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High Court of Punjab and HaryanaLPA/1104/2017allowed

Panjab University v. Inder Mohan Joshi

2022-09-28Mr. Justice Gurmeet Singh Sandhawalia,Mr. Justice Jagmohan Bansal37 pages

 

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, university vide communication dated 28.10.2003 through Chairman of Department of Chemistry informed the petitioner that he is to retire w.e.f. 31.12.2003 on attaining age of 62 years. It was further communicated that he would be entitled to benefit of accrued furlough, leave encashment as mentioned in the aforesaid letter. It was further made clear that retiral benefits for the service beyond 60 years would be extended after decision of Punjab and Haryana High court in CWP No. 11465 of 2002. For the sake on convenience, extracts of letter dated 28.10.2003 are reproduced as below:- "

I am desired to inform you that Professor I.M.Joshi is to retire from the Panjab University service w.e.f. 31.12.2003 after attaining the age of 62 years and has been continuing in service beyond 60 years at his/her own risk and responsibility, subject to the decision of the Punjab & Haryana High Court in CWP No. 11465/2002 against the University regarding enhancement in the age of retirement from 60 to 62 years. The Vice-Chancellor has sanctioned the following retirement benefits to him/her as admissible to him/her upto the age of 60 years i.e. 31.12.2001 in terms of Senate decision 27.05.2001 (Para 3):- (i) Gratuity as admissible under Regulation 15.1 and 15.2 at Pages 131-132 of P.U. Cal. Vol.1, 2000; (ii) Furlough for six month (maximum) as admissible under Regulation 12.1(B) at page 121 of P.U. Cal.

Volume-1, 2000 read with Syndicate decision dated 30.08.1986 (Para 17) with permission to do business or service elsewhere during the period of furlough; and (iii) Encashment of Earned Leave as may be due but not exceeding 300 days as admissible under Rule 17.3 at page 95 of the P.U. Cal. Volume-III, 2003.

. would be paid only after the decision of the Punjab & Haryana High Court. In case the Punjab & Haryana High Court decides against the teachers, he/she would not be entitled to retiral benefits for the service rendered beyond the age of 60 years."

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12. There cannot furthermore be any doubt that Article 14 is a positive concept. The Constitution does not envisage enforcement of the equality clause where a person has got an undue benefit by reason of an illegal act. In Panchi Devi v. State of Rajasthan [(2009) 2 SCC 589], this Court held:

"...Article 14 of the Constitution of India has a positive concept. Equality, it is trite, cannot be claimed in illegality. Even otherwise the writ petition as also the review petition have rightly not been entertained on the ground of delay and laches on the part of the appellant."

13. The Court in a given case may be inclined to pass

similar order as has been done in the earlier case on the basis of equality or otherwise.

14. The discretionary jurisdiction under Article 226 of the Constitution may, however, be denied on the ground of delay and latches. It is now well settled that who claims equity must enforce his claim within a reasonable time.

...................The said principle was reiterated in S.S. Balu v. State of Kerala [(2009) 2 SCC 479] in the following terms:- "17. It is also well-settled principle of law that "delay defeats equity". The Government Order was issued on 15-1-2002. The appellants did not file any writ application questioning the legality and validity thereof. Only after the writ petitions filed by others were allowed and the State of Kerala preferred an appeal there against, they impleaded themselves as party-respondents. It is now a trite law that where the writ petitioner approaches the High Court after a long delay, reliefs prayed for may be denied to them on the ground of delay and laches irrespective of the fact that they are similarly situated to the other candidates who obtain the benefit of the judgment. It is, thus, not possible for us to issue any direction to the State of Kerala or the Commission to appoint the appellants at this stage."

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54 "16. An employee, who is re-employed in the interest of university service beyond the date of his compulsory retirement, may be granted leave in accordance with the

< terms and conditions of his reemployment.

17.1 Earned leave at the credit of an employee, beyond 180/300 days, shall lapse on the date of retirement. 17.2 An employee may be granted leave preparatory to retirement up to four months.

17.3 An employee on retirement (or on retirement voluntarily) shall be paid cash equivalent to such number of days of earned leave as may be decided by the Punjab Govt. for its own employees, from time to time. The case equivalent to leave salary (excluding City Compensatory Allowance and House Rent Allowance) thus admissible will be paid in lumpsum as a one time settlement for which the authority competent to sanction leave shall issue suo moto an order granting cash equivalent to leave salary on a pay drawn on the date of retirement. Provided that if an employee proceeds on leave preparatory to retirement under Rule 17.2, the benefit of payment of cash equivalent to leave salary under Rule 17.3 shall be admissible after deducting the period spent on leave preparatory to retirement.

Provided further that an employee, who have voluntarily retired or has retired on invalidism, shall be entitled to the aforesaid benefit of cash payment for the unutilised leave due, notwithstanding that as a result of it the period between date of his retirement as aforesaid and the date on which he would have retired in the normal course on superannuation exceeds the date of retirement on superannuation."

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-.   ; Rajasthan and another vs. Senior High Secondary School, Lachhmangarh and others (2005) 10 SCC 346 vide which Hon'ble Supreme Court has held that leave encashment is a part of the salary and covered in the wider expression 'scale of pay and allowances'. The Apex Court as noted by learned Single Judge, has held: 9  (

                 

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19.3 The findings of Hon'ble Apex Court are based upon Sections 2 and 29 of Rajasthan Non-Government Educational Institutions Act, 1989 and Rules framed thereunder. The Hon'ble Court has concluded that leave encashment would form part of salary after distinguishing the judgment in State of Punjab vs. Om Parkash Kaushal, (1996) 5 SCC 325 to hold that the Punjab Privately Managed Recognised Schools Employees (Security of Service) Act, 1979 had a restrictive meaning in comparison to the Rajasthan Act wherein the rule itself provided that except compensatory allowance salary would include aggregate of all emoluments including dearness allowance and other allowances. The Hon'ble Court interpreted different Sections of 1989 Act as well Rules made thereunder. Sections 2 and 29 of 1989 Act and Rule 51 made thereunder making it clear that salary would include leave encashment, and thus, Hon'ble Court held that leave encashment would form part of salary.

19.3 A two Judge Bench of Hon'ble Supreme Court in Manipal Academy of Higher Education vs. Provident Fund commissioner (2008) 5 SCC 428 held that expression 'basic wages' does not include leave encashment for the determination of employee's contribution to provident fund. The relevant extracts of judgment are reproduced as below:- "8. It is to be noted that in the case before the Bombay High Court the factual scenario was somewhat peculiar. There the employer was including the amount of leave encashment as emoluments for the purpose of calculating provident fund dues from the employer as

. well as employee's contribution. When the Employees' Union took up the issue to the Commissioner it was informed that the provision does not provide for deduction of provident fund on leave encashment.

9. On the strength of the letter dated 3.7.1991 of the Commissioner, Hindustan Lever Ltd. decided to make provision for deduction. It was this direction of the department which was challenged by the Union. In this context the High Court has held that the Commissioner's letter/circular was illegal and leave encashment dues should be included for provident fund contribution. In fact it was the understanding of the parties over the period that leave encashment will be included in the wages.

10. The basic principles as laid down in Bridge Roof's case (supra) on a combined reading of Sections 2(b) and 6 are as follows:

(a) Where the wage is universally, necessarily and ordinarily paid to all across the board such emoluments are basic wages.

(b) Where the payment is available to be specially paid to those who avail of the opportunity is not basic wages. By way of example it was held that overtime allowance, though it is generally in force in all concerns is not earned by all employees of a concern. It is also earned in accordance with the terms of the contract of employment but because it may not be earned by all employees of a concern, it is excluded from basic wages.

(c) Conversely, any payment by way of a special incentive or work is not basic wages.

11. In TI Cycles of India, Ambattur v. M.K. Gurumani and Ors. (2001 (7) SCC 204) it was held that incentive

+  wages paid in respect of extra work done is to be excluded from the basic wage as they have a direct nexus and linkage with the amount of extra output It is to be noted that any amount of contribution cannot be based on different contingencies and uncertainties. The test is one of universality. In the case of encashment of leave the option may be available to all the employees but some may avail and some may not avail. That does not satisfy the test of universality. As observed in Daily Partap v. Regional Provident Fund Commissioner (1998

(8) SCC 90) the test is uniform treatment or nexus underdependent on individual work.

12. The term 'basic wage' which includes all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in accordance with the terms of the contract of employment can only mean weekly holidays, national holidays and festival holidays etc. In many cases the employees do not take leave and encash it at the time of retirement or same is encashed after his death which can be said to be uncertainties and contingencies. Though provisions have been made for the employer for such contingencies unless the contingency of encashing the leave is there, the question of actual payment to the workman does not take place.

In view of the decision of this Court in Bridge Roof's case (supra) and TI Cycles's case (supra) the inevitable conclusion is that basic wage was never intended to include amounts received for leave encashment." In Kichha Sugar Company Limited through General Manager vs. Tarai Chini Mill Majdoor Union, Uttarakhand (2014) 4 SCC 37, a two Judge Bench of Hon'ble Supreme Court held that overtime wages and leave encashment would not form part of expression 'wages'.

+ The Hon'ble Court while interpreting Section 2(b) of Employees' Provident Funds and Miscellaneous Provisions Act, 1952 has held that overtime wages and leave encashment would not be included for the calculation of Hill development allowance. The relevant paragraphs of the judgment are reproduced as below:- "8.

In view of the rival submissions, the question which falls for our determination is as to the meaning of the expression 'basic wage'. The expression 'basic wage' has not been explained by the Government in the order granting Hill Development Allowance. It has been defined only under Section 2(b) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. Therefore, we have to see what meaning is to be given to this expression in the present context. Section 2(b) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 defines 'basic wages' as follows:

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Yes