Can penal action against a bank officer for failing to ensure end-use of a loan be questioned merely because the Bank suffered no loss?

No. A bank officer holds a position of trust as he deals with public funds, and sanction of a loan beyond one's power, or not ensuring end-use of the loan, amounts to financial irregularity which exposes the Bank to financial risk. Penal action on proof of such a charge cannot be questioned merely because no loss is suffered by the Bank.

Punjab and Sind Bank Officers' Service Regulations, 1982 — Regulation 20(3)(iii) — Punjab and Sind Bank Employees' Pension Regulations, 1995 — Disciplinary proceedings after superannuation — Reduction in the scale of pay — Implementability of punishment — End-use of loan — Misconduct — Punjab and Sind Bank Officers' Service Regulations, 1982 — Regulation 20(3)(iii) — Proceedings continue after superannuation — Held: Where the extant service Regulations permit continuance of disciplinary proceedings initiated before superannuation, those proceedings can be continued and brought to their logical conclusion thereafter. The Regulation being statutory in nature, the fiction that the officer is deemed to be in service must be given full effect. (¶29, 36) Punjab and Sind Bank Officers' Service Regulations, 1982 — Penalty after superannuation — Punishment must be implementable — Held further: Where the penalty is dismissal there is no technical difficulty, as it results in forfeiture of pension and other retiral dues. But where the punishment results in mere reduction or adjustment of pension, the Court must consider whether it is implementable post-retirement. (¶36) Punjab and Sind Bank Officers' Service Regulations, 1982 — Reduction by three stages in the scale of pay — Pension computed on salary last drawn — Held further: A reduction of the pay scale by three stages on a permanent basis relates back to the date the incumbent superannuated. Since pension is ordinarily computed on the salary last drawn, such a punishment is not difficult to implement. (¶37) Bank officer — Failure to ensure end-use of loan — Financial irregularity; dereliction constitutes misconduct — Held further: A bank officer holds a position of trust as he deals with public funds, and failure to ensure end-use of a loan is a financial irregularity which cannot be questioned merely because no loss is suffered by the Bank. Any dereliction, whether by negligence, casualness or deliberate intention, constitutes misconduct; appeal dismissed. (¶19, 20, 39)

One judgment a day. That's the whole habit.

Read the full text of VIRINDER PAL SINGH v. PUNJAB AND SIND BANK & ORS — and get the Supreme Court's output as a five-minute daily read, with plain-language headnotes and the questions each judgment settles.

Free forever plan · 30 seconds · data stays in India