Leave-surrender encashment under a binding settlement cannot be denied merely because the employer later stopped the facility.

An employee's entitlement to leave-surrender salary was upheld where an existing Section 12(3) settlement recognised the benefit for the relevant period. The employer had discontinued the facility from February 2011 on financial grounds, but its later circular dated 09.01.2017 was treated as extending the same benefit to employees who could not surrender leave earlier. Financial difficulty could not defeat a benefit already secured under the settlement, particularly where similarly placed employees had received relief. The rejection order was therefore quashed, and the employee was held entitled to encash earned leave for the relevant period, subject to eligibility and payment within the time fixed.

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Issues: Whether the petitioner was entitled to surrender leave salary for the period during which the respondent corporation had discontinued the leave-surrender facility, and whether the impugned rejection order could be sustained in view of the settlement under Section 12(3) and the later circular.

Analysis: The entitlement flowed from the existing settlement under Section 12(3), which permitted surrender of earned leave for specified periods. The respondent corporation had itself admitted, through its RTI response, that the leave-surrender practice was stopped from February 2011 because of financial crisis. The later circular dated 09.01.2017 was treated as extending the benefit to employees for the earlier period when surrender was not made possible. A financial constraint could not be used to deny a benefit already recognized under the settlement, and similarly placed employees had already been granted relief on the same basis.

Conclusion: The impugned rejection order was unsustainable and was quashed. The petitioner was held entitled to claim leave salary surrender encashment for the relevant period, subject to eligibility, and the amount was directed to be disbursed within the time fixed by the Court.

Final Conclusion: The writ petition succeeded, and the petitioner obtained enforcement of the earned leave surrender benefit for the relevant service years.

Ratio Decidendi: A benefit admitted under a binding settlement cannot be denied merely because the employer later discontinued the facility on financial grounds, especially where the employer's own subsequent circular extends the benefit for the same period.

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