Deprivation of privilege leave encashment is violation of constitutional right: Bombay High Court

Leave encashment is akin to salary and depriving a person of leave encashment would amount to violation of Constitutional right, the Bombay High Court recently held [Dattaram Sawant & Anr v. Vidarbha Konkan Gramin Bank].A Bench of Justices Nitin Jamdar and MM Sathaye observed that leave encashment like salary is akin to property and if an employee has chosen to accumulate his earned leave to his credit, then encashment becomes his right.“Leave encashment is akin to a salary, which is property. Depriving a person of his property without any valid statutory provision would violate Article 300A of the Constitution of India. Leave encashment paid on account of unutilised leave is not a bounty. If an employee has earned it and the employee has chosen to accumulate his earned leave to his credit, then encashment becomes his right,” the Court held..The Court was approached by two employees, Dattaram Sawant and Seema Sawant, seeking encashment of privilege leaves which was rejected by their employer, Vidarbha Konkan Gramin Bank.Both had worked with the bank for over 30 years before tendering their resignations.Their superiors accepted the resignation and issued an experience certificate to both..The bank regulations provided employees with privilege leave compound at one day for every 11 days of service on duty.Dattaram Sawant had 250 days of credit privilege leave and according to him, that amounted to ₹6,57,554. Seema Sawant claimed to have 210 days of credit privilege leave which amounted to ₹4,66,830.When the two petitioners requested for encashment of their privilege leaves, the bank addressed a letter informing that the facility for encashment of privilege leave for those who have resigned came into existence only on September 14, 2015, after the petitioners had resigned from service.Aggrieved by the same, the petitioners moved the Court seeking directions to the bank to pay the amounts of privilege leave standing to their credit with interest at 8% per annum..The Court opined that the accrued right of encashment of privilege leave could not have been rejected by the bank.“The refusal by the Respondent -Bank to extend the benefit of encashment of privilege leave is arbitrary and cannot be sustained. It is declared that the Petitioners are entitled to leave encashment as prayed for. The Respondent – Bank is directed to calculate the amounts payable towards encashment to the Petitioner along with interest at the rate of 6% per annum and pay the same to the Petitioners within six weeks from today,” the Court ordered..Advocates Shailendra Kanetkar and Yash Dhawal appeared for the petitioners. Advocates Bhavesh Wadhwani and Shrishti Shetty briefed by MV Kini & Co appeared for the bank. [Read Judgment]