Disciplinary proceedings are initiated only upon issuance of a charge-sheet, not a show-cause notice.

The Petitioner, a retired General Manager of Punjab National Bank (PNB), served as MD of its London subsidiary from 2011 to 2015

In December 2016, following the identification of irregularities in NPA accounts, the Bank called for his explanation

On February 27, 2017, the Bank sought vigilance advice to initiate major penalty proceedings

On February 28, 2017—the Petitioner’s date of superannuation—the Bank issued a show cause notice and a retirement order stating that disciplinary proceedings would continue under Regulation 20(3)(iii) of the PNB (Officers’) Service Regulations, 1979

A formal charge-sheet was subsequently served on March 1, 2017, after his retirement

The Petitioner challenged the continuation of the enquiry and the withholding of his retirement dues

1. Whether disciplinary enquiry can be initiated under Discipline and Appeal Regulations against an officer who has retired on superannuation?

2. Whether disciplinary proceedings commence with the issuance of a show cause notice or only upon the issuance of a memorandum of charge-sheet?

The court primarily applied Regulation 20(3)(iii) of the PNB (Officers’) Service Regulations, 1979, which allows proceedings to continue after retirement only if they were "initiated" while the officer was in service

It relied on the precedent set in UCO Bank v. Rajinder Lal Capoor (2007) 6 SCC 694, which established that disciplinary proceedings are not initiated by a show cause notice but only when a charge-sheet is issued

The court further distinguished between "pendency" under Regulation 20(3)(ii)—applicable only to prevent resignation—and "initiation" under Regulation 20(3)(iii), which requires a valid charge-sheet before superannuation to create the legal fiction of "deemed service"

Finally, the court noted that penalties under Discipline and Appeal Regulations cannot be imposed on superannuated officers unless specific pension regulations (such as Regulation 48 of the PNB Pension Regulations, 1995) are invoked

The court reasoned that for the Bank to invoke the legal fiction under Regulation 20(3)(iii) to continue proceedings post-retirement, such proceedings must have been validly initiated prior to superannuation

Applying the Rajinder Lal Capoor precedent, the court found that the show cause notice issued on the Petitioner’s last day of service did not constitute "initiation" of proceedings; initiation occurred only when the charge-sheet was served on March 1, 2017, by which time the Petitioner had already retired

The court rejected the Bank’s attempt to rely on Regulation 20(3)(ii), clarifying that the broader definition of "pendency" (including show cause notices) is a proviso limited to Regulation 20(3)(i) regarding the acceptance of resignations, and does not extend to the continuation of enquiries post-superannuation

As the Petitioner was no longer in service when the charge-sheet was issued, the Bank lacked jurisdiction to proceed under the Discipline and Appeal Regulations

The Court quashed the charge-sheet dated March 1, 2017, and the order withholding retirement dues. The Respondent-Bank was directed to release all retirement dues within 12 weeks, though the court noted the Bank could "take a call" on whether to freshy initiate proceedings specifically under the Pension Regulations of 1995 if the criteria in Regulation 48 were met