Holding

A dismissed employee is provisionally entitled to pension only up to the date of the dismissal order, not until the appellate order is disposed.

Summary

M.L. Kalra, an officer of the New Bank of India (later merged with Punjab National Bank), was superannuated on 30 November 1994 while disciplinary proceedings were pending. The bank continued the proceedings and dismissed him on 22 March 1996. Kalra received provisional pension from the date of superannuation up to the dismissal date and claimed it should continue until his appeal was disposed on 5 March 1997. The Delhi High Court allowed this claim, but the Supreme Court held that the dismissal order terminates service, making the employee entitled to provisional pension only up to the dismissal date, not until the appellate order. The Court clarified that departmental proceedings are disciplinary in nature and an appeal does not keep the employee under suspension. Consequently, the High Court judgment was set aside and the appeal was allowed.

Issues considered

Whether departmental proceedings initiated against a superannuated employee constitute disciplinary proceedings for the purpose of pension regulations.
Whether an employee dismissed after superannuation is entitled to provisional pension until the disposal of the appeal against the dismissal order.
Interpretation of Regulation 22 of the Punjab National Bank (Employees') Pension Regulations, 1995 in relation to dismissal.

Subjects

service lawpensiondismissalsuperannuationprovisional pensiondepartmental proceedingsdisciplinary proceedingsbank regulationsappealforfeiture of service

Judgment

[2008] 2 S.C.R. 200

A PUNJAB NATIONAL BANK
v.
M.L., KALRA AND ANOTHER
(Civil Appeal No. 4837 of 2005)·
JANUARY 30, 2008
B
[S~B. SINHA AND HARJIT SINGH BEDI, JJ.]

Service Law - Pension - Dismissal from service after
date of superannuation -Payment of provisional pension -
From the date of superannuation till the date of order of
C dismissal - Claim for, till the date of order disposing of
departmental appeal -Held: Employee is provisional entitled
to the pension till the date of order of dismissal and not till the
order of disposal of departmental appeal - Punjab National
Bank (Officers') Service Regulations, 1979 - Regulation 20
D (3)' (iii) - Punjab National Bank (Employees') Pension
Regulations, 1995 - Regulation 22 (1).
Departmental proceedings were initiated against the
respondent-employee under Regulation 20 (3) (iii) of
Punjab National Bank (Officers) Service Regulations,
E 1979. In the meantime on 30.11.1994 the respondent was
superannuated. Thereafter the departmental proceedings
were concluded. Disciplinary authority passed order of
dismissal on 22.3.1996. Appeal against the order was
dismissed on 6.3.1997. In the meantime, the respondent
F was paid provisional pension in terms of Regulation 46
of Punjab National Bank (Employees') Pension
Regulations, 1995 from the date of superannuation till the
date of his dismissal. Respondent filed writ petition
claiming provisional pension till the date of disposal of
G his appeal. Single Judge of High Court allowed the writ
petition. The order was further confirmed by Division
Bench of High Court. Hence the present appeal.
Respondent contended that the proceedings
initiated against him were departmental ana not
H 200
PUNJAB NATIONAL BANK v. M.L. KALRAAND 201
ANOTHER [S.B. SINHA, J.]

disciplinary. Hence order of dismissal could not have been A
passed against a retired person.
Allowing the appeal, the Court·
HELD: In the context of the present dispute, there is
no distinction between departmental proceeding an~ B
disciplinary proceeding. When an order of dismissal or
removal is passed, clause (1) of Regulation 22 woult;t
apply. Services of an employee can be validly terminated
only once. Only because an appeal has been provided
against an order of dismissal from services, the same ipsb c
facto would not mean that the same would remain under
animated suspension. [Paras10, 12 and 13] [205-A;
206-C, D]
Syndicate Bank Ltd. vs. K.R. V Bhat 1998(1) SCR 327;
P.H. Kalyani vs. MIS.Air France Calcutta 1964 (2) SCR 104; D
Ramesh Chandra Sharma vs. Punjab National Bank and Anr.
2007 (8) SCALE 240 relied on.
State of Maharashtra vs. Chandrabhan Tale 183 (3) SCd
287; Union of/ndia and Ors. vs. J. Ahmed 1979 (2) SCC 286
- distinguished. E 1

CIVILAPPELLATE JURISDICTION: Civil Appeal No. 4837
of 2005.
From the final Judgment and Order dated 23.09.2003 o~
·\ the High Court of Delhi at New Delhi in LPA No. 336 of 2003. F
A. Sharan, ASG., Yashraj Singh Deora, Harshvardhan Jha
and Awadhesh Kumar Singh (for M/s. K.L. Mehta & Co.) for the
Appellant.
Ambhoj Kumar Sinha and Ashok Bhalla for the G
Respondents.
The Judgment of the Court was delivered by
S.B. SINHA, J. 1. The short question involved in this
appeal, is the interpretation of the provisions of the Punjab. H
202 SUPREME COURT REPORTS [2008] 2 S.C.R. ~

~·
A National Bank (Officers') Service Regulations, 1979 vis-a-vis
Punjab National Bank (Employees') Pension Regulations, 1995
(in short "Pension Regulations"), which arises out of a judgment
and order of the High Court of Delhi at New Delhi passed in
LPA No. 336 of 2002.
B 2. Respondent herein was an employee of the New Bank
of India. On or about 4th September, 1993 the said Bank was
amalgamated with the appellant bank. A charge sheet was 1
issued against the respondent on 19th August, 1993. He reached
the ag~ of superannuation on 30th November, 1994. Appellant,
c however, relying on or on the basis of Regulation 20 (3) (iii) of
the Punjab National Bank (Officers') Service Regulations, 1979,
continued the departmental proceedings against him. The same
was completed after his retirement on 1st August, 1995. An order
of punishment was passed by the disciplinary authority
D dismissing the respondent from service on 22nd March, 1996,
directing :- ;-

"Provisions of Regulation 20(3)(iii) of Punjab National Bank ..,;, -{ I.
Officers Service Regulations, 1979 were invoked vide Ir
letter dated 23.11.1994 and it was inter alia made clear
E to Shri Kalra that though he will cease to be in service of
. the bank on 30.11.1994 (on attaining the age of
superannuation) but the disciplinary proceedings initiated
against him will continue as if he was in service until the
disciplinary proceedings are completed and final orders
F is passed i!l respect thereof and that he will not be entitled
for payment of retirement benefits till the proceedings are
I-
~
concluded and final order is passed thereon except his
own contribution to CPF. lhe payment of terminal benefits
to Shri Kalra, if any, will be made keeping in view the
G above order of "dismissal"."
~
3. An appeal preferred thereagainst by the respondent
before the appellate authority was dismissed by an order dated
5th March, 1997 stating:-

H "The Board carefully considered the grounds of appeal

l
PUNJAB NATIONAL BANK v. M.L. KALRAAND 203
ANOTHER [S.B. SINHA, J.]

preferred by Shri M.L. Kalra along with records of the A
· case and after detailed discussions observed that the
petitioner has not brought out any case based on the merits,
which warrants interference with the decisions of the
Disciplinary Authority. As such, the Board decided to
confirm the punishment of Major penalty of 'Dismissal' B
from service which shall be a disqualification for future
..... , employment' imposed on Shri M.L. Kalra by the
Disciplinary Authority. Shri M.L. Kalra be informed
accordingly."
4. In the meanwhile, the respondent was paid his c
provisional pension in terms of Regulation 46 of Pension
Regulations from the date. of superannuation till the date of
dismissal i.e .. 22nd March, 1996.
5. Respondent claimed that he was entitled to payment of
the said provisional pension till 5th March, 1997 i.e. till the D
disposal of his appeal by the appellate authority. On the said
... ~
premise a writ petition was filed by him. A learned Single Judge
of the High Court by an order dated 22nd February, 2002 directed
that the arrears of provisional pension also be paid for the period
during which the appeal was pending. An intra-court appe2I filed E
by the appellant had been dismissed by a Division Bench of
the High Court by reason of the impugned judgment.
The High Court in support of its order relied on a decision
of this Court in State of Maharashtra vs. Chandrabhan Tale :
(1983) 3 sec 387. F
---'-~
6. Mr. Amarendra Sharan, learned Additional Solicitor
General, in support of the appeal submitted that the order of
disciplinary proceeding culminated in an order passed by the
disciplinary authority and in that view of the matter, the said order
G
cannot be taken into consideration for the purpose of payment
~
of provisional pension.
7. Mr. Ambhoj Kumar Sinha, learned counsel appearing
on behalf of the respondent, on the other hand, submitted that a
retired person cannot be directed to be dismissed and a H
204 SUPREME COURT REPORTS [2008] 2 S.C.R.
~

A distinction exists between a disciplinary proceeding and a +
departmental proceeding. As the Regulation 46, it was urged,
refers to departmental proceedings, the appellant was entitled
to payment of provisional pension till the date of determina!ion
of the appeal.
B Regulations 42, 45 and 46 of the Pension Regulations if
read conjointly, the learned counsel contended, would clearly
show that the delinquent employee was entitled to payment of 1
provisional pension subject of course to an order which may be
passed by the disciplinary authority only for withholding or
c revision thereof.
8. Clause (b) of sub-regulation (2) of Regulation 22 of the
Pension Regulations postulates that the delinquent employee
would be entitled to receive pension if he is permitted to retire
or retires on attaining the age of compulsory retirement while
D
under suspension.
Terms and conditions of the services of an officer of the
appellant-Bank are governed by the Punjab National Bank --r-< '
(Officers') Service Regulations, 1979 ; Regulation 20(3) (iii)
E whereof reads as under:-
"20. Termination of Service
(3) (iii) The officer against whom disciplinary proceedings
have been initiated will cease to be in service on the date
F 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
G
the proceedings are completed and final order is passed
')--
thereon except his own contribution to CPF."
9. In this case we are not concerned with the legality or
validity of the order of dismissal passed against the respondent.
H The issue before us is a short one.
'
~
PUNJAB NATIONAL BANK v. M.L. KALRA AND 205
ANOTHER [S.B. SINHA, J.]
~·
· 10. On reading the two Regulations conjointly, the question A
which arises for consideration is as to whether a departmental
proceeding can be said to be a disciplinary proceeding. We
do not find any distinction in the said term in the context of the
present dispute.
11. Regulation 22 of Pension Regulations reads as under:- B
~

' "22. Forfeiture of service:-
(1) Resign~tion or dismissal or removal or termination of
an employee from the service of the bank shall entail
forfeiture of his entire past service and consequently shall e
not qualify for pensionary benefits;
(2) An interruption in the service of a Bank employee
entails forfeiture of his past service, except in the following
cases, namely:-
0
(a) authorized leave of absence;
" ...., (b) suspension, where it is immediately followed by
reinstatement, whether in the same or a different post,
or where the bank employee dies or is permitted to
retire or is retired on attaining the age of compulsory
E
retirement while under suspension;
(c) transfer to non-qualifying service in an establishment
under the control of the Government or Bank if such
~ . transfer has been ordered by a competent authority F
in the public interest;
(d) joining time while on transfer from one post to another.
(3) Notwithstanding anything contained in sub-regulation
(2), the appointing authority may, by order, commute G
-< retrospectively the periods of absence without leave as
extraordinary leave.
(4)(a) In the absence of a specific indication to the contrary
in the service record, an interruption between two spells
of service rendered by a bank employee shall be. treated H
206 SUPREME COURT REPORTS [2008) 2 S.C.R.

A as automatically condoned and the pre-interruption service
treated as qualifying service;
(b) Nothing in clause (a) shall apply to interruption caused
by resignation, dismissal or removal from service or for
participation in a strike:
B
Provided that before making an entry in the service
record of the Bank employee regarding forfeiture of past
service because of his participation in strike, an
opportunity of representation may be given to such bank
c employee."
12. When an order of dismissal or removal is passed,
clause (1) of Regulation 22 would apply. Clause (2) will have
application only when an interruption in service takes place.

0 13. Services of an employee can be validly terminated
only once. Only because an appeal has been provided
against an order of dismissal from services, the same ipso
facto would not mean that the same would remain under
animated suspension.
E 14. The issue is covered by large number of decisions of
this Court. In Syndicate Bank Ltd. vs. K.R. V Bhat: [1968] 1
SCR 327 this Court held that an order of dismissal or discharge
can be passed only once irrespective of when the finality in
relation thereto is reached and all that the appellate authority
F considers is whether the order of dismissal requires to be
sustained or .modified. ·
In P.H. Kalyani vs. Mis. Air France Calcutta : [1964] 2
SCR 104 this Court observed that the operation of order of
punishment made by the employer does not depend on its
G confirmation by the Court.
· 16. We may also notice that in a recent judgment this Court,
in Ramesh Chandra Sharma vs. Punjab National Bank and
another: 2007 (8) SCALE 240, upon taking into consideration
H both the provisions of the Service Regulations as also the
PUNJAB NATIONAL BANK v. M.L. KALRAAND 207
ANOTHER [S.B. SINHA, ·J.]
..,
• Pension Regulations, opined :- A
"17. Where a proceeding is initiated for withholding or
withdrawal of pension, Regulation 43 of the Pension !':'"
_,;'.f

Regulations would be attracted. But provisions of the said
Regulation if read in its entirety clearly go to show that an
B
officer would not qualify for pensionary benefits, if inter
alia, he is dismissed from service.
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 c
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 & Appeal) Regulations, the Bank need not
D
take recourse to Regulation 48 of the Pension Regulations
.. .... as Regulation 22 thereof would be attracted .
We are, therefore, of the opinion that the High Court
committed a manifest error in passing the impugned
judgment." E
17. The decision of this Court in Chandrabhan Tale (supra)
• was rendered in an absolute different fact situation. Therein the
question which arose for consideration was as to whether
subsistence allowance is payable even during the pendency of
~ the appeal. In the facts and circumstances of that case, it was F
held that the subsistence allowance should be granted. We do
not think that any ratio was laid down therein. Upon dismissal
from services, the employee ceases to be in employment with
effect from the date when the original order had been passed
and not from the date of the order of the appellate authority G
subject, of course, to the condition that the original order is
affirmed.

... 18. Reliance has been placed by the learned counsel for
the respondent on Union of India and others vs. J. Ahmed :
H
208 SUPREME COURT REPORTS [2008] 2 S.C.R.

A (1979) 2 sec 286. We do not find any application of the said
decision in the instant case which is merely an authority for the
proposition as to what would constitute a "misconduct".
19, For the reasons abovementioned the impugned
judgment cannot be sustained and it is set aside accordingly.
8 The Appeal is allowed. But in the facts and circumstances of
the case, there will be no order as to costs.
K.K.T. Appeal allowed.

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