Page Rank penalty means the drop in page rank of the website in search engine. Google search engine always impose penalty on those websites which contains duplicate content and which use black hat SEO techniques to increase their Page Rank.
Google had warned for sometime the risks of link selling and it appears that high Page Rank directory sites and other websites which offered 'sponsored listings' to paying clients were hit by Page Rank penalties during the update.
And if you doubt or are certain that your site has suffered from PageRank Penalty then you can ensure it has breached or violated Webmaster Guidelines and even Request Reconsideration. Visit: support.google.com/webmasters/bin/answer.py?hl=en&answer=35843
Page rank penalty means dropping the rank of the page in the search engine. Search engine gives the penalty to those websites which are containing the duplicate contents, and use the black hat SEO techniques for increasing the rank of their websites. It also affects when you get the bad back links and your website containing the comments in websites which have lots of penalty.