Virinder Pal Singh vs Punjab And Sind Bank - Civil Appeal

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• Know your Kanoon - Doc Gen Hub - Counter Argument - Case Predict AI - Talk with IK Doc -... Upgrade to Premium [Cites 17, Cited by 0 ] ### Supreme Court of India

Virinder Pal Singh vs Punjab And Sind Bank on 19 March, 2026

Author: Pamidighantam Sri Narasimha

Bench: Pamidighantam Sri Narasimha

REPORTABLE
2026 INSC 266
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

                                     CIVIL APPEAL NO. 3571 OF 2026
                                      (Arising out of SLP (C) No. 10742/2026)
                                        (Arising out of Diary No. 603/2024)

                             VIRINDER PAL SINGH                        …APPELLANT

                                                    VERSUS

                             PUNJAB AND SIND
                             BANK & ORS.                         …RESPONDENT(S)

                                               JUDGMENT MANOJ MISRA, J.

1. Leave granted.

2. This appeal impugns judgment and order of the

                             High Court of Punjab and Haryana at Chandigarh1
   
                             dated 23.02.2023 in LPA No. 370 of 2018 which
   
                             arose out of CWP No. 12865 of 2014.
   

FACTS

1. In brief, facts relevant for deciding this appeal are

                             as follows:
   

Signature Not Verified Digitally signed by CHETAN ARORA Date: 2026.03.19 16:41:30 IST Reason: 1

High Court SLP (C) D. No. 603/2024 Page 1 of 34

(i) The appellant while in service of Punjab

& Sind Bank2 i.e., the first respondent

was served a charge sheet on

30.09.2011, inter alia, on allegation of

irregularities in disbursement of loans.
(ii) On 30.09.2011 itself, the appellant

                        superannuated from service. However,

                        the disciplinary proceedings continued

                        and one of the charges, namely, Charge

                        No. 2, that is the appellant had failed to

                        ensure the end use of the loan, was found

                        partly proved. Consequently, vide order

                        dated    15.06.2013,       punishment         of

                        reduction by three stages in the time

                        scale of pay, on permanent basis, was

                        imposed upon the appellant.

(iii) Aggrieved therewith, the appellant

                        preferred an appeal before the Appellate

                        Authority which was dismissed by order

                        dated    19.04.2014.       Thereafter,       the 2 Bank SLP (C) D. No. 603/2024                                              Page 2 of 34 appellant preferred a writ petition i.e.,

                              CWP No. 12865/2014 before the High

                              Court, which was heard by a Single

                              Judge Bench of the High Court.

(iv) Before the learned Single Judge, the

                              appellant, inter alia, urged that the

                              penalty imposed upon him was not

                              permissible as he had superannuated.

                              Post retirement, penalties specified in the

                              Punjab   and     Sind   Bank    Employees’

                              Pension Regulations, 19953 alone could

                              be imposed.

(v) The aforesaid argument was accepted by

                              the    learned     Single      Judge.       In consequence, the punishment order was

                              set aside while reserving the right of the

                              Bank to issue a fresh show cause notice

                              for action under the Pension Regulations. 3 Pension Regulations.

SLP (C) D. No. 603/2024 Page 3 of 34

(vi) Aggrieved therewith, the Bank preferred

                              an intra court appeal before the Division

                              Bench of the High Court.

(vii) The Division Bench by relying upon a

                              three-Judge Bench decision of this Court

                              in Chairman-Cum-Managing Director,

                              Mahanadi      Coalfields    Limited      v.

Rabindranath Choubey4 and

                              Regulation 20(3)(iii) of the Punjab and

                              Sind Bank Officers’ Service Regulations,

                              19825 held that the extant Service

                              Regulations permitted continuance of

                              disciplinary proceedings post attainment

                              of the age of superannuation, therefore

                              the   disciplinary   proceedings    could

                              continue and brought to its logical

                              conclusion as per those Regulations. As

                              a result, the order of the learned Single

                              Judge was set aside, and the writ petition

                              of the appellant was dismissed.

4 (2020) 18 SCC 71 5 Service Regulations.

SLP (C) D. No. 603/2024 Page 4 of 34

(viii) Aggrieved by the order of the Division

                      Bench, the appellant is before us.

SLP (C) D. No. 603/2024 Page 5 of 34 SUBMISSIONS ON BEHALF OF THE APPELLANT

1.    On behalf of the appellant, it was submitted that
   
             once the appellant had attained the age of
   
             superannuation, the master-servant relationship
   
             between the Bank and the appellant ceased to exist,
   
             therefore, the punishment of reduction of pay could
   
             not have been imposed. Though the Bank could
   
             have either reduced the pension, otherwise payable,
   
             or recover the loss, if any, caused to the Bank,
   
             under the Pension Regulations.
   

2.    Reliance was placed on a decision of this Court in [Ramesh Chandra Sharma v. Punjab National
   
             Bank](https://indiankanoon.org/doc/1461990/) and another6        to contend that for the
   
             purposes of proceeding with disciplinary action
   
             post-retirement, punishment of dismissal from
   
             service stands on a different footing than reduction
   
             of pay, as by dismissal the liability to pay pension
   
             also ceases. Reliance was also placed on UCO Bank
   
             and others vs. Prabhakar Sadashiv Karvade7 to 6 (2007) 9 SCC 15 7 (2018) 14 SCC 98 SLP (C) D. No. 603/2024                                         Page 6 of 34 contend that Service Regulations apply to serving
   
             employees only.
   

3.    It was next contended that the appellant had taken
   
             multiple other grounds (i.e., (a) the concerned
   
             charge was not proved; (b) the concerned charge
   
             was not relatable to any specified misconduct; and
   

(c) the punishment as well as the appellate order

              was a non-speaking one), which the High Court

              failed to address. To buttress the submission that

              disciplinary /Appellate Authority’s order must carry

              reasons, reliance was placed on decisions of this

              Court in [A.L. Kalra v. Project and Equipment

              Corporation of India Limited8](https://indiankanoon.org/doc/1606318/) and [Allahabad

              Bank and others v. Krishna Narayan Tewari9](https://indiankanoon.org/doc/129571523/).

1.    It was also contended that even if the merits of the
   
             finding(s)   returned   by   the   Inquiry   Officer,
   
             Disciplinary Authority and Appellate Authority was
   
             not specifically questioned before the High Court, it
   
             being a pure question of law can be raised at any
   
             stage. In this regard, reliance was placed on 8 (1984) 3 SCC 316 9 (2017) 2 SCC 308 SLP (C) D. No. 603/2024                                          Page 7 of 34 decisions        of    this     Court     in   Securities      and
   
             Exchange Board of India through its [Chairman
   
             v. Roofit Industries Limited10](https://indiankanoon.org/doc/25029651/) and [Chittoori
   
             Subbanna v. Kudappa Subbanna](https://indiankanoon.org/doc/1752222/) and others11.
   
             SUBMISSIONS ON BEHALF OF THE BANK
   

2.   Per contra, the learned counsel for the Bank
   
             submitted that the general principle that there
   
             could be no disciplinary action post termination of
   
             master-servant              relationship,       consequent        to
   
             attaining the age of superannuation, has an
   
             exception, which is, that if the extant Service
   
             Rules/Regulations                permit        continuance        of
   
             disciplinary proceedings post attainment of the age
   
             of superannuation, the proceedings can continue
   
             and brought to its logical conclusion. Regulation
   
             20(3)(iii)     of     the      Service    Regulations   permits
   
             continuance of disciplinary proceedings against the
   
             charged-officer even post-superannuation, if those
   
             were initiated prior to incumbent’s superannuation, 10 (2016) 12 SCC 125 11 AIR 1965 SC 1325 : 1964 SCC OnLine SC 322 SLP (C) D. No. 603/2024                                                        Page 8 of 34 as is the case here.      It was contended that in [Ramesh Chandra Sharma](https://indiankanoon.org/doc/1461990/) (supra), this Court
   
           held that in view of the provisions of Regulation
   
           20(3)(iii) it is permissible to continue with the
   
           disciplinary proceedings post-retirement. Same
   
           view has been taken by a three-Judge Bench of this
   
           Court in [Canara Bank v. D.R.P. Sundharam12](https://indiankanoon.org/doc/96246621/).
   
           On the other hand, Pension Regulations become
   
           applicable when proceedings are initiated under the
   
           Pension Regulations.
   

3.    It was next contended that the decision in
   
           Prabhakar Sadashiv Karvade (supra) relied by
   
           the appellant is distinguishable on facts inasmuch
   
           as in that case the charged-officer had retired before
   
           service of charge-sheet. In that context, it was held
   
           that extant Regulations would apply to only serving
   
           employees.
   

4.   On merits of the charge and the orders passed by
   
           the     Disciplinary/Appellate   Authority,   it     was
   
           submitted that the Inquiry Officer in his report
   

5. (2016) 12 SCC 724 SLP (C) D. No. 603/2024 Page 9 of 34 dated 20.12.2012 found Charge No. 2 partly proved

        because the borrower had made cash withdrawals
   
        of several lacs of rupees without supporting bills. In
   
        that context, the Inquiry Officer concluded that the
   
        charged officer had failed to ensure end-use of the
   
        loan amount. The said conclusion is logical and
   
        cannot be held perverse. More so, when the loan
   
        account had turned Non-Performing Asset (for
   
        short, NPA). It was submitted that diversion of loan
   
        is best prevented by ensuring that it is used for the
   
        purpose intended. Withdrawal by cash, without
   
        supporting bills, is a clear indication of misuse of
   
        loan amount. Moreover, the appellant had never
   
        questioned the finding qua cash withdrawals
   
        without supporting bills.
   

6. Besides, the punishment imposed on the appellant
   
        had resulted in reduction of pension by a meagre
   
        sum of Rs. 302 per month. Thus, the punishment
   
        is not shockingly disproportionate to the gravity of
   
        the proven misconduct. Further, as to what
   
        punishment is to be imposed, the discretion vests SLP (C) D. No. 603/2024                                      Page 10 of 34 with the disciplinary authority. In this regard
   
             decision of this Court in [Union of India And
   
             Others v. Ram Karan13](https://indiankanoon.org/doc/140986884/) was relied upon. Based on
   
             the aforesaid submissions, it was prayed on behalf
   
             of the Bank that the appeal be dismissed.
   
             ANALYSIS
   

7.  We have heard the learned counsel for the parties
   
             and have perused the materials on record.
   

8.  On consideration of the rival submissions, in our
   
             view, following issues arise for our determination:
   

(i) Whether post-retirement of the

                           appellant, punishment of reduction of

                           three stages in the scale of pay, as

                           imposed    by   the   respondent,      was

                           permissible under the extant Service

                           Regulations, or action under the Pension

                           Regulations was the only way forward?

(ii) Whether there is any perversity/infirmity

                           in the enquiry report and the order(s)

                           passed by the Disciplinary/Appellate 13 (2022) 1 SCC 373 SLP (C) D. No. 603/2024                                             Page 11 of 34 Authority? If yes, whether it could be

                                raised as a ground when it was not

                                pressed before the High Court?

1.   Before proceeding to address Issue No. (i), we would
   
              address Issue No. (ii) as it turns on facts. Issue No.
   

(ii) relates to the merits of the Inquiry Report and

               the order(s) of the Disciplinary/Appellate Authority.

               It also relates to the consequence of High Court not

               addressing the same. In this regard, it be noted that

               the charge which stood proved was in respect of

               appellant’s failure to ensure end use of the loan

               disbursed by the Bank. The Inquiry Officer held the

               charge as partly proved because Bills in respect of

               cash payments of up to Rs. 27.25 lacs were not on

               record, and it was reported that the account had

               turned NPA.

1.   The enquiry report14 takes note of the evidence
   
              produced and the submissions made by both sides. After analyzing the same, it holds Charge No. 2 partly proved. The enquiry report is in respect of two 14 Which is contained in Annexure P-6 SLP (C) D. No. 603/2024                                              Page 12 of 34 charges. Charge No. 1 is held not proved whereas
   
        Charge No. 2 is held partly proved because there
   
        existed no Bills on record to demonstrate as to how
   
        the cash was spent. Based on that, the Inquiry
   
        Officer concluded that there was failure on part of
   
        the appellant to ensure end-use of the loan amount.
   

2. The appellant was given opportunity to submit his
   
        comments on the Inquiry Report. In his comments
   
        to the Inquiry Report, the appellant did not claim
   
        that he was not given due opportunity of hearing or
   
        that a faulty procedure was adopted by the Inquiry
   
        Officer.     In fact, he did not even challenge the
   
        finding of the Inquiry Officer that no Bills were there
   
        on    record.      Rather   his   stand    was    that   his
   
        predecessor-in-office had also not taken Bills, but
   
        no objection was taken to his predecessor’s
   
        conduct.      In    that    backdrop,     the   disciplinary
   
        authority, while accepting the finding of the Inquiry
   
        Officer, imposed the punishment in question.
   

3. Ensuring end-use of loan disbursals serves multiple
   
        purposes. First, it ensures that loan is not diverted SLP (C) D. No. 603/2024                                            Page 13 of 34 for purposes other than the one for which it is
   
        sanctioned/ disbursed. Often loans are prioritized
   
        for   a particular        purpose.   Ensuring end use
   
        safeguards         that   purpose.   Second,     it   secures
   
        recovery. For example, if loan is for purchase of a
   
        machine to run a business, if the machine is
   
        purchased, possibility of business yielding profits is
   
        greater than where the loan is diverted for purposes
   
        other than to serve the business. Besides, it is a
   
        matter        of   common     knowledge       that    loan   is
   
        sanctioned after appraisal of the project or the
   
        business in respect of which the loan is sought.
   
        Appraisal is often to ascertain the feasibility and
   
        viability of the project / business for which the loan
   
        is sought. Failure to ensure end use would render
   
        the appraisal meaningless. In such circumstances,
   
        if end use of the loan is not ensured, the Bank
   
        would be exposed to financial risk.
   

4. In the instant case, as there was no challenge to the
   
        indictment that huge amount of cash withdrawals
   
        was          allowed      without    taking      supporting SLP (C) D. No. 603/2024                                              Page 14 of 34 bills/receipts, the charge that the appellant had
   
              failed to ensure end use of the loan stood proved. It
   
              was in this context, probably, the learned counsel
   
              for appellant while assailing the disciplinary action
   
              pressed only one ground i.e., that the extant
   
              Discipline            and         Appeal          Regulations/Service
   
              Regulations under which the punishment was
   
              imposed, applied to serving employees only. Even
   
              before the Division Bench of the High Court, it
   
              appears, no argument was raised on the merit of the
   
              finding that Charge No. 2 was partly proved.
   

5.   Besides, a bank officer holds a position of trust as
   
              he deals with public funds. Sanction of loan beyond
   
              one’s power, or not ensuring end-use of the loan,
   
              amounts to financial irregularity which exposes the
   
              Bank to financial risk. Therefore, penal action on
   
              proof of such a charge cannot be questioned merely
   
              because no loss is suffered by the Bank15.
   

6.   Moreover, where an employee of a Bank handles
   
              money of depositors /customers/investors, it is 15 [Disciplinary Authority-Cum-Regional Manager and others v. Nikunja Bihari Patnaik](https://indiankanoon.org/doc/1854374/), (1996) 9 SCC 69 SLP (C) D. No. 603/2024                                                                      Page 15 of 34 most essential for him to be cautious and not
   
           reckless in discharge of his duties because he deals
   
           with the money for and on behalf of his employer.
   
           Every such employee/officer is, therefore, required
   
           to take all possible steps to protect the interests of
   
           his employer. He must, therefore, discharge his
   
           duties with utmost sense of integrity, honesty,
   
           devotion and diligence and must ensure that he
   
           does       nothing,        which        is     unbecoming             of    an
   
           employee/officer.             Although          good      conduct          and
   
           discipline is expected from every employee/officer of
   
           an institution, but it is required more when the
   
           institution         deals      with       money         of    customers/
   
           depositors/investors. Any dereliction in discharge
   
           of duties by such an employee or officer, whether by
   
           way of negligence/casualness, or with deliberate
   
           intention, constitutes misconduct16.
   

7. In that backdrop, we find neither any perversity in

           the finding(s) returned by the Inquiry Officer nor do
   
           we deem it appropriate to permit the appellant to 16 [Mihir Kumar Hazara Choudhury v. Life Insurance Corporation and another](https://indiankanoon.org/doc/190867895/), (2017) 9 SCC 404; [Chairman and
   

   Managing Director, United Commercial Bank and others v. P.C. Kakkar](https://indiankanoon.org/doc/899744/), (2003) 4 SCC 364. SLP (C) D. No. 603/2024 Page 16 of 34 question the merit of the finding(s) that Charge No.

        2 was partly proved, particularly when no such plea
   
        was pressed before the High Court.
   

8. For the aforesaid reasons, we decline to accept
   
        appellant’s submissions that the Writ Court and the
   
        Division Bench of the High Court failed in their
   
        obligation to examine the merits of the disciplinary
   
        action.      Moreover, upon consideration of the
   
        enquiry report and the comments of the appellant
   
        to the same, we do not find any good ground to hold
   
        that Charge No. 2, as discussed above, was not
   
        partly proved, or that the punishment awarded was
   
        shockingly disproportionate to the gravity of proven
   
        misconduct. Issue No. (ii) is decided in the above
   
        terms.
   

9. Now, we shall address Issue No. (i) i.e., whether,
   
        post-retirement, the punishment as imposed upon
   
        the appellant is permissible in law.
   

10. In support of his contention on the issue, the
    
         learned counsel for the appellant had placed SLP (C) D. No. 603/2024                                    Page 17 of 34 reliance on Regulation 2 of the Service Regulations
    
         which reads as under:
    

“2. OFFICERS TO WHOM THE REGULATIONS
APPLY

1. (1) These Regulations shall apply to all officers of the Bank and to such other employees of the Bank to whom they may be made applicable by the Competent Authority to the extent and subject to such conditions as such authority may decide. (2) They shall also apply to officers transferred/ posted/deputed outside India except to such extent as may be specifically or generally prescribed by the Competent Authority.

(3) They shall, however, not apply to employees
appointed/engaged in any country outside India and
permanently serving there.”

1. On the other hand, the learned counsel for the Bank
   
        relied on Regulation 20 (3), more particularly
   
        Clause (iii) of Sub-regulation (3) of Regulation 20, of
   
        the Service Regulations. Sub-regulation (3) of
   
        Regulation 20 reads as under:
   

“20. TERMINATION OF SERVICE
(3) (i) An officer against whom disciplinary
proceedings are pending shall not leave/discontinue
or resign from his service in the bank without the
prior approval in writing of Competent Authority and
any notice or resignation given by such an officer
before or during the disciplinary proceedings shall
not take effect unless it is accepted by the Competent
Authority.

(ii) Disciplinary proceedings shall be deemed to
be pending against any employee for the purpose of
this regulation if he has been placed under
suspension or any notice has been issued to him to
show cause why disciplinary proceedings shall not be
instituted against him and will be deemed to be
pending until final orders are passed by the
Competent Authority.
SLP (C) D. No. 603/2024 Page 18 of 34
(iii) The officers against whom disciplinary
proceedings have been initiated will cease to be in
service on the date of superannuation, but the
disciplinary proceedings will continue as if he was in
service until the proceedings are concluded and final
order is passed in respect thereof. The concerned
officer will not receive any pay and/or allowance after
the date of superannuation. He will also not be
entitled for the payments of retirement benefits till
the proceedings are completed and final order is
passed thereon except his own contribution to CPF.”
26. The contention on behalf of the appellant is that the

         Service Regulations, of which Regulation 20 (3) (iii)

         is a part, would apply to all officers of the Bank.

         However, once an officer superannuates, he is no

         longer an officer of the Bank therefore, Regulation

         20 (3) (iii) cannot rescue disciplinary proceedings

         post-retirement. Thus, it is contended,                 post-

         retirement, action can be taken only under the

         Pension Regulations.

1. At this stage, it would be useful to refer to two
   
        decisions placed on behalf of the appellant, namely,
   
        “UCO Bank and Others vs. Prabhakar Sadashiv
   
        Karvade” (supra) (for short, Prabhakar Sadashiv
   
        Karvade) and “Ramesh Chandra Sharma vs.
   
        Punjab National Bank and Another” (supra) (for
   
        short, Ramesh Chander Sharma).
   

SLP (C) D. No. 603/2024 Page 19 of 34

1. In Prabhakar Sadashiv Karvade, based on a
   
        charge sheet served on 09.09.2000, the incumbent
   
        was dismissed from service on 12.10.2004 while he
   
        had retired from service on 13.12.1993. In that
   
        context, this Court considered various service
   
        Rules/       Regulations   which     were    extracted        in
   
        Paragraph 8 of the judgment. Relevant portion of
   
        which is reproduced below:
   

“8. …..

Discipline and Appeal Regulations

1. Penalties—The following are the penalties which may be imposed on an officer employee, for acts of misconduct or for any other good and sufficient reasons—

Minor penalties —

(a) censure;
(b) withholding of increments of pay with or without
cumulative effect;

(c) withholding of promotion;

(d) recovery from pay or such other amount as may
be due to him of the whole or part of any pecuniary
loss caused to the Bank by negligence or breach of
orders.

(e) reduction to a lower stage in the timescale of pay
for a period not exceeding 3 years, without
cumulative effect and not adversely affecting the
officer's pension.

Major penalties — SLP (C) D. No. 603/2024 Page 20 of 34

(f) save as provided for in (e) above, reduction to a
lower stage in the timescale of pay for a specified
period, with further directions as to whether or not
the officer will earn increments of pay during the
period of such reduction and whether on the expiry
of such period the reduction will or will not have the
effect of postponing the future increments of his pay.

(g) reduction to a lower grade or post,

(h) compulsory retirement;

(i) removal from service which shall not be a
disqualification for future employment;

(j) dismissal which shall ordinarily be a
disqualification for future employment.”

              “1979 Regulations

              20 (3) (iii) The officer against whom disciplinary
              proceedings have been initiated will cease to be in
              service on the date of superannuation but the
              disciplinary proceedings will continue as if he was in
              service until the proceedings are concluded and final
              order is passed in respect thereof. The concerned
              officer will not receive any pay and/or allowance after
              the date of superannuation. He will also not be
              entitled for the payment of retirement benefits till the
              proceedings are completed and final order is passed
              thereon except his own contributions to CPF.”

              “The Pension Regulations

1. Provisional Pension —(1) An employee who has
   retired on attaining the age of superannuation or
   otherwise and against whom any departmental or
   judicial proceedings are instituted or departmental
   proceedings are continued, a provisional pension,
   equal to the maximum pension which would have
   been admissible to him, would be allowed subject to
   adjustment against final retirement benefits
   sanctioned to him, upon conclusion of the
   proceedings but no recovery shall be made where the
   pension finally sanctioned is less than the provisional
   pension or the pension is reduced or withheld, etc.
   either permanently or for a specified period.

             (2) In such cases the gratuity shall not be paid to
             such an employee until the conclusion of the SLP (C) D. No. 603/2024                                              Page 21 of 34 proceedings against him. The gratuity shall be paid
             to him on conclusion of the proceedings subject to
             the decision of the proceedings. Any recoveries to be
             made from an employee shall be adjusted against the
             amount of gratuity payable.
   

Explanation. — in this Chapter—(a) to (e)
***

1. Recovery of pecuniary loss caused to the
   Bank—(1) The competent authority may withhold or
   withdraw a pension or a part thereof, whether
   permanently or for a specified period, and order
   recovery from pension of the whole or part of any
   pecuniary loss caused to the bank if in any
   departmental or judicial proceedings the pensioner is
   found guilty of grave misconduct or negligence or
   criminal breach of trust or forgery or acts done
   fraudulently during the period of his service;

             Provided that the Board shall be consulted before any
             final orders are passed.
   

Provided further that departmental proceedings, if
instituted while the employee was in service, shall,
after the retirement of the employee, be deemed to be
proceedings under these Regulations and shall be
continued and concluded by the authority by which
they were commenced in the same manner as if the
employee had continued in service.

Provided also that no departmental or judicial
proceedings, if not initiated while the employee was
in service, shall be instituted in respect of a cause of
action which arose or in respect of an event which
took place more than four years before such
institution.

(2) Where the competent authority orders recovery of
pecuniary loss from the pension, the recovery shall
ordinarily be made at a rate exceeding one-third of
the pension admissible on the date of retirement of
the employee.

Provided that where a part of pension is withheld or
withdrawn, the amount of pension drawn by a
pensioner shall not be less than the minimum
pension payable under these Regulations.” SLP (C) D. No. 603/2024 Page 22 of 34 After considering the aforesaid Regulations, this

         Court held as under:

“9. A reading of the plain language of Regulation 4 of
the Discipline and Appeal Regulations and
Regulation 20(3)(iii) of the 1979 Regulations makes it
clear that any of the penalties, whether major or
minor can be imposed only on a serving officer
employee of the Bank. This necessarily implies that
none of the penalties specified in Regulation 4 of the
Discipline and Appeal Regulations can be imposed on
an officer employee after his retirement from service,
though in terms of Regulation 20(3)(iii) of the 1979
Regulations, the disciplinary proceedings initiated
against an officer employee before his retirement can
be continued and final order is passed and further
that such officer employee is not entitled to retiral
benefits till the conclusion of disciplinary
proceedings and passing of final order. The only
exception to this is that the officer is entitled to
receive his own contribution to CPF. However, there
is nothing in the language of these Regulations from
which it can be inferred that the disciplinary
authority has the power to impose a substantive
punishment on retired officer employee. This
becomes more explicit from a conjoint reading of
Regulation 48 of the Pension Regulations which
empowers the competent authority to withhold or
withdraw a pension or a part thereof and order
recovery from pension of the whole or part of any
pecuniary loss caused to the bank if in a
departmental or judicial proceedings, the pensioner
is found guilty of grave misconduct or negligence or
criminal breach of trust or forgery or acts done
fraudulently during the period of his service. Second
proviso to Regulation 48 contains a fiction and lays
down that if the departmental proceedings are
instituted while the employee was in service, the
same shall be deemed to be proceedings under the
Regulations and continued and concluded as if the
employee had continued in service. The third proviso
imposes a bar on the initiation of departmental or
judicial proceedings against an employee after his
retirement in respect of an event which took place
more than 4 years before such institution. The sum
and substance of these Regulations is that even
though a departmental inquiry instituted against an
officer employee before his retirement can continue SLP (C) D. No. 603/2024 Page 23 of 34 even after his retirement, none of the substantive
penalties specified in Regulation 4 of 1979
Regulations, which include dismissal from service,
can be imposed on an officer employee after his
retirement on attaining the age of superannuation.
Therefore, we have no hesitation to hold that order
dated 12-10-2004 passed by the disciplinary
authority dismissing the respondent from service,
who had superannuated on 31-12-1993 was ex facie
illegal and without jurisdiction and the High Court
did not commit any error by setting aside the same.

1. We may also observe that master and servant
   relationship between the respondent and the
   employer i.e. Appellant 1 Bank had come to an end
   for all practical purposes on 31-12-1993 i.e. the date
   of superannuation. The departmental inquiry
   initiated against the respondent before his retirement
   could be continued for a limited purpose for
   determining whether or not he is entitled for full
   pensionary benefits and gratuity.”
   (Emphasis supplied)

2. In Ramesh Chandra Sharma (supra), the issue

was whether punishment of dismissal could be

inflicted on an employee who has already retired on

attaining the age of superannuation. In that

context, this Court considered Regulation 20(3)(iii)

of the Service Regulations (which is in same terms

as Regulation 20(3) (iii) of 1979 Regulations

extracted in the preceding paragraph) and

Regulations 22, 43 and 48 of the Pension

Regulations, which are reproduced below:

“22. (i) Resignation or dismissal or removal or
termination of an employee from the services of the SLP (C) D. No. 603/2024 Page 24 of 34 Bank shall entail forfeiture of his entire past service
and consequently shall not qualify for pensionary
benefits.

1. Withholding or withdrawal of pension.—The competent authority may, by order in writing, withhold or withdraw a pension or a part thereof, whether permanently or for a specified period, if the pensioner is convicted of a serious crime or criminal breach of trust or forgery of (sic or) acting fraudulently or is found guilty of grave misconduct. Provided that where a part of pension is withheld or withdrawn, the amount of such pension shall not be reduced below the minimum pension per mensem payable under these Regulations.

1. Recovery of pecuniary loss caused to the Bank.— (1) The competent authority may withhold or withdraw a pension or a part thereof, whether permanently or for a specified period and order recovery from pension of the whole or part of any pecuniary loss caused to the Bank if in any departmental or judicial proceedings the pensioner is found guilty of grave misconduct or negligence or criminal breach of trust or forgery or acts done fraudulently during the period of his service:

Provided that the Board shall be consulted before any
final orders are passed;

Provided further that departmental proceedings, if
instituted while the employee was in service, shall,
after the retirement of the employee, be deemed to be
proceedings under these Regulations and shall be
continued and concluded by the authority by which
they were commenced in the same manner as if the
employee had continued in service;

(2) No departmental proceedings, if not instituted
while the employee was in service, shall be instituted
in respect of an event which took place more than
four years before such institution:

Provided that the disciplinary proceedings so
instituted shall be in accordance with the procedure
applicable to disciplinary proceedings in relation to
the employee during the period of his service.
SLP (C) D. No. 603/2024 Page 25 of 34
(3) Where the competent authority orders recovery of
pecuniary loss from the pension, the recovery shall
not ordinarily be made at a rate exceeding one-third
of the pension admissible on the date of retirement of
the employee:

Provided that where a part of pension is withheld or
withdrawn, the amount of pension drawn by a
pensioner shall not be less than the minimum
pension payable under these Regulations.”

Construing the object of Regulation 20(3)(iii)

(supra), this Court observed:

“17. ……
The said Regulation clearly envisages continuation of
a disciplinary proceeding despite the officer ceasing
to be in service on the date of superannuation. For
the said purpose a legal fiction has been created
providing that the delinquent officer would be
deemed to be in service until the proceedings are
concluded and final order is passed thereon. The said
Regulation being statutory in nature should be given
full effect.”

Thereafter, upon considering Regulations 22, 43

and 48 of the Pension Regulations, it was held:

“25. Indisputably as a consequence of the order
imposing the punishment of dismissal from service
the appellant would not have qualified for the
pensionary benefits.

……………

1. Where a proceeding is initiated for withholding
   or withdrawal of pension, Regulation 43 of the
   Pension Regulations would be attracted. But
   provisions of the said Regulation if read in its entirety
   clearly go to show that an officer would not qualify for
   pensionary benefits, if, inter alia, he is dismissed
   from service.

2. Regulation 48 empowers the Bank to recover
   pecuniary loss caused to it from the pensionary
   benefits. Regulation 20(3)(iii) of the (Discipline and
   Appeal) Regulations must be read in conjunction with SLP (C) D. No. 603/2024 Page 26 of 34 the Pension Regulations. Where the employees are
   pension optees, Regulation 48(1) shall apply. In any
   event, if an officer is removed or dismissed from
   service under Regulation 4 of the (Discipline and
   Appeal) Regulations, the Bank need not take recourse
   to Regulation 48 of the Pension Regulations as
   Regulation 22 thereof would be attracted.”

3. In [Chairman-cum-Managing Director, Mahanadi

Coalfields Ltd. vs. Rabindranath Choubey](https://indiankanoon.org/doc/65806947/) (supra) (for short, Mahanadi Coalfields Ltd.), the

issue, inter alia, under consideration was, ‘whether,

in view of Rule 34.2 of the 1978 Rules, the

punishment of dismissal can be imposed upon

finding one guilty of misconduct, where

departmental enquiry is instituted while the

employee is in service and continued after he

attains the age of superannuation?’

1. Rule 34.2 and 34.3 of CDA Rules, which were

considered by this Court in Mahanadi Coalfields

Ltd., read as under:

“34.2. Disciplinary proceeding, if instituted while
the employee was in service whether before his
retirement or during his re-employment shall, after
the final retirement of the employee, be deemed to be
proceeding and shall be continued and concluded by
the authority by which it was commenced in the same
manner as if the employee had continued in service.
SLP (C) D. No. 603/2024 Page 27 of 34
34.3. During the pendency of the disciplinary
proceedings, the Disciplinary Authority may withhold
payment of gratuity, for ordering the recovery from
gratuity of the whole or part of any pecuniary loss
caused to the Company if have been guilty of offences
/misconduct as mentioned in sub-section (6) of Section 4 of the Payment of Gratuity Act, 1972 or to
have caused pecuniary loss to the Company by
misconduct or negligence, during his service
including service rendered on deputation or on re-
employment after retirement. However, the
provisions of Sections 7(3) and 7 (3- A) of the Payment
of Gratuity Act, 1972 should be kept in view in the
event of delayed payment, in the case the employee is
fully exonerated.”

1. In that context, in Mahanadi Coalfields Ltd., this
   
        Court held:
   

“7. Indisputably, the respondent was governed by
the CDA Rules. Therefore, Rules 34.2 and 34.3 of the
CDA Rules shall be applicable and the respondent
employee shall be governed by the said provisions.
Rule 34 permits the management to withhold the
gratuity during the pendency of the disciplinary
proceedings. Rule 34.2 permits the disciplinary
proceedings to be continued and concluded even
after the employee has attained the age of
superannuation, provided the disciplinary
proceedings are instituted while the employee was in
service. It also further provides that such disciplinary
proceedings shall be deemed to be the proceedings
and shall be continued and concluded by the
authority by which it was commenced in the same
manner as if the employee had continued in service.
Therefore, as such, on a fair reading of Rule 34.2 of
the CDA Rules, an employee shall be deemed to be
continued in service, after he attains the age of
superannuation/retired, for the limited purpose of
continuing and concluding the disciplinary
proceedings which were instituted while the
employee was in service. Therefore, at the conclusion
of such disciplinary proceedings any of the penalty
provided under Rule 27 of the CDA Rules can be
imposed by the authority including the order of
dismissal. If the submission on behalf of the
employee that after the employee has attained the age
of superannuation and/or he has retired from SLP (C) D. No. 603/2024 Page 28 of 34 service, despite Rule 34.2, no order of penalty of
dismissal can be passed is accepted , in that case, it
will be frustrating permitting the authority to
continue and conclude the disciplinary proceedings
after retirement. If the order of dismissal cannot be
passed after the employee has retired and/or has
attained the age of superannuation in the
disciplinary proceedings which were instituted while
the employee was in service , in that case, there shall
not be any fruitful purpose to continue and conclude
the disciplinary proceedings in the same manner as
if the employee had continued in service.

1. It is true that while considering the very
   provisions of the CDA Rules, namely, Rule 34.2 and
   Rule 34.3 of the CDA Rules, this Court in [Jaswant
   Singh Gill Jaswant Singh Gill v. Bharat Coking Coal
   Ltd., (2007) 1 SCC 663 : (2007) 1 SCC (L&S) 584] has
   observed and held that once the employee is
   permitted to retire on attaining the age of
   superannuation, thereafter no order of dismissal can
   be passed. However, for the reasons stated
   hereinabove, we are not in agreement with the view
   taken by this Court in [Jaswant Singh Gill Jaswant
   Singh Gill v. Bharat Coking Coal Ltd., (2007) 1 SCC
   663: (2007) 1 SCC (L&S) 584]. As observed
   hereinabove, if no major penalty is permissible after
   retirement, even in a case where the disciplinary
   proceedings were instituted while the employee was
   in service , in that case, Rule 34.2 would become
   otiose and shall be meaningless.

2. On the contrary, there is a decision of three-

Judge Bench of this Court in Ram Lal
Bhaskar [SBI v. Ram Lal Bhaskar, (2011) 10 SCC
249: (2012) 1 SCC (L&S) 402] taking just a contrary
view. In Ram Lal Bhaskar [SBI v. Ram Lal Bhaskar,
(2011) 10 SCC 249: (2012) 1 SCC (L&S) 402], Rule
19(3) of the State Bank of India Officers Service
Rules, 1992 came up for consideration which was
pari materia with Rule 34.2 of the CDA Rules. The
said Rule 19(3) of the State Bank of India Officers
Service Rules, 1992 also permits the disciplinary
proceedings to continue even after the retirement of
an employee if those were instituted when the
delinquent employee was in service. In that case,
charge-sheet was served upon the respondent before
his retirement. The proceedings continued after his
retirement and were conducted in accordance with
the relevant Rules where charges were proved.
SLP (C) D. No. 603/2024 Page 29 of 34 Punishment of dismissal was imposed. The High
Court allowed [Ramlal Bhaskar v. SBI, Writ-A No.
8415 of 2003, order dated 12-4-2006 (All)] the
petition and quashed the order of dismissal. This
Court reversed the said decision of the High Court. In
the said decision, it was specifically observed by this
Court while considering the pari materia provisions
that in case disciplinary proceedings under the
relevant Rules of service have been initiated against
an officer before he ceased to be in the bank's service
by the operation of, or by virtue of, any of the Rules
or the provisions of the Rules, the disciplinary
proceedings may, at the discretion of the Managing
Director, be continued and concluded by the
authority by whom the proceedings were initiated in
the manner provided for in the Rules as if the officer
continues to be in service, so however, that he shall
be deemed to be in service only for the purpose of the
continuance and conclusion of such proceedings. In
the said decision, this Court also took note of another
decision of this Court in [Rajinder Lal Capoor UCO
Bank v. Rajinder Lal Capoor, (2007) 6 SCC 694 :

(2007) 2 SCC (L&S) 550] and it is observed even in the said decision that the UCO Bank Officer
Employees' Service Regulations, 1979 which were
also pari materia to the SBI Rules as well as the CDA
Rules, could be invoked only when the disciplinary
proceedings had been initiated prior to the
delinquent officer ceased to be in service.”
33. What is important to note is that in Mahanadi

         Coalfields Ltd., this Court had the occasion to

         consider its earlier decision in Ramesh Chandra

         Sharma, and the same was approved.

1. The ratio of Mahanadi Coalfields Ltd. is found in
   
        paragraphs 47 and 48 of the judgment, which are
   
        reproduced below:
   

SLP (C) D. No. 603/2024 Page 30 of 34

“47. Thus considering the provisions of Rules 34.2
and 34.3 of the CDA Rules, the inquiry can be
continued given the deeming fiction in the same
manner as if the employee had continued in service
and appropriate punishment, including that of
dismissal can be imposed apart from the forfeiture of
the gratuity wholly or partially including the recovery
of the pecuniary loss as the case may be.

1. In view of the above and for the reasons stated above and in view of the decision of the three-Judge Bench of this Court in Ram Lal Bhaskar [SBI v. Ram Lal Bhaskar, (2011) 10 SCC 249 : (2012) 1 SCC (L&S) 402] and our conclusions as above, it is observed and held that (1) the appellant employer has a right to withhold the gratuity during the pendency of the disciplinary proceedings, and (2) the disciplinary authority has powers to impose the penalty of dismissal/major penalty upon the respondent even after his attaining the age of superannuation, as the disciplinary proceedings were initiated while the employee was in service.”
2. In Mahanadi Coalfields Ltd., Ajay Rastogi, J.

wrote a separate opinion partly concurring and

         partly dissenting with the majority view. In respect

         of the first question, Ajay Rastogi, J. concurred with

         the majority view whereas in respect of the second

         question, that is, whether the penalty of dismissal

         could be imposed after the employee had retired

         from service, Ajay Rastogi, J. opined thus:

“78.2.Que. 2—Whether the penalty of dismissal
could be imposed after the employee stood retired
from service?

Ans. In my considered view, after conclusion of the
disciplinary inquiry, if held guilty, indeed a penalty SLP (C) D. No. 603/2024 Page 31 of 34 can be inflicted upon an employee/delinquent who
stood retired from service and what should be the
nature of penalty will always depend on the relevant
scheme of the Rules and on the facts and
circumstances of each case, but either of the
substantive penalties specified under Rule 27 of the
1978 Rules including dismissal from service are not
open to be inflicted on conclusion of the disciplinary
proceedings and the punishment of forfeiture of
gratuity commensurate with the nature of guilt may
be inflicted upon a delinquent employee provided
under Rule 34.3 of the 1978 Rules read with sub-
section (6) of Section 4 of the 1972 Act.”
36. On a survey of the decisions cited and discussed

         above, in our view, what is settled is that if the

         extant       service      Rules/Regulations          permit

         continuance      of    the   disciplinary     proceedings,

         initiated against an officer/ employee before he had

         attained the age of superannuation, those can be

         continued and brought to its logical conclusion even

         after he had attained the age of superannuation.

         And where, pursuant to such proceedings, the

         ultimate penalty imposed is of dismissal, there may

         be no technical difficulty in its implementation as it

         may result in forfeiture of pension and other retiral

         dues. Therefore, in such an event, the question of

         entitlement to pensionary benefits may not arise.

         However, where the punishment imposed is such SLP (C) D. No. 603/2024                                            Page 32 of 34 which may, instead of forfeiture of pension in its

         entirety, result in mere reduction or adjustment of

         pension, or recovery from post retiral dues, the

         Court        may     have   to   consider   whether       such

         punishment           is   implementable     or    not,   post-

         retirement.

1. In the instant case, the punishment awarded is of
   
        reducing       the    pay   scale   by    three   stages     on
   
        permanent basis. Such reduction in the pay scale
   
        would relate back to the date the incumbent
   
        superannuated from service. Ordinarily, pension is
   
        computed based on salary last drawn/payable.
   
        Therefore, in our view, it would not be difficult to
   
        implement such a punishment as pension can be
   
        computed accordingly.
   

2. For the foregoing reasons, in our view, the Division
   
        Bench of the High Court was justified in allowing
   
        the writ appeal by properly construing Regulation
   
        20(3)(iii) of the Service Regulations. SLP (C) D. No. 603/2024                                               Page 33 of 34
   

3. The appeal therefore lacks merit and is accordingly
   
        dismissed. Pending applications, if any, shall stand
   
        disposed of. There shall be no order as to costs.
   

….............................................J.
(Pamidighantam Sri Narasimha)

                           ................................................J.
                           (Manoj Misra)

  New Delhi;

March 19, 2026 SLP (C) D. No. 603/2024 Page 34 of 34