The Lucknow Bench of the Allahabad High Court disposed a petition seeking direction to the respondents to forthwith release the gratuity, leave encashment benefits, and the partially unpaid interest on EPF, together with compound interest @ 18 per annum w.e.f the date of retirement up to the date of the payment.
A Single Bench of Justice Neeraj Tiwari passed this order while hearing a petition filed by Ashok Kumar Nigam.
The petition has been filed with the following reliefs:-
“(i) Issue a writ, order or direction in the nature of Certiorari thereupon quashing the order dated 09.03.2021 and 14.02.2020 contained as Annexure No1 and 2 respectively to this writ petition.
(ii) Issue a writ, order or direction in the nature of Mandamus commanding the opposite parties to forthwith release the gratuity, leave encashment benefits, and the partially unpaid interest on EPF, together with compound interest @ 18 per annum w.e.f the date of retirement 30.04.2020 up to the date of the payment.”
At the very outset, counsel for the petitioner submitted that except leave encashment and interest, all other amounts have already been paid to the petitioner.
Counsel for the petitioner further submitted that the petitioner was posted at UP Upbhokta Sahkari Sangh Ltd, Lucknow (Sangh) and after attaining the age of superannuation, he was retired from service on 31.7.2020. After retirement, EPF was released in favour of petitioner, but interest and other retiral dues have not been paid to him, therefore, he has no option, but to approach the Court by filing a petition.
He also submitted that during the pendency of writ petition, except leave encashment and interest, all other amounts have been paid to the petitioner. There is no dispute on the point that petitioner is employee of respondents, therefore, he is entitled for payment of leave encashment alongwith interest and also interest upon the other retiral dues, which has already been paid to him during the pendency of writ petition from due date to the date of actual payment.
He lastly submitted that under such facts and circumstance, writ of mandamus may be issued to respondents to pay leave encashment alongwith interest and also interest upon the other retiral dues, which has already been paid to the petitioner during the pendency of writ petition.
Rakesh Kumar Chaudhary, counsel for the respondents submitted that “Sangh” was functioning on the registration issued under Multi State Cooperative Societies Act, 2002. There was no provision to allow any financial assistance by the Government of India or by the State Government to the societies functioning under the Act of 2002. The aforesaid Multi-State Cooperative Society was under heavy loss to the extent that the aforesaid society was not in a position to pay the salary to its employees and retiral benefits to its retired employees.
Since the aforesaid Multi-State society was running in U.P and the management of the society was constantly seeking assistance from the State Government, therefore, the State Government considered the matter sympathetically and found a way out to consider the financial issues being faced by the Multi-State society and hence, the instant society under U.P Cooperative Societies Act, 1965 got registered. Instant society was then registered under the provisions of U.P Cooperative Societies Act, 1965 and was founded on 20.02.2019. The assets and liabilities of all the employees, which includes the Petitioners, were transferred from the earlier multi-state society to the present society on 01.03.2019.
He further submitted that petitioner is not entitled for payment of leave encashment as a matter of right and it is prerogative by Government either to pay or not.
Counsel for the petitioner has disputed the aforesaid submissions of counsel for the respondents and submitted that as per the counter affidavit, it is admitted that petitioner is entitled for payment of leave encashment as a matter of right.
He next submitted that services of petitioners are governed by U.P Co-operative Societies Employees Service Regulations, 1975 and Regulation 52 itself provides for leave encashment to the State Government employees and also employees of “Sangh”.
It is also mentioned in the counter affidavit that Government order dated 19.8.2016 is occupying the field for payment of leave encashment to the State Government employees and shall also be applicable for the petitioner. Not only this, he also submitted that the Managing Director in its order dated 13.9.2018 accepted that petitioners are entitled for payment of gratuity and leave encashment.
Rakesh Kumar Chaudhary, counsel for the respondents could not dispute the aforesaid submissions based on the record of the counter affidavit. He lastly submitted that as “Sangh” is under heavy financial crunch, therefore, some extra time may be granted to the respondents to pay leave encashment.
“Under such facts and circumstances, once it is not disputed that petitioner is entitled for payment of leave encashment as well as interest and also considering the financial crunch faced by the “Sangh”, respondents are directed to pay 50 percent amount of leave encashment to the petitioner within six months i.e up to June, 2023 and remaining amount of 50 percent within next six months i.e up to December, 2023″, the Court observed while disposing the petition.
“So far as interest part is concerned, after receiving the leave encasement, petitioner is given liberty to move representation before the Managing Director-respondent no 1 for payment of interest upon leave encashment as well as other retiral dues, which has already been paid to the petitioner during the pendency of writ petition from due date to the date of actual payment. In case any such representation is filed along with certified copy of this order, respondent no 1 shall consider the same sympathetically and take decision maximum within three months for payment. In case Managing Director-respondent no 1 is of the view that petitioner is not entitled for payment of interest, he shall pass a reasoned order for the same. It is made clear that financial crunch would not be treated as ground for denial of interest”, the order reads.