2025 INSC 126
SUPREME COURT OF INDIA
(HON’BLE
HRISHIKESH ROY, J., HON’BLE SUDHANSHU DHULIA, J. AND HON’BLE S.V.N. BHATTI,
JJ.)
KRISHNADATT AWASTHY
Petitioner
VERSUS
STATE OF M.P.
Respondent
Civil
Appeal No(S). 4806 OF 2011 With Civil Appeal No. 4807 Of 2011 Civil Appeal No.
4808 Of 2011 Civil Appeal No. 4809 Of 2011-Decided on 29-01-2025
Service Law
(A)
Constitution of India, Article 14 - Panchayat Raj Act Avam Gram Swaraj
Adhiniyam, 1993, Section 49(c), 100, sub-section (2) of Section 53, sub-section
(1) of Section 70 read with subsection (1) of Section 95 - Madhya Pradesh
Panchayat Shiksha Karmis (Recruitment and Conditions of Service) Rules, 1997,
Rule 2(h), 5, 40 -Appeal and Revision Rules,1995, Rule 5 – Service Law –
Selection -
Post of school teachers (Shiksha Karmi Grade III) in Janpad Panchayat –
Judicial review - Principle of nemo judex causa sua - Whether the selection is
vitiated for violation of the first limb of natural justice i.e. rule against
bias? - In a scenario such as this where the members did not participate in the
interview, a reasonable likelihood of bias cannot reasonably be inferred -
While it is true that actual bias need not be proved, this appears to be a case
of allegation of bias without any foundational footing - Absence of opportunity
of hearing at the initial stage, has prevented the selectee to show that no
relative had influenced their selection - It also disables this Court to
examine the issue holistically to conclusively determine bias – Held that this
clearly appears to be a case of mere suspicion of bias particularly on account
of the fact that the Janpad Panchayat unanimously passed a resolution for
recusal of the concerned member. It must also be borne in mind that rule
against bias is itself considered as a ground for recusal. The selectees were
not arrayed and they couldn’t contest the selection before the Collector, in
the absence of a complete picture on the process, it is all the more difficult
to deduce that there was a reasonable likelihood of bias. In light of the
aforesaid reasons, our conclusion in this matter is that the selection is not
vitiated on account of violation of the nemo judex rule.
(Para 29 and 35)
(B)
Constitution of India, Article 14 - Panchayat Raj Act Avam Gram Swaraj
Adhiniyam, 1993, Section 49(c), 100, sub-section (2) of Section 53, sub-section
(1) of Section 70 read with subsection (1) of Section 95 - Madhya Pradesh
Panchayat Shiksha Karmis (Recruitment and Conditions of Service) Rules, 1997,
Rule 2(h), 5, 40 -Appeal and Revision Rules,1995, Rule 5 – Service Law - Recruitment
– Selection - Post of school teachers (Shiksha
Karmi Grade III) in Janpad Panchayat – Judicial review - Principle of natural
justice i.e. audi alteram partem - Whether it is a case of violation of the
principle of audi alteram partem? Is demonstration of prejudice necessary to
succeed with a claim of violation of the principle of audi alteram partem? -
The principle of audi alteram partem lies at the very heart of procedural
fairness, ensuring that no one is condemned or adversely affected, without
being given an opportunity to present their case - Collector records in his
order that even though the selected ‘relatives’ have not been made parties, ‘it
is proved that the appointment of these relatives could not be deemed to be
made according to the scheme’ and hence it is not necessary to provide an
opportunity of hearing - This was reiterated by the Commissioner in his Revisional
order - The Division Bench in its order also notes that it was imperative to
implead the affected parties – In the absence of notice, the breach strikes at
the fundamental core of procedural fairness, rendering the decision invalid
unless exceptional circumstances justify such deviation. The vitiation of
selection was not only a breach of the principles of natural justice but also
contrary to the express statutory provision that required for an opportunity to
show cause and an opportunity to provide self-defence. The prejudice theory
must be understood as an exception to the general rule and cannot therefore be
the norm. In view of the foregoing, a gross violation of the principle of audi
alteram partem is noticed in the present case.
(Para 49 and 54)
(C)
Panchayat Raj Act Avam Gram Swaraj Adhiniyam, 1993, Section 49(c), 100,
sub-section (2) of Section 53, sub-section (1) of Section 70 read with
subsection (1) of Section 95 - Madhya Pradesh Panchayat Shiksha Karmis
(Recruitment and Conditions of Service) Rules, 1997, Rule 2(h), 5, 40 -Appeal
and Revision Rules,1995, Rule 5 – Service Law – Selection - Post of school
teachers (Shiksha Karmi Grade III) in Janpad Panchayat – Judicial review -
Principle of natural justice - Whether the breach of the principle of audi
alteram partem at the original stage can be cured, at the Revisional stage?
- Held that an ineffective hearing at
the initial stage therefore taints the entire decision-making process leading
to a cascade of flawed orders at subsequent stages - Providing a hearing
to the affected individual, minimizes the risk of administrative authorities
making decisions in ignorance of facts or other relevant circumstances, as it
allows all pertinent issues to be brought to light - This process not only aids
the administration in arriving at a correct decisions but also enables courts
to more effectively review such actions - The primary purpose of natural
justice is to assist the administration in reaching sound decisions at the
outset, reducing the likelihood of decisions being overturned later - Its
significance lies in fostering fair and well-informed decision- making at the
very first instance - Held that a defect
at the initial stage cannot generally be cured at the appellate stage - Even in
cases where a ‘full jurisdiction’ may be available at the appellate stage, the
Courts must have the discretion to relegate it to the original stage for an
opportunity of hearing - Therefore, the ex-parte decision to set aside the
appellants selection stands vitiated.
(Para
66 and 67)
JUDGMENT
Hrishikesh Roy J. :- Heard Mr. Vivek
Tankha, learned Senior Counsel appearing for the appellant. The respondents are
represented by Ms. Mrinal Gopal Elker, learned counsel and Mr. Avdhesh Kumar
Singh, learned counsel.
2.
This matter is posted before this larger Bench on account of the split verdict
rendered on 4.4.2024 by the two learned Judges of this Court. The case
pertains to the validity of appointments made for the post of school
teachers (Shiksha Karmi Grade III) in Janpad Panchayat, Gaurihar in the
year 1998. Four CivilAppeals were filed before this Court by ten persons, who
are alleged to be the relatives of the members of the selection committee and
were placed in the final select list of 249 Shiksha Karmis.
3.
While Justice JK Maheshwari upheld the finding to set aside the selection of
Shiksha Karmis on account of the violation of the first limb of the principle
of natural justice i.e. rule against bias, Justice KV Vishwanathan has however
upheld the selection, citing inter alia, a breach of the right to a fair
hearing. Therefore, in this case, we are confronted with a conflict between the
two foundational principles of natural justice i.e. rule against bias (nemo
judex in causa sua) and the right to a fair hearing (audi alteram partem).
I.
RELEVANT FACTS
4.
Initially, one Kunwar Vijay Bahadur Singh Bundela challenged the preparation of
the select list by filing an appeal before the Collector, District Chhatarpur,
who quashed the select list, vide order dated 31.8.1998 and remitted the matter
for fresh consideration. Thereafter, a fresh select list consisting of 249
candidates including the names of appellants (and four others) was published on
16.9.1998 and the appointment order was issued on 17.9.1998. The selection and
appointment of the appellants was challenged by an unsuccessful
candidate-Archana Mishra (Respondent No. 4 herein), before the Collector,
District Chatarpur, Madhya Pradesh, under Section 3 of Madhya Pradesh Panchayat
(Appeal and Revision) Rules, 1995(for short “Appeal and Revision Rules,1995)
alleging that elements of nepotism, corruption and bias have seeped into the
selection process because of the composition of the selection committee. The
Collector, accepting the challenger’s contention vide order dated 02.06.1999,
set aside the appellants’ appointment by concluding that the recruitment was
vitiated on account of bias and nepotism. The Collector found fault with the
composition of the selection committee, some of whom were the family members of
the appellants herein and opined that the award of marks in the selection, was
improper. Relying on Section 40(c) and Section 100 of Panchayat Raj Act Avam
Gram Swaraj Adhiniyam, 1993 (for short “Adhiniyam, 1993), it was noted that
office bearers cannot facilitate financial gains to relatives. The Collector
further noted that:
‘ …it is proved that
the appointment of these relatives could not be deemed to be according to the
prescribed procedure and the scheme and therefore, it is not necessary to call
them up’.
5.
Relying on the MP High Court’s judgment in Hira Lal Patel v Chief Executive
Officer, District Panchayat, Sarangarh [(1998)
2 MP WN 39] , the Collector without issuing notice to the selectees
observed that if the appointment is not made as per the scheme, it can be
terminated without giving any opportunity of hearing.
6.
Aggrieved by the above interference with the selection, the appellants filed a
Revision petition before the Commissioner, Revenue, Sagar Division under
section 5 of the Appeal and Revision Rules,1995. The selectees contended
therein that without arraying them and without affording them any hearing, the
Collector could not have interfered with the selection and this would be in
violation of the principles of natural justice. The Revision Petition was
however dismissed by the Commissioner vide order dated 14.3.2000. In the said
order the Commissioner observed in para (6) that the selection is contrary to
Section 40(C) of the Adhiniyam, 1993. The Revisional Authority brushed aside
the plea of non-joinder and of not affording opportunity of hearing, by relying
on the admission of the relationship of the appellants with the members of the
selection committee, as noted in the reply filed by the Chief Executive
Officer. Aggrieved by the order of the Commissioner, the appointees filed a
writ petition under Article 226 of the Constitution of India before
the Madhya Pradesh High Court which was however dismissed by the learned single
judge vide order dated 31.7.2008. Relying on State Bank of Patiala v SK
Sharma[1996 (3) SCC 364] , it
was observed that the opportunity of hearing has to be tested on the touchstone
of actual prejudice being caused to the writ petitioners. It was also noted
that full opportunity of hearing was granted at the Revisional stage by the
Commissioner. According to the learned Judge the Chief Executive officer’s
reply established that few selectees were relatives of Smt. Pushpa
Dwivedi(Chairperson of the selection Committee) and similarly, close relatives
of Shri Swami Singh(member of the Education Committee) such as his sister-
in-law, son, daughter-in-law and nephew were also among the selected
candidates. The Single Judge relied on the five-judge bench decision of
this Court in AK Kraipak v Union of India[1969 (2) SCC 262] (for short “AK Kraipak”) where it was emphasized
that the presence of interested parties in the selection committee creates a
reasonable likelihood of bias, even if direct participation is limited. It was
therefore concluded that even though Smt. Pushpa Dwivedi(Chairperson) and Swami
Singh(member) recused themselves during interviews of their alleged relatives,
their presence on the committee could have influenced the overall selection
process.
7.
The appellants then preferred a writ appeal which was dismissed by the Division
bench of the High Court on 15.12.2008. The Division Bench noted inter alia
that:
‘though it was
imperative on the part of appellants to implead the affected parties, yet as
the affected parties had been given full opportunity from all aspects by the
revisional forum as well as by the Learned Single Judge, we do not think it apt
and apposite to quash the order and remand the matter to the Collector’.
8.
Relying on decisions of this Court on bias[A.K.
Kraipak v Union of India (1969) 2 SCC 262; J. Mohapatra & Co. v.
State of Orissa, (1984) 4 SCC 103, Ashok Kumar Yadav v. State of Haryana,
(1985) 4 SCC 417, Kirti Deshmankar v. Union of India, (1991) 1 SCC 104, Gurdip
Singh v. State of Punjab, (1997) 10 SCC 641, Utkal University v. Nrusingha
Charan Sarangi, (1999) 2 SCC 193, G.N. Nayak v. Goa University, (2002) 2 SCC
712, Govt. of T.N. v. Munuswamy Mudaliar, 1988 Supp SCC 651 : AIR 1988 SC
2232, Bihar State Mineral Development Corporation v. Encon Builders (I) (P)
Ltd., (2003) 7 SCC 418.], the Division Bench observed that bias is a state
of mind at work and when the degree of relationship is in quite proximity, bias
has to be inferred.
9.
Thereafter when the matter reached the Supreme Court, Justice KV Vishwanathan
concluded that the selection of appellants was erroneously set aside, in breach
of the principle of audi alteram partem. It was further held that the principle
must be adhered to at the original stage. Furthermore, Rule 9 of the Appeal and
Revision Rules, 1995 was not complied with. It was also observed that the
orders of the Collector & Commissioner made no reference either to
definition of ‘relative’ in explanation to Section 40(c) of Adhiniyam nor to
the resolution providing for recusal. Non-impleadment of parties amounted
to ‘no opportunity at all’ for hearing was the conclusion reached by Justice KV
Vishwanathan.
10.
On the other hand, Justice J.K. Maheshwari upheld the decision to cancel the
appointment of the appellants and opined that the first limb of natural justice
i.e. ‘rule against bias’ was irrefutably proved, as reasonable likelihood of
bias was established. The plea of non-impleadment was considered to be a
useless formality. It was further held that unless prejudice is demonstrated,
mere non-joinder at the initial stage does not violate the principles of
natural justice.
II.
SUBMISSIONS
11.
The foundational contention of the appellants is that since their appointments
were cancelled without affording them any hearing and without arraying them as
a party in the challenge by the respondent no. 4(Archana Mishra), the adverse
decision taken against the appellants, is legally unsustainable. Mr. Vivek
Tankha, the learned Senior Counsel would argue that an incorrect narrative was
the basis for the allegation made by the respondent No. 4, about unfair
selection. It is specifically pointed out that none of the relatives of the
candidates had participated during the selection of the appellants. More
importantly, the related persons had not awarded any marks to influence the
selection. Specifically adverting to the marks obtained by the challenger and
the selectees, the appellants argue that it was a fair selection and that
intervention was unmerited.
12.
On the other hand, learned Counsel for the respondent, Mrinal Gopal Elker, and
Avdhesh Kumar Singh, would rely on Section 40(c) of the Adhiniyam,1993 to
project that the said section provides that ‘any of the office bearers shall
not cause financial gain to his relatives’. According to them, the presence of
close relatives in the selection process vitiated the process of selection of
Shiksha Karmis. They projected that non- adherence to the principles of audi
alteram partem, if any, was cured by the proceedings before the commissioner
wherein appellants were given full opportunity. On that basis, it was submitted
that the non- granting of opportunity of hearing by the Collector at the
original stage was inconsequential. According to the respondent, the reasonable
likelihood of bias in selection is established by the close relationship
between the Committee members and the selected candidates who have been awarded
high marks in comparison to other candidates in the interview process.
III.
ISSUES
13.
Going by the above submissions, the following broad issues fall for our
consideration:
A. Whether the
selection is vitiated for violation of the first limb of natural justice i.e.
rule against bias?
B. Where it is a case
of violation of the principle of audi alteram partem? Is demonstration of
prejudice necessary to succeed with a claim of violation of the principle of
audi alteram partem?
C. Whether the breach
of the principle of audi alteram partem at the original stage can be cured, at
the Revisional stage?
IV.
DISCUSSION
14.
Judicial review of administrative actions are permissible on the grounds of
illegality, unreasonableness or irrationality and procedural irregularity[State of A.P. v. McDowell & Company,
(1996) 3 SCC 709; Tata Cellular v. Union of India, (1994) 6 SCC 651; and
Council of Civil Service Unions v. Minister for Civil Service, 1985 AC 374
(HL); Mohd. Mustafa v. Union of India, (2022) 1 SCC 294.]. Lord
Diplock[Council of Civil Service Unions
v. Minister for Civil Service, 1985 AC 374.] succinctly described each of
the aforementioned grounds for judicial review as under:
“By “illegality” as a
ground for judicial review I mean that the decision-maker must understand
correctly the law that regulates his decision-making power and must give effect
to it. Whether he has or not is par excellence a justiciable question to be
decided, in the event of dispute, by those persons, the Judges, by whom
the judicial power of the State is exercisable.
By “irrationality” I
mean what can by now be succinctly referred to as “Wednesbury [Associated
Provincial Picture Houses v. Wednesbury Corpn., (1948) 1 KB 223 (CA)]
unreasonableness”. It applies to a decision which is so outrageous in its
defiance of logic or of accepted moral standards that no sensible person who had
applied his mind to the question to be decided could have arrived at it.
Whether a decision falls within this category is a question that Judges by
their training and experience should be well equipped to answer, or else there
would be something badly wrong with our judicial system. To justify the
court's exercise of this role, resort I think is today no longer needed to
Viscount Radcliffe's ingenious explanation in Edwards v. Bairstow
[Edwards v. Bairstow, 1956 AC 14 : (1955) 3 WLR 410 (HL)] , of irrationality
as a ground for a court's reversal of a decision by ascribing it to an inferred
though unidentifiable mistake of law by the decision-maker. “Irrationality” by
now can stand on its own feet as an accepted ground on which a decision may be
attacked by judicial review.
I have described the
third head as “procedural impropriety” rather than failure to observe basic
rules of natural justice or failure to act with procedural fairness towards the
person who will be affected by the decision. This is because susceptibility to
judicial review under this head covers also failure by an Administrative
Tribunal to observe procedural rules that are expressly laid down
in the legislative instrument by which its jurisdiction is conferred, even
where such failure does not involve any denial of natural justice. But the
instant case is not concerned with the proceedings of an Administrative
Tribunal at all.”
15.
It is equally well-settled that courts under its writ jurisdiction do not
interfere with selections made by expert bodies by reassessing the comparative
merits of the candidates. Interference with selections is limited to decisions
vitiated by bias, malafides and violation of statutory provisions [Dalpat Abasaheb Solunke v. B.S. Mahajan,
(1990) 1 SCC 305; Badrinath v. State of T.N., (2000) 8 SCC 395, National
Institute of Mental Health & Neuro Sciences v. K. Kalyana Raman, 1992 Supp
(2) SCC 481; I.P.S. Dewan v. Union of India, (1995) 3 SCC 383; UPSC v.
Hiranyalal Dev, (1988) 2 SCC 242; ; M.V. Thimmaiah v. UPSC, (2008) 2 SCC 119
and UPSC v. M. Sathiya Priya, (2018) 15 SCC 796] . Additionally, this
Court has also held that administrative action can be reviewed on the ground of
proportionality if it affects fundamental rights guaranteed under Article
19 and 21 of the Constitution of India[Om Kumar v. Union of India, (2001) 2 SCC 386 : 2001 SCC (L&S)
1039; Union of India v. G. Ganayutham, (1997) 7 SCC 463 : 1997 SCC
(L&S) 1806 ].
16.
In this case, our primary focus is on procedural impropriety and in particular,
the breach of the principles of natural justice. The process for arriving at a
decision is equally significant as the decision itself. If the procedure is not
‘fair’, the decision cannot be possibly endorsed. The principles of natural
justice as derived from common law which guarantee ‘fair play in action’[Maneka Gandhi v. Union of India, (1978) 1
SCC 248] , has two facets which include rule against bias and the rule
of fair hearing. Additionally, a reasoned order has also been regarded as a
third facet of the principles of natural justice[S.N. Mukherjee v. Union of India, (1990) 4 SCC 594 ; Siemens
Engg. & Mfg. Co. of India Ltd. v. Union of India, (1976) 2 SCC 981; CCI v.
SAIL, (2010) 10 SCC 744; Kranti Associates (P) Ltd. v. Masood Ahmed Khan,
(2010) 9 SCC 496] and holds utmost
significance in ensuring fairness of the process.
ISSUE
A 7
17.
The first issue that falls for our consideration is whether the selection
stands vitiated on the ground of violation of the rule against bias. It must be
borne in mind that when a statute specifies the procedure for administrative
decision making, the principles of natural justice supplement but do not
substitute the statutory procedure[AK
Kraipak v Union of India (1969) 2 SCC 262] . However, even if the
statute does not provide for the administrative procedure, the authorities are
bound to make decisions in adherence to the principles of natural justice.
18.
Let us now consider the relevant statutory provisions in the present case which
operate alongside the common law principles. The Madhya Pradesh Panchayat
Shiksha Karmis (Recruitment and Conditions of Service) Rules, 1997 is framed in
exercise of the powers conferred by sub-section (2) of Section 53, sub-section
(1) of Section 70 read with subsection (1) of Section 95 of Adhiniyam, 1993 is
apposite. Rule 2(h) defines ‘Shiksha Karmi’ as under:
“Shiksha Karmi” means
the person appointed by Zila Panchayat or Janpad Panchayat, as the case may be,
for teaching in the schools under their control.”
19.
Rule 5 deals with ‘Methods of Selection and Recruitment’. Sub-rule 8 provides
that the Selection Committee shall be constituted consisting of members as
specified in Schedule II by the Zila Panchayat or the Janpad Panchayat, as the
case ,may be. The relevant sub-Rule 9 reads as under:
(i) the Committee will
assess the candidates called for interview and award marks in the following
manner:
"a) 60% marks for
marks obtained in the qualifying examination specified in Schedule II;
b) 25% marks for the
teaching experience in the schools of concerning Janpad Panchayat or Zila
Panchayat. Similar benefits will be given for teaching experience of equivalent
rural school. The decision of the Committee on the validity and valuation of
the certificate of teaching experience of rural schools will be final;
c) 15% marks for oral
test which may include the test for-
i) communication
skills in local dialect
ii) knowledge of local
environment
iii) general knowledge
iv) training and
teaching aptitude and
v) any other test
which the Selection Committee may deem fit.
d) Other things
remaining the same, preference, preference will be given to candidates who
possess certificate in B. Ed, BTI or D. Ed.
e) All other things
remaining the same, in the final selection, those who have teaching experience
of schools of Janpad Panchayat or Zila Panchayat will be given preference.
(ii) Select list of
each category shall be prepared on the basis of above assessment in order of
merit and shall include 10% names in waiting list which shall be valid for six
months.”
20.
The statutory Rules clearly specify the designation of those who must be
included in the selection committee, as outlined in Schedule II of the
Rules,1997. They are following:
“1.Chairperson,
Standing Committee of Education of Janpad Panchayat;
2. Chief Executive
Officer, Janpad Panchayat;
3. Block Education
Officer (Member Secretary);
4. Two specialists in
the subject to be nominated by the Standing Committee for Education of whom one
shall be woman; and
5. All members from
the Standing Committee of whom atleast one belongs to Scheduled Castes,
Scheduled Tribes or OBC, in case there is no SC/ST/OBC member in the Standing
Committee then the same shall be nominated from the General Body.”
21.
Therefore, ‘all members from the Standing Committee’ were required to be a part
of the selection committee. It is also important to note that the following
resolution was passed by the Standing Committee on recusal:
“(C) Letter No.
423/S.T.98 dated 26.07.1998 of the Collector, Chhatarpur was read over by Chief
Executive Officer, in which it has been mentioned that at the time of recruitment
of teachers those members and officers also take part in the interview whose
close relatives are the candidates due to which the entire selection process is
likely to be affected. Therefore, the directions are given toimmediately
examine whether any candidate is the close relative of the member of the
Committee in the interview. If any near relative of the member or the officer
is the candidate, then such member or officer should not be present on the date
of interview and any impartial person should be kept in his place. The
Committee unanimously decided that if any close relative of any member, officer
or subject expert appears for interview then the marks to be given by that
member, officer or subject specialist should be given by Chief Executive
Officer and that member, officer or subject expert shall not be present at the
venue of interview. This resolution has been passed unanimously.”
22.
Rule 40 deals with the removal of office bearers of Panchayat and provides as
under:
“40. Removal of office-bearers
of Panchayat- (1) The State Government or the prescribed authoritymay after
such enquiry as it may deem fit to make at any time, remove an office bearer-
(a) if he has been
guilty of misconduct in the discharge of his duties; or
(b) if his continuance
in office is undesirable in the interest of the public: Provided that no person
shall be removed unless he has been given an opportunity to show cause why he
should not be removed from his office.
Explanation-For the purpose of this sub-section
“Misconduct” shall include-
(a) any action
adversely affecting,-
(i) the sovereignty,
unity and integrity of India; or
(ii) the harmony and
the spirit of common brotherhood amongst all the people of State transcending
religious, linguistic, regional, caste or sectional diversities; or
(iii) the dignity of
women; or
(b) gross negligence
in the discharge of the duties under this Act;
[(c) the use of
position or influence directly or indirectly to secure employment for any
relative in the Panchayat or any action for extending any pecuniary benefits to
any relative, such as giving out any type of lease, getting any work done
through them in the Panchayat by an office-bearer of Panchayat. Explanation. -
For the purpose of this clause, the expression “relative” shall mean father,
mother, brother, sister, husband, wife, son, daughter, mother- in-law,
father-in-law, brother -in-law, sister-in-law, son-in-law or daughter-in-law :
]”
23.
The explanation to clause(c) provides for the definition of the expression
‘relative’ to mean ‘father, mother, brother, sister, husband, wife, son,
daughter, mother-in-law, father-in-law, brother-in-law, sister-in-law,
son-in-law or daughter-in-law’. Rule 100 of the Adhiniyam which has some
relevance reads thus:
“100. Penalty for
acquisition by a member, office bearer or servant of interest in contract. - If
a member or office bearer or servant of Panchayat knowingly acquires, directly
or indirectly any personal share or interest in any contract or employment,
with, by or on behalf of a Panchayat without the sanction of or permission of
the prescribed authority he shall be deemed to have committed an offense under
Section 168 of the Penal Code, 1860 (XLV of 1860).”
24.
Having noted the relevant statutory provisions, a brief survey of the
jurisprudence on the appropriate test for bias and the applicable standard of
proof would now be in order before the statutory law and the common law
principles are applied to the facts of the present case.
25.
The principle of nemo judex causa sua found its origin in English law. In Dimes
v. Proprietors of the Grand Junction Canal[Dimes
v. The Proprietors of the Grand Junction Canal, (1852) 3 HLC 759], the
House of Lords in a case concerning pecuniary interest observed that the rule
against bias extends not only to actual bias but also to the appearance of
bias. This principle was later extended to other forms of interest in R v.
Sussex Justices ex parte McCarthy [[1924]
1 KB 256] where it was held that ‘even a suspicion that there has
been improper interference with the course of justice’, would lead to the
vitiation of proceedings. Lord Hewart noted that it is of fundamental
importance that justice should not only be done, but should manifestly and
undoubtedly be seen to be done. Lord Denning in Metropolitan Properties Co.
(FGC) v Lannon[(1969) 1 QB 577] noted that, ‘if right minded persons
would think that, in the circumstances, there was a ‘real likelihood of bias’
on his part, he should not sit. And if he does sit, his decision does not
stand’. It was further held that ‘there must be circumstances from which a
reasonable man would think it likely or probable that the justice, or chairman
as the case may be, would, or did, favour one side at the expense of the
other.’
26.
The emphasis on ‘likely or probable’ as noted by Lord Denning, was considered
in R v Gough[R v. Gough, 1993 AC
646] (for short “Gough”) where the Court shifted the focus to the possibility
of bias rather than its probability. The test articulated in Gough (supra), was
whether there was a ‘real danger of bias’ rather than a ‘real likelihood’ of
bias. It prioritised the court’s assessment of bias over the perception of a
fair-minded and informed observer emphasising that the court ‘personifies the
reasonable man’. This test was criticised in other common law jurisdictions for
veering away from the public perception of bias. The House of Lords modified
the said test in Porter v Magill[(2002) 1
All ER 465] and pronounced as under:
“The Court must first
ascertain all the circumstances which have a bearing on the suggestion that the
judge was biased, it must then ask whether those circumstances would lead to a
fair minded and informed observer to conclude that there was a real possibility
that the Tribunal was biased.”
27.
Indian Courts have consistently adopted the ‘real likelihood’ test to determine
bias[Manak Lal v Dr. Prem Chand
Singhvi 1957 SCC OnLine SC 10; Ranjit Thakur v. Union of
India (1987) 4 SCC 611; Rattan Lal Sharma v. Managing Committee, Dr.
Hari Ram (Co-Education) Higher Secondary School, (1993) 4 SCC 10; S
Parthasarathi v. State of AP (1974) 3 SCC 459; SK Golap and others v
Bhuban Chandra Panda 1990 SCC OnLine Cal 264; GN Nayak v Goa University
(2002) 2 SCC]. In a recent decision in Central Organisation
for Railway Electrification v. ECI SPIC SMO MCML (JV) A Joint Venture Co. [2024 SCC OnLine SC 3219] a constitution bench of this Court speaking
through DY Chandrachud CJ(of which one of us was a member), summarised the
Indian position thus:
“Although there have
been vacillations about the test in England, the Indian courts have been
largely consistent in their approach by applying the test of real likelihood of
bias or reasonable apprehension of bias. Recently, the court has used the real
danger of bias test. However, the above discussion shows that there is no
significant difference between the real danger of bias test and the real
possibility of bias test if the question of bias is inferred from the
perspective of a reasonable or fair-minded person.”
28.
Turning now to the facts of the present case, let us first examine whether the
selection can be set aside if there are circumstances which would give rise to
a reasonable likelihood of bias from the perspective of a fair-minded person:
(i) The resolution for
recusal, passed unanimously by the Janpad Panchayat would be a relevant and an
important factor that reflects on the efforts to ensure impartiality
in the selection process. The resolution mandated that members who had
close relatives among the candidates would recuse themselves from the interview
process, with their responsibilities being delegated to the Chief Executive
Officer. In this manner, the Panchayat addressed the concern and perception of
bias in the mind of a fair-minded observer. Recusal is an acceptable mechanism
and serves to eliminate any reasonable likelihood of bias. It was however
argued that the counter affidavit filed by the Chief Executive Officer, Janpad
Panchayat, attaching the certificate given by the Sarpanch of the Panchayat,
acknowledges the relationship of the selected/appointed candidates with the
members of selection committee giving rise to a reasonable conclusion of bias.
However, when the concerned person has recused and did not award any marks, it
is difficult for us to accept a contention on a so-called relative, influencing
the selection.
(ii) The statutory
definition of ‘relative’, as per the Adhiniyam,1993 was not specifically adverted
to by the adjudicatory forums. This was an important omission as few candidates
do not fall within the scope of this definition of ‘relative’. Thus, the
challenge of bias gets diluted further.
(iii) It has also been
argued that marks obtained by the Complainant in the interview was more than
the marks obtained by the appellants. These facts could have been demonstrated
by the appellants (selectees) before the Collector, if they were arrayed as the
affected party and opportunity of hearing was provided to them.
29.
In a scenario such as this where the members did not participate in the
interview, a reasonable likelihood of bias in our opinion cannot reasonably be
inferred. While it is true that actual bias need not be proved, this appears to
be a case of allegation of bias without any foundational footing. We must also
be mindful of the fact that the absence of opportunity of hearing at the
initial stage, has prevented the selectee to show that no relative had
influenced their selection. It also disables this Court to examine the issue
holistically to conclusively determine bias.
30.
It must also be emphasized that the nemo judex rule is subject to the rule of
necessity and yields to it[ Union of
India v Tulsiram Patel, (1985) 3 SCC 398; Swadesh Cotton Mills v Union of
India, (1981) 1 SCC 664] . In J Mohapatra v State of Orissa[(1984) 4 SCC 103] , the Court
recognized that the doctrine of necessity
serves as an exception to the rule against bias. In a matter like this, the
doctrine of necessity would also be squarely attracted since the statute
explicitly mandates the composition of the selection Committee, as outlined in
Schedule II of the Rules. The doctrine of necessity recognizes that
decision-making bodies need to function even in circumstances where potential
conflicts of interests may arise. Here as earlier noted, the concerned members
recused and did not award any marks. It must however be borne in mind that the
doctrine of necessity is an exception and must be applied bearing in mind the
circumstances in a given case. The size of the jurisdiction must also be taken
into account for the application of the doctrine of necessity. In this regard,
Forsyth and Wade[H. W. R. Wade,
Administrative Law (5th Edition)] have noted that in small jurisdictions,
qualified persons may be few in number and likely to be known to the parties
making the ‘fair minded and informed observer’ test impractical. The doctrine
of necessity is where such considerations of size should be considered rather
than in the distortion of the test.
31.
The assumption of impartiality must not also be an abstract analysis but should
equally consider the contextual background, for the application of the doctrine
of necessity. This is a selection at a village level where it is very likely,
that people involved would know each other. In Charanjit Singh v Harinder
Sharma[(2002) 9 SCC 732], a public
interest action was filed challenging the selection of clerks, firemen,
drivers, peons and instructors for the Municipal Council in Mansa, a small town
in Punjab by a selection committee which had relatives of some of the selectees
on it. The High Court had quashed the decision but the Supreme Court noted that
in a small town like Mansa, it would be difficult to constitute a Selection Committee
of total strangers. The relative of some candidate or the other is bound to
find a place on the Committee. Therefore, the Court is required to see whether
the prescribed balancing mechanism was followed when a relative of the member
of the Selection Committee was being considered. The Rules required that when
such a candidate appeared, the concerned selection committee member should
recuse from the proceedings and such a candidate could only be appointed after
obtaining the approval of the Regional Deputy Director, Local Government. This
was seen as an acceptable mode to rule out bias in selection or selections
being influenced by a relative.
32.
Reliance has been placed on the landmark decision in Kraipak(supra) that
significantly expanded the scope of judicial review of administrative
decisions. This ruling was cited in Javid Rasool Bhat v. State of
Jammu & Kashmir[(1984) 2 SCC 682] where
the Court distinguished Kraipak(supra) as under:
“Great reliance was
placed by the learned counsel on A.K. Kraipak & Ors. V. Union of
India on the question of natural justice. We do not think that the case is
of any assistance to the petitioners. It was a case where one of the persons,
who sat as member of the Selection Board, was himself one of the persons to be
considered for selection. He participated in the deliberations of the Selection
Board when the clams of his rivals were considered. He participated in the
decisions relating to the orders of preference and seniority. He participated
at every stage in the deliberations of the Selection Board and at every stage
there was a conflict between his interest and duty. The court had no hesitation
coming to the conclusion that there was a reasonable likelihood of ibis and
therefore, there was a violation of the principles of natural justice. In the
case before us, the Principal of the Medical College, Srinagar, dissociated
himself from the written test and did not participate in the proceedings when
his daughter was interviewed. When the other candidates were interviewed, he
did not know the marks obtained either by his daughter or by any of the
candidates. There was no occasion to suspect his bona fides even remotely.
There was not even a suspicion of bias, leave alone a reasonable likelihood of
bias. There was no violation of the principals of natural justice.”
33.
A five-judge constitution bench of this Court in Ashok Kumar Yadav v State
of Haryana[(1985) 4 SCC 417] endorsed
the decision in Javed Rasool(supra) and held that when a near relative of
a member of the Public Service Commission is a member of the Selection
Committee, it will be enough if the concerned member desists from interviewing
his relation. He should withdraw from the committee when his relative appears
for the interview and he should not participate in discussion in regards
to the merit of the candidate and even the marks should not be disclosed to the
concerned member.
34.
Similarly, in Jaswant Singh Nerwal v State of Punjab[1991 Supp (1) SCC 313], the father of one of the selected
candidates was in the selection committee conducting the interview. However, he
did not participate in the deliberation when his son appeared for viva voce. It
was held therein that selection was thus not vitiated.
35.
Guided by the above ratios, on facts, this clearly appears to be a case of mere
suspicion of bias particularly on account of the fact that the Janpad Panchayat
unanimously passed a resolution for recusal of the concerned member. It must
also be borne in mind that rule against bias is itself considered as a ground
for recusal. The selectees were not arrayed and they couldn’t contest the
selection before the Collector, in the absence of a complete picture on the
process, it is all the more difficult to deduce that there was a reasonable
likelihood of bias. In light of the aforesaid reasons, our conclusion in this
matter is that the selection is not vitiated on account of violation of the
nemo judex rule.
ISSUE
B
36.
This brings us to the second limb of the principle of natural justice i.e. audi
alteram partem and whether the demonstration of prejudice is mandatory for
raising a claim of violation of right of hearing. The principle of audi alteram
partem lies at the very heart of procedural fairness, ensuring that no one is
condemned or adversely affected, without being given an opportunity to present
their case. The decision in Ridge v Baldwin[[1964]
AC 40] is regarded as a significant landmark decision in British
administrative law and is often referred to as a magna carta of natural
justice. This decision has resonated deeply in the Indian legal context where
natural justice principles are firmly entrenched with constitutional
guarantees.
37. In Mohinder
Singh Gill v. Chief Election Commr [(1978)
1 SCC 405] (for short ‘Mohinder Gill’), this Court observed that:
“Today in our
jurisprudence, the advances made by natural justice far exceed old frontiers
and if judicial creativity belights penumbral areas, it is only improving the
quality of government by injecting fair play into its wheels.. law lives not in
a world of abstractions but in a cosmos of concreteness and to give up
something good must be limited to extreme cases. If to condemn unheard is
wrong, it is wrong except where it is overborne by social necessity.”
38. In Swadeshi
Cotton Mills v. Union of India[(1981) 1
SCC 664] , this Court held:“this rule of fair play must not be jettisoned
save in very exceptional circumstances where compulsive necessity so
demands. The Court must make every effort to salvage this cardinal rule to the
maximum extent possible, with situational modifications.”
39.
Justice Bhagwati in Maneka Gandhi v Union of India[(1978) 1 SCC 248], described natural justice as a profound
‘humanising principle’ designed to imbue the law with fairness and ensure
justice. This principle has garnered widespread recognition across democratic
societies and has evolved into a universally accepted rule, influencing areas
of administrative decision- making.
40.
Wade and Forsyth[H W R Wade and C F
Forsyth, Administrative Law (Oxford University Press, 11th ed, 2014)]
discuss the essence of good and considerate administration as under:
“Judges are naturally
inclined to use their discretion when a plea of natural justice is used as the
last refuge of a claimant with a bad case. But that should not be allowed to
weaken the the basic principle that fair procedure comes first, and that it is
only after hearing both sides that merits can be properly considered. In the
case of a tribunal which must decide according to, it may be justifiable to
disregard a breach of natural justice where the demerits of the claim are such
that it would in any case be hopeless. But in the case of a discretionary
administrative decision, such as dismissal of a teacher or expulsion of a
student, hearing their case will often soften the heart of the authority and
alter their decision, even though it is clear from the outset that punitive
action would be justified. This is the essence of a good and considerate administration,
and the law should take care to preserve it.”
41.
The opportunity of hearing is considered so fundamental to any civilised legal
system that the courts have read the principles of natural justice into an
enactment to save it from being declared unconstitutional on procedural grounds
[Olga Tellis v. Bombay Municipal
Corporation (1985) 3 SCC 545)] .
42.
It has been argued before us that if the failure to provide hearing does not
cause prejudice, observing the principle of natural justice may not be
necessary. In this context, a three judge bench of this Court in SL
Kapoor v Jagmohan[(1980) 4 SCC 379] speaking
through Justice Chinappa Reddy considered such arguments to be ‘pernicious’ and
held that ‘the non-observance of natural justice is itself prejudice to any man
and proof of prejudice independently of proof of denial of natural justice is
unnecessary’ . The Supreme Court, however, has drawn out an exception where ‘on
admitted or indisputable facts only one conclusion is possible, and under the
law, only one penalty is permissible, then the Court may not compel the
observance of natural justice’[Swadeshi
Cotton Mills v Union of India (1981) 1 SCC 664; Aligarh Muslim University
v Mansoor Ali Khan (200) 7 SCC 529] .
43.
Professor IP Massey[I.P. Massey,
Administrative Law (8th Edition,2012)] has commented on this shift as
under:
“Before the decision
of the Highest Court in SL Kapoor v Jagmohan, the rule was that the
principles of natural justice shall apply only when the an administrative action
has caused some prejudice to the person, meaning thereby that he must have
suffered some ‘civil consequences’.
Therefore, the person
had to show something extra in order to prove ‘prejudice’ or civil
consequences. This approach had stultified the growth of administrative law
within an area of highly practical significance. It is gratifying that in
Jagmohan, the Court took a bold step in holding that a separate showing of
prejudice is not necessary. The non-observance of natural justice is in itself
prejudice caused. However, merely because facts are admitted or are
undisputable it does not follow that the principles of natural justice need not
be observed.”
44. In Bank
of Patiala v SK Sharma[(1996) 3 SCC
364] , the Supreme Court observed that where an enquiry is not
convened by any statutory provision and the only obligation of the
administrative authority is to observe the principles of natural justice, the
Court/tribunal should make a distinction between a total violation of the rule
of fair hearing and violation of the facet of that rule. In other words, a
distinction must be made between ‘no opportunity’ or ‘no adequate opportunity’.
In the case of the former, the order passed would undoubtedly be invalid and
the authority may be asked to conduct proceedings afresh according to the rule
of fair hearing. But in the latter case, the effect of violation of a facet of
the rule of fair hearing has to be examined from the standpoint of prejudice.
45. In Dharampal
Satyapal Ltd. v. Dy. Comm. Of Central Excise, Gauhati and Ors. [(2015) 8 SCC 519], this Court dealt
with the prejudice question as under:
“42. So far so good.
However, an important question posed by Mr Sorabjee is as to whether it is open
to the authority, which has to take a decision, to dispense with the
requirement of the principles of natural justice on the ground that affording
such an opportunity will not make any difference? To put it otherwise, can the
administrative authority dispense with the requirement of issuing notice by
itself deciding that no prejudice will be caused to the person against whom the
action is contemplated? Answer has to be in the negative. It is not permissible
for the authority to jump over the compliance of the principles of natural
justice on the ground that even if hearing had been provided it would have
served no useful purpose. The opportunity of hearing will serve the purpose or
not has to be considered at a later stage and such things cannot be presumed by
the authority. This was so held by the English Court way back in the year 1943
in General Medical Council v. Spackman [1943 AC 627].
This Court also spoke
in the same language in Board of High School and Intermediate Education v.
Chitra Srivastava [(1970) 1 SCC 121]……”
46. In
a more recent decision in State of UP v Sudhir Kumar Singh[(2021) 19 SCC 706], the position of law
was summarised as under:
“(1) Natural justice
is a flexible tool in the hands of the judiciary to reach out in fit cases to
remedy injustice. The breach of the audi alteram partem rule cannot by itself,
without more, lead to the conclusion that prejudice is thereby caused.
(2) Where procedural
and/or substantive provisions of law embody the principles of natural justice,
their infraction per se does not lead to invalidity of the orders passed. Here
again, prejudice must be caused to the litigant, except in the case of a
mandatory provision of law which is conceived not only in individual interest,
but also in public interest.
(3) No prejudice is
caused to the person complaining of the breach of natural justice where such
person does not dispute the case against him or it. This can happen by reason
of estoppel, acquiescence, waiver and by way of non-challenge or non-denial or
admission of facts, in cases in which the Court finds on facts that no real
prejudice can therefore be said to have been caused to the person complaining
of the breach of natural justice.
(4) In cases where
facts can be stated to be admitted or indisputable, and only one conclusion is
possible, the Court does not pass futile orders of setting aside or remand when
there is, in fact, no prejudice caused. This conclusion must be drawn by the
Court on an appraisal of the facts of a case, and not by the authority who
denies natural justice to a person.
(5) The “prejudice”
exception must be more than a mere apprehension or even a reasonable suspicion
of a litigant. It should exist as a matter of fact, or be based upon a definite
inference of likelihood of prejudice flowing from the non-observance of natural
justice.”
47.
The aforementioned principles on the ‘prejudice exception’ must not be however
be understood as infringing upon the core of the principle of audi alteram
partem. In this regard, the constitutionalisation of administrative law
and the doctrinal shifts spearheaded in Maneka Gandhi(supra) were
succinctly observed in a recent judgment in Madhyamam Broadcasting Ltd. v.
Union of India[(2023) 13 SCC 401] , as under:
“55.1.Firstly,
procedural fairness was no longer viewed merely as a means to secure a just
outcome but a requirement that holds an inherent value in itself. In view of
this shift, the courts are now precluded from solely assessing procedural
infringements based on whether the procedure would have prejudiced the outcome of
the case. [S.L. Kapoor v. Jagmohan, (1980) 4 SCC 379; “The non-observance of
natural justice is itself prejudice to any man and proof of prejudice
independently of proof of denial of natural justice is unnecessary; also
see Swadeshi Cotton Mills v. Union of India, (1981) 1 SCC 664 : AIR 1981
SC 818] Instead, the courts would have to decide if the procedure that was
followed infringed upon the right to a fair and reasonable procedure,
independent of the outcome. In compliance with this line of thought, the courts
have read the principles of natural justice into an enactment to save it from
being declared unconstitutional on procedural grounds. [Olga Tellis
v. Bombay Municipal Corpn., (1985) 3 SCC 545; C.B. Gautam v. Union of
India, (1993) 1 SCC 78; Sahara India (Firm) (1) v. CIT, (2008) 14 SCC
151; Kesar Enterprises Ltd. v. State of U.P., (2011) 13 SCC 733] 55.2.
Secondly, natural justice principles breathe reasonableness into the procedure.
Responding to the argument that the principles of natural justice are not
static but are capable of being moulded to the circumstances, it was held that
the core of natural justice guarantees a reasonable procedure which is a
constitutional requirement entrenched in Articles 14,
19 and 21. The facet of audi alteram partem encompasses the
components of notice, contents of the notice, reports of inquiry, and materials
that are available for perusal.
While situational
modifications are permissible, the rules of natural justice cannot be modified
to suit the needs of the situation to such an extent that the core of the
principle is abrogated because it is the core that infuses procedural
reasonableness. The burden is on the applicant to prove that the procedure that
was followed (or not followed) by the adjudicating authority, in effect,
infringes upon the core of the right to a fair and reasonable hearing. [See
para 12 of Bhagwati, J.'s judgment in Maneka Gandhi v. Union of India,
(1978) 1 SCC 248.]”
48.
Pertinently on the issue, a five judge bench of this Court in CORE(supra)
described the object of observing the principles of natural justice as under:
“80. …The object of
observing the principles of natural justice is to ensure that “every person
whose rights are going to be affected by the proposed action gets a fair
hearing.” The non-observance of natural justice is itself a prejudice to any
person who has been denied justice depending upon the facts and circumstances
of each case. The principle of procedural fairness is rooted in the principles
of the rule of law and good governance. In Madhyamam Broadcasting
Limited v. Union of India(2023) 13 SCC 401 , this Court held that the
requirement of procedural fairness “holds an inherent value in itself.”
49.
Returning to the facts of the present case, the Collector records in his order
that even though the selected ‘relatives’ have not been made parties, ‘it is
proved that the appointment of these relatives could not be deemed to be made
according to the scheme’ and hence it is not necessary to provide an
opportunity of hearing. This was reiterated by the Commissioner in his
Revisional order. The Division Bench in its order also notes that it was
imperative to implead the affected parties. As noted by Justice Vishwanathan,
Respondent No. 4(Archana Mishra) ought to have impleaded the candidates who
were selected and appointed and even if she didn’t array the affected parties,
the Collector should have given an order for impleadment of the selectees. The
facts here are not such where only one position emerges. It is a case of disputed
facts. Significantly the legal effect of recusal was not examined in the orders
and it is difficult to speculate what the conclusion of the Collector and the
Revisional authority would have been, if they were posted of the recusal
resolution.
50.
Moreover, the question about whether prejudice was caused due to non-observance
of the principles of natural justice could not be raised where such principles
are incorporated into 32 of 44
statutory procedure[State Govt. Houseless Harijan Employees Association v State of
Karnataka (2001) 1 SCC 610] . In this regard, Rule 9 is crucial and
reads as under:
“9. Power of appellate or revisional authority.-
The appellate or revisional authority after giving an opportunity to parties to
be heard and after such further enquiry, if any, as it may deem necessary
subject to the provisions of the Act and the rules made there under, may
confirm, vary or set aside the order or decision appealed against.”
51.
Considering the above, Justice Vishwanathan rightly notes as under:
“At least at the stage
when the Collector identified all the 14 names, Rule 9 of the A&R Rules,
ought to have been complied with and notices ought to have been issued giving
an opportunity to the selected candidates to set out their version and
thereafter hold such enquiry as the Collector may deem necessary. This was also
not done. This is all the more when only the appointment of the 14 candidates
of the 249 appointees/candidates were set aside on the ground that 33 they were
relatives and it was not a case of setting aside of the entire selection.
It is well settled
that in service matters when an unsuccessful candidate challenges the selection
process, in a case like the present where the specific grievance was against 14
candidates under the category of relatives and when the overall figure was only
249, at least the candidates against whom specific allegations were made and
who were identified ought to have been given notices and made a party. This
Court has, even in cases where the selected candidates were too large, unlike
in the present case, held that even while adjudicating the writ petitions at
least some of the selected candidates ought to be impleaded even it is in a
representative capacity. It has also been held that in service jurisprudence,
if an unsuccessful candidate challenges the selection process the selected
candidates ought to be impleaded. [See J.S. Yadav vs. State of Uttar
Pradesh and Another, (2011) 6 SCC 570 (para 31) and Prabodh Verma and
Others vs. State of Uttar Pradesh and Others, (1984) 4 SCC 251 (para 28) and
Ranjan Kumar and Others vs. State of Bihar and Others, 2014:INSC:276 = (2014)
16 SCC 187 (paras 4,5,8,9 & 13)] This is not a case where the allegation
was that the mischief was so widespread and all pervasive affecting the result
of the selection in a manner as to make it difficult to sift the grain from the
chaff. It could not be said and it is not even the case of the State that it
was not possible to segregate the allegedly tainted candidates from the untainted
candidates. [See Union of India and Others vs. G. Chakradhar, (2002)
5 SCC 146 (paras 7 & 8), Abhishek Kumar Singh vs. G. Pattanaik and Others,
2021:INSC:305 = (2021) 7 SCC 613 (para 72).”
52.
In a catena of cases, significantly a clear distinction has been crafted by
this Court between the service of notice and the requirement of fair hearing [East India Commercial Co. Ltd. v.
Collector of Customs AIR 1962 SC 1893; Uma Nath Pandey and Ors. v state of
UP (2009) 12 SCC 40] . The respondents rely on SK Sharma(supra)
which highlights the circumstances when non- adherence to the principle of
natural justice, will not be fatal. It must however be borne in mind
that S.K. Sharma (supra) was not a case of total denial of
opportunity unlike in the present case. In fact, as Justice Vishwanathan
rightly notes in S.K. Sharma (supra), after noticing the classic case
of Ridge vs. Baldwin[1964 AC 40] , this Court expressly records that where
there is a total violation of principles of natural justice, the violation would
be of a fundamental nature. Therefore, SK Sarma(supra) did not deal with
the violation of the first limb of Audi
Alteram Partem principles, a situation of non-service of notice. The judgment
in fact explicitly records that “a distinction ought to be made between
violation of the principle of natural justice, audi alteram partem, as such,
and violation of a facet of the said principle. In other words, distinction
between “no notice” “no hearing” and “no adequate hearing” or to put it in
different words, “no opportunity” and “no adequate opportunity”, was
highlighted. The judgement in SK Sharma(supra) is therefore
inapplicable to the present matter which is a case of no notice whatsoever.
53.
The statutory provision also clearly provided for an opportunity of hearing:
“40. Removal of
office-bearers of Panchayat- (1) The State Government or the prescribed
authority may after such enquiry as it may deem fit to make at any time, remove
an office-bearer-
(a) if he has been
guilty of misconduct in the discharge of his duties; or
(b) if his continuance
in office is undesirable in the interest of the public:
Provided that no
person shall be removed unless he has been given an opportunity to show cause
why he should not be removed from his office.” [emphasis supplied]
54.
In the absence of notice, the breach strikes at the fundamental core of
procedural fairness, rendering the decision invalid unless exceptional
circumstances justify such deviation. The vitiation of selection was not only a
breach of the principles of natural justice but also contrary to the express
statutory provision that required for an opportunity to show cause and an
opportunity to provide self-defence. The prejudice theory must be understood as
an exception to the general rule and cannot therefore be the norm. In view of
the foregoing, a gross violation of the principle of audi alteram partem is
noticed in the present case.
ISSUE
C
55.
The next issue that falls for our consideration is whether the denial of
natural justice at the initial stage can be cured by an appellate body. The
earliest decision on the issue was delivered by the High Court of Australia in
Australian Workers’ Union v Bowen[Australian
Workers’ Union v Bowen (No. 2) (1948) 77 C.L.R. 601]. Bowen contested his
dismissal by the General Council of the Union, claiming bias because the Union
Secretary acted as both prosecutor and judge. While the Commonwealth Court of
Conciliation and Arbitration ruled in his favour, the decision was overturned
on appeal. The appellate court held that the Secretary’s role did not violate
the rule against bias and, even if it had, any flaw in the
original proceedings was remedied by a fair appeal to the Annual
Conference, which Bowen did not dispute.
56.
Thereafter, in a case involving a trade union dispute, Lord Denning in
Annamunthodo v Oilfield Workers’ Trade Union [[1961] AC 945 (PC)] , ruled that a flaw in natural justice
during the initial hearing could not be remedied by an appeal.
57.
Leary v. National Union of Vehicle Builders[(1970)
2 All ER 713] (for short “Leary”) is a leading authority on the point that
a failure of natural justice at the initial stage cannot be cured at the
appellate stage. The case involved the plaintiff’s expulsion by a Branch
Committee of his trade union, at a meeting about which he was unaware. He
approached the Appeals Council for relief against the order of the branch
Committee, which conducted a full rehearing but upheld the Branch Committee’s
decision. The plaintiff then filed a writ, seeking declarations that his
expulsion from union membership as well as his position as area organizer was
unlawful, invalid, and void. Megarry J framed the question thus:
“if a man has never
had a fair trial by the appropriate trial body, is it open to an appellate body
to discard its appellate function and itself give the man the fair trial that
he has never had?. If the rules and the law combine to give the member the
right to a fair trial and the right of appeal, why should he be told that he
ought to be satisfied with an unjust trial and a fair appeal?... Even if the
appeal is treated as a hearing de novo, the member is being stripped of
his right to appeal to another body from the effective decision to expel him'
58.
It was held that the proper course in such a situation would be to hear the
matter afresh:
“If one accepts the
contention that a defect of natural justice in the trial body can be cured by
the presence of natural justice in the appellate body, this has the result of depriving
the member of his right of appeal from the expelling body. If the rules and the
law combine to give the member the right to a fair trial and the right of
appeal, why should he be told that he ought to be satisfied with an unjust
trial and a fair appeal? Even if the appeal is treated as a hearing de novo,
the member is being stripped of his right to appeal to another body from the
effective decision to expel him. I cannot think that natural justice is
satisfied by a process whereby an unfair trial, though not resulting in a valid
expulsion, will nevertheless have the effect of depriving the member of a right
of appeal when a valid decision to expel him is subsequently made. Such a
deprivation is a powerful result to be achieved by what in law is a mere
nullity; and it is no mere triviality that might be justified on the ground
that natural justice does not mean perfect justice. As a general rule, at all
events, I hold that a failure of natural justice in the trial body cannot be
cured by a sufficiency of natural justice in an appellate body.”
59.
In Calvin v Carr[(1979) 2 WLR 755] (for
short “Calvin”), the Judicial Committee of the Privy Council only gave a
qualified endorsement to the Leary principle. In Lloyd v McMahon[(1987) 1 AC 625], Lord Templeman
considered the Calvin principle but commented that instead of laying down
general principles, the question arising in that case must be answered by
considering the particular statutory provisions applicable therein. In
that case, a distinction was drawn between full appeals where all the evidence
may be examined and limited appeals on questions of law only or where the
appellate body does not investigate findings of fact.
60.
Indian courts have applied the Leary principle as a rule[Institute of Chartered Accountants v. L. K. Ratna (1986) 4 SCC
537; Fareed Ahmed v Ahmedabad Municipality AIR 1976 SC 2095; Shri Mandir
Sita Ramji v Government of Delhi (1975) 4 SCC 298; Mysore SRT Corp v
Mirza Khasim AIR 1977 SC 747; Laxmidhar v State of Orissa AIR
1974 Ori 127; Kashiram Dalmia v State AIR 1978 Pat 265; G
Rajalakshmi v Appellate Authority AIR 1980 AP 100; Serajuddin Co. v
State of Orissa AIR 1974 Cal 296] and the Calvin principle as an
exception[Charan Lal Sahu v Union of
India (1990) 1 SCC 613; Jayantilal Ratanchand Shah v Reserve Bank of
India (1996) 9 SCC 650; United Planters’ Association of Southern
India v KG Sangameswaran (1997) 4 SCC 741] . This is more so due
to the institutional structure as the writ court does not usually go into facts
and judicial review of administrative action is limited to the decision-making
process and not the decision itself. In our view, the provision for an appeal
should not rest on the assumption that the appellate body is infallible. When
one party is denied the opportunity to present their case, the initial decision
fails to provide meaningful guidance to the appellate authority, in achieving a
fair and just resolution.
61.
In this context, Professor Wade[H. W. R.
Wade, Administrative Law ((Oxford: Clarendon Press 1982)] has observed as under:
“In principle, there
ought to be an observance of natural justice at both stages… If natural justice
is violated at the first stage , the right to appeal is not so much a true
right to appeal as a corrected initial hearing: instead of fair trial followed
by appeal., the procedure is reduced to an unfair trial followed by fair
trial”
62.
Professor Laurence Tribe[Lawrence H.
Tribe, ‘American Constitutional Law’ ((The Foundation Press 1978)]
had pertinently observed that whatever the outcome, a valued human interaction
in which the affected person experiences atleast the satisfaction of
participating in the decision that vitally concerns her is of utmost
importance:
“Both from the right
to be heard and the right to be told why, are analytically distinct from the
right to secre a different outcome; these rights to interchange express the
elementary idea that to be a person, rather than a thing, is at atleast to be
consulted about what is done with one.”
63. In Institute
of Chartered Accountants v. L. K. Ratna[(1986)
4 SCC 537] , the Indian Supreme Court endorsed the position adopted by
Megarry J. Rejecting the argument that an appeal to the High Court
under Section 22A of the Chartered Accountants Act, 1949, could
rectify the initial defect, Pathak J. declared the order null, void, and of no
effect. This ruling was consistent with two earlier Supreme Court
decisions in State of U.P. v. Mohammed Nooh[1958 SCR 595] and Mysore State Road Transport
Corporation v. Mirja Khasim [(1977)
2 SCC 457] , both of which established that an appeal cannot validate what
is clearly a nullity.
64.
The Supreme Court has invoked the Calvin principle only in exceptional
circumstances. For instance, in Charan Lal Sahu v Union of India[(1990) 1 SCC 613] in a case
concerning a challenge to the validity of the Bhopal Gas Leak Disaster
(Processing of Claims) Act, 1985, the Court applied the Calvin principle, given
the fact that the settlement fund was held to be sufficient to meet the needs
of just compensation to the victims of the Bhopal gas leak tragedy, it was held
that the grievance on the score of not hearing the victims first would not
really survive. It recorded that “to do a great right” after all it is
permissible sometimes “to do a little wrong”.
65.
What is also of fundamental importance in the present case is that Rule 5(b)
clearly provided that application for revision could be only entertained on the
point of law and not on facts:
“(b) An application
for revision by any party shall only be entertained if it is on the point of
law and not on facts.”
66.
Additionally, a perusal of the order(s) of the Collector and Commissioner in
Revision would also show that they are practically identical. An ineffective
hearing at the initial stage therefore taints the entire decision-making
process leading to a cascade of flawed orders at subsequent stages. Providing
a hearing to the affected individual, minimizes the risk of administrative
authorities making decisions in ignorance of facts or other relevant
circumstances, as it allows all pertinent issues to be brought to light. This
process not only aids the administration in arriving at a correct decisions but
also enables courts to more effectively review such actions. The primary purpose
of natural justice is to assist the administration in reaching sound decisions
at the outset, reducing the likelihood of decisions being overturned later. Its
significance lies in fostering fair and well-informed decision- making at the
very first instance.
67.
Following the above discussion, it must be concluded that a defect at the
initial stage cannot generally be cured at the appellate stage. Even in cases
where a ‘full jurisdiction’ may be available at the appellate stage, the Courts
must have the discretion to relegate it to the original stage for an
opportunity of hearing. Therefore, the ex-parte decision to set aside the
appellants selection stands vitiated.
V.
CONCLUSION
68.
The principle of audi alteram partem is the cornerstone of justice, ensuring
that no person is condemned unheard. This principle transforms justice from a
mere technical formality into a humane pursuit. It safeguards against arbitrary
decision-making, and is needed more so in cases of unequal power dynamics[Upendra Baxi, ‘Preface: The Myth and
Reality of the Indian Administrative Law’, in IP Massey(ed)
‘Administrative Law’ (8th edn, EBC 2012)].
69.
An allegation of bias, can only be proved if facts are established after giving
an opportunity of hearing. This process requires a fair and transparent
procedure in which the concerned parties are given an adequate opportunity to
present their case. Such an opportunity allows the accused party or the
affected individuals to respond to the allegations, provide evidence, and
clarify any misgivings regarding the decision-making process. Therefore, for an
allegation of bias to be proved, it is imperative that the procedural
safeguards of a fair hearing are observed allowing for establishment of the
relevant facts.
70.
In light of the foregoing, we uphold the opinion of Justice KV Vishwanathan
allowing the appeal(s) and setting aside the judgment of the Division Bench.
Resultantly, this Court is not able to endorse the opinion rendered by Justice
JK Maheshwari.
71.
Since the selection pertains to the year 1998, and the appellants have
continuously held office and performed their duties for over twenty-five years
under interim orders, remanding the matter for a fresh inquiry would hardly be
a practical exercise and will be an injustice to the appointees.
The
time lag can be better appreciated by bearing in mind that one of the
appellants has already superannuated.
72.
The matters stand answered and allowed on the above terms.
Parties
to bear their own cost.
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