Dear friend,
Sanction of leave to the employee is under the provisions of Shops and Establishment Act or Factories Act whereas notice period is internal matter between employer and employee and it is not covered under any statute as such. Therefore, there is is no connection between employee leave and notice period.
To be precise, your indirect question is can the employee avail of leave during the notice period? Yes, surely if he/she is eligible. You can sanction the leave as per the policy on employee leave in vogue.
Thanks,
Dinesh Divekar