on the advice of the expert of the previous post, if willing to make wasteful experiment and have no hesitation to waste your precious time and money, besides continually getting your peace of mind disturbed till the final judgment of your 2nd case and further leading to remorse after that also.

However, if you can manage to get the rules revised in your favour with effect from 2014, the best. .

Best of luck!

Raj Kumar Makkad (Expert) 26 April 2020
Respected Shri Dhingra ji

Kindly go through Rule 19.5.2, 19.5.3 and 19.5.4 of leave Encashment Rules posted by expert P. Venu relevant for the subject under discussion and elaborate so that we all may be benefitted.

On the one hand, rules permit to encashment entire leaves in the application which in the present matter, were not utilized fully then what shall be with the remaining leaves.

Kindly elaborate.

P. Venu (Expert) 26 April 2020
It appears that the Rules, as accessed, has since been modified/amended. Let us await feedback from the author.

Guest (Expert) 26 April 2020
Dear Shri Raj Kumar Makkad,

I have already mentioned that I have replied according to the information/ facts supplied by the author of the query. You may like to know that Rules of Government of India and the PSUs go on changing from time to time.

Moreover, Shri Venu has also mentioned "it appears that the Rules, as accessed, has since been modified/ amended. Let us await feedback from the author."

It may also be pointed out that the link of the manual represents part-II of the HR Manual and on the website of the NLC, a clear mention is there against Part-III, as under revision. That clearly denotes that the management has been in the process of revision of the Rules Manual since some time past.

So, why should we be impatient to assume anything in the absence of clarification by the author.

Rajendra K Goyal (Expert) 27 April 2020
As advised before request the NLC to reconsider the matter again.

Raj Kumar Makkad (Expert) 27 April 2020
Respected Dhingra ji!

I am not impatient rather wanted a clarification that even if the entire leaves as were accruing at the time of moving the application were utilized wrongly or rightly but what shall have happen with the remaining leaves? Can those leaves be forfeited by the management on that ground or the employee is entitled to avail the same after his retirement/superannuation?

Guest (Expert) 27 April 2020
Dear Shri Makkad,

Leave stands forfeited after the date of retirement, if rules of any organization do not permit leave encashment.

In the olden days, in the case of Government service, when no encashment was permissible, one mature of leave, called "Leave Preparatory to Retirement" and popularly known as "LPR" was permissible for the employees to avail. So, most of the employees used to go on LPR before retirement. That kind of leave was not refused to any employee. However, that depended only on the employee whether to proceed on LPR or not. Yhe balance of leave available in the leave account of the employee used to be forfeited after the date of retirement.

So, even now, any unavailed leave is forfeited. Employees always get two kinds of leave, "earned leave" and "half pay leave". credited to their account every year. That contimues to accumulate, if not availed from time to time. Earned leave has a limit for the purpose of accummulation, but not the half pay leave.

After introduction of leave encashment, the employees usually get earned leave encashed, not the half pay leave, as that often puts the employee at some loss due to the implication of some complicated provision of the rule. Thus the non cashed half pay leave gets forfeited after the retirement of the employee.

Raj Kumar Makkad (Expert) 27 April 2020
Respected Dhingra Sir!

Thanks a lot enlightening on this vital issue under discussion. I have also gone through the latest law prevailing in this company which confirms your interpretation of the relevant rule 19.1.5 which is submitted as under:

19.5.1. The leave encashable is thirty days per year or 50% of the earned leave at credit, on the first date of the month of encashment, whichever is less.
(Proc.No.CORP/P&A/WR/800/2001-2/Dt.16.7.2001)

I again pay my regards for clearing the confusion.

P. Venu (Expert) 28 April 2020
The author is yet to provide the information.

In terms of the provisions of CCS(Leave) Rules applicable to Central Government servants both EL and HPL could be encashed at the time of retirement:

39. Leave/Cash payment in lieu of leave beyond the date of retirement, compulsory retirement or quitting of service:

(1) No leave shall be granted to a Government servant beyond-

(a) the date of his retirement, or

(b) the date of his final cessation of duties, or

(c) the date on which he retires by giving notice to Government or he is retired by Government by giving him notice or pay and allowances in lieu of such notice, in accordance with the terms and conditions of his service, or

(d) the date of his resignation from service.

(2) (a) Where a Government servant retires on attaining the normal age prescribed for retirement under the terms and conditions governing his service, the authority competent to grant leave shall, suo motu, issue an order granting cash equivalent of leave salary for both earned leave and half pay leave, if any, at the credit of the Government servant on the date of his retirement subject to a maximum of 300 days;

(b) The cash equivalent of leave salary under clause (a) shall be calculated as follows and shall be payable in one lumpsum as a one-time settlement, -

(i) Cash equivalent for earned leave = Pay admissible on the date of retirement plus Dearness Allowance admissible on that date X Number of days of unutilized earned leave at credit subject to the total of earned leave and half pay leave not exceeding 300 days.

(ii) Cash equivalent in lieu of half pay leave component = Half pay leave salary admissible on the date retirement plus Dearness Allowance admissible on that date X Number of days of half pay leave at credit subject to the total of earned leave and half pay leave at credit not exceeding 300 days.

Note. - The overall limit for encashment of leave including both earned leave and half pay leave shall not exceed 300 days.

(c) To make up the shortfall in earned leave, no commutation of half pay leave shall be permissible.

These norms have been in vogue since 2006.

Guest (Expert) 28 April 2020
You are welcome Makkad ji. Always, my aim is to guide correctly to the best of my knowledge. I do not resort to gossipling in cut pieces through multiple posts, like the one you would have noticed frequently.

krishna mohan (Expert) 29 April 2020
I witnessed a healthy debate. Congratulations to all experts. EL encashment cited by Shri Venu could be the rule prevalent today and mostly practised to limit the EL accumulation and its resultant liability at the time of retirement. Going by the facts presented by the queriest, 50% rule of encashment appears to have been in vogue i.e. 50% of 200 days and left over leave ought to have been encashed as per EL encashment rules of NLC. Unless the factual matrix provided on the applicable rules, very difficult to provide the right answer. If leave encashment made due to ignorance or clerical error and now that management also disposed off the case, queriest can approach a lawyer specialized on service matter for right advise including appeal to get rightful and lawful remedy.

Rajendra K Goyal (Expert) 29 April 2020
Sir,
since the NLC has refused to entertain the claim / rejected the claim on reconsideration after HC orders, the Author was advised to approach / represent NLC again to reconsider the decision on the basis of existing rules.

Any legal action if warranted can be taken after that and on discussion with the lawyer.

Raj Kumar Makkad (Expert) 29 April 2020
CCS Pension Rules are not applicable in the given issue rather special rules stand prescribed and the same shall be applicable.

K.Muthu (Querist) 30 April 2020
Thank you one and all experts who have advised me in my EL/HPL encashment issue with NLC India. As rightly pointed out by Shri Krishna mohan, the leave encashment rule of NLC India cited by Shri Venu may be the rule prevalent today. When I was in service till 30.04.2016, NLC's leave encashment rules were governed by NLC Circular No.CORP/HR/Policy&Rules/1920/2013 dated 17.06.2013 wherein the relevant provisions are stated as follows:
"Clause 19.5.1 - Employees will be permitted to encash Earned leave upto a maximum of 60 days at their credit per calendar year.
Clause 19.5.1(b) - Employees who complete 30 years of service as on the date of application will also be permitted to encash Earned leave
upto a maximum of 200 days but only in any one of the calendar years during remainder of his/her service."

As suggested by Shri Rajendra K Goyal, after the rejection of my claim on reconsideration after High Court orders, I once again approached NLC HR department in 2018 with a request to reconsider their decision to allow me for encashment of 100 days unavailed leave but I received a letter of refusal from them.
I came to know that only NLC Board have the powers to make any relaxation/modification in NLC leave encashment rules.
An eminent lawyer in Madras High Court who represented me in filing the writ petition against NLC in 2017 is of the opinion "if the case is contested, it is very difficult to win and if we are able to impress the judge through arguments, then only there will be a chance for winning. Anyway it is not a straight case to win".
In this situation I am helpless to get back my hard earned leave encashment salary.
Once again, I thank one and all the experts who have contributed their valuable time and knowledge to help me.

Raj Kumar Makkad (Expert) 30 April 2020
Welcoming your regards, may I ask whether you represented to the Board or not? If not, why not till to day?

P. Venu (Expert) 01 May 2020
Thanks for the information. However, you are yet to provide the information as to the ground on which your representation had been rejected! Does the said communication itself cites any ground? If not, try to obtain the same under RTI. It is better if a copy the concerned file noting is sought or, better, the application is made for inspecting the file and thereafter, request is made for the information that is material and relevant.

There are good chances for you to succeed in as much as there is noting in the said Clause 19(5)(1)(b) which rules out an inadvertent error being corrected and remedial action taken. Your further representation/appeal/memorial ought to be in this direction. Moreover, it is too simplistic to emphasize that the error/mistake was because of your subordinates.

It was not an official correspondence, but a personal application. When an official working with you helps you in a personal matter, he is just a friend, not your subordinate.

Even otherwise, it is poor supervision/management to pass the buck to the subordinate, even in performance of official duties. It is elementary that a superior only delegates the task, not the responsibility. And the Law holds that a person, having affixed his signature cannot postulate that he is unaware of the contents.

Rajendra K Goyal (Expert) 01 May 2020
In such a case move to Board with the request to consider your request as a special case if not acceptable in routine.

Again request to take the help of Association leaders, if they cooperate.