As far as my knowledge goes -
Understanding Compensatory Off
A comp off is a compensatory off. You give this off or leave to someone who works on a holiday or weekly off. Usually, a comp off is given on a working day.
Now ideally, if he would not have got a comp off, yet he was eligible for the said holiday or weekly off (and perhaps it was his fortune that he's able to club it).
Honestly, I fail to understand what your exact query is, but I believe you wish to ask this -
Clarifying Compensatory Off Usage
One of your employees has exhausted and used up all leaves. He is taking compensatory offs, and if it is allowed.
Now I'll answer it with an example for better understanding -
Say, for example, you have Sundays as a weekly off. This person worked on last Sunday and wishes to take a comp off on, say, Friday this week. Now, the immediate Saturday is a holiday, and then is Sunday - a weekly off.
In this case, no matter how many days of holidays and weekly offs there are, the person is eligible for the comp off as well as all holidays and weekly offs.
However, if the person has taken a leave for his purpose (not worked on a working day), that cannot be adjusted as a comp off.
Eligibility for Compensatory Off
A comp off is a benefit. It is not an obligation. Comp off is given only to those who have worked on holidays or weekly offs or given extra hours or, say, worked double shifts, etc. No other person is eligible.
A person who is exhausted of all his/her leaves, any leave taken thereafter (it not being a comp off) would be treated as a leave without pay, and the salary would be deducted.
Hope it cleared your query :)