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Civil · Reportable judgment

State of Sikkim and Others vs Dr. Mool Raj Kotwal

Court
Supreme Court of India
Date
23 April 2025
Case No.
Civil Appeal No(s). 5464-5465 of 2025
Result
Allowed
Bench
J.K. Maheshwari, Rajesh Bindal
Citation
[2025] 4 S.C.R. 2347 : 2025 INSC 559
Acts & Sections
Sikkim Government Service Rules, 1974 Sikkim Government Services (Leave) Rules…
Supreme Court Reports [2025] 4 S.C.R. 2347 : 2025 INSC 559
Issue for consideration
Whether an employee of the State who had availed the benefit of leave encashment maximum of 300 days once on attaining the age of superannuation under Rule 36 of Sikkim Government Services (Leave) Rules, 1982, can further be entitled for leave encashment again on relieving after the period of re-employment.
Headnote

Sikkim Government Service Rules, 1974 – rr.98, 102 – Sikkim Government Services (Leave) Rules, 1982 – rr.6, 17, 31, 32,

36 – Grant of benefit of leave encashment second time for the period of re-employment of respondent after attaining the age of superannuation, in particular beyond the maximum period of 300 days as prescribed – Respondent filed writ petition challenging the cancellation of the order to grant leave encashment and directing payment of sum as sanctioned – Allowed by Single Judge relying upon Rule 36 read with Rule

32 of Leave Rules, declaring him entitled for grant of leave encashment again for unutilized leave during the period of re-employment – Appeal by the State, dismissed by Division Bench – Interference with:

Held: 1.1 Under Rule 36 of Leave Rules, a regular government servant, if retires under Sikkim Government Service Rules, 1974 would be entitled for leave encashment maximum for 300 days – If the government servant is re-employed after 58 years of age and continued for a long time and gets leaves accumulated during the period of re-employment, he/she cannot get benefit of leave encashment second time merely because he/she is having leave in his/her credit during the period of re-employment. [Para 33]

1.2 Leave Rule 32 does not ipso facto deal with the applicability of Leave Rule 36 for grant of leave encashment – Single Judge was not correct to interpret Rule 32 and 36 by applying deeming fiction for the re-employed government servant – Hence, those findings cannot be countenanced, and the Division Bench erred in affirming the same. [Para 24]

1.3 Leave Rules recognize benefit of leave encashment to a government servant whose service has been extended and who has retired from regular service under the Service Rules, but not to the re-employed retired government servant – Therefore, the leave encashment is permissible maximum upto 300 days of leave and not beyond as on the date of retirement, including the case of extension of service. [Para 29]

1.4 Clarificatory order issued by State in the matter of grant of leave encashment for the earned leave to government employees on ‘extension of service’ subject to maximum period of 300 days and not beyond, is completely in consonance with the spirit of Rules 31, 32 and 36 of Leave Rules. [Para 30]

Read the full headnote (4 more paragraphs)

1.5 In the present case, the respondent was in the regular employment and superannuated on completion of 58 years of age on 31.01.2005 under Service Rules – He was granted benefit of leave encashment maximum of 300 days under Rule 36 of the Leave Rules – On re-employment, he was continued for more than 14 years and relieved on 28.05.2019 – On relieving after re employment, the benefit of leave encashment was again sanctioned on 31.05.2019 – The government on realising the mistake and interplay of Rules 32 and 36 with the spirit of the Leave Rules, issued clarificatory order on 27.02.2020 denying the benefit of leave encashment beyond 300 days, is in consonance with the spirit of Rule 36, which is just and reasonable to the extent indicated – Therefore, cancellation of sanction of leave encashment order dated 31.05.2019 is also in consonance to the law – Orders passed by Single Judge and the Division Bench set aside. [Paras 31, 33]

Service Law – Leave encashment – Purpose of granting, stated – Principle of deferred compensation – Discussed – Sikkim Government Services (Leave) Rules, 1982 – r.36. [Paras 25-29]

Sikkim Government Service Rules, 1974 – rr.98, 102 – Sikkim Government Services (Leave) Rules, 1982 – rr.6, 17, 31, 32,

36 – Interplay of, explained. [Paras 17-23]

Keywords: Leave Encashment · Benefit of leave encashment · Superannuation · Leave encashment on relieving after re-employment · Regular government servant · Benefit of leave encashment second time · Re-employed retired government servant · Extension of service · Clarificatory order · Grant of leave encashment · Encashment of unutilized earned leave

As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Divya Pandey. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.

Full Judgment Text

Judgment J.K. Maheshwari J. 1. Leave granted. 2. Assailing the order dated 27.04.2023 passed in Writ Appeal No. 8 of 2022 confirming the order dated 08.09.2022 passed in Writ Petition (C) No. 14 of 2022, by High Court of Sikkim at Gangtok, the State of Sikkim (in short ‘State’) has filed these appeals. The discord between the parties is regarding grant of benefit of leave encashment second time for the period of re-employment of respondent after attaining the age of superannuation, in particular beyond the maximum period of 300 days as prescribed. 3. Being aggrieved by the order dated 21.0
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