Justice Mummineni Sudheer Kumar was hearing a petition filed by N Udayakumar, a retired employee of the Tamil Nadu State Transport Corporation (Kumbakonam) Ltd, seeking payment of the salary equivalent to 135 days of earned leave that remained unencashed at the time of his retirement.
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NewsLegalCan retired employee claim earned leave that was not encashed? Madras High Court answers
Can retired employee claim earned leave that was not encashed? Madras High Court answers
The Madras High Court was hearing a petition filed by a retired employee of the Tamil Nadu State Transport Corporation Ltd seeking payment of salary equivalent to 135 days of earned leave that remained unencashed.
Written by: Richa Sahay
4 min read
New Delhi
Jun 9, 2026 01:25 PM IST
madras high court Transport Corporation earned leave retired employee encashment
Observing that there was no reason to re-adjudicate a settled issue, the court directed the transport corporation to permit the petitioner to encash the earned leave. (AI-generated image)
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The Madras High Court recently directed the Tamil Nadu State Transport Corporation to pay a retired employee the value of 135 days of unencashed earned leave, along with 6 per cent annual interest, holding that his entitlement to encash the leave standing to his credit could not be denied merely because he was unable to avail the benefit during service.
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Justice Mummineni Sudheer Kumar was hearing a petition filed by N Udayakumar, a retired employee of the Tamil Nadu State Transport Corporation (Kumbakonam) Ltd, seeking payment of the salary equivalent to 135 days of earned leave that remained unencashed at the time of his retirement.
“The entitlement of the petitioner to encash the available earned leave to his credit cannot be denied. Further, as the petitioner is deprived of encashing the same at the relevant point of time, he is also entitled to receive the amounts due and payable on encashment with interest at the rate of 6% per annum,” the June 5 order read.
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Justice Mummineni Sudheer Kumar madras high court retired employee earned leave unencashedJustice Mummineni Sudheer Kumar noted that a coordinate bench had already dealt with an identical claim in 2018.
‘No reason to re-adjudicate settled issue’
The court noted that the issue was no longer res integra (an untouched matter), as a coordinate bench had already dealt with an identical claim in 2018, a decision that was subsequently affirmed by a division bench in 2019.
Observing that there was no reason to re-adjudicate a settled issue, the court allowed the petition and directed the transport corporation to permit the petitioner to encash the earned leave standing to his credit.
The court further directed the corporation to disburse the amount, along with interest at 6% per annum from the date of the petitioner’s superannuation until actual payment, within five months.
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Retired employee to encash leaves
According to the petitioner, a settlement entered into under Section 12(3) of the Industrial Disputes Act, 1947 (settlement of workplace disputes), entitled employees of the corporation to surrender 15 days of earned leave every year or 30 days every two years, while accumulating the remaining leave as terminal benefits up to a maximum of 240 days.
The petitioner, Udayakumar, who has retired from service, was allowed to encash 240 days of earned leave. However, the petitioner claimed that he has 135 days more earned leave available, which were earned by him during his service period. But the petitioner was not allowed to encash the said earned leave at the relevant point of time due to the financial crisis being faced by the said transport corporation.
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Hence, he claimed that he was entitled to encash the same, but the said transport corporation was not allowing it. Hence, the petitioner contended that he was entitled to encashment of the earned leave available to his credit and payment thereof with interest at 6% per annum.
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Arguments
Appearing for the petitioner, advocate A Rahul pointed out that the very same issue had fallen for consideration before this court in 2018, and a coordinate bench allowed an identical claim under identical facts.
It was also further brought to the notice of this court that the said order of the single judge was also confirmed by the division bench of this court in 2019.
The state was represented by standing counsel S C Herold Singh.
© IE Online Media Services Pvt Ltd
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Richa Sahay
Richa Sahay
Richa Sahay is a Legal Correspondent for The Indian Express, where she focuses on simplifying the complexities of the Indian judicial system. A law postgraduate, she leverages her advanced legal education to bridge the gap between technical court rulings and public understanding, ensuring that readers stay informed about the rapidly evolving legal landscape. Expertise Advanced Legal Education: As a law postgraduate, Richa possesses the academic depth required to interpret intricate statutes and constitutional nuances. Her background allows her to provide more than just summaries; she offers context-driven analysis of how legal changes impact the average citizen. Specialized Beat: She operates at the intersection of law and public policy, focusing on: Judicial Updates: Providing timely reports on orders from the Supreme Court of India and various High Courts. Legal Simplification: Translating dense “legalese” into accessible, engaging narratives without sacrificing factual accuracy. Legislative Changes: Monitoring new bills, amendments, and regulatory shifts that shape Indian society…. Read More
This article went live on June ninth, twenty twenty-six, at twenty-five minutes past one in the afternoon.
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