Holding

If the service regulations permit continuation of disciplinary proceedings initiated before superannuation, a reduction in pay scale may be imposed post‑retirement and implemented by adjusting the pension, and such punishment is not perverse.

Summary

The appellant, a bank officer, was served a charge sheet for loan disbursement irregularities on the day he superannuated, and disciplinary proceedings continued, resulting in a permanent reduction of three pay‑scale stages. The appellant challenged the punishment, arguing that post‑retirement only the Pension Regulations could be applied, not the Service Regulations. The Supreme Court examined whether the Service Regulations allowed continuation of disciplinary action after superannuation and whether the reduction in pay could be lawfully imposed. It held that Regulation 20(3)(iii) creates a legal fiction permitting proceedings to continue as if the officer were still in service, and that a reduction in pay can be effected by adjusting the pension. The Court found no perversity in the inquiry findings and affirmed the High Court's view, dismissing the appeal.

Issues considered

Whether post‑retirement punishment of reduction in pay scale is permissible under the Service Regulations or only under the Pension Regulations.
Whether there is any perversity or infirmity in the enquiry report and disciplinary orders, and if such a ground can be raised when not pressed before the High Court.

Legislation cited

Payment of Gratuity Act, 1972s. 4(1), s. 7(3), s. 7(3-A)
Punjab and Sind Bank Employees’ Pension Regulations, 1995s. Regulation 46, s. Regulation 48
Punjab and Sind Bank Officers’ Service Regulations, 1982s. Regulation 2, s. Regulation 20(3)(iii)

Headnote

Issue for Consideration (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 in the enquiry report and the order(s) passed by the Disciplinary/Appellate Authority. If yes, whether it could be raised as a ground when it was not pressed before the High Court. Headnotes† Punjab and Sind Bank Officers’ Service Regulations, 1982 –

Subjects

Service LawPost-retirementReduction in Scale of payService regulationsPension regulationsEnquiry reportLoan disbursalFinancial irregularityPenal actionLast Drawn PaySuperannuationFiduciary Duty

Judgment

[2026] 4 S.C.R. 249 : 2026 INSC 266

Virinder Pal Singh
v.
Punjab and Sind Bank & Ors.
(Civil Appeal No. 3571 of 2026)
19 March 2026
[Pamidighantam Sri Narasimha and Manoj Misra,* JJ.]

Issue for Consideration
(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 Authority.
If yes, whether it could be raised as a ground when it was not
pressed before the High Court.

Headnotes†
Punjab and Sind Bank Officers’ Service Regulations, 1982 –
r.20(3)(iii) – Appellant while in service of first respondent-
bank was served a charge sheet on 30.09.2011, inter alia,
on allegation of irregularities in disbursement of loans – On
30.09.2011 itself, the appellant superannuated from service –
However, the disciplinary proceedings continued – By 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 – Appeal against the said order was
dismissed by the Appellate Authority – Writ petition filed
by the appellant herein was allowed by the Single Judge of
the High Court – However, the Division Bench of the High
Court 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
Punjab and Sind Bank Officers’ Service Regulations, 1982 –
Correctness:

* Author
250 [2026] 4 S.C.R.

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Held: In the instant case, as there was no challenge to the indictment
that huge amount of cash withdrawals was allowed without taking
supporting bills/receipts, the charge that the appellant had failed to
ensure end use of the loan stood proved – 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 – 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 Bank – This Court finds that there is neither any
perversity in the finding(s) returned by the Inquiry Officer nor do
this Court deems it appropriate to permit the appellant to question
the merit of the finding(s) that Charge No.2 (appellant had failed
to ensure the end use of the loan) was partly proved, particularly
when no such plea was pressed before the High Court – 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 view of this Court, it would not
be difficult to implement such a punishment as pension can be
computed accordingly. [Paras 18, 19, 21, 37]

Punjab and Sind Bank Officers’ Service Regulations, 1982 –
r.20(3)(iii) – Post retirement continuation of the disciplinary
proceedings:
Held: In view of this Court, 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 which may, instead of forfeiture
of pension in its entirety, result in mere reduction or adjustment of
[2026] 4 S.C.R. 251

Virinder Pal Singh v. Punjab and Sind Bank & Ors.

pension, or recovery from post retiral dues, the Court may have
to consider whether such punishment is implementable or not,
post-retirement. [Para 36]

Case Law Cited
UCO Bank and Others v. Prabhakar Sadashiv Karvade (2018) 14
SCC 98; Ramesh Chandra Sharma v. Punjab National Bank and
Another [2007] 7 SCR 585 : (2007) 9 SCC 15; Chairman-Cum-
Managing Director, Mahanadi Coalfields Limited v. Rabindranath
Choubey [2020] 8 SCR 1 : (2020) 18 SCC 71 – relied on.
A.L. Kalra v. Project and Equipment Corporation of India Limited
[1984] 3 SCR 646 : (1984) 3 SCC 316; Allahabad Bank and
Others v. Krishna Narayan Tewari [2017] 1 SCR 389 : (2017)
2 SCC 308; Securities and Exchange Board of India through
its Chairman v. Roofit Industries Limited [2015] 12 SCR 190 :
(2016) 12 SCC 125; Chittoori Subbanna v. Kudappa Subbanna
and Others [1965] 2 SCR 661 : AIR 1965 SC 1325 : 1964 SCC
OnLine SC 322; Canara Bank v. D.R.P. Sundharam (2016) 12
SCC 724; Union of India and Others v. Ram Karan [2021] 7 SCR
300 : (2022) 1 SCC 373; Disciplinary Authority-Cum-Regional
Manager and Others v. Nikunja Bihari Patnaik [1996] Supp. 1 SCR
314 : (1996) 9 SCC 69; Mihir Kumar Hazara Choudhury v. Life
Insurance Corporation and Another [2017] 9 SCR 418 : (2017) 9
SCC 404; Chairman and Managing Director, United Commercial
Bank and Others v. P.C. Kakkar [2003] 1 SCR 1034 : (2003) 4
SCC 364 – referred to.

List of Acts
Punjab and Sind Bank Officers’ Service Regulations, 1982.

List of Keywords
Service Law; Post-retirement; Reduction in Scale of pay;
Service regulations; Pension regulations; Enquiry report; Loan
disbursal; Financial irregularity; Penal action; Last Drawn Pay;
Superannuation; Fiduciary Duty.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3571 of 2026
From the Judgment and Order dated 23.02.2023 of the High Court
of Punjab & Haryana at Chandigarh in LPA No. 370 of 2018
252 [2026] 4 S.C.R.

Supreme Court Reports

Appearances for Parties
Advs. for the Appellant(s):
Vivek Singh, C.P. Rajwar, Ms. Udita Singh, Rohan Chandra.
Advs. for the Respondent(s):
Rajesh Kumar Gautam, Anant Gautam, Deepanjal Choudhary,
Ms. Likivi Jakhalu, Kushagra Nilesh Sahay.

Judgment / Order of the Supreme Court

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

1 High Court
2 Bank
[2026] 4 S.C.R. 253

Virinder Pal Singh v. Punjab and Sind Bank & Ors.

(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.
(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 5 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.

3 Pension Regulations.
4 (2020) 18 SCC 71
5 Service Regulations.
254 [2026] 4 S.C.R.

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5. Reliance was placed on a decision of this Court in Ramesh Chandra
Sharma v. Punjab National Bank 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 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 order must
carry reasons, reliance was placed on decisions of this Court in A.L.
Kalra v. Project and Equipment Corporation of India Limited8
and Allahabad Bank and others v. Krishna Narayan Tewari9.
7. 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 decisions of this Court in Securities and Exchange
Board of India through its Chairman v. Roofit Industries Limited10
and Chittoori Subbanna v. Kudappa Subbanna and others11.

SUBMISSIONS ON BEHALF OF THE BANK
8. 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

6 (2007) 9 SCC 15
7 (2018) 14 SCC 98
8 (1984) 3 SCC 316
9 (2017) 2 SCC 308
10 (2016) 12 SCC 125
11 AIR 1965 SC 1325 : 1964 SCC OnLine SC 322
[2026] 4 S.C.R. 255

Virinder Pal Singh v. Punjab and Sind Bank & Ors.

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, as is
the case here. It was contended that in Ramesh Chandra Sharma
(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. On the other
hand, Pension Regulations become applicable when proceedings
are initiated under the Pension Regulations.
9. 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.
10. On merits of the charge and the orders passed by the Disciplinary/
Appellate Authority, it was submitted that the Inquiry Officer in his
report 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.
11. 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 with the disciplinary authority. In this

12 (2016) 12 SCC 724
256 [2026] 4 S.C.R.

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regard decision of this Court in Union of India And Others v. Ram
Karan13 was relied upon. Based on the aforesaid submissions, it was
prayed on behalf of the Bank that the appeal be dismissed.

ANALYSIS
12. We have heard the learned counsel for the parties and have perused
the materials on record.
13. 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 Authority?
If yes, whether it could be raised as a ground when it was not
pressed before the High Court?
14. 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.
15. 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
charges. Charge No. 1 is held not proved whereas Charge No. 2
is held partly proved because there existed no Bills on record to

13 (2022) 1 SCC 373
14 Which is contained in Annexure P-6
[2026] 4 S.C.R. 257

Virinder Pal Singh v. Punjab and Sind Bank & Ors.

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.
16. 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.
17. Ensuring end-use of loan disbursals serves multiple purposes. First,
it ensures that loan is not diverted 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.
18. In the instant case, as there was no challenge to the indictment
that huge amount of cash withdrawals was allowed without taking
supporting 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.
258 [2026] 4 S.C.R.

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19. 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.
20. Moreover, where an employee of a 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 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.
21. 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 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.
22. 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.

15 Disciplinary Authority-Cum-Regional Manager and Others v. Nikunja Bihari Patnaik (1996) 9 SCC 69
16 Mihir Kumar Hazara Choudhury v. Life Insurance Corporation and Another (2017) 9 SCC 404; Chairman
and Managing Director, United Commercial Bank and Others v. P.C. Kakkar (2003) 4 SCC 364.
[2026] 4 S.C.R. 259

Virinder Pal Singh v. Punjab and Sind Bank & Ors.

23. Now, we shall address Issue No. (i) i.e., whether, post-retirement,
the punishment as imposed upon the appellant is permissible in law.
24. In support of his contention on the issue, the learned counsel for
the appellant had placed reliance on Regulation 2 of the Service
Regulations which reads as under:
“2. OFFICERS TO WHOM THE REGULATIONS APPLY
2. (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.”
25. 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.
260 [2026] 4 S.C.R.

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(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.
27. 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).
28. 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
4. 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;
[2026] 4 S.C.R. 261

Virinder Pal Singh v. Punjab and Sind Bank & Ors.

(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 —
(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.”
262 [2026] 4 S.C.R.

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“The Pension Regulations
46. 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 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)
***
48. 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.
[2026] 4 S.C.R. 263

Virinder Pal Singh v. Punjab and Sind Bank & Ors.

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.”
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
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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 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.
10. 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)

29. In Ramesh Chandra Sharma (supra), the issue was whether
punishment of dismissal could be inflicted on an employee who has
[2026] 4 S.C.R. 265

Virinder Pal Singh v. Punjab and Sind Bank & Ors.

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 Bank shall entail
forfeiture of his entire past service and consequently shall
not qualify for pensionary benefits.
43. 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.
48. 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;
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(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.
(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.
……………
[2026] 4 S.C.R. 267

Virinder Pal Singh v. Punjab and Sind Bank & Ors.

26. 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.
27. 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 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.”
30. In Chairman-cum-Managing Director, Mahanadi Coalfields
Ltd. vs. Rabindranath Choubey (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?’
31. 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.
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-
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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.”
32. 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 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
[2026] 4 S.C.R. 269

Virinder Pal Singh v. Punjab and Sind Bank & Ors.

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.
8. 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.
9. 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
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proved. 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.
34. The ratio of Mahanadi Coalfields Ltd. is found in paragraphs 47
and 48 of the judgment, which are reproduced below:

“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.
[2026] 4 S.C.R. 271

Virinder Pal Singh v. Punjab and Sind Bank & Ors.

48. 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.”
35. 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 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
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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
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.
37. 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.
38. 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.
39. 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.

Result of the case: Appeal dismissed.

†
Headnotes prepared by: Ankit Gyan