Madras HC on Foreign Travel in Bank LTC: Administrative Perk, Not Enforceable Right

Background and Context

The Madras High Court, in All India State Bank Officers Federation Vs State Bank of India, examined whether officers of public sector banks have an enforceable right to undertake foreign travel under Leave Travel Concession (LTC) and Home Travel Concession (HTC), or whether such foreign travel is merely an administrative concession that can be withdrawn unilaterally.

The challenge before the Court was to:

  • The Indian Banks’ Association (IBA) Circular dated 07.04.2014, and
  • The State Bank of India (SBI) e-Circular dated 15.04.2014,

both of which withdrew the facility that had allowed officers to visit foreign destinations while availing LTC/HTC, with reimbursement restricted to the eligible Indian segment of travel.

Petitioners also sought a direction to continue the foreign travel facility as it existed prior to 07.04.2014.

Parties and Their Positions

Petitioners

The writ petition was filed by:

  • All India State Bank Officers Federation (first petitioner – a registered union representing a large majority of SBI officers),
  • All India Bank Officers’ Confederation (second petitioner – also a registered union), and
  • Mr. K. Bhavanisankar (third petitioner – an individual officer).

Their core assertions were:

  1. Long‑standing practice since 1982

    • They pointed to an IBA Circular dated 18.09.1982 and subsequent circulars under which officers were allowed to travel abroad while availing LTC, subject to reimbursement being capped at the amount admissible for travel within India.
    • This facility, according to them, had been consistently implemented by public sector banks, SBI, and scheduled commercial banks.

  2. No extra financial burden on banks

    • Reimbursement remained limited to the eligible fare for travel to the home town or other permitted Indian destination.
    • The foreign leg of the journey was effectively funded by the officer, with the bank only reimbursing what would be payable for travel in India.

  3. Service condition and welfare benefit

    • The petitioners claimed that foreign travel under LTC/HTC had become a settled welfare measure and service condition of officers.
    • Once such a facility becomes embedded in service conditions, it cannot, in their view, be withdrawn without negotiation or consent.

  4. Violation of principles of natural justice

    • The withdrawal in 2014 was criticised as unilateral, without prior notice, dialogue, or consultation with officers’ bodies.
    • This, they argued, amounted to arbitrary action that infringed the principles of natural justice, since an existing advantage was taken away without giving officers an opportunity to be heard.

  5. Reliance on HR Handbook and past circulars

    • Petitioners highlighted provisions in SBI’s HR Handbook, particularly Chapter 17 (paragraphs 17.4 and 17.18), which mentioned permission to visit foreign countries as part of LTC.
    • They also relied on a bipartite settlement/joint note dated 27.04.2010 and subsequent clarificatory circulars from IBA and SBI to argue that the facility was rooted in negotiations.

State Bank of India and IBA

SBI and IBA opposed the writ petition, stressing the following:

  1. Rule 44 of SBI Officers’ Service Rules is decisive

    • Rule 44 of the State Bank of India Officers’ Service Rules, 1992, framed under Section 43(1) of the State Bank of India Act, 1955, governs LTC and Leave Encashment for officers.
    • Rule 44(1) clearly restricts LTC to travel to:
      • Home town, and
      • “any place in India by the shortest route.”
    • There is no reference whatsoever to travel outside India in the statutory Rule.

  2. Foreign travel permitted only through administrative circulars

    • The facility to visit foreign destinations while availing LTC stemmed solely from non‑statutory circulars, including:
      • SBI circular dated 20.08.1981,
      • IBA circular dated 18.09.1982,
      • Subsequent circulars dated 29.11.2006, 04.04.2007, 08.10.2008, and 12.07.2012.
    • These circulars merely allowed officers to:
      • Travel abroad en route, while
      • Receive reimbursement only up to the admissible fare for travel to their Indian home town/designated place.

  3. No enforceable right – only a concession

    • As foreign travel was not provided for in Rule 44, the facility was characterised as an additional concession and not part of the statutory service conditions.
    • A concession introduced by executive instructions can be modified or withdrawn at any time, particularly on policy grounds.

  4. No bipartite agreement on foreign travel

    • SBI categorically denied the existence of any bipartite settlement formally incorporating foreign travel into service conditions.
    • Negotiations with officers’ associations, unlike settlements with “workmen” under the Industrial Disputes Act, 1947, did not create a statutory settlement.
    • The Joint Note dated 27.04.2010 did not contain any clause guaranteeing the facility of visiting foreign centres while availing LTC.