2025:HHC:15017

IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA

CWP No.8382 of 2025
Decided on: 15th July, 2025
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Anita Kumari ....Petitioner

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Versus
State of H.P. & Ors. …Respondents

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_________________________________________________________________
Coram
Ms. Justice Jyotsna Rewal Dua

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1 Whether approved for reporting? Yes
_________________________________________________________________
For the petitioner: Ms.Shivangi Sharma, Advocate vice
Mr. Vikas Rajput, Advocate.
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For the respondents: Mr. Anup Rattan, Advocate General,
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with Mr. Rajat Chaudhary, Assistant
Advocate General.
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Jyotsna Rewal Dua, Judge

Petitioner feels aggrieved against the office

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letter/circular dated 17.12.2024 (Annexure P-6) issued by

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respondent No.3 directing all concerned-Deputy Directors of

Elementary Education that “credit of earned leave may be

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allowed without any financial benefits in favour of TGTs who

have been allowed regularization retrospectively with all

consequential benefits.”

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Whether reporters of Local Papers may be allowed to see the judgment? yes

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2. Background

2(i) Petitioner was appointed as Assistant Librarian

in erstwhile Dugra Chand Memorial College Jaisinghpur,

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District Kangra. The respondent-State took over the college

vide notification dated 06.02.2007. Services of the staff of the

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said college were also taken over retrospectively w.e.f.

06.02.2007 on contract basis.

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2(ii). Aggrieved against respondents’ decision in taking

over her services on contract basis,

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Anita Kumari Vs. State of H.P. and Anr 2. The said writ
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petition was disposed of with direction to the respondents to

consider and decide petitioner’s representation in accordance

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with law laid down in Om Prakash Vs. State of H.P. and

Ors.3 as affirmed in State of H.P. Vs. Om Prakash 4. The

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representation was decided by the respondents and vide office

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order dated 25.07.2022, services of the petitioner were taken

over w.e.f. 06.02.2007 as Assistant Librarian on regular

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basis. Respondents granted benefits to the petitioner on

account of her retrospective regularization but earned leave

for this period of retrospective regularization (w.e.f. 2007 to

2
CWP No.8590 of 2010 decided on 02.05.2012
3
CWP No.7602 of 2010 decided alongwith connected matter on 02.05.2012
4
LPA No.54 of 2013, decided alongwith connected matters on 04.10.2019

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2015) was not granted.

2(iii) Petitioner next represented to the respondents

claiming benefits of earned leaves on account of her

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retrospective regularization. This claim was made in light of

decision rendered in Sunita Sangroli Vs. State of H.P. and

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Ors5. Respondents came up with office circular/letter dated

17.12.2024 (Annexure P-6) allowing credit of earned leave on

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account of retrospective regularization but without any

financial benefits. The said office circular/letter reads as

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under:-
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Subject:-Clarification regarding accumulation of earned leave
from date of regularization of services retrospectively in
compliance to the judgments passed by the Hon'ble
High Court of Himachal Pradesh.
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Sir,
Please find enclosed herewith letter received
from the Secretary (Education) to the Govt. of H.P. vide
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letter No.EDUC-E05/25/2024 dared 5092024 regarding

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clarification regarding accumulation of earned leave

from date of regularization of services retrospectively in
compliance to the judgments passed by the Hon’ble
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High Court of Himachal Pradesh.

The matter has been examined at Government
level and it is found that cases similar situated to that
of Sunita Sangroli (CWP No. 5043/2022) as per
directions conveyed to Director of Higher Education
Shimla vide this office letter No.EDN-B-E(3)-4/2024

5
CWP No.5043 of 2022 decided on 08.08.2023

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dated 01.08.2024 (Copy enclosed).

You are therefore directed, that credit of
earned leave may be allowed without any
financial benefits in favour of TGTs who have been

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allowed regularization retrospectively with all

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consequential benefits.”

2(iv) In the above background, petitioner has instituted

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this writ petition, seeking following substantive reliefs: -

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a. That respondent may kindly be directed to credit the
earned leaves in the leave account of petitioner
admissible to them due to retrospective
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regularization
benefits.
of her services with all financial
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b. That all earned/privileged leaves which has not
availed by petitioner for the period when petitioners
has also served the department from initial date of
appointment may be counted as earned leave with
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fincial benefits in accordance with judgment passed by

this Hon,ble court and same be credited in leave
account of petitioners and thereafter same may be
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paid to them or earned leaves may be enchased in

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favor of petitioner.
c. That the word "without financial benefits" in letter
dated 17-12-2024 may be quashed and set aside.
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3. Heard learned counsel on both sides and

considered the case file.

4. Consideration

4(i). Absolutely no reason is discernible from the

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impugned office circular for not allowing financial benefits

while crediting the earned leaves in the leave account of the

petitioner in view of her retrospective regularization with all

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consequential benefits.

State of Sikkim and others Vs. Dr. Mool Raj

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Kotwal6, pertained to the claim of leave encashment for the

period of re-employment after attaining the age of

of
superannuation. The claim was rejected as Leave

Encashment could be claimed

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during service tenure till superannuation. However, some

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observations of the Hon’ble Apex Court, relevant to the

context of Earned Leave encashment are being extracted

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hereinafter:-

25. In the said sequel, the philosophy and purpose of

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granting encashment of unutilized earned leave also

warrants attention. Leave encashment is a legal
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entitlement that exists within the framework of service

law and in the welfare of the employee. It allows
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employees to receive a monetary benefit in exchange

for leave they have earned but not taken during
regular employment. This right is based on the
principle of deferred compensation to an employee who
has not taken leaves and served, for which the
employer must compensate not only for his/her work,
but also for benefits of leave accumulated over time

6
Civil Appeal No. 5464 of 2025 decided on 23.04.2025

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limited to 300 days maximum. This entitlement is often

established in statutory provisions, service rules (such
as Rule 36 of the Leave Rules) or employment
contracts, ensuring that employees are fairly

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compensated for their unutilized leave.

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26. A three-judges Bench of this Court in ‘State of
Rajasthan and Another Vs. Senior Higher
Secondary School, Lacchmangarh and Others’7 ,

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although in context of Section 29 of Rajasthan Non-
Government Education Institutions Act, 1989,

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interpreted Leave Encashment as ‘nothing but salary
for the unavailed leave to the credit of the employee’.
Nonetheless, something more is required to
understand the full import behind grant of Leave
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Encashment, which is the benefit after retirement to a
devoted employee. Jurisprudentially, leave
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encashment is grounded in two key principles: equity
and economic security. The principle of equity ensures
that employees who forgo their right to take leave for
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the benefit of the organization are not deprived of its

monetary value. The principle of economic security
treats leave encashment as a form of deferred wages,
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similar to gratuity or pension benefits. This reinforces

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the employer’s duty to maintain fair labour practices

and protects employees’ financial rights.
27. Interpreting leave encashment provisions goes beyond
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financial compensation and connects to broader legal

principles of dignity and welfare during service.
However, such interpretations must carefully balance
the interests of both employees and the financial
stability of the organization, especially when public
exchequer is involved. Courts must tread carefully to

7
(2005)10 SCC 346 (para 21)

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prevent employees from claiming leave encashment

multiple times for the same accrual, which could lead
to unjust enrichment and may go against the public
interest of largesse.

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28. Therefore, while leave encashment ensures that

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extraordinary work ethic of an employee is rewarded,
it must be applied in a way that upholds both
employee rights and institutional sustainability.

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Naturally, courts must interpret leave encashment
rules and statutes in a manner that prevents undue

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financial burden on employers while ensuring that
employees receive what they are lawfully entitled to.
29. Thus, Leave Rules recognize benefit of leave
encashment to a government servant whose service
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has been extended and who has retired from regular
service under the Service Rules, but not to the re-
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employed retired government servant. Therefore, the
leave encashment is permissible maximum upto 300
days of leave and not beyond as on the date of
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retirement, including the case of extension of service.

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4(ii) Not allowing financial benefits for the earned leave

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due and admissible to the petitioner is contrary to the ratio

of decision in Sunita Sangroli4. In the said case there was

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delay in regularization of service of the petitioner. The said

delay was attributable to the respondent-Department. Prayer

was accordingly made for grant of benefit of earned leave to

the petitioner from the due date of regularization.

Respondents in the said case had defended not crediting

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earned leaves on account of retrospective regularization on

the basis of instructions issued by the Financial Department.

According to the said instructions, benefit of earned leaves

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was not part of consequential benefits; There was no

provision in the CCS (Leave) Rules, 1972, to grant benefit of

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earned leaves from retrospective date. All these objections

were turned down by the Court. It was held that

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entitlement of civil servant to earned leave start from date he

joins services where earned leave are permissible. Earned

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leave becomes an incidence of service, a benefit available to
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the civil servant by virtue of his being appointed to the civil

post. There can be no discrimination between the persons

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who have received service benefits of regular employment

w.e.f. retrospective date, be it under the orders of the Court

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or otherwise and others in whose cases the requirement of

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grant of benefits retrospectively did not arise. Denial of the

benefit of earned leave to the petitioner from retrospective

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date of regularization was held bad in law being

discriminatory, arbitrary and against Articles 14 and 16 of

the Constitution of India. Relevant portion from the decision

is as under:-

“By way of instant petition, petitioner has prayed for

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following substantive reliefs:-

ii That writ of mandamus may kindly be issued,
directing the respondent department to
grant benefit of earned leave to the

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petitioner from the due date of

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regularization i.e. 25.06.1997, in view of the
fact that the delay in regularization of service of
the petitioner is clear cut fault on the part of the

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respondent department and for the fault of the
respondent department, the petitioner cannot be
deprived from getting the benefit of earned leave.’

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2. The issue involved in the instant petition is with
respect to the grant of benefit of earned leave
from a retrospective date.

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3&4. ……………………..
Respondents by way of their reply to the petition have
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sought to defend their action on the basis of the
instructions issued by the Finance Department, vide
office memorandum dated 06.07.2020 (Annexure P-7),
according to which, the benefit of earned leave was not
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a part of consequential benefits. It is submitted on

behalf of the respondents that the leave is regularized
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under CCS Rules, 1972 and in such rules there is no

provision to grant the benefit of earned leave from
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retrospective date.
6 to9 ……………………………………..
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10. The entitlement of civil servant to an earned leave starts

from the date she joins the service, where earned leave
is permissible. That being so, the earned leave
becomes an incidence of service, a benefit
available to the civil servant by virtue of he being
appointed to a civil post. In this view of the
matter, to discriminate between the persons who
have received service benefits of regular

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employment w.e.f. retrospective date, be it under

the orders of the Court or otherwise and others in
whose cases the requirement of grant of benefits
retrospectively did not arise, is clearly

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discriminatory and without any intelligible

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differentia.
11. It is not a case that the petitioner had not rendered
actual services to the State from the date from which

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she was allowed to derive her benefits by virtue of a
decision in compliance to the orders of the Court. Once,

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she had rendered the services from such date and had
been ordered to be conferred with all the service
benefits from such date, denial of the benefit of earned
leave to the petitioner from such retrospective date is
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bad in law for the reason that it is discriminatory and
arbitrary and hence against the Articles 14 and 16 of
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the Constitution of India.
12. Instructions issued, vide office memorandum dated
06.07.2020, by the Finance Department of State
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Government, Annexure P-7, thus, cannot be sustained

for the reasons detailed above. Even otherwise, the CCS
Leave Rules, 1972, do not provide for any embargo on
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the grant of benefit of earned leave from retrospective

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date.
13. In result, the petition is allowed. Office memorandum
dated 06.07.2020 (Annexure P-7), is quashed and set
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aside. Respondents are directed to grant benefit of

earned leave to the petitioner from the initial date of
contract appointment i.e. 25.06.1997 within eights
weeks from today.”

It is admitted position of the parties that the

above judgment has attained finality and has been accepted

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and implemented by the respondents.

4(iii) The Central Civil Services (Leave) Rules entitles,

the petitioner to financial benefits in lieu of maximum 300

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earned leaves. The, office circular dated 17.12.2024

(Annexure P-6) permits credit of earned leaves for the period

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of retrospective regularization to the leave account of the

petitioner but without any monetary benefit. Denial of

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financial benefits to the extent of 300 earned leave spanning

petitioner’s entire service career inclusive of

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question, cannot be held to be in consonance with law.

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4(iv) During hearing of the case on 14.07.2025, learned

Assistant Advocate General had placed on record an office

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order dated 11.07.2025 issued by respondent No.2 and

submitted that the aforesaid office order reflects the stand of

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the respondents and no further reply is required to be filed.

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In the aforesaid office order, respondent No.2 has

now assigned following reason for denying financial benefits

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in lieu of earned leaves falling to petitioner’s credit from

retrospective date of regularization of her services:-

“And whereas, the Government has notified HP

Recruitment and conditions of Service of Govt.
Employees bill, 2024 wherein it has been mentioned
that after 12.12.2003 contractual will be entitled for

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service benefit after regularization only. Now therefore,

in view the provisions contained in HP Government
has notified Recruitment and conditions of Service of
Govt. Employees Act, 2024 (Act No. 23 of 2025), any

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benefit of contract service is not admissible to any

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employee. Accordingly, at this stage the case of
petitioner is not similar to Smt. Sunita Sangroli.
Keeping in view the position explained above, the

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case of Smt. Anita Kumari, Assistant Librarian in GC
Jaisinghpur, Distt. Kangra is hereby rejected being not

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similar to Smt. Sunita Sangroli. However, Smt. Anita
Kumari, Assistant Library is hereby granted the
benefit of credit of earned leave w.e.f. 01-01-2006 on
notional basis subject to total credit of 300 Earned
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Leave.”
As per above extract, petitioner cannot be granted
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actual financial benefits in lieu of earned leaves from the

date of her retrospective regularization on account of the H.P.

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Recruitment and Conditions of Service of Government

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Employees Act, 2024 ( hereinafter called as 2024 Act) , as

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under the aforesaid enactment, after 12.12.2003 contractual

employees will be entitled for service benefit only after

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regularization of their services. Benefit of contractual service

will not be admissible to any employee.

Interestingly, the 2024 Act came into force w.e.f.

25.02.2025, whereas, the decision to deny financial benefits

to the petitioner in lieu of earned leaves admissible to her

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on account of her retrospective regularization had been

taken much earlier i.e. 17.12.2024. Respondents cannot

take shelter behind the 2024 Act for defending the order

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passed prior thereto.

Furthermore, instant is not a case where

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petitioner has claimed benefit of contractual service. The

services of the petitioner have already been regularized w.e.f.

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06.02.2007. The aforesaid enactment has no applicability to

the facts and relief claimed in the present case. Petitioner

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now, is not seeking benefit of contractual service in her claim
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of financial benefits for 300 earned leaves by computing the

same from the date of her regularization i.e. 06.02.2007.

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Petitioner’s claim is purely based upon the date of

retrospective regularization of her services w.e.f. 06.02.2007.

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It has not been disputed that petitioner’s services have been

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regularized retrospectively w.e.f. 06.02.2007 with all

consequential benefits and that petitioner had been in

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position thorough out and had actually worked during the

period in question. That being the position, petitioner is

entitled to earned leaves on account of retrospective

regularization of services for the period in question.

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Apparently, the respondents have also acknowledged this

fact as the office order issued on 11.07.2025 states that

petitioner will be entitled to notional benefits of earned leaves

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from retrospective date of regularization of her services. This

admission of respondents takes away the foundation of their

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defence that in view of the 2024 Act, petitioner cannot be

allowed benefit of earned leaves from the retrospective date of

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regularization of her services. When petitioner’s entitlement

to the earned leaves to the extent of 300 from the date of her
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retrospective regularization is not in dispute, there is no valid
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reason for denying financial benefits in lieu thereof. Earned

leave is not something which can be credited to the leave

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account of an employee on notional basis. When respondents

do not dispute petitioner’s entitlement to earned leave during

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period of retrospective regularization of her services, the

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financial benefits attached thereto shall follow but of course

in lieu of maximum of 300 earned leaves during entire service

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career of the petitioner’s inclusive of period of retrospective

regularization of her service. Financial benefits for maximum

300 earned leaves will be admissible to the petitioner at the

time of her superannuation.

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5. In view of above discussion, the impugned office

circular/letter dated 17.12.2024 (Annexure P-6) and office

order dated 11.07.2025 are quashed and set aside. Petitioner

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is held entitled to financial benefits in lieu of earned leaves

falling to her credit on account of her retrospective

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regularization to maximum of 300 earned leaves in her total

service career. In the given facts, petitioner, however, shall

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not be entitled to claim earned leaves from the date of her

retrospective regularization till her actual joining the post on

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regular basis for any other purpose. The writ petition is
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disposed of on above terms.

Pending miscellaneous application(s), if any, also

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stand disposed of.

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Jyotsna Rewal Dua

Judge
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July 15, 2025

R.Atal
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