All India State Bank Officers Federation Vs State Bank of India (Madras High Court)
Summary: The Madras High Court considered a writ petition by the All India State Bank Officers Federation, the All India Bank Officers’ Confederation and K. Bhavanisankar challenging the Indian Banks’ Association circular dated 7 April 2014 and the State Bank of India circular dated 15 April 2014. These circulars withdrew the earlier facility permitting officers to include overseas destinations in Leave Travel Concession (LTC) or Home Travel Concession (HTC). The petitioners submitted that the facility had been extended since the early 1980s, was subject to the financial ceiling applicable to travel within India, and had been continued through successive instructions. They argued that unilateral withdrawal without negotiations or an opportunity of hearing was arbitrary and infringed an established employment benefit.
SBI disputed that overseas LTC was a statutory service condition or a right secured by a bipartite agreement. It relied on Rule 44 of the State Bank of India Officers’ Service Rules, 1992, which provides LTC for travel to a hometown or another place in India by the shortest route. According to SBI, the foreign-travel arrangement was an additional facility under administrative circulars, rather than an amendment to Rule 44. The Indian Banks’ Association had recommended uniform restrictions following discussions concerning the misuse of LTC facilities, and the Department of Financial Services subsequently advised public-sector banks against permitting foreign destinations, including travel through such destinations, under LTC schemes.
The Court examined the distinction between a statutory service entitlement and a non-statutory administrative concession. It found that Rule 44 did not recognise overseas travel as an LTC entitlement, that the administrative letters did not acquire statutory force, and that no binding bipartite settlement establishing the claimed foreign-travel right had been demonstrated. The Court distinguished the authorities cited on deprivation of existing rights and natural justice, reasoning that withdrawal of this additional facility did not alter the officers’ statutory service conditions. It also addressed the Income Tax Department’s submissions, observing that section 10(5) of the Income Tax Act provides exemption for eligible travel concession relating to travel within India, not overseas travel.
Consequently, the Court upheld the policy-based withdrawal of the overseas LTC facility, found no perversity or legal infirmity in SBI’s decision, and dismissed the writ petition without costs, closing the connected miscellaneous petitions. The decision concerns the legality of withdrawing the additional foreign-travel concession and the statutory limits of LTC exemption; it does not abolish the domestic LTC entitlement available under Rule 44. The Court also declined to treat the long-standing administrative practice as creating an irrevocable service right. Its reasoning distinguishes a benefit expressly protected by service rules from a discretionary concession that the employer may withdraw in accordance with the applicable policy.
Cases Discussed
- All India Bank Officers Confederation v. Union of India — (1989) 4 SCC 90
- H.L. Trehan v. Union of India — (1989) 1 SCC 76
- Prakash Ratan Sinha v. State of Bihar — (2009) 14 SCC 690
- Mahabir Auto Stores v. Indian Oil Corporation — (1990) 3 SCC 752
- State Bank of India v. Assistant Commissioner of Income Tax (TDS) — [2022] 138 taxmann.com 102 (Karnataka)
- Director General of Foreign Trade v. Kanak Exports — (2016) 2 SCC 226
- Balco Employees Union v. Union of India — (2000) 2 SCC 333
- State of U.P. v. Sudhir Kumar Singh — cited in the judgment
