W.P.(C) 3462/2017 Page 1 of 6 $~10 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 3462/2017 HARISH CHANDER .....Petitioner Through: Ms. Amrita Sarkar, Mr. Ashish Kumar Singh, Mr. Gitesh Sinha and Mr. Kartik Gupta, Advocates. versus DELHI TRANSCO LTD .....Respondent Through: Appearance not given. CORAM: HON'BLE MR. JUSTICE SANJEEV NARULA O R D E R % 17.07.2026 1. The present petition raises a short question concerning the Petitioner’s entitlement to interest on the delayed payment of leave encashment. The principal amount of ₹2,02,200 was released on 21st December, 2016. The surviving claim is confined to interest for the period during which that amount remained withheld. 2. During the pendency of the petition, the original Petitioner, Harish Chander, expired and his legal representatives were brought on record. The claim being for an accrued monetary entitlement, it survives for consideration at their instance. 3. The original Petitioner retired from the service of the Respondent on 31st August, 2007. The payment order dated 23rd August, 2007 reflected leave encashment of ₹1,32,640, corresponding to 300 days of earned leave, but marked the amount as withheld. At the relevant time, criminal This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/07/2026 at 11:41:43 W.P.(C) 3462/2017 Page 2 of 6 proceedings relating to disproportionate assets were pending against him. 4. The Petitioner was subsequently convicted. His criminal appeal was dismissed by this Court on 10th November, 2014, though the sentence of imprisonment was reduced. The Special Leave Petition preferred against that judgment was dismissed on 16th February, 2015. 5. By an order dated 30th December, 2015, the Respondent communicated the decision of its Board of Directors to withhold the Petitioner’s pension and gratuity permanently under Rule 9 of the CCS (Pension) Rules, 1972. The order did not provide for withholding of leave encashment. 6. On 6th January, 2016, the Petitioner sought release of his leave encashment. He thereafter instituted W.P.(C) 4632/2016. By an order dated 3rd August, 2016, this Court upheld the action concerning pension and gratuity, but directed the Respondent to consider the Petitioner’s claim for leave encashment and to communicate its decision within eight weeks. 7. As the amount was not released within the stipulated period, the Petitioner initiated contempt proceedings. During the pendency of those proceedings, a sum of ₹2,02,200 was credited to his account on 21st December, 2016. 8. By its order dated 2nd January, 2017 in CONT.CAS(C) 1384/2016, this Court directed the Respondent to furnish the computation of the amount paid. The Respondent thereupon issued a communication dated 4th January, 2017 stating that ₹2,02,200 represented leave encashment for 300 days, calculated in accordance with the revised pay scales. Interest was declined on the ground that the CCS (Pension) Rules, 1972 contained no provision for payment of interest on withheld leave encashment. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/07/2026 at 11:41:43 W.P.(C) 3462/2017 Page 3 of 6 9. Counsel for the Petitioners submits that there was no lawful order authorising the withholding of leave encashment and that the amount, having remained with the Respondent for more than nine years, must carry interest. In this regard, reliance is placed upon S.K. Dua v. State of Haryana.1 10. The Respondent, on the other hand, submits that the amount was withheld because criminal proceedings were pending against the Petitioner. It is further contended that the Petitioner had himself requested the Respondent to maintain status quo until disposal of his criminal appeal, that the Pension Trust was responsible for disbursement, and that no statutory provision permits payment of interest on leave encashment. 11. The objections to the maintainability of the petition are without substance. The earlier writ petition did not adjudicate the Petitioner’s claim for interest. On the contrary, liberty was expressly reserved to him to avail of an appropriate remedy if aggrieved by the decision of the Respondent. The present petition was instituted pursuant to that liberty. 12. The objection concerning non-joinder of the Pension Trust is equally untenable. The Respondent was the Petitioner’s employer and it was the Respondent which determined and processed his entitlement. The administrative arrangement under which the Pension Trust ultimately disbursed the amount cannot defeat a claim arising from the Respondent’s decision to withhold it. 13. Leave encashment is governed by the CCS (Leave) Rules, 1972. Under Rule 39(2), the competent authority is required, upon superannuation, to issue an order granting the cash equivalent of earned leave standing to the 1 (2008) 3 SCC 44 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/07/2026 at 11:41:43 W.P.(C) 3462/2017 Page 4 of 6 credit of the employee. Rule 39(3) permits withholding of the whole or part of that amount only where disciplinary or criminal proceedings are pending and the competent authority forms the view that some money may become recoverable from the employee upon conclusion of those proceedings. 14. The mere pendency of criminal or disciplinary proceedings does not, by itself, authorise withholding. There must be a conscious decision by the competent authority, founded upon the possibility of a monetary recovery from the employee. In Government of NCT of Delhi v. Prem Nath Manchanda,2 this Court held that leave encashment cannot be withheld in the absence of a specific order recording the satisfaction contemplated by Rule 39(3). The same principle has been reiterated in Satya Prakash v. Chairman cum Managing Director, Bharat Sanchar Nigam Limited,3 and Prof. Sachidanand Sinha v. Jawaharlal Nehru University.4 15. No order satisfying the requirements of Rule 39(3) has been placed before the Court. The mere notation “W/H” against the amount of leave encashment in the provisional payment order cannot substitute the statutory satisfaction. It neither identifies a decision of the competent authority nor records that any amount was likely to become recoverable from the Petitioner upon conclusion of the criminal proceedings. 16. The subsequent proceedings initiated by the Respondent also do not cure this defect. The memorandum dated 20th August, 2009 proposed withholding only of pension and gratuity. The Petitioner’s request dated 8th September, 2009 to await the outcome of his criminal appeal was made in response to that proposal and sought continuance of provisional pension and 2 2018 SCC OnLine Del 13066 3 2019 SCC OnLine Del 8039 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/07/2026 at 11:41:43 W.P.(C) 3462/2017 Page 5 of 6 medical facilities. It cannot be construed as a request, much less consent, to withhold leave encashment. 17. The final order dated 30th December, 2015 was likewise confined to permanent withholding of pension and gratuity under Rule 9 of the CCS (Pension) Rules, 1972. It neither dealt with nor authorised withholding of leave encashment. The eventual conviction of the Petitioner cannot retrospectively supply the statutory satisfaction which was never recorded under Rule 39(3). 18. The Respondent’s principal reason for declining interest is that the applicable rules do not provide for it. That contention is answered by S.K. Dua. The Supreme Court observed that even in the absence of statutory rules or administrative instructions, interest upon delayed retiral dues may be claimed under Part III of the Constitution, since such benefits are not a bounty. 19. More recently, in Narottam Singh Shami v. Government of NCT of Delhi,5 decided on 16th September, 2025, a Division Bench of this Court held that an administrative clarification stating that the CCS (Leave) Rules do not provide for interest does not prohibit its award. 20. Interest in such cases is compensatory. It recompenses the employee for being deprived of the use of money which ought lawfully to have been made available to him. Once the withholding is found to be unsupported by the governing rules, the Respondent cannot retain the benefit of the amount during the intervening period without compensating the employee. 21. The rate of 15 per cent per annum claimed in the petition is, however, 4 W.P.(C) 16488/2024, decided on 28th November, 2024 5 W.P.(C) 13125/2019 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/07/2026 at 11:41:43 W.P.(C) 3462/2017 Page 6 of 6 excessive. In the facts of the case, simple interest at 6 per cent per annum would meet the ends of justice. 22. The petition is, accordingly, allowed. The Respondent is directed to pay simple interest at the rate of 6 per cent per annum on the leave encashment amount of ₹2,02,200, from 1st September, 2007 until 21st December, 2016. 23. The amount shall be computed and released to the substituted legal representatives of the original Petitioner, upon completion of the requisite formalities, within eight weeks from today. In the event the substituted legal representatives seek payment in favour of one amongst them, the Respondent shall be at liberty to do so upon the filing of a no-objection affidavit by the remaining legal representatives. Failing such consensus, the amount shall be released in equal shares to all the substituted legal representatives, without prejudice to their inter se rights, if any. SANJEEV NARULA, J JULY 17, 2026 as This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/07/2026 at 11:41:43