A bank officer of Punjab and Sind Bank was served a charge sheet on 30.09.2011 — the very day he superannuated — for irregularities in loan disbursement. Disciplinary proceedings continued post-retirement; Charge No. 2 (failure to ensure end-use of the loan) was found partly proved, and by order dated 15.06.2013 the punishment of reduction by three stages in the time scale of pay on a permanent basis was imposed. The Single Judge of the Punjab & Haryana High Court set aside the punishment, holding that post-retirement only the Pension Regulations could be invoked. The Division Bench reversed, relying on Regulation 20(3)(iii) of the Service Regulations and the three-Judge Bench decision in Chairman-Cum-Managing Director, Mahanadi Coalfields Limited v. Rabindranath Choubey (2020) 18 SCC 71. The appellant came to the Supreme Court by Civil Appeal No. 3571 of 2026.
The Supreme Court dismissed the appeal. On the merits of the charge, the Court found no perversity in the Inquiry Officer's findings: the appellant had never challenged the indictment that cash withdrawals of several lakhs were allowed without supporting bills, and a bank officer's failure to ensure end-use of a loan is a financial irregularity exposing the Bank to risk — penal action for such a charge cannot be questioned merely because no actual loss was suffered by the Bank. The Court also declined to permit the appellant to raise the merits of the inquiry findings for the first time before the Supreme Court, having not pressed those grounds before the High Court.
On the principal legal question, the Court synthesised UCO Bank and Others v. Prabhakar Sadashiv Karvade (2018) 14 SCC 98, Ramesh Chandra Sharma v. Punjab National Bank (2007) 9 SCC 15, and Mahanadi Coalfields Ltd. (supra) to hold that where the extant Service Regulations (here, r.20(3)(iii)) permit continuation of disciplinary proceedings initiated before superannuation, those proceedings can be concluded and any permissible punishment imposed even post-retirement. Crucially, the Court drew a distinction between punishments that result in total forfeiture of pension (e.g., dismissal — no implementation difficulty) and punishments that merely reduce or adjust pension: for the latter category, the Court must examine implementability. On the facts, reduction of pay by three stages relates back to the date of superannuation and pension — being computed on last pay drawn/payable — can be recalculated accordingly, making the punishment perfectly implementable.