In Brief
The Supreme Court held that a retired government employee cannot claim leave encashment twice—once on retirement from regular service and again upon relief from re-employment. The Court ruled that Rule 36 of the Sikkim Leave Rules applies only to government servants retiring from regular service, and re-employment is discretionary, not an extension of regular service. Leave encashment, capped at 300 days, is a one-time welfare entitlement representing deferred wages. The State's clarificatory order limiting encashment to 300 days inclusive of re-employment periods was upheld as valid, and the High Court's orders favoring the respondent were overturned. The Court balanced employee welfare with fiscal discipline, preventing unjust enrichment and public financial burden.
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