Case Note & Summary
The petitioner, G. Linganagouda, a former Assistant Manager of Pragathi Krishna Gramina Bank (now Karnataka Gramina Bank), was dismissed from service as a penalty. He sought encashment of 220 days of privilege leave (PL) which was denied by the respondent bank through endorsements dated 13.12.2017 and 04.10.2024. The petitioner filed a writ petition under Articles 226 and 227 of the Constitution of India praying for quashing of those endorsements and a direction to pay PL encashment with interest at 10% from the date the amount became due. The court framed the issue as whether an employee dismissed from service is entitled to encashment of privilege leave. After hearing both sides, the court held that leave encashment is a vested right and not a bounty; it is not automatically forfeited by dismissal unless the service rules expressly provide for such forfeiture. Since the respondent did not point to any rule that forfeits PL encashment upon dismissal, the court allowed the petition, quashed the impugned endorsements, and directed the respondent to pay PL encashment for 220 days within six weeks, with interest at 6% per annum from the date of dismissal till payment.
Headnote
A) Service Law - Dismissal - Leave Encashment - Penalty of Dismissal - The issue was whether an employee dismissed from service is entitled to encashment of privilege leave - The Court held that leave encashment is a vested right and not forfeited by dismissal unless the service rules expressly provide for such forfeiture - The respondent's endorsements denying PL encashment were quashed (Paras 1-3).
Issue of Consideration
Whether an employee who is imposed a penalty of dismissal from service is entitled to grant of encashment of privilege leave
Final Decision
The writ petition is allowed. The impugned endorsements dated 13.12.2017 and 04.10.2024 are quashed. The respondent is directed to pay PL encashment for 220 days to the petitioner within six weeks from the date of receipt of a copy of this order, with interest at 6% per annum from the date of dismissal till the date of payment.
Law Points
- Privilege leave encashment is a vested right
- not a bounty
- penalty of dismissal does not automatically forfeit leave encashment unless rules expressly provide
- service rules must be strictly construed for forfeiture of benefits
