WP/4949/2022 of P.Thiruvengadame Vs Indian Overseas Bank on 17 September 2026

O R D E R

This Writ Petition has been filed seeking issuance of a Writ of Certiorarified Mandamus, calling for the records relating to the impugned Circular bearing Ref.No.7(f)102/2003-2004, dated 13.03.2004, as amended by Circular No.IRD/164/2015-16, dated 03.02.2016, issued by the respondent Bank and consequently directing the respondents to settle and pay the leave encashment for 240 days due and payable to the petitioner, as claimed by him in his representation dated 15.07.2020, within a time frame to be fixed by this Court.

2. The learned Senior Counsel appearing for the petitioner would submit that the petitioner was imposed with the punishment of discharge from service with superannuation benefits for certain alleged misconduct, vide order dated 23.10.2019. Since the petitioner had only a very limited period of service remaining, he did not challenge the said order and, consequently, the order imposing punishment reached finality. It is the contention of the petitioner that, after the imposition of the punishment, the respondents had settled the petitioner’s contribution towards provident fund and the gratuity amount. However, they refused to pay the encashment of earned leave on the ground that, as per the Circular of the respondent Bank, dated 13.03.2004, the petitioner is not entitled to leave encashment, since the punishment imposed upon him was one of discharge from service.

2.1. The learned Senior Counsel would further submit that leave encashment is a right to property within the meaning of Article 300-A of the Constitution of India. Therefore, unless the Regulations specifically prohibit the same, the question of curtailing the petitioner’s right through a Circular is contrary to the Regulations. In support of his contention, the learned Senior Counsel relied upon the judgment of the Hon’ble Supreme Court in Bank of Baroda v. S.K.Kool (D) through L.Rs. and others, reported in (2014) 2 SCC 715, State of Jharkhand and others v. Jitendra Kumar Srivastava and others, reported in (2013) 12 SCC 210, and the judgment of the High Court of Kerala in Central Bank of India v. O.Vijayan in (W.A.No.1043 of 2018, dated 09.01.2018). Hence, he prayed to interfere with the impugned Circular and for a consequential direction to the respondents to settle the earned leave encashment benefit payable to the petitioner.

3. Per contra, the learned counsel appearing for the respondents stoutly opposed the contentions raised by the learned Senior Counsel for the petitioner and would contend that the benefit of leave encashment came into force through the Bipartite Settlement dated 31.10.1979 and that, according to the Bipartite Settlement, the privilege of leave encashment would be available only to those who retired from service. Though certain amendments were subsequently made in respect of payment of earned leave encashment, persons subjected to the punishment of dismissal, discharge and termination/removal from service were excluded from the benefit of leave encashment. It is the further contention of the learned counsel for the respondent Bank that, having committed grave misconduct, if the petitioner is additionally granted the benefit of leave encashment, the same would amount to encouraging the petitioner for having committed such grave misconduct. In support of his contention, the learned counsel for the respondent relied upon the judgment of the Madurai Bench of this Court in Vinoth Kumar v. General Manager (W.P.No.17636 of 2025, dated 28.08.2025), and the judgment of the Gauhati High Court in The Union of India v. Utpal Datta Talukdar (W.P.(C)No.2477 of 2024 dated 12.11.2024). Hence, he prayed to dismiss the Writ Petition.

4. I have given my anxious consideration to the submissions made on either side.

5. It is not in dispute that the petitioner was imposed with the punishment of “discharge from service with superannuation benefits”, in terms of Clause 6(d) of the Memorandum of Settlement dated 10.04.2002. The learned counsel appearing for the respondents relies upon Regulation 38 of the Indian Overseas Bank (Officers’) Service Regulations, 1979. According to the said Regulation, the leave to the credit of an officer shall lapse upon resignation, retirement, death, discharge or dismissal. However, the benefit of earned leave encashment has been provided for compulsory retirement or death. But, in the case of resignation, 50% of the earned leave benefit has been provided.

6. Here, it is the contention of the respondents that, in the instant case, the petitioner was awarded with the punishment of discharge from service. Therefore, as per Regulation 38, the leave would automatically lapse. For ready reference, this Court deems it appropriate to extract Regulation 38, which reads as follows:-

“38. LAPSE OF LEAVE (Amended as per gazette notification dated 08.02.2022) Save as provided below, all leave to the credit of an officer shall lapse on resignation, retirement, death, discharge, dismissal or termination: Provided that where an officer retires from the Bank's service, he shall be eligible to be paid a sum equivalent to the emoluments of any period, not exceeding two hundred and forty days of privilege leave that he had accumulated. Provided further that where an officer has been compulsorily retired including as a measure of punishment, he shall be eligible to be paid a sum equivalent to emoluments of any period, not exceeding two hundred forty days of privilege leave that he has accumulated. Provided also that where an officer dies while in service. there shall be payable to his legal representatives, a sum equivalent to the emoluments for the period not exceeding two hundred and forty days of privilege leave to his credit as on the date of his death. Provided also that where an officer resigns from service on or after 1st April, 2001 after giving due notice as in sub regulation

(2) of regulation 20 he may be paid a sum equivalent to the emoluments in respect of privilege leave to the extent of half of such leave to his credit on the date of cessation of service, subject to a maximum of one hundred and twenty days.”

7. However, it is the contention of the learned Senior Counsel that the punishment imposed upon the petitioner is one of “discharge from service with superannuation benefits”. Therefore, the term “superannuation” has to be construed as retirement. If that being the case, even according to Regulation 38, the petitioner would be entitled to encashment of earned leave.

8. In the present case, the facts are not in dispute. The only question that arises for consideration is as to whether the punishment of “discharge from service with superannuation benefits” would result in the lapse of all the leave, as provided under Regulation 38. In this regard, the learned Senior Counsel would submit that the punishment for gross misconduct has been provided under the Bipartite Settlement dated 10.04.2002, as amended on 11.11.2002, as follows:- “6. An employee found guilty of gross misconduct may:

a. be dismissed without notice; or

b. be removed from service with superannuation benefits i.e. Pension and/or Provident Fund and Gratuity as would be due otherwise under the Rules or Regulations prevailing at the relevant time and without disqualification from future employment; or c. be compulsorily retired with superannuation benefits i.e. Pension and/or Provident Fund and Gratuity as would be due otherwise under the Rules or Regulations prevailing at the relevant time and without disqualification from future employment; or

d. be discharged from service with superannuation benefits i.e. Pension and/or Provident Fund and Gratuity as would be due otherwise under the Rules or Regulations prevailing at the relevant time and without disqualification from future employment; or ….”

9. In the case in hand, we are concerned only with the punishment prescribed under Clause 6(d), namely, “discharge from service with superannuation benefits”. At this juncture, the learned counsel appearing for the respondent would invite the attention of this Court to the Circular dated 13.03.2004, wherein it has been stated that, in the case of discharge, leave encashment would not be admissible. Therefore, the learned counsel for the respondent would contend that, by virtue of the aforesaid Circular, since the petitioner was imposed with the punishment of discharge, he is not entitled to encashment of leave.

10. Before delving into the other factual aspects, this Court deems it appropriate to consider certain precedents. The judgment of the Hon’ble Supreme Court in S.K.Kool (D)’s case (cited supra) has held that, where the punishment imposed is one of removal from service with superannuation benefits, the expression “superannuation benefits” would include all the benefits ordinarily available to an employee on retirement. To put it in other words, whatever benefits are available to an employee on account of his retirement would also be available to him, as the punishment itself provides a window for superannuation benefits. For ready reference, this Court deems it appropriate to extract paragraphs 13 and 14 of the judgment in S.K.Kool (D)’s case (cited supra), which reads as follows:- “13. The Regulation does not entitle every employee to pensionary benefits. Its application and eligibility is provided under Chapter II of the Regulation whereas Chapter IV deals with qualifying service. An employee who has rendered a minimum of ten years of service and fulfils other conditions only can qualify for pension in terms of Article 14 of the Regulation. Therefore, the expression "as would be due otherwise" would mean only such employees who are eligible and have put in minimum number of years of service to qualify for pension. However, such of the employees who are not eligible and have not put in required number of years of qualifying service shall not be entitled to the superannuation benefit though removed from service in terms of Clause 6(b) of the Bipartite Settlement. Clause 6(b) came to be inserted as one of the punishments on account of the Bipartite Settlement. It provides for payment of superannuation benefits as would be due otherwise. The Bipartite Settlement tends to provide a punishment which gives superannuation benefits otherwise due. The construction canvassed by the employer shall give nothing to the employees in any event. Will it not be a fraud Bipartite Settlement? Obviously it would be. From the conspectus of what we have observed we have no doubt that such of the employees who are otherwise eligible for superannuation benefit are removed from service in terms of Clause 6(b) of the Bipartite Settlement shall be entitled to superannuation benefits. This is the only construction which would harmonise the two provisions. It is well settled rule of construction that in case of apparent conflict between the two provisions, they should be so interpreted that the effect is given to both. Hence, we are of the opinion that such of the employees who are otherwise entitled to superannuation benefits under the Regulation if visited with the penalty of removal from service with superannuation benefits shall be entitled for those benefits and such of the employees though visited with the same penalty but are not eligible for superannuation benefits under the Regulation shall not be entitled to that.

14. Accordingly, we hold that the employee's heirs are entitled to superannuation benefits. The entire amount that the Respondent is found entitled to along with interest at the rate of

6% per annum should be disbursed within 6 weeks from the date of receipt/communication of this Order.”

11. In similar circumstances, the Hon’ble Supreme Court, in Jitendra Kumar Srivastava’s case (cited supra), has held that terminal benefits are in the nature of property within the meaning of Article 31(1) of the Constitution of India, [which has since been omitted by the Constitution (Forty-Fourth Amendment) Act, 1978], therefore, the deprival can only by authority of law. It has further been held that pension does not cease to be property on the mere denial or cancellation of it. The Hon’ble Supreme Court has further held that the character of pension as “property” cannot possibly undergo such mutation at the whim of a particular person or authority.

12. In the case in hand, according to the Regulations, the leave would not lapse upon the retirement of an employee. Whereas, in the present case, the petitioner was discharged from service with superannuation benefits. In an identical case, the Division Bench of the High Court of Kerala, in O.Vijayan’s case (cited supra), has held that the expression “superannuation benefit”, in its normal connotation, would include all the benefits to which an employee is entitled as per the rules and regulations of the Bank on retirement.

13. Though the learned counsel appearing for the respondents relied upon the judgment of this Court in Vinoth Kumar’s case (cited supra), the learned Single Judge, relying upon Regulation 38 alone, has denied the relief sought for by the petitioner. Whereas, the judgment of the Division Bench of High Court of Kerala in O.Vijayan’s case (cited supra), which was ultimately confirmed, by the Hon’ble Supreme Court was not brought to the notice of this Court. Further in the above judgment and in S.K.Kool (D)’s case (cited supra) it has been clearly held that the expression “superannuation benefits” would include all the benefits available to a retired employee.

14. In the case in hand, according to Regulation 38, when an employee retires, the leave does not lapse. Therefore, the ruling relied upon by the learned counsel for the respondents is contrary to the interpretation given by the Hon’ble Supreme Court with regard to the expression “superannuation benefits”. Hence, the aforesaid ruling is not applicable to the facts and circumstances of the present case.

15. In the aforesaid case, a person who had been imposed with the punishment of discharge from service with superannuation benefits was directed to be granted the benefit of earned leave encashment. The aforesaid judgment was upheld by the Hon’ble Supreme Court in S.L.P.(C)No.31705 of 2018, dated 10.12.2018. Therefore, it is amply clear that the very issue raised in the present Writ Petition has already been considered and decided by the Division Bench of the High Court of Kerala, which view was subsequently upheld by the Hon’ble Supreme Court. Therefore, the issue raised in the present Writ Petition is no longer res integra.

16. As already observed, since the petitioner was imposed with the punishment of discharge from service with superannuation benefits, and as per the judgement of the Division Bench of the High Court of Kerala in O.Vijayan’s case (cited supra), which was later upheld by the Hon’ble Supreme Court that superannuation benefits would include all the benefits available to an employee on normal retirement, as the leave would have not lapse upon retirement of an employee under Regulation 38. Hence, this Court is of the firm view that the rejection of the petitioner’s claim on the basis of the Circular dated 13.03.2004 is liable to be interfered with, as the said Circular is contrary to Regulation 38. Therefore, the Circular, to the extent that it is contrary to Regulation 38, is liable to be interfered with.

17. In view of the above, the impugned order dated 13.03.2004 is set aside to the extent that it is contrary to Regulation 38. Further, the respondents are directed to pay the earned leave encashment amount payable to the petitioner within a period of eight weeks from the date of receipt of a copy of this order, along with interest at the rate of 6% per annum from the date of his discharge till the date of disbursement of the earned leave encashment amount.

18. In the result, this Writ Petition is allowed as indicated above. No costs.

.09.2026

kv Index : Yes Speaking Order Neutral Citation : Yes

To

1. Indian Overseas Bank, Rep. by its Chief Executive Officer/ Managing Director, Central Office, 763, Anna Salai, Chennai – 600 002.

2. General Manager (HRM), Indian Overseas Bank, Central Office, 763, Anna Salai, Chennai – 600 002.

C.KUMARAPPAN, J. kv Pre Delivery order in W.P.No.4949 of 2022 17.09.2026