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IN THE HIGH COURT OF JUDICATURE AT MADRAS
S.M. SUBRAMANIAM, J.
All India State Bank Officers Federation (Regn No.727/MDS) Represented by its Vice President, Chennai & Others - Appellant
Versus
State Bank of India, Represented by its Chairman, Corporate Centre, Mumbai & Others - Respondent
W.P.No. 11991 of 2014 & M.P.No. 2 of 2014 & M.P.No.1 of 2015 & W.M.P.No. 8869 of 2018
Decided On : 24-06-2022
LEAVE TRAVEL CONCESSION - SERVICE RULES - ACT SECTION REFERRED - PUBLIC SECTOR BANKS - LTC SCHEME - FOREIGN TRAVEL - SERVICE CONDITIONS - NATURAL JUSTICE - PRINCIPLES OF NATURAL JUSTICE - GOVERNMENT POLICY - PUBLIC INTEREST - PREJUDICE - SERVICE RIGHTS - STATUTORY RULES - ADMINISTRATIVE INSTRUCTIONS - CONCESSIONS - FACILITIES - INDIAN BANK ASSOCIATION - STATE BANK OF INDIA OFFICERS SERVICE RULES, 1992 - RULE 44 - INCOME TAX ACT, 1961 - SECTION 10(5) - GOVERNMENT OF INDIA MEMORANDUM - DEPARTMENT OF FINANCIAL SERVICES - CIRCULAR - TRAVEL CONCESSION - LEAVE ENCASHMENT - LEAVE FARE CONCESSION - REIMBURSEMENT - SHORTEST ROUTE - DOMICILE - ADDITIONAL FACILITY - POLICY DECISION - WITHDRAWAL OF CONCESSION - VIOLATION OF SERVICE RIGHTS - INFRINGEMENT OF SERVICE CONDITIONS - BIPARTITE AGREEMENT - SETTLEMENT - STATUTORY ENFORCEABILITY - PRINCIPLES OF NATURAL JUSTICE - PREJUDICE - ADMITTED FACTS - PUBLIC SECTOR BANKS - EXTERNAL AFFAIRS - PUBLIC INTEREST - EXECUTIVE ACTIONS - FOREIGN AFFAIRS - GOVERNMENT OF INDIA POLICY - INDIAN BANK ASSOCIATION - SERVICE RIGHTS - PERVERSE DECISION - WRIT PETITION - DISMISSAL.
Fact of the Case:
The petitioners, All India State Bank Officers Federation and All India Bank Officers' Confederation, challenged the validity of the circular dated 07.04.2014 issued by the third respondent read with the e-circular dated 15.4.2014 issued by the first respondent. They sought a direction to continue the LTC/HTC to cover foreign travel as provided to the officers of the respondent-Bank and members of the third respondent prior to 07.04.2014. The respondents contended that the benefit of visiting foreign countries, foreign centers enroute, while availing LTC facility for destinations in India had been extended pursuant to the bilateral discussions with the Petitioners is not correct and it cannot be contended by the Petitioners that the same has been unilaterally withdrawn. The 4th respondent, Commissioner of Income Tax, filed an affidavit, stating that originally an interim stay of operation of the impugned Circulars issued by the respondents was granted by this Court by order dated 25.04.2014 on the undertaking given by the petitioners that later if the writ petition is dismissed, the amount paid towards LTC to cover foreign/overseas travel will be refunded by the individual officers concerned. However, thereafter, on 16.02.2015, this Hon'ble Court explained the interim order granted by this Court to the effect that any amount paid to the petitioner towards LTC or reimbursement of LTC pursuant to the impugned order would not amount to income, so as to enable the Bank to deduct tax at source. If the writ petition is dismissed, the employees are liable to pay tax on the amount paid by the Bank.
Finding of the Court:
The Court held that the circular, granting additional facility to the Officers of the State Bank of India to travel abroad has no Statutory force. The cancellation of benefit of Leave Travel Concession to travel abroad did not result in infringement of service rights or in violation of service conditions of the officers of the State Bank of India. In the absence of any bipartite agreement or an express agreement between the parties, mere discussion resulted in extension of benefit to travel abroad under Leave Travel Concession scheme cannot be construed as a service condition. Withdrawal of such additional facility to travel abroad, which is not contemplated under Rule 44 of the Officers Service Rules, without providing an opportunity will not cause any prejudice or in violation of the principles of natural justice.
Issues: 1. Whether the Circular, granting additional facility to the Officers of the State Bank of India to travel abroad has got any Statutory force or not? 2. Whether the cancellation of benefit of Leave Travel Concession to travel abroad resulted in infringement of service rights or in violation of service conditions of the officers of the State Bank of India or not? 3. Whether in the absence of any bipartite agreement or an express agreement between the parties, mere discussion resulted in extension of benefit to travel abroad under Leave Travel Concession scheme can be construed as a service condition or not? 4. Whether withdrawal of such additional facility to travel abroad, which is not contemplated under Rule 44 of the Officers Service Rules, without providing an opportunity will cause any prejudice or in violation of the principles of natural justice or not?
Ratio Decidendi: 1. The Leave Travel Concession to the Officers of the State Bank of India is confined only to “any place in India by the shortest route”. When the Rule contemplates that the Leave Travel Concession 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. 2. There was no bipartite agreement or settlement between the parties. The officers of the Bank are permitted to avail reimbursement facility by way of simple instructions. The ambiguity involved in such instructions normally result in untruthful claims by the officers, though not bogus claims. 3. Concessions or facilities extended by way of Administrative Instructions beyond the scope of the rules cannot be construed as an absolute right to the employees. Rule 44 of the State Bank of India Officers Service Rules, 1992, contemplates Leave Travel Concession and Leave Encashment only to “any place in India by the shortest route”. Admittedly, the Rule was not amended. By way of an Administrative Instruction, the Leave Travel Concession was extended beyond the domicile of India to travel abroad. Thus, such an Administrative Instruction cannot have statutory force and it is an additional facility extended without any statutory backup. 4. The Government of India, Ministry of Finance based on the letter addressed to Cabinet Secretary by the Chief Vigilance Commissioner had taken a decision and issued a circular dated 30.04.2014. The said letter reads as under: F.No.14/04/2013-VIG Government of India Ministry of Finance Department of Financial Services .......... dated April 30th, 2014 To; CMDs of PSBs/FIs/PSCIs Chairman of IRDA/PFRDA/NABARD Governor, RBI Chief Vigilance Officer of PSBs / Fis / PSCIs / IRDA / RBI / PFRDA / NABARD Subject: Rules and Guidelines for Leave Travel Concession/Leave Travel Allowance. 1. Chief Vigilance Commissioner in his letter dated 08.10.2013 addressed to Cabinet Secretary, with a copy endorsed to Secretary, DFS has raised concern relating to irregularities observed in the leave travel concession/leave travel allowance (LTC/LTA) schemes prevalent in various public sector organisations including PSBs and suggested a review of the rules and guidelines for LTC/LTA in various organisations in the public sector and instruct the said organisations to take strict departmental action against the erring officials in specific cases of violation. 2. Pursuant to the above direction of CVC, the matter was examined in this Department and it was decided that PSBs/PSICs/FIs/NABARD/RBI/IRDA/PFRDA may be advised to formulate LTC/LTA schemes based on the principles of the GOI Scheme. 3. The LTC/LIA scheme in particular should cover following: a) travel to foreign destinations, including travel via foreign destinations while availing LTC facility may not be allowed. b) reimbursement of fare should be based on actual expenditure which in turn should not be beyond the entitled class of travel: c) In case the officer travels in a class lower than his entitled class then his entitlement would be limited to the class of travel. If part of the journey is through a lower class then the entitlement would be proportionately reduced. 4. The conditions in para 3 above may be implemented with immediate effect. 5. The LTC/LTA scheme duly revised on above lines may be issued with prior approval of the respective Boards in a time bound manner. (Mritunjay Singh) Under Secretary to the Govt. of India. 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 cancelling the concession extended to travel abroad under Leave Travel Concession facility.
Final Decision: The writ petition was dismissed.
JUDGMENT
(Prayer: Writ Petition filed Under Article 226 of the Constitution of India, to issue a writ of Certiorarified Mandamus, to quash the impugned Circular Letter No.CIR/HR & IR/F/ 2014-15/9195 dated 07.4.2014 issued by the 3rd respondent read with the e-Circular bearing No.CDO/ P&HRD-PM/ 7/ 2014-15 dated 15.4.2014 issued by the 1st respondent and singed by the 2nd respondent herein, after calling for the concerned records from the respondents and consequently direct the respondents to continue the LTC/HTC to cover foreign travel as provided to the officers of the respondent bank and members of the 3rd respondent prior to 07.4.2014.)
The writ on hand has been instituted, questioning the validity of the Circular dated 07.04.2014 issued by the third respondent read with the e-Circular dated 15.4.2014 issued by the 1st respondent. Further, a direction is sought for to continue the LTC/HTC to cover foreign travel as provided to the officers of the respondent-Bank and members of the 3rd respondent prior to 07.4.2014.
2. The first writ petitioner is All India State Bank Officers Federation. The second writ petitioner is All India Bank Officers' Confederation and the third petitioner is Mr.K.Bhavanisankar.
3. The first writ petitioner is a registered Trade Union and represents more than 90% of the officers employed in the offices of the State Bank of India all over India. The second writ petitioner is also a registered Trade Union.
4. The writ petitioners state that as early as on 18.09.1982, the Indian Bank's Association issued a Circular pursuant to such bilateral discussions with the petitioners, permitting L.T.C facility to cover foreign travel also within the eligibility to travel within the Country. This was continued and reiterated in the 3rd respondent's Circular dated 08.10.2008. 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.
5. The petitioners state that the Leave Travel Concession to the officers' Bank is governed by Rule-44(1) of the State Bank of India Officers Service Rules, 1992 contained in Chapter 17, Rule 17.4 and 17.18, permitting visit to a foreign country by the officer as part of the LTC facility. On 04.4.2007, the Bank issued detailed instructions regarding LT.C to foreign countries. Further, clarifications were issued by the Bank's circular dated 29.10.2013. Officers were advised to provide valid bills and tickets in order to avail the facility and to prevent mis-utilization. The petitioners' members working in the respondent Bank are thus availing the foreign travel facility along with their families to visit other countries, which falls within the four year block period. The officers make their own arrangement for booking the tickets, after prior sanction of the bank, which grants in advance. Thereafter, the officers undertakes the journey with their family and comes back and submit the tickets, bills and expenses for having made the payment, which is reimbursed by the bank.
6. On 27.04.2010, the 3rd respondent, consisting of representatives of all Banks and the 2nd petitioner herein signed a bipartite settlement, with effect from 1.11.2007, on various conditions of service. Existing terms were revised. The fare eligible under L.T.C was agreed upon. Other terms were continued. The officers continued to get the facility of foreign travel being covered by L.T.C On 12.07.2012, the 3rd respondent issued another letter, clarifying the fares, the officers are entitled to. The letter was marked to the petitioners, who are parties to the Bipartite settlement.
7. The petitioners state that on 07.04.2014, the Indian Bank's Association unilaterally took a decision to withdraw the L.T.C covering overseas travel. The decision was not preceded by any notice or discussion with the petitioners, th
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