Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(SC) 287

SUPREME COURT OF INDIA
Pamidighantam Sri Narasimha, Manoj Misra, JJ.
Virinder Pal Singh – Appellant
Versus
Punjab And Sind Bank & Ors. – Respondents
Civil Appeal No. 3571 of 2026 (Arising out of SLP (C) No. 10742/2026) (Arising out of Diary No. 603 of 2024)
Decided On : 19-03-2026

Advocates appeared:
For the Petitioner(s): Mr. Vivek Singh, Adv. (Arguing Counsel) Mr. C.p. Rajwar, Adv. Ms. Udita Singh, AOR Mr. Rohan Chandra, Adv.
For the Respondent(s): Mr. Rajesh Kumar Gautam, AOR (Arguing Counsel) Mr. Anant Gautam, Adv. Mr. Deepanjal Choudhary, Adv. Ms. Likivi Jakhalu, Adv. Mr. Kushagra Nilesh Sahay, Adv.

IMPORTANT POINTS
(1) Disciplinary Proceedings – If extant service Rules/Regulations permit continuance of disciplinary proceedings, initiated against an officer/ employee before he had attained age of superannuation, those can be continued and brought to its logical conclusion even after he had attained age of superannuation.
(2) Punishments – 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 loan, amounts to financial irregularity which exposes Bank to financial risk – Penal action on proof of such a charge cannot be questioned merely because no loss is suffered by Bank.

Headnote:
(A) Service Law – Punishment – 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 loan, amounts to financial irregularity which exposes Bank to financial risk – Penal action on proof of such a charge cannot be questioned merely because no loss is suffered by Bank – Where employee of Bank handles money of depositors /customers/investors, it is most essential for him to be cautious and not reckless in discharge of his duties because he deals with money for and on behalf of his employer – Every such employee/officer is required to take all possible steps to protect interests of his employer – He must 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 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 misconduct. (Paras 19 and 20)
(B) Service Law – Disciplinary Proceedings – If extant service Rules/Regulations permit continuance of disciplinary proceedings, initiated against an officer/ employee before he had attained age of superannuation, those can be continued and brought to its logical conclusion even after he had attained age of superannuation – Where, pursuant to such proceedings, 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 – In such an event, question of entitlement to pensionary benefits may not arise – However, where punishment imposed is such which may, instead of forfeiture of pension in its entirety, result in mere reduction or adjustment of pension, or recovery from post retiral dues, Court may have to consider whether such punishment is implementable or not, post-retirement. [Regulation 20(3)(iii) of Punjab and Sind Bank Officers’ Service Regulations, 1982] (Para 36)
Facts of the case:
Following issues arise for determination:
(i) Whether post-retirement of appellant, punishment of reduction of three stages in scale of pay, as imposed by respondent, was permissible under extant Service Regulations, or action under Pension Regulations was the only way forward?
(ii) Whether there is any perversity/infirmity in enquiry report and order(s) passed by Disciplinary/Appellate Authority? If yes, whether it could be raised as a ground when it was not pressed before High Court?
Findings of Court:
In instant case, punishment awarded is of reducing the pay scale by three stages on permanent basis. Such reduction in pay scale would relate back to the date incumbent superannuated from service. Ordinarily, pension is computed based on salary last drawn/payable. Therefore, it would not be difficult to implement such a punishment as pension can be computed accordingly. Division Bench of High Court was justified in allowing writ appeal by properly construing Regulation 20(3)(iii) of Service Regulations.
Result : Appeal dismissed.

Judgement Key Points

Based on the provided legal document, here are the key points with their respective references:

Continuation of Disciplinary Proceedings Post-Retirement: If extant service Rules/Regulations permit the continuance of disciplinary proceedings initiated against an officer/employee before they attained the age of superannuation, those proceedings can be continued and brought to their logical conclusion even after they have attained the age of superannuation (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) .
Implementation of Dismissal Punishment Post-Retirement: Where the ultimate penalty imposed is dismissal, there may be no technical difficulty in its implementation as it results in the forfeiture of pension and other retirement dues; consequently, the question of entitlement to pensionary benefits may not arise (!) (!) .
Implementation of Pay Reduction or Pension Adjustment: Where the punishment imposed results in a mere reduction or adjustment of pension, or recovery from post-retirement dues, the Court must consider whether such punishment is implementable post-retirement (!) (!) .
Implementability of Reduction in Pay Scale: A punishment involving a reduction in the pay scale (e.g., reducing by three stages on a permanent basis) can be implemented post-retirement because pension is computed based on the salary last drawn/payable, allowing the reduction to be factored into the pension calculation (!) (!) .
Nature of Bank Officer's Duty: A bank officer holds a position of trust dealing with public funds; sanctioning loans beyond one's power or failing to ensure the end-use of a loan constitutes financial irregularity exposing the bank to risk, and penal action for such charges cannot be questioned merely because no loss was suffered by the bank (!) (!) (!) .
Standard of Conduct: Employees of banks handling money for depositors/customers must discharge duties with utmost integrity, honesty, devotion, and diligence; any dereliction, whether by negligence or deliberate intention, constitutes misconduct (!) (!) (!) .
Merits of Inquiry Report and Perversity: The Supreme Court declined to examine the merits of the inquiry report or find perversity in the findings (specifically regarding the failure to ensure end-use of loans) because the appellant did not challenge these findings before the High Court, and the charge was logically proved based on cash withdrawals without supporting bills (!) (!) (!) (!) (!) .
Applicability of Service Regulations: Regulation 20(3)(iii) of the Punjab and Sind Bank Officers' Service Regulations permits the continuation of disciplinary proceedings initiated prior to superannuation, even though the officer ceases to be in service on the date of superannuation (!) (!) (!) .
Distinction Regarding Pension Regulations: While disciplinary proceedings can continue post-retirement under Service Regulations, substantive penalties like dismissal are generally imposed on serving officers; however, where the master-servant relationship ends, the focus shifts to the implementation of penalties regarding pensionary benefits under Pension Regulations (!) (!) (!) (!) (!) (!) .

JUDGMENT

MANOJ MISRA, J.

1. Leave granted.

2. This appeal impugns judgment and order of the High Court of Punjab and Haryana at Chandigarh¹[High Court] dated 23.02.2023 in LPA No. 370 of 2018 which arose out of CWP No. 12865 of 2014.

FACTS

3. In brief, facts relevant for deciding this appeal are as follows:

(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 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[Pension Regulations.] 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.

(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 Choubey, (2020) 18 SCC 71 and Regulation 20(3)(iii) of the Punjab and Sind Bank Officers’ Service Regulations, 1982⁵[Service Regulations.] 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.

(viii) Aggrieved by the order of the Division Bench, the appellant is before us.

SUBMISSIONS ON BEHALF OF THE APPELLANT

4. 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.

5. Reliance was placed on a decision of this Court in Ramesh Chandra Sharma v. Punjab National Bank and another, (2007) 9 SCC 15 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 Karvade, (2018) 14 SCC 98 to contend that Service Regulations apply to serving employees only.

6. 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 orde