The Allahabad High Court has quashed an order of the Uttar Pradesh Rajkiya Nirman Nigam Ltd. (UPRNN) that denied leave encashment benefits to a retired employee on the ground of a pending departmental inquiry. The Court ruled that mere pendency of such proceedings cannot justify withholding leave encashment, and directed the Corporation to issue a no-dues certificate and release the amount due.
Background of the Case
The petitioner, Ajay Kumar Misra, retired on 31 July 2024 from the post of Project Manager (Civil) in the UPRNN. He approached the Court challenging the order dated 15 February 2025 passed by the Corporation, which refused to issue him a no-dues certificate and denied him payment of leave encashment benefits. The ground cited for refusal was the pendency of a departmental inquiry initiated on 10 June 2020.
Arguments by the Petitioner
Appearing through counsels Shivanshu Goswami, Arpit Verma, and Prerna Jalan, the petitioner argued that the Corporation’s refusal was arbitrary and contrary to established legal principles. The petitioner relied on the Allahabad High Court judgment in Masood Ahmad v. State of U.P. [2023:AHC-LKO:47936], which followed the precedent set in Madhusudan Agarwal v. State of U.P. [Writ-A No. 36019 of 2008, decided on 18.04.2015]. These decisions held that leave encashment benefits cannot be withheld solely because of the pendency of a departmental or criminal proceeding.
Stand of the Respondents
The respondent-Corporation was represented by Ms. Ranjana Agnihotri, who did not dispute the legal position as established in Masood Ahmad and Madhusudan Agarwal. The State of U.P. was represented by the learned Standing Counsel and Shishir Jain.
Court’s Observations
Justice Abdul Moin, delivering the judgment, noted the consensus on the legal proposition that mere pendency of departmental proceedings cannot be a valid ground to withhold leave encashment benefits.
The Court observed:
“Perusal of the aforesaid judgment indicates that this Court while placing reliance on the judgment of Madhusudan Agarwal Vs. State of U.P. and Ors… has held that leave encashment cannot be withheld on the ground of pendency of departmental inquiry or criminal proceedings.”
Decision
Accepting the petitioner’s contention and the undisputed legal position, the Court allowed the writ petition and quashed the impugned order dated 15 February 2025.
The respondents were directed:
- To issue a no-dues certificate to the petitioner, subject to there being no further legal impediment
- To pay the due leave encashment within eight weeks from the date of receipt of the certified copy of the order
- To also consider payment of interest on the delayed leave encashment from the date it became due till the date of actual payment
Ajay Kumar Misra v. State of U.P. & Others | Writ-A No. 8428 of 2025
