Right to get reimbursement for foreign travel under LTC scheme is not an absolute right; Madras High Court upheld withdrawal of the scheme for SBI officers

Madras High Court

Madras High Court: S M Subramaniam, J. upheld the decision taken by Indian Banks Association to unilaterally withdraw the facility for State Bank of India officers to visit overseas countries as part of Leave Travel Concession ‘LTC’/ Home Travel Concession ‘HTC’.

The instant writ was filed challenging the validity of the circular dated 07-4-2014 issued by Indian Banks Association (‘R3’) read with the e-Circular dated 15-4-2014 issued by State Bank of India (‘R1’). The circulars under challenge unilaterally took a decision to withdraw the Leave Travel Concession ‘LTC’ covering overseas travel for SBI officers, and the officers were not entitled to visit overseas countries/ centers as part of LTC or HTC (Home Travel Concession) with immediate effect.

The Indian Bank’s Association issued a Circular dated as early as on 18-09-1982 pursuant to bilateral discussions with the All India State Bank Officers Federation and All India Bank Officers Confederation (‘Petitioners’) being trade unions permitting LTC facility to cover foreign travel also within the eligibility to travel within the Country. This was continued and reiterated in a Circular dated 08-10-2008 issued by Indian Banks Association (R3). All the public Sector Banks, the State Bank of India and the Scheduled Commercial Banks have implemented and extended the facilities to their officers. There is no additional expenditure for the Banks as the amount paid is only as per the eligibility to travel within the country.

Rule 44 of the State Bank of India Officers, Service Rules, 1992, contemplates Leave Travel Concession and Leave Encashment and sub rule-1 to rule-44 provides that

“(1) During each block of four years, an officer shall be eligible for leave travel concession for travel to his home-town once in each block of two years. Alternatively, he may travel in one block of two years to his home-town and in the other block to any place in India by the shortest route.”

The Court noted that Rule 44 of the State Bank of India Officers, Service Rules, 1992 specifically contemplates that the travel is permissible to any place in India, extension of benefit to travel abroad granted by the State Bank of India itself is not in consonance with the terms of Rule 44. Therefore, it is to be construed as an additional facility or concession extended to the officers, which is otherwise not in consonance with the Statutory Rules in force and therefore, cannot have any statutory force.

Placing reliance on Director General of Foreign Trade v. Kanak Exports, (2016) 2 SCC 226 wherein it was observed

“We may state, at the outset, that the incentive scheme in question, as promulgated by the Government, is in the nature of concession or incentive which is a privilege of the Central Government. It is for the Government to take the decision to grant such a privilege or not. It is also a trite law that such exemptions, concessions or incentives can be withdrawn at any time. In such circumstances, even the Doctrine of Promissory Estoppel cannot be ignored.”

The Supreme Court in Balco Employees Union v. Union of India, (2002) 2 SCC 333, held that “Laws, including executive action relating to economic activities should be viewed with greater latitude that laws touching civil rights such as freedom of speech, religion etc., that the legislature should be allowed some play in the joints because it has to deal with complex problems which do not admit of solution through any doctrine or straitjacket formula and this is particularly true in case of legislation dealing with economic matters, where having regard to the nature of the problems greater latitude require to be allowed to the legislature. The question, however, is as to whether it can be done retrospectively, thereby taking away some right that had accrued in favour of another person?”

The Court noted that when the Government of India specifically passed a memorandum that the Leave Travel Concessions to the officers of the Public Sector Undertakings and others to be restricted on par with the Government of India scheme, then there is a context and meaning with reference to certain foreign affairs and therefore, there is no infirmity in respect of the order impugned passed by the respondents in canceling the concession extended to travel abroad under Leave Travel Concession facility. Rule 44 of the State Bank of India Officers’ Service Rules, 1992, regarding Leave Travel Concession and Leave Encashment are comprehensive and provides the procedures, definitions etc., the said Rule alone would have the statutory enforceability.

On the contention of the petitioner with respect to opportunity of hearing not being provided before the decision was taken, the Court observed that when the concession to travel abroad has been permitted without entering into bipartite agreement or through a statute, question of granting an opportunity to the officers does not arise. Such an additional facility to travel abroad is a policy decision taken by the respondent / Management and such a policy has been withdrawn, taking note of the memorandum issued by the Government of India, Ministry of Finance and based on the decision taken by the Indian Bank Association. Thus, the decision taken without providing an opportunity to the petitioners would not constitute violation of principles of natural justice nor their service rights are infringed.

The Court further noted that the concession and the facility extended to get reimbursement of the foreign travel expenses, was given by way of an additional facility through a letter and such letter was cancelled and the facility was withdrawn pursuant to the orders of the Government of India, Ministry of Finance and the Circular issued by the Indian Bank Association. The policy of the Government of India, Ministry of Finance is to be followed in the interest of public by all the Public Sector Banks, which was adopted by the Indian Bank Association.

The Court opined that the petitioners could not establish that the additional facility to travel abroad under the Leave Travel Concession is a service right or condition of service. Thus, the withdrawal would not infringe the rights of the employees nor caused any prejudice and thus, held “this Court do not find any perversity in respect of the decision taken for withdrawal of the additional concession granted to the officers of State Bank of India to travel abroad under Leave Travel Concession scheme. However, it is made clear that the officers are entitled to the Leave Travel Concession and Leave Encashment as contemplated under Rule 44 of the State Bank of India Officers Service Rules, 1992.”

[All India State Bank Officers Federation v. State Bank of India, 2022 SCC OnLine Mad 3372, decided on 24-06-2022]


Advocates who appeared in this case :

R. Vaigai, Senior Advocate, for the Petitioners;

Om Prakash, Senior Advocate, for R1 and R2;

Mr. S. Rajesh, Advocate, for R4;

No appearance, for R3.


*Arunima Bose, Editorial Assistant has reported this brief.

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