Dear Ansishere,
In my personal opinion, such a situation is to be viewed from the HR Policy perspective of the organization rather than legal perspective. For instance, if you take the practice being adopted in Government service, the process of transit of an existing employee from a lower cadre post to a higher cadre post in the same department or other through direct recruitment is not treated as termination of service but transfer of service only so as to enable the incumbent to get continuity of service and leave benefits subject to the condition that the employee should ensure that there would be no break in service. Coming to the particular point you raised, if the leave conditions are the same in respect of both the posts, well, since the employee and the employer are the same, his existing leave account can be continued. Like I said at the outset, it depends upon the policy of the organization.