Disciplinary proceedings initiated prior to superannuation may continue post-retirement if service regulations so provide. Penalties, including reduction in pay scale, are legally permissible and implementable post-retirement as they impact the computation of pensionary benefits, provided the proceedings were validly instituted while the employee was in service.

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

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

Signature Not Verified

Digitally signed by CHETAN ARORA Date: 2026.03.19

Reason:

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(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

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, 1995, 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 Choubey4 and Regulation 20(3)(iii) of the Punjab and Sind Bank Officers’ Service Regulations, 1982, 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.

4 (2020) 18 SCC 71

(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 Sharm