Recovery of disputed LTC fare requires prior show-cause notice and opportunity of hearing.

The applicant, a Senior Technician-I at CSIR–Indian Institute of Chemical Biology, applied for Leave Travel Concession (LTC) for herself and her family to travel from Kolkata to Pelling, Sikkim, via Bagdogra, during 16–21 March 2016.

The LTC was sanctioned by the respondents, following which she purchased economy-class tickets from IndiGo Airlines for the Kolkata–Bagdogra and Bagdogra–Kolkata journeys and claimed reimbursement of ₹31,890.

She completed the journey and submitted the relevant tickets and boarding passes.

Upon subsequent audit scrutiny, the respondents treated the air fare as inadmissible on the ground that, under the instructions applicable in March 2016, the applicant, being a Government servant not ordinarily entitled to travel by air, was required to travel in accordance with the then-prevailing conditions, including travel by Air India.

The respondents consequently issued a memorandum dated 18 May 2020 directing recovery of ₹31,890.

The applicant challenged the recovery memorandum, relying principally on the DoP&T Office Memorandum dated 20 September 2018, which permitted eligible Government servants to travel by economy-class air services of any airline on specified North-Eastern Region sectors, subject to the LTC-80 fare ceiling.

She also contended that the recovery order had been issued without notice or an opportunity of hearing.

The Tribunal heard the matter and considered the parties’ rival submissions regarding the applicability of the 2014 instructions and the alleged retrospective application of the 2018 Office Memorandum.

1. Whether the respondents could order recovery of the applicant’s LTC air fare without first issuing a show-cause notice and providing an opportunity of hearing?

2. Whether the applicant’s travel by IndiGo Airlines in March 2016 was permissible under the LTC instructions applicable at the time, or under the DoP&T Office Memorandum dated 20 September 2018?

3. Whether the recovery of ₹31,890 was legally sustainable in the absence of a reasoned determination by the competent authority after considering the applicant’s explanation?

The Tribunal exercised jurisdiction under Section 19 of the Administrative Tribunals Act, 1985.

The matter was governed by the LTC instructions and Government memoranda applicable to the journey undertaken in March 2016, including the DoP&T Office Memorandum dated 26 September 2014 and the Ministry of Finance Office Memorandum dated 16 September 2010, as relied upon by the respondents.

The DoP&T Office Memorandum dated 20 September 2018, effective from 26 September 2018, permitted certain Government servants not ordinarily entitled to air travel to travel by economy class by any airline on specified NER sectors, subject to the LTC-80 fare ceiling; the Tribunal noted the respondents’ contention that this instruction was prospective and did not govern a journey undertaken in 2016.

Independently of the ultimate entitlement to reimbursement, the principles of audi alteram partem and procedural fairness required that the applicant be given notice and an opportunity to respond before an adverse recovery order was made.

The competent authority was also required to pass a reasoned and speaking order under the rules applicable to the claim.

The Tribunal did not finally determine whether the applicant’s IndiGo fare was admissible under the LTC regime applicable in March 2016 or whether the 2018 Office Memorandum could assist her retrospectively.

It observed, however, that the respondents had ordered recovery without issuing a show-cause notice or granting the applicant an opportunity to explain her position, despite the dispute concerning the applicable instructions, the nature of the airline used, and the alleged fare ceiling.

Since the applicant had relied on the 2018 Office Memorandum, the tickets, boarding passes, and the assertion that IndiGo offered the cheapest fare, these matters required consideration by the competent authority.

The recovery memorandum therefore could not stand as a final determination without compliance with natural justice and a reasoned examination of the applicable LTC rules.

It remanded the matter to the competent authority to issue a show-cause notice within four weeks of receiving the order and to provide the applicant an opportunity to submit a detailed reply.

Thereafter, the authority was directed to pass a reasoned and speaking order under the rules applicable to the claim, including the rules in force at the relevant time.

Recovery of the disputed amount was stayed until completion of this process.

The Original Application was accordingly disposed of without costs.