S. Adinarayana, S/O. Late Surya Rao, Aged 60 Years, Occ: General Manager V. Girijan Cooperative Corporation Ltd and Government of Andhra Pradesh

WP/17897/2012

AI Insights

The case revolves around the petitioner, S. Adinarayana, a former General Manager of the Girijan Cooperative Corporation Ltd, who sought the release of his terminal benefits, including leave encashment, gratuity, and other service benefits, which were delayed post-retirement. The petitioner argued that the Corporation's refusal to release these benefits was arbitrary and illegal, particularly citing an ongoing inquiry and demands for collateral security as conditions for release. The court examined the legality of these conditions and the handling of the petitioner's terminal benefits, ultimately finding in favor of the petitioner by directing the unconditional release of the leave encashment amount.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 833255 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 27-01-2026
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Andhra Pradesh Cooperative Societies Act, 1964
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: MALLIKHARJUNA RAO PULUGU
• Assessee Lawyers: K V L RAO
• Keywords: Gratuity; Income Tax; Leave encashment; Terminal Benefits; Writ of Mandamus; Audit Inspection
• Section: 51

Judgement Text

"1 HN, J W.P.No.17897_2012 APHC010551762012 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3457] TUESDAY,THE TWENTY SEVENTH DAY OF JANUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE HARINATH.N WRIT PETITION NO: 17897/2012 Between: 1. S. ADINARAYANA, S/O. LATE SURYA RAO, AGED 60 YEARS, OCC: GENERAL MANAGER, R/O. D.NO. 2-5/3, SANTOSHNAGAR, YELLAPUVANIPALEM, GOPALAPATNAM, VISAKHAPATNAM ...PETITIONER AND 1. GIRIJAN COOPERATIVE CORPORATION LTD, CHINNA WALTAIR, VISAKHAPATNAM, REPRESENTED BY ITS VICE CHAIRMAN AND MANAGING DIRECTOR 2. GOVERNMENT OF ANDHRA PRADESH, REPRESENTED BY PRINCIPAL SECRETARY TO GOVERNMENT, TRIBAL WELFARE DEPARTMENT AT SECRETARIAT, HYDERABAD ...RESPONDENT(S): Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased toIssue a Writ of Mandamus or any other appropriate Writ or Writs, Order or Direction, declaring the action of first Respondent Corporation in not releasing terminal benefits to the petitioner as illegal and arbitrary, by consequently directing the Respondents to forthwith consider the representations made by petitioner on 9.10.2011 and 17.3.2012 and release his terminal benefits viz Leave Encashment for 300 days amounting to Rs.6 lakhs, Interest @ 24 % on gratuity amount of Rs.3.50 lakhs and Interest @ 24 % on G.S.L.I. amount of Rs.56000/- which were paid to the petitioner after 1 yr 11 months of his retirement; Award costs and pass IA NO: 1 OF 2012(WPMP 22917 OF 2012 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased Issue interim directions to the first respondent to forthwith consider the representations made by petitioner on 9.10.2011 and 17.3.2012 and release his terminal benefits viz Leave Encashment for 300 days amounting to Rs.6 lakhs, pending disposal of W P No. of 2012 and pass Printed from counselvise.com 2 HN, J W.P.No.17897_2012 IA NO: 1 OF 2013(WPMP 3966 OF 2013 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to give directions to the first respondent to release terminal benefits which are due to the petitioner, by accepting the indemnity bond, instead of insisting for security of immovable property, pending disposal of above writ petition, and pass IA NO: 1 OF 2019 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased To expedite the hearing of above writ petition by fixing an early date of hearing in the interest of justice IA NO: 1 OF 2025 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased pleased to permit the petitioner to amend the prayer in WP.No. 17897 of 2012, as; “declaring the action of the 1st respondent in not releasing the terminal benefits to the petitioner and further issuing the Proc. Rc.No.706/2010/Admn.1, dated 29-11-2021, directing the petitioner and his two sons to deposit the original documents i.e., (1) Registered sale deed bearing document No.970/2000, dated 17-04-2000 (2) its link sale deed bearing document No.784/1991 dated 30.07.1991, as collateral security along with under taking Bond from family members of the writ petitioner until a final audit inspection report being conducted U/s 51 of ARCS Act, 1964 is received and confirm the deposit by exciting a Memorandum of deposit of title deeds, as illegal, arbitrary and violation of principles of natural justice, and consequently direct the Respondents to release the terminal benefits of the petitioner i.e.. Leave Encashment for 300 days amounting to Rs.6,00,000/- (Rupees Six lakhs only), and Interest @ 24% on the gratuity amount of Rs.3,50,000/- and G.S.L.I. amount of Rs.56,000/-, which were already paid to the petitioner after 1 year 11 months of his retirement. Award costs Counsel for the Petitioner: 1. K V L NARASIMHA RAO Counsel for the Respondent(S): 1. MALLIKHARJUNA RAO PULUGU (SC FOR GIRIJAN COOPERATIVE CORPORATION LTD) Printed from counselvise.com 3 HN, J W.P.No.17897_2012 THE HONOURABLE SRI JUSTICE HARINATH.N WRIT PETITION NO: 17897 of 2012 ORDER: 1. The learned counsel appearing for the petitioner submits that the petitioner is challenging the inaction on the part of the 1st respondent Corporation in not releasing terminal benefits of the petitioner and seeks a direction to the respondent to consider the representations of the petitioner submitted on 09.10.2011 and 17.03.2012 and also seek release of his terminal benefits, including leave encashment, together with interest, apart from release of gratuity and other service benefits to the petitioner. 2. The learned counsel appearing for the petitioner submits that the petitioner worked as a General Manager in the 1st respondent Corporation and attained the age of superannuation on 30.04.2010. It is submitted that the petitioner was working as the General Manager (Finance) and was handling all issues relating to finance of the 1st respondent Corporation. It is also submitted that the petitioner was alleged to have made payment to the Income Tax Department for getting the attachment of the bank accounts lifted. It is submitted that Income Tax Department raised a demand against the 1st respondent and the 1st respondent was required to remit the tax demanded; however, as no payments were made, the Income Tax Department frozen the bank accounts of the 1st respondent. The petitioner, being the officer in charge of the Finance Department in the capacity of General Manager, Printed from counselvise.com 4 HN, J W.P.No.17897_2012 remitted an amount of Rs.39,46,000/- to the Income Tax Department to set the attachment of the bank accounts lifted. 3. It is submitted that the Income Tax Department raised further demands, which were challenged by the 1st respondent and W.P.No.18277 of 2008, W.P.No.4786 of 2009, and ITTA No.344 of 2011 were filed. At that point of time, stay was granted by this Court on the demands raised by the Income Tax Department, subject to depositing 50% of the disputed tax. 4. It is submitted that the 1st respondent requested the Registrar of Corporative Societies to order an enquiry after the retirement of the petitioner on the alleged unauthorized remittances of Rs. 39,46,000/- to Income Tax Department. The learned counsel appearing for the petitioner submits that the respondent authorities have not initiated any enquiry under Section 51 of the Andhra Pradesh Cooperative Societies Act, 1964, till date, however, have denied the service benefits to the petitioner on the pretext of an enquiry pending against him. 5. The learned Standing counsel appearing for the 1st respondent submits that the final audit inspection was awaited and that, during the pendency of the writ petition, the respondent authorities released the service benefits except for the leave encashment component. 6. The learned counsel appearing for the petitioner submits that the petitioner has filed I.A.No.1 of 2025 seeking to challenge the proceedings dated 29.11.2021, whereby the 1st respondent called upon the petitioner and Printed from counselvise.com 5 HN, J W.P.No.17897_2012 his two sons to deposit the original documents, such as the registered sale deed bearing Document No.970 of 2000 dated 17.04.2000 and its link document No.784 of 1991 dated 30.07.1991, as collateral security, along with an undertaking bond from both family members, pending final audit inspection conducted under Section 51 of Andhra Pradesh Cooperative Societies Act, 1964. 7. The learned counsel for the petitioner has placed on record the proceedings dated 29.11.2021, whereby the respondent authorities sanctioned encashment of 277 days of earned leave, which were to the credit of the petitioner as on the date of retirement on 30.04.2010. The Finance Wing of the 1st respondent was also directed to arrange payment of leave encashment to the petitioner on compliance with the above said conditions. 8. Though the writ petition is filed in the year 2012, no counter-affidavit has been filed. The learned Standing counsel for the 1st respondent has placed on record the instructions received from the 1st respondent. As seen from the instructions, all terminal benefits were released to the petitioner except the leave encashment, and that the writ petitions filed by the 1st respondent against the Income Tax Assessments are pending adjudication before this Court. It is also stated that the Registrar of Cooperative Societies is yet to initiate a fresh enquiry under Section 51 of the Andhra Pradesh Cooperative Societies Act, 1964. It is further stated that the 1st respondent Corporation incurred heavy loss on account of crediting of Rs.70,60,000/- to the Income Printed from counselvise.com 6 HN, J W.P.No.17897_2012 Tax Department. It is also admitted that no disciplinary action was initiated against the petitioner, no financial responsibility was fixed on the petitioner, and no recovery notice was ever issued to the petitioner. 9. The only issue that falls for consideration is whether the act of the petitioner in remitting the amount demanded by the Income Tax Department would call for an enquiry on an audit inspection followed by an enquiry under Section 51 of the Andhra Pradesh Cooperative Societies Act, 1964. The contention of the 1st respondent that, in view of the amendment to the Income Tax Act, Clause 206-C was deleted, which would absolve the 1st respondent from paying any demanded tax is already under consideration before this Court in the writ petitions filed by the 1st respondent. The amounts remitted by the petitioner for releasing the attached bank accounts are lying with the Income Tax Department, and in the event this Court finds that the assessments of the Income Tax Department are liable to be set aside, it is always open for the 1st respondent to reclaim the amounts so credited. 10. It is also an admitted fact that the petitioner attained the age of superannuation on 30.04.2010, and that the respondent authorities released all service benefits except leave encashment of 277 days of earned leave. Calling upon the petitioner to submit original documents in view of the said payments is concerned, this Court finds no justification in issuance of the order dated 29.11.2021 by the 1st respondent calling upon the petitioner and his two sons to submit the registered sale deed bearing Document No.970 of Printed from counselvise.com 7 HN, J W.P.No.17897_2012 2000 dated 17.04.2000 and its links sale deed bearing No.784 of 1991 dated 13.07.1991 as collateral security, along with an undertaking bond from the family members of S.Adinarayana, until a final inspection report is conducted under Section 51 of the Andhra Pradesh Cooperative Societies Act, 1964, and further requiring the petitioner to execute a memorandum of deposit of title deeds subject to the opinion of the Standing Counsel for the 1st respondent. 11. The impugned proceedings and the amended proceedings dated 29.11.2021 are liable to be set aside to the extent of calling upon the petitioner to furnish the registered sale deed bearing Document No.970 of 2000 dated 17.04.2000 and its links sale deed bearing No.784 of 1991 dated 13.07.1991. It is evidently clear that the petitioner is not alleged to have committed any misappropriation, nor it is the case of the 1st respondent that disciplinary proceedings were initiated against the petitioner for having credited the amount demanded by the Income Tax Department. It is also not the case of the 1st respondent that any enquiry under Section 51 has found fault with the acts of the petitioner. Admittedly, as on date, nothing is on record to show that the audit report is final or that an enquiry under Section 51 is proposed to be held against the petitioner. 12. The petitioner deposited the amounts with the Income Tax Department in terms of the assessments arrived at by the Department. Any grievance against the said assessments is already under challenge before this Court, Printed from counselvise.com 8 HN, J W.P.No.17897_2012 and the payments deposited by the 1st respondent with the Income Tax Department shall be dealt with in accordance with the outcome of the writ petitions filed by the 1st respondent. 13. The 1st respondent has released all the service benefits except the leave encashment component, and for releasing the same, called upon the petitioner to comply with certain directions such as deposit of title deeds and other conditions. Such conditions cannot be imposed for release of the leave encashment. Accordingly, the impugned proceedings dated 29.11.2021, insofar as they require the petitioner and his sons to submit the original registered sale deed bearing Document No.970 of 2000 dated 17.04.2000 and its links sale deeds bearing No.784 of 1991 dated 13.07.1991, and furnishing the bonds and deposit of memorandum of title deeds, are unsustainable. 14. Accordingly, the impugned proceedings stand modified to the above extent, and the writ petition is disposed off directing the 1st respondent to release the leave encashment amount due payable to the petitioner without imposing any conditions and to release the same within a period of four (04) weeks from the date of receipt of this order. There shall be no order as to costs. Pending miscellaneous petitions, if any, shall stand closed. ___________________ JUSTICE HARINATH.N Date:27.01.2026 NKA Printed from counselvise.com 9 HN, J W.P.No.17897_2012 101 THE HONOURABLE SRI JUSTICE HARINATH.N WRIT PETITION NO: 17897 of 2012 Date: 27.01.2026 NKA Printed from counselvise.com "