Haryana Gramin Bank VRS Leave Encashment: High Court Upholds Interest on Delayed Payments

The judgment and what happened

The Punjab and Haryana High Court’s Division Bench decided LPA-3766-2025 and LPA-3767-2025 on 25 August 2026. The appeals were filed by Haryana Gramin Bank against a Single Judge’s order dated 9 December 2025. The earlier order granted interest on delayed encashment of privilege leave to employees who had taken voluntary retirement.

This article recovers an older, still relevant employee-benefits judgment. Neither the court decision nor a fresh policy amendment occurred on 8 November 2026.

Why the employees went to court

The employees had voluntarily retired during 2020 and 2021. They sought payment for unused privilege leave under the Sarva Haryana Gramin Bank (Officers and Employees) Service Regulations, 2010. They initially did not receive that payment and pursued a writ petition. The bank released the underlying leave-encashment amounts during the proceedings, but did not pay interest for the delay.

The names in the litigation reflect the bank’s historical name and service regulations. The bank is now called Haryana Gramin Bank; the current name does not retroactively change the older regulations or employee service events.

The bank’s case and the court’s reasoning

The bank argued that privilege-leave encashment was linked to superannuation rather than voluntary retirement, and relied on a 2024 amendment to contest interest from the original retirement dates. The Division Bench found that the bank itself had already paid the principal amounts. It also found no convincing restriction in the applicable rules that would have made the claim unavailable solely because the employees had taken voluntary retirement.

The court described voluntary retirement as a form of retirement and rejected the bank’s attempt to use the subsequent amendment as a reason to avoid interest for the earlier payment delay. It held that the interest award compensated for money released substantially after the employees’ retirement without adequate justification.

What the High Court ordered

The Division Bench dismissed both appeals. It declined to interfere with the Single Judge’s grant of interest from each eligible employee’s retirement date until actual payment of the respective leave-encashment amount. The accessible decision does not specify a new universal interest rate, and this report therefore does not assign one.

The text confirms the decision on the appeals; a separate check of any later Supreme Court proceedings, stay, review or implementation record was not available. No claim is made that a particular employee has subsequently received the full interest amount.

Practical relevance and limits for bankers

For an officer retiring voluntarily, the exact wording of the applicable bank’s service and pension regulations, the retirement date, the leave balance and the timing of payment can determine the claim. This ruling illustrates why a delayed retirement payment may carry an interest consequence when the underlying entitlement is established.

It is not an instruction that every serving or retired PSB or RRB officer automatically receives the same benefit or interest calculation. Employees should consult the rules and amendments applicable to their own institution and dates, and obtain a formal determination where a claim is disputed.

• Check the service regulations that were effective on the actual date of retirement.
• Keep leave-balance statements, payment dates and correspondence if a delay is contested.
• Distinguish an entitlement to the underlying leave amount from a separate right to compensation for delay.

Sources and References

• Haryana Gramin Bank Through Its General Manager and Others v Ajit Singh and Others, 25 August 2026 — Indian Kanoon judgment transcript