No disciplinary action can be initiated against employee after superannuation: SC

In a significant judgment, the Supreme Court has upheld a High Court decision, ruling that disciplinary proceedings against a retired State Bank of India (SBI) employee were initiated without jurisdiction and directing the bank to release the employee’s pending service dues within six weeks.

Case Background

The apex court noted that the respondent, an SBI employee, officially retired on December 26, 2003, after 30 years of service. However, his tenure was extended on August 5, 2003, allowing him to serve until October 1, 2010. Following this date, there was no further extension of his service period.

The court observed that while a notice to show cause was issued to the employee on August 18, 2009, the disciplinary proceedings formally began much later, on March 18, 2011, when the disciplinary authority issued a charge memo.

Arguments from SBI

SBI’s counsel argued that the employee himself had claimed before the inquiry and appellate authorities that his retirement was due on October 30, 2012. The employee had not raised any objection during the proceedings or before the High Court about being out of SBI’s service as of October 1, 2010. Therefore, the counsel contended, the disciplinary proceedings initiated on March 18, 2011, were valid.

Supreme Court's Ruling

The bench rejected SBI’s arguments, emphasizing that a disciplinary proceeding initiated after an employee’s superannuation or extended service period is invalid. “Where the disciplinary proceeding itself is without jurisdiction, upholding the same on the plea that it was not challenged on such grounds would amount to legitimizing an illegal process,” the court stated.

The bench further clarified that while pending disciplinary proceedings initiated before retirement can continue post-superannuation under specific rules (such as Rule 19(3) of SBI’s Service Rules), fresh proceedings cannot be initiated after an employee has retired.

Directions to SBI

Dismissing SBI’s appeal, the court directed the bank to expedite the release of all pending dues to the retired employee, ensuring the process is completed within six weeks.

This ruling reaffirms the principle that institutions must adhere strictly to procedural and jurisdictional rules in disciplinary matters, particularly involving retired employees.