STATE OF SIKKIM AND OTHERS versus DR. MOOL RAJ KOTWAL

Citation: [2025] 4 S.C.R. 2347 · Decided: 23-04-2025 · Supreme Court of India · Bench: J.K. MAHESHWARI · Disposal: Appeal(s) allowed

Judgment (excerpt)

[2025] 4 S.C.R. 2347 : 2025 INSC 559
State of Sikkim and Others 
v. 
Dr. Mool Raj Kotwal
(Civil Appeal No(s). 5464-5465 of 2025)
23 April 2025
[J.K. Maheshwari* and Rajesh Bindal, JJ.]
Issue for Consideration
Whether an employee of the State who had availed the benefit of 
leave encashment maximum of 300 days once on attaining the age 
of superannuation under Rule 36 of Sikkim Government Services 
(Leave) Rules, 1982, can further be entitled for leave encashment 
again on relieving after the period of re-employment.
Headnotes†
Sikkim Government Service Rules, 1974 – rr.98, 102 – Sikkim 
Government Services (Leave) Rules, 1982 – rr.6, 17, 31, 32, 
36 – Grant of benefit of leave encashment second time for 
the period of re-employment of respondent after attaining the 
age of superannuation, in particular beyond the maximum 
period of 300 days as prescribed – Respondent filed writ 
petition challenging the cancellation of the order to grant leave 
encashment and directing payment of sum as sanctioned – 
Allowed by Single Judge relying upon Rule 36 read with Rule 
32 of Leave Rules, declaring him entitled for grant of leave 
encashment again for unutilized leave during the period of 
re-employment – Appeal by the State, dismissed by Division 
Bench – Interference with:
Held: 1.1 Under Rule 36 of Leave Rules, a regular government 
servant, if retires under Sikkim Government Service Rules, 1974 
would be entitled for leave encashment maximum for 300 days – 
If the government servant is re-employed after 58 years of age 
and continued for a long time and gets leaves accumulated during 
the period of re-employment, he/she cannot get benefit of leave 
encashment second time merely because he/she is having leave 
in his/her credit during the period of re-employment. [Para 33]
* Author
2348
[2025] 4 S.C.R.
Supreme Court Reports
1.2 Leave Rule 32 does not ipso facto deal with the applicability 
of Leave Rule 36 for grant of leave encashment – Single Judge 
was not correct to interpret Rule 32 and 36 by applying deeming 
fiction for the re-employed government servant – Hence, those 
findings cannot be countenanced, and the Division Bench erred 
in affirming the same. [Para 24]
1.3 Leave Rules recognize benefit of leave encashment to a 
government servant whose service has been extended and who 
has retired from regular service under the Service Rules, but not 
to the re-employed retired government servant – Therefore, the 
leave encashment is permissible maximum upto 300 days of leave 
and not beyond as on the date of retirement, including the case 
of extension of service. [Para 29]
1.4 Clarificatory order issued by State in the matter of grant of 
leave encashment for the earned leave to government employees 
on ‘extension of service’ subject to maximum period of 300 days 
and not beyond, is completely in consonance with the spirit of 
Rules 31, 32 and 36 of Leave Rules. [Para 30]
1.5 In the present case, the respondent was in the regular 
employment and superannuated on completion of 58 years of 
age on 31.01.2005 under Service Rules – He was granted benefit 
of leave encashment maximum of 300 days under Rule 36 of 
the Leave Rules – On re-employment, he was continued for 
more than 14 years and relieved on 28.05.2019 – On relieving 
after re employment, the benefit of leave encashment was again 
sanctioned on 31.05.2019 – The government on realising the 
mistake and interplay of Rules 32 and 36 with the spirit of the 
Leave Rules, issued clarificatory order on 27.02.2020 denying the 
benefit of leave encashment beyond 300 days, is in consonance 
with the spirit of Rule 36, which is just and reasonable to the 
extent indicated – Therefore, cancellation of sanction of leave 
encashment order dated 31.05.2019 is also in consonance to the 
law – Orders passed by Single Judge and the Division Bench set 
aside. [Paras 31, 33]
Service Law – Leave encashment – Purpose of granting, 
stated – Principle of deferred compensation – Discussed – 
Sikkim Government Services (Leave) Rules, 1982 – r.36. 
[Paras 25-29]
[2025] 4 S.C.R. 
2349
The State of Sikkim v. Dr. Mool Raj Kotwal
Sikkim Government Service Rules, 1974 – rr.98, 102 – Sikkim 
Government Services (Leave) Rules, 1982 – rr.6, 17, 31, 32, 
36 – Interplay of, explained. [Paras 17-23]
Case Law Cited
State of Rajasthan and Another v. Senior Higher Secondary School, 
Lacchmangarh and Others (2005) 10 SCC 346 – referred to.
List of Acts
Sikkim Government Service Rules, 1974; Sikkim Go

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