Holding

An authority who has already decided a matter is disqualified from acting as the appellate authority in the same matter unless expressly permitted by legislation, and the order of the Board was vitiated by bias.

Summary

Amar Nath Chowdhury, an employee of Braithwaite & Co. Ltd., was removed from service by the Disciplinary Authority, who was also the Chairman‑cum‑Managing Director of the company. He appealed the removal before the Board of Directors, but the same Chairman‑cum‑Managing Director presided over and participated in the Board's deliberations, which dismissed the appeal by a non‑speaking order. The appellant challenged the Board's order before the High Court; a Single Judge set aside the removal, but the Division Bench reversed that decision. The Supreme Court examined whether a person who decided the original disciplinary matter could also act as the appellate authority, invoking the rule against bias and natural justice. It held that, absent a statutory provision permitting a dual function, the Chairman‑cum‑Managing Director was disqualified from hearing the appeal, and the doctrine of necessity could not justify the participation. Consequently, the Court set aside both the removal order and the Board's appellate order and remitted the matter to the appellate authority to decide afresh with a speaking order. The appeal was allowed.

Issues considered

Whether the Chairman‑cum‑Managing Director, who acted as the Disciplinary Authority, was disqualified from presiding over the Board of Directors hearing the appeal under the rule against bias.
Whether the doctrine of necessity can override the rule against bias in the context of internal company disciplinary proceedings.

Subjects

disciplinary proceedingsbiasrule against biasnatural justicedual functionappellate authorityadministrative lawdoctrine of necessityboard of directorsremoval from service

Judgment

y

A AMAR NATH CHOWDHURY
v.
BRAITHWAITE AND CO. LTD. AND ORS.

JANUARY 11, 20\l2

B (V.N. KHARE AND ASHOK BHAN, JJ.]

Service Law:
--1 .
Disciplinary Proceedings-Bias-Appeal against order of Disciplinary
C Authority-Disciplinary Authority also acting as Appellate Authority-Held,
order of Appellate Authority vitiated on account of bias-Dual function
permissible only when permitted by an act of legislation or statutory
provision-Administrative Law-Bias.

D Disciplinary proceedings were initiated against appellant by the
respondent-Company. Disciplinary Authority, who was the Chairman-cum-
Managing Director of the company, accepted the report oflnquiry Committee .•/
and removed the appellant from service. Appellant preferred appeal against
the said order under regulations framed by the company before the Board of
Directors which was dismissed by a non-speaking order. The Chairman-cum-
E Managing Director presided over and participated in the deliberations of the
meeting of the Board. Appellant filed writ petition challenging the said order
which was allowed by Single Judge. In appeal, Division Bench reversed the
order of Single Judge. Hence, this appeal.

Appellant contended that order of Appellate Authority was vitiated on
F account of legal bias by the participation of Disciplinary Authority in the
deliberations of meeting of the Board which decided his appeal.

Respondent relied upon doctrine of necessity and contended that rule
against bias is not available as Chairman-cum-Managing Director was
G required to participate in the meeting of the Board under the Regulations
framed by the Company.

Allowing the appeal, the Court

HELD : I. Where an authority earlier had taken a decision, he is
H disqualified to sit in appeal against his own decision, as he already prejudged
184
A.N. CHOWDHURYv. BRAITHWAITE AND CO. LTD. [V.N. KHARE,J.] 185
the matter, otherwise such an appeal would be termed an appeal from Caesar A
to Caesar and filing of an appeal would be an exercise in futility. Such a dual
function is not permissible on account of established rule against bias. In a
situation where such a dual function is discharged by one and the same
authority, unless permitted by an act of legislation or statutory provision, the
same would be contrary to rule against bias. [187-G)
B
Financial Commissioner (Taxation) Punjab and Ors. v. Harbhajan
Singh, [1996) 9 SCC 281, relied on.

2. Fair play demanded the Chairman-cum-Managing Director of the
Company ought not to have participated in the deliberations of the meeting of C
the Board when the Board heard and decided the appeal of the appellant. The
Board could have constituted a Committee of the Board/Management or any
officers of the Company by excluding Chairman-cum-Managing Director of
the Company and delegated any of its power, including the appellate power, to
such a committee to eliminate any allegation of bias against such an appellate
authority. Reliance on the doctrine of necessity in the present case is totally D
misplaced. [188-E]

3. The order and judgment under challenge as well as the order passed
by the Appellate Authority are set aside and the matter is sent back to the
Appellate Authority to decide the appeal by a speaking order, in accordance
with law. [188-G] E
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 193 of2002.

From the Judgment and Order dated 12.5.2000 of the Kolkata High Court
in F.M.A. No. 144of1992.
F
P.P. Rao, Ms. Nandini Mukherjee and Deba Prasad Mukherjee for the
Appellant.

D.P. Roy Chowdhury and G.S. Chatterjee for the Respondents.

The Judgment of the Court was delivered by G
V.N. KHARE, J. Leave granted.

The appellant herein was an employee of the Braithwaite and Company
Limited, Calcutta, a Government of India Undertaking (hereinafter referred to
as 'the Company). It appears that certain misconduct committed by the H
y

186 SUPREME COURT REPORTS [2002] l S.C.R.

A appellant came to the notice of the Company. With the result, the Company "f
decided to initiate disciplinary proceedings against the appellant, herein. ""
Consequently, the appellant was served with a charge-sheet to which he gave
an explanation. An Inquiry Committee constituted for that purpose after
making an enquiry, found that the charges levelled against the appellant
proved. The Inquiry Committee accordingly submitted its report to the
B Disciplinary Authority. The Disciplinary Authority, who was the then Chairman-
cum-Managing Director of the Company accepted the report submitted by the
Inquiry Committee and he, by order dated 13.2.84, removed the appellant from
service.

C Under the regulations framed by the Company, an appeal against an
order of the Disciplinary Authority lies before the Board of Directors of the
Company (hereinafter referred to as the 'Board'). The appellant preferred an
appeal against the order of his removal from service before the Board. It is
not disputed that Shri S. Krishnaswami, who was then the Chairrnan-cum-
Managing Director of the Company and who, in his capacity as the Disciplinary
D Authority, removed the appellant from service presided over and participated
in the deliberations of the meeting of the Board. The Board by order dated
31.8.84, dismissed the appeal filed by the appellant by a non-speaking order.
Aggrieved, the appellant filed a writ petition under Article 226 of the Constitution
of India before the Calcutta High Court. A Learned Single Judge of the High
E Court after having found defect in the proceedings, set aside the order of
removal passed against the appellant. The Company filed a Letters Patent
Appeal before a Division Bench of the High Court. The Division Bench found
the order and judgment of the Learned Single Judge as erroneous and in that
view of the matter, the order passed by the Learned Single Judge was set
aside and the writ petition filed by the appellant stood dismissed. It is against
F the said judgment and order of the High Court, the appellant has preferred
this appeal.

This Court while entertaining the special leave petition out of which the
present appeal arises, passed the following order:

G "Issue notice confined to the question as to why the case may not
be remanded to the appellate authority."
..
One of the arguments raised by Shri P.P. Rao, learned senior counsel
appearing on behalf of the appellant, is that the order of removal having been
passed by the Disciplinary Authority - Shri S. Krishnaswami, who was then
H the Chairman-cum-Managing Director of the Company, was disqualified to
A.N. CHOWDHURYv. BRAITHWAITE AND CO. LTD. [V.N. KHARE,J.J !87

.. have presided over and participated in the deliberations of the meeting of the A
Board which heard and dismissed the appeal and, therefore, the order of the
Appellate Authority was vitiated on account of legal bias. We find substance
in the argument. It is not disputed that Shri S. Krishnaswami was then the
Chairman-cum-Manag!ng Director of the Company. It is also not disputed that
Shri Krishnaswami was also the Disciplinary Authority who passed the order B
of removal against the appellant. The question, therefore, arises whether the
proceedings of the Board was vitiated on account of participation of the
Disciplinary Authority while deciding the appeal preferred by the appellant.

One of the principles of natural justice is that no person shall be a judge
in his own cause or the adjudicating authority must be impartial and must act C
without any kind of bias. The said rule against bias has its origin from the
maxim known as 'Debet esse Judex in Propria Causa', which is based on the
principle that justice not only be done but should manifestly be seen to be
done. This could be possible only when a judge or an adjudicating authority
decides the matter impartially and without carrying any kind of bias. Bias may
be of different kind and form. It may be pecuniary, personal or there may be D
bias as to the subject-matter etc. In the present case, we are not concerned
with any of the aforesaid form of bias. What we are concerned with in the
present case is whether an authority can sit in appeal against its own order
passed in the capacity of Disciplinary Authority. In Financial Commissioner
(Taxation) Punjab and others v. Harbhajan Singh, [1996] 9 sec 281, it was E
held that the Settlement Officer has no jurisdiction to sit over the order
passed by him as an Appellate Authority. In the present case, the subject-
matter of appeal before the Board was whether the order of removal passed
,.
by the Disciplinary Authority was in conformity with law. It is not disputed
that Shri S. Krishnaswami, the then Chairman-cum-Managing Director of the
Company acted as a Disciplinary Authority as well as an Appellate Authority F
when he presided over and participated in the deliberations of the meeting
of the Board while deciding the appeal of the appellant. Such a dual function
is not permissible on account of established rule against bias. In a situation
where such a dual function is discharged by one and the same authority,
unless permitted by an act of legislation or statutory provision, the same G
• would be contrary to rule against bias. Where an authority earlier had taken
a decision, he is disqualified to sit in appeal against his own decision, as he
already prejudged the matter otherwise such an appeal would be termed an
appeal from Caesar to Caesar and filing of an appeal would be an exercise in
futility. In that view of the matter, in the present case, fair play demanded that
Shri Krishnaswami, the then Chai;man-cum-Managing Director of the Company H
y

188 SUPREME COURT REPORTS (2002) I S.C.R.

·I
A ought not to have participated in the deliberations of the meeting of the Board
when the Board heard and decided the appeal of the appellant.

Learned counsel appearing for the respondent, however, pressed into
service the "Doctrine of Necessity" in support of his contention. He contended
that the rule against bias is not available when, under the regulations framed
B by the Company, the Disciplinary Authority who happened to be Chairman-
cum-Managing Director of the Company was required to preside over the
meeting of the Board and, therefore, the then Chairman-cum-Managing Director
of the Company was not disqualified to preside over and participate in the
meeting of the Board which dismissed the appeal of the appellant. We find '
c no merit in the argument. Rule 3 (d) of the Company's Conduct, Discipline and
Appeal Rules (in short 'COAR') defines 'Board' in the following terms:

"Board means the proprietors of the Company and includes, in relation
to exercise of powers, any committee of the Board/Management or
any Officer of the Company to whom the Board delegates any of its
D powers."

In view of the aforesaid definition of the expression 'Board', the Board ...;
could have constituted a committee of the Board/Management or any officers
of the Company by excluding Chairman-cum-Managing Director of the
Company and delegated any of its power, including the appellate power, to
E such a committee to eliminate any allegation of bias against such an appellate
authority. It is, therefore, not correct to contend that rule against bias is not
available in the present case in view of the 'doctrine of necessity'. We are,
therefore, of the view that reliance of the doctrine of necessity in the present -,
case is totally misplaced.

F For the reasons stated hereinbefore, we find that the appeal deserves
to succeed. Accordingly, the order and judgment under challenge as well as
the order passed by the Appellate Authority are set aside and the matter is
sent back to the Appellate Authority to decide the appeal by a speaking
order, in accordance with law. Before we part with the case, we further direct
G that the Company shall not take any step to realise any money which has
been paid to the appellant on his superannuation till the matter is finally • ,
decided by the appropriate Appellate Authority.

The appeal is allowed. There shall be no order as to costs.

H A.KT. Appeal allowed.