Is leave encashment after resignation Mandatory policy for IT Services company

Hi,
I have recently resigned from an IT Service company baased out of Hyderabad India. During my FFS, Leave encashment wasn't done and was stated that it isn't in the company policy.
But what I Understand is that Leave encashment is mandatory is part of company exit policy and only payment on gross or basic is what company can define.
Please help me in understanding it better.
thanks in Advance
Thank You

You cannot have an HR policy which is against the law. When your establishment is covered by AP Shops and Commercial Establishments Act, you should follow the entire provisions as such. You can have better benefits but you can not come down from that. When there is any provision absent, then you can relate the same as with reference to industrial practice also. The AP Shops...Act makes it mandatory to allow 8 days' Earned leave encashment to all existing employees. It is okay that nothing is mentioned about an employee who leaves the company. In such situation the company should follow the practice and the practice is to pay earned leave encashment, though not required for CL and SL. Very strictly speaking, an employee who takes EL for more than 5 days shall be paid wages for the days of leave in advance,ie, before his leave starts. This is law, not necessarily be applicable to other states but in AP.But how many of us pay it in advance? Nobody. That means, we make rules, we direct and the employees obey. It is okay. But when it comes to situation like this, why don't we be flexible and allow encashment?