Amarnath Choudhary V. Braithwaite and Co. Ltd.- Case Analysis

7/27/2019 Amarnath Choudhary V. Braithwaite and Co. Ltd.- Case Analysis

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GUJARAT NATIONAL LAW UNIVERSITY

AMARNATH CHOWDHURY

v. BRAITHWAITE & CO.LTD. & Ors.A CASE STUDY

BY:

SRINJOY BHATTACHARYA

2nd

Year, Gujarat National Law University

Registration Number 11B149


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INDEX

1. INTRODUCTION- Pg 1-101.1RULE AGAINST BIAS(NEMO JUDEX IN CAUSA SUA)-Pg 2

1.1.1. TYPES OF BIAS-Pg 41.1.2. TESTS OF BIAS- Pg 5

1.1.2.1 DIFFERENTIATION BETWEEN THE TESTS- Pg 8

1.1.3. EXCEPTIONS TO THE RULE AGAINST BIAS-Pg 10

2. AMARNATH CHOUDHARY v. BRAITHWAITE & CO. LTD. & Ors.- Pg 11-15

2.1 FACTS OF THE CASE- Pg 11

2.2 FINDINGS AND DECISION OF THE SUPREME COURT- Pg 12

2.3 PERSONAL VIEWS ON THE JUDGEMENT- Pg 14

3. CONCLUSION- Pg 16


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1) INTRODUCTIONThe Principles of Natural Justice (PNJ) form the cornerstone of administrative law in India, in

specific, and across existing legal systems in countries across the world, in general. In India,there has been no statutory limit that has been set within which the administrative agencies are

supposed to exercise their decision making powers. This limit has been set by the Indian

judiciary through various decisions over the years, through application of the PNJ.

Simply put, PNJ entails fairness, equity and equality. In a welfare state like India, the role and

jurisdiction of the administrative agencies are increasing manifold with the passage of time. The

concept of Rule of Law would lose its validity if the instrumentalities of the state are not charged

with the duty of discharging these functions in a fair and just manner.

In India, the PNJ are firmly enshrined in Article 14 and Article 21 of the Constitution. With the

introduction of the concept of substantive and procedural due process within the ambit of

Article 211, all that entails fairness with the boundaries of PNJ can be read into Article 21. The

violation of the PNJ would lead to arbitrariness and thus, would be a violation of Article 14 of

the Indian Constitution2.

In the case of A.K. Kraipak v. Union of India3, the Supreme Court of India held that the PNJ can

also be applied to administrative proceedings. The concept of natural justice in itself is meant to

prevent the miscarriage of justice and entails the following:

i) No one shall be a judge in his own cause (nemo judex in causa sua) orthe Ruleagainst bias;

ii) No decision shall be given against a person without affording him reasonable hearing-(audi alteram partem).

Thus, as can be seen from the above decision of the Supreme Court, the PNJ entails two basic

principles. With regard to the case at hand, an analysis of the first principle i.e., the Rule Against

Bias is pertinent.

1.1) RULE AGAINST BIAS (NEMO JUDEX IN CAUSA SUA)According to the Blacks Law Dictionary, bias is defined as an Inclination; bent; prepossession:

a preconceived opinion; a predisposition to decide a cause or an issue in a certain way, which

does not leave the mind perfectly open to conviction.4

1Union of India v. R. Gandhi, (2010) 6 SCR 857

2E.P. Royappa v. State of Tamil Nadu, 1974 SCR (2) 348

3AIR 1970 SC 2042

4http://theblackslawdictionary.org/bias/; Last visited on 30

thMarch, 2013.
http://thelawdictionary.org/conviction/http://theblackslawdictionary.org/bias/http://theblackslawdictionary.org/bias/http://theblackslawdictionary.org/bias/http://theblackslawdictionary.org/bias/http://thelawdictionary.org/conviction/


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In general legal usage, bias means an operative prejudice, whether conscious or unconscious

with regard to a party or an issue. The Rule against Bias flows from the following two principles:

i) No one should be a judge in his own causeii) Justice should not only be done but manifestly and undoubtedly be seen to be done-

Lord Hewart, the Lord Chief Justice of England and Wales.5

The essence of this principle is to ensure impartiality in decision making. Without impartiality,

public confidence cannot be maintained in the legal system. A lack of impartiality would result

in loss of nobility of the legal system and would ensure chaos. Lord Denning observed in

Metropolitan Properties Co. (F.G.C.) Ltd. V. Lannon6: Justice must be rooted in confidence

and confidence is destroyed when right-minded people go away thinking: 'The judge was

biased.'"

However, impartiality of the judge is not required in isolation. In addition, it is required that the

judge is in a position to apply his mind objectively to the dispute before him. The Rule against

Bias, thus, has two main aspects:

i) The administrator exercising adjudicatory powers must not have any personal orproprietary interest in the outcome of the proceedings.

ii) There must be real likelihood of bias. Real likelihood of bias is a subjective term,which means either actual bias or a reasonable suspicion of bias. It is difficult

to prove the state of mind of a person. Therefore, what the courts see is whether

there is reasonable ground for believing that the deciding factor was likely to

have been biased.

Where a person, who discharges a quasi-judicial function, has, by his conduct, shown that he isinterested, or appears to be interested, that will disentitle him from acting in that capacity. In thisregardthe Supreme Court pointed out that one of the fundamental principles of natural justice isthat in case of quasi-judicial proceedings, the authority, empowered to decide the dispute

between opposing parties must be one without bias, by which is meant an operative prejudice,whether conscious or unconscious towards one side or the other in the dispute.

7

At this juncture, it is imperative to differentiate between malafide and bias. In case of mala fide,

Courts insist on proof of mala fide while as in case of bias, proof of actual bias is not necessary.What is necessary is that there was real likelihood of bias and the test is that of a reasonable

man. Professor M.P. Jain puts it in the following words:

The reason underlying this rule is that bias being a mental condition there are serious

difficulties in the path of proving on a balance of probabilities that a person required to actjudicially was in fact biased. Bias is the result of an attitude of mind leading to a predisposition

towards an issue. Bias may arise unconsciously. It is not necessary to prove existence of bias in

5R v. Sussex Judges, Ex Parte McCarthy [1924] 1 K.B. 256 at 259

6[1969] 1 Q.B. 577

7Wade, Administrative Law , Page 311, 1982 Edition.


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fact, what is necessary is to apply the test what will reasonable person think about the matter?

Further, justice should not only be done but seem to be done. Therefore, the existence of actual

bias is irrelevant. What is relevant is the impression which a reasonable man has of theadministration of justice.

8

Griffith and Street comment on the English position with regard to the same in their book,Principles of Administrative Law. According to them, Rule of bias is only a principle ofjudicial conduct and is imposed strictly on the exercise of the judicial or quasi- judicial

authorities. In the matters of sole discretion of the authority or in the matters depending upon the

subjective satisfaction of the authority concerned, the Court will not issue any order on theground of bias for quashing it. The search for mala fide intention and scrutinizing the honest

intention of the administrative authorities have always been subject-matter of judicial review by

the English Courts.9

1.1.1) TYPES OF BIASBias can take the following forms:

I) PECUNIARY BIAS: Judicial approach is unanimous and decisive on the point thatany financial interest, howsoever, small it may be, would vitiate administrative

action. The disqualification will not be avoided by non-participation of the biased

member in the proceeding if he was present when the decision wasreached.

10However, the rule against bias will not be applied where the judge though

having a financial interest, has no financial interest in the outcome of the case.11

II) PERSONAL BIAS: Personal bias arises from a certain relationship equation betweenthe deciding authority and the parties which incline him unfavourably or otherwise on

the side of one of the parties before him. Such equation may develop out of varied

forms of personal or professional hostility or friendship. However, no exhaustive list

is possible.12

III) SUBJECT MATTER BIAS:Those cases fall within this category where the deciding

officer is directly, or otherwise, involved in the subject matter of the case. Here again

mere involvement would not vitiate the administrative action unless there is a reallikelihood of bias.

13

IV) DEPARTMENTAL BIAS/INSTITUTIONAL BIAS: The problem of departmentalbias is something which is inherent in the administrative process, and if it is noteffectively checked, it may neglect the very concept of fairness in the administrative

8M.P. Jain Evolving Indian administrative Law, p. 78.

9Griffith and Street, Principles of Administrative Law, Pg. 20.

10 R. v. Hendon Rural Distt. Council ex p. Chorley, (1933) 2 KB 696.11

R. v. Mulvihill, (1990) 1 All ER 436.12

Meenglas Tea Estate v. Workmen, AIR 1963 SC 1719. The Supreme Court held that the

manager cannot conduct an enquiry against worker arising from an allegation that he had beatenthe Manager. In D.K.Khanna v. Union of India, AIR 1973 HP 30, the High Court quashed the

selection of he candidate where his son-in-law was a member of the Selection Committee.13

R. v. Deal Justices ex p. Curling, (1881) 45 LT 439; Murlidhar v. Kadam Singh, AIR 1954 MP

111; Gullapalli Nageswara Rao v. APSRTC, AIR 1959 SC 308


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proceeding.14

The problem of departmental bias also arises in a different context

where the functions of a judge and a prosecutor are combined in the same department.

It is not uncommon to find that the same department which initiates a matter alsodecides it, therefore, at times, departmental fraternity and loyalty militates against the

very concept of fair hearing.15

However, where there is no such conflict between the

duty and interest of the department, concept of institutional bias cannot be narrowlyconstrued in view of compelling institutional constraints.16

V) PRECONCEIVED NOTION BIAS: Bias arising out of preconceived notions is a

very delicate problem of administrative law. On one hand, no judge as a human being

is expected to sit as a blank sheet of paper, on the other hand, preconceived notionswould vitiate a fair trial.

17However, the problem of bias arising from preconceived

notions may have to be disposed of as an inherent limitation of the administrative

process.

VI) BIAS ON ACCOUNT OF OBSTINACY: The Supreme Court18 has discovered a newcategory of bias arising out of thoroughly unreasonable obstinacy. Obstinacy implies

unreasonable and unwavering persistence and the deciding officer would not take no

for no answer. This new category of bias was discovered in a situation where a judgeof the Calcutta High Court upheld his own judgment while sitting in an appeal against

his own judgment.

1.1.2) TESTS OF BIASThe following tests are generally applied to test bias:

I) TEST OF REAL LIKELIHOOD OF BIAS OR REASONABLE SUSPICION OFBIAS: Much confusion has been caused in the past by the concurrent use of two

differently formulated tests for disqualifying bias. Many judges have laid down and

applied the real likelihood formula, holding that the test for disqualification iswhether the facts, as assessed by the court, give rise to real likelihood of bias

19; and

this test has naturally been emphasized in cases where allegation of bias was far-

fetched.20

Other judges have employed a reasonable suspicion test emphasizing that

justice must be seen to be done, and that no person should adjudicate in any way if it

might reasonably be thought that he ought not to act because of some personal

14Gullapalli Nageswara Rao v. APSRTC,Id.

15 Hari v. Dy. Commr. Of Police, AIR 1956 SC 55916

South Indian Cashew Factories Workers Union v. Kerela State Cashew Development Corpn.

Ltd., (2006) 5 SCC 20117

Govindaraju v. State of T.N., (1973) 1 SCC 33618

THE TRIBUNE, May 18, 1998, at Pg.1119

R. v. Rand, (1866) LR 1 QB 230; R v. Sutherland Justices, (1901) 2 KB 357; Hannam v.

Bradford Corporation, [1970] 1 WLR 93720

R. v. Camborne Justices ex p. Pearce, [1955] 1 QB 41


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interest.21

In one case it was even said that the rule for judges of all kinds was that

they must be free from even unreasonable suspicion of bias.

In many cases, both the tests lead to the same result, since likelihood was given the

meaning of possibility rather than probability. For if there was no real possibility of

bias, no reasonable person would suspect it. But other judicial statements, more

naturally, equated likelihood with probability22, so that the two tests became

different, and courts confronted with them felt obliged to elect between them.

In order to challenge administrative action successfully on the ground of personal

bias, it is essential to prove that there is a reasonable suspicion of bias23

or a real

likelihood of bias. The reasonable suspicion test looks mainly to outward

appearance, and the real likelihood test focuses on courts own evaluation of

possibilities; but in practice the tests have much in common with one another and in

the vast majority of cases they will lead to the same result.24

In this area of bias, the

real question is not whether a person was biased. It is difficult to prove the state of

mind of a person. Therefore, what the courts see is whether there is a reasonableground for believing that the deciding officer was likely to have been biased.

II) THE REASONABLE SUSPICION TEST: As the name of the reasonable suspicionof bias test indicates, reasonableness plays a vital role in its application. The real

question regarding this test is whether it actually exists.

This test postulates that where the statements or actions or position of an adjudicator

causes necessarily a reasonable person25

, not a fool26

, nor a whimsical, capricious, or

morbid person27

, to think that there is a real possibility of bias on his part for or

against a party in a particular case, he is disqualified from sitting.

21R. v. Gaisford, [1892] 1 QB 381; Metropolitan Properties Co. (FCG) Ltd. .v Lannon, [1969] 1

QB 57722

R v. Barnsley Licensing Justices ex p. Barnsley and District Licensed Victuallers Association,[1960] 2 QB 16723

Metropolitan Properties Co. (FCG) Ltd. .v Lannon, supra note 2724

I.P. Massey, Administrative Law, Pg.204, 2008 Edn.25 Contrary to Lord Esher M.R.s suggestions in Eckersley v. Mersey Docks and Harbour Board,[1894] 2 Q.B. 667 that one should consider the suspicions of not necessarily reasonable

people; criticized by Lord O Brien C.J. in R. v. Cork Country Justices, [1910] 2 I.R. 271 as

being loose expressions.26

Unlike that which Day J. in R. v. Taylor, ex p. Vogwill (1898) 14 T.L.R. 185 proscribed:

Anything at any time which would make fools suspect.27

See R. v. Cork Country Justices, supra note 25.


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In the earlier days of rule against bias, the courts implicitly denied the existence of

reasonable suspicion test by relating non-pecuniary interest to only the real likelihood

test28

and the peculiar substantial interest doctrine.29

Even at that time, however, Lord Esher M.R. stated that the law required that an

adjudicator could not reasonable be suspected of being biased30

; while Lopes L.J.said that the test of bias was whether there was any reasonable any real or

substantial ground for suspecting bias.31

This test secured the quashing of a

conviction for illegal salmon fishing in England when the presiding justices weremembers of prosecuting association.

32It was also applied on other occasions in

England and Australia.33

This test enjoyed a major break-through in R. v. Sussex Justices ex. p. McCarthy. In

this case Lord Hewart C.J. laid down that it is not merely of some importance but it

is of fundamental importance that justice should not only be done, but shouldmanifestly and undoubtedly be seen to be done. Adding that nothing should be done

which created even a

suspicion of improper interference with justice, Lord Hewart reinforced the

reasonable suspicion test.

In the three decades following this case, the test was employed in many other cases,

suppressing the decisions of valuation assessment committees and justices presidingover family disputes in England, quashing the orders of magistrates making

unfortunate remarks in New Zealand and Australia and avoiding arbitration

awards in Australia. Moreover, this test was otherwise recognized.

III) THE REAL LIKELIHOOD TEST:Ever since English justices certified that a corporation, inwhose bonds theircestui qui trustees had invested, might appropriate a stream, andBlackburn J. held that non-pecuniary interest had not been proved as there was no

real likelihood of bias34

, no one has doubted the existence of the real likelihood of

bias test.

What has been queried, by Danckwerts L.J. for example, is this : must there be a real

likelihood that the tribunal was biased, or is it sufficient that a reasonable person

would think that the tribunal might be biased?35

Those answered question are apt to

throw doubt on whether a court must apply the perception of a reasonable person in

28R. v. Rand, supra note 19.

29 R. v. Henly, [1892] 1 Q.B. 50430

Allinson v. General Medical Council, [1894] 1 Q.B. 75031

Id.32

R. v. Allan, (1864) 4 B.& S. 91533

Law v. Chartered Institute of Patent Agents, [1919] 2 Ch. 276; R. v. Huggins, [1895] 1 Q.B.

563; Sharp v. Carey, (1897) 23 V.L.R, 248, F.S.C.34

R v. Rand, supra note 1935

Metropolitan Properties Co. Ltd. v. Lannon, supra note 22


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determining a real likelihood of bias. Likewise, Devlin L.J. persists that real

likelihood depends on the impression which the courts gets from

circumstances.36

Noticeably he speaks of the impressions of the court, not of the

reasonable person, without stating what criteria the court would use in gaining its

impression.

Surely, when the founding fathers of the Commonwealth Bills of Rights guaranteed

to the individual the right to have his criminal charge and his civil rights or

obligations determined by an independent and impartial37

tribunal, they doubtless

meant to secure freedom from bias as judged by the reasonable person.

Obviously the standard of a morbid person cannot be used. Nor, however, can one use

that of an irrepressible optimist, never accepting that even when Mans passions are

noble they are too often diverted from their true course.38

Rather one agrees with

Lord Denning J.R. that a real likelihood bias exists when a reasonable man would

think it likely or probable that an adjudicator favoured one side unfairly.39

So, too

Professor de Smith suggests that real likelihood is based on the reasonableapprehensions

40of a reasonable man.

1.1.2.1) DIFFERENTIATION BETWEEN THE TESTS

I) ABSENCE OF DIFFERENTIATION: Three reasons may be identified for absence for differentiation.

Firstly, so ling as the existence of reasonable suspicion test was denied, differentiation was

unimportant. Now that this test if flourishing, this differentiation is unavoidable. The second is

the conviction that in the great majority of cases either test will lead to the same

result.41

[48] And, thirdly, there is little (if any) difference between the two tests.42

Also

according to Lord Widgery C.J. no good purpose would be served by attempting adifferentiation.

43

But, on the other hand, it is inelegant to have two tests existingpari passu without an articulated

differentiation. Since, there are two tests, and tow formulations of one test, there must be some

real difference between them.

II)OUTWARD APPEARANCES:Professor de Smith suggests that reasonable suspicion tests

look mainly to outward appearances; real likelihood tests focus on the courts own evaluation

36 R. v. Barnsley Licensing Justices, supra note 2837

Urias Forbes,Administrative Law in West Indies 21 I.C.L.Q. 95 (1972)38

Sir Hugh Wooding,Law Reform Necessary in Trinidad and Tobago 9 CAN. B.J. 292 (1966)39

Metropolitan Properties Co. Ltd. v. Lannon, supra note 22.40

S.A. De Smith,Judicial Review of Administrative Action, Pg. 230, 3rd

Edition 1973.41

Turner v. Allison, [1971] N.Z.L.R. 83342

Hannam v. Bradford Corporation, supra note 1943

R. .v. Altrincham, ex p. Pennington, [1975] 1 Q.B. 549


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of the probabilities.44

If by the courts own evaluation, Professor de Smith means the judgment

of the court uninfluenced by that of a reasonable man, this conflicts with his opinion that real

likelihood is based on the reasonable apprehensions of a reasonable man.

Moreover, both the tests mainly look to the outward appearances. Lord Denning reaffirms the

principle because it emphasizes that real likelihood does not consider the mind of the

adjudicator, so that even if he was as impartial as he could be, still his decision cannot stand if

right-minded persons, if his good friends, perceive a real likelihood of bias.45

The entirety of rule against bias must be concerned with the outward appearances because it is

never necessary to prove that an adjudicator has actually been biased.46

III)ACTUAL DIFFERENTIATION: Difference between the two tests is a reflection of the

nearness to which a given circumstance approximates to a concrete temptation to an adjudicator

to deviate from the path of impartiality in order to favour unfairly a party to or an interest in a

matter. Real likelihood ofa bias denoted the predominant probability of the risk of bias as

discerned by a reasonable person; whereas a reasonable suspicion of bias, connoting a less

commanding danger of bias than does a real likelihood, presents a substantial possibility of the

risk of bias as perceived by a reasonable person.

The courts almost invariably identify real likelihood with probability. But they very rarely

associate reasonable suspicion with possibility. And Professor de Smith defines real likelihood in

terms of both probabilities and possibilities.47

IV)DIFFERENTIATION IN THE INDIAN SCENARIO: In the case ofS. Parthasarthi v. State

of A.P.48, it was held that the tests of real likelihood of bias and reasonable suspicion of bias are

inconsistent with each other. The first test if preferable and surmise conjecture is not enough. In

case where there is real likelihood of bias the ultimate decision based on the report of the

Enquiry Officer will be quashed. The cumulative effect of following circumstances show bias:

(i) Repeated memorandums given by the authorities threatening disciplinary action.

(ii) Overlooking claim for promotion.

(iii) Making deduction from pay for absence which were restored by higher authorities.

44Supra Note 40, at Pg. 231.

45Metropolitan Properties Co. Ltd. v. Lannon, supra note 22

46R. v. Edwards, (1922) 1 St.R. 36; Rexats Kudan v. Carty, (1933) 1 J.L.R. 99

47Supra Note 40, at Pg 230

48AIR 1973 SC 2701


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(iv) Asking him to tale charge of weeding section and not giving facilities asked for.

(v) Sending a letter to hospital for mental diseases asking about the mentak condition ofthe appellant and his refusal not to advise retrenchment on medical grounds and starting

disciplinary proceedings thereafter.

1.1.3) EXCEPTIONS TO THE RULE AGAINST BIAS

The following are the exceptions to the Rule against Bias:

I) DOCTRINE OF NECESSITY: This was the claim raised by the Respondentsin the given case.

49There are cases in which a disqualified adjudicator cannot

be replaced, as no one else is authorized to act. It has been observed that

"disqualification of an adjudicator will not be permitted to destroy the only

tribunal with power to act".50

In such cases, natural justice has to give way to

necessity in order to maintain the integrity of judicial and administrative

systems.51

This issue regarding necessity was raised inDimes v. Grand Junction Canal

Proprietors.52

The Lord Chancellor had to sign an order for enrolment in

order to allow the appeal to proceed from the Vice-Chancellorto the House of

Lords. It was held that his shareholding in the canal company which barred

him from sitting in the appeal did not affect his power to enroll, as no one but

him had the authority to do so. It was mentioned this was allowed "for this

[was] a case of necessity, and where that occurs the objection of interest

cannot prevail".53

II) WAIVER:The court normally requests that an objection be taken as soon asthe prejudiced party has knowledge of the bias.54 If an objection is not raisedand proceedings are allowed to continue without disapproval, it will be held

that the party has waived its right to do so.55

492002 AIR 678

50Geoffrey A. Flick (1979),Natural Justice: Principles and Applications, London: Butterworths,

pp. 138139, ISBN 978-0-409-35260-3.51

Great Charte v. Kennington (1795) 2 Str. 1173, 93 E.R. 110752 (1852) 3 H.L. Cas. 759, 10 E.R. 301, House Of Lords, UK.53

Allison v. General Council of Medical Education and Registration [1894] 1 Q.B. 750, C.A.

(England & Wales).54

Wakefield Local Board of Health v. West Riding and Grimsby Rly. Co. (1865) L.R. 1 Q.B. 84,H.C. (Q.B.) (England & Wales).
http://en.wikipedia.org/wiki/Chancellor_of_the_High_Courthttp://en.wikipedia.org/wiki/LexisNexis_Butterworthshttp://en.wikipedia.org/wiki/International_Standard_Book_Numberhttp://en.wikipedia.org/wiki/Special:BookSources/978-0-409-35260-3http://www.commonlii.org/uk/cases/EngR/1795/490.pdfhttp://www.commonlii.org/uk/cases/EngR/1852/789.pdfhttp://www.commonlii.org/uk/cases/EngR/1852/789.pdfhttp://www.commonlii.org/uk/cases/EngR/1795/490.pdfhttp://en.wikipedia.org/wiki/Special:BookSources/978-0-409-35260-3http://en.wikipedia.org/wiki/International_Standard_Book_Numberhttp://en.wikipedia.org/wiki/LexisNexis_Butterworthshttp://en.wikipedia.org/wiki/Chancellor_of_the_High_Court


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2) AMAR NATH CHOWDHURY v. BRAITHWAITE & CO. LTD. &Ors.

56

2.1) FACTS OF THE CASE

Amarnath Choudhary(hereinafter referred to as the Appellant) was an employee ofBraithwaite & Co. Ltd.(hereinafter referred to as the Company), a Calcutta-based

Government of India undertaking.

A certain misconduct committed by the Appellant came to the notice of the Company.Pursuant to the same, the Company decided to institute disciplinary proceedings against

the Appellant. He was served with a show-cause notice, to which he was to reply.

An Inquiry Committee was set up for the purpose of an Enquiry with respect to the issue.After perusing the necessary evidences, it found that the charges leveled against the

appellant proved. The Inquiry Committee accordingly forwarded its findings in the form

of a report to the Disciplinary Authority.

The Disciplinary Authority, who was the Chairman-cum-Managing Director of theCompany, Shri S. Krishnaswami, accepted the report submitted by the Inquiry

Committee, and consequently dismissed the Appellant from service vide an Order dated

13.02.1984.

Under the regulations framed by the Company, an appeal against an order of theDisciplinary Committee lies with the Board of Directors of the Company. The Appellant

accordingly preferred an appeal against the decision of the Disciplinary Committee to the

Board Of Directors.

It was found that the Chairman-Cum-Managing Director, Shri S. Krishnaswami, theDisciplinary Authority, was also a member of the Board of Directors of the Company. It

was he who presided over the meeting of the Board when the matter at hand came before

it in the form of appeal. The Board ,vide a non-speaking Order dated 31.08.1984,

dismissed the appeal and upheld the order of the Appellant Authority.

Aggrieved by the decision, the Appellant filed a writ petition under Article 226 of theConstitution of India. The Learned Single Bench, after having perused the matter, found a

discrepancy in the proceedings and set aside the order of removal passed against the

Appellant.

The Company, in turn, filed a Letters Patent Appeal before a Division Bench of theCalcutta High Court against the decision of the Learned Single Judge. The DivisionBench found the order and judgment of the Learned Single Bench to be erroneous and

with that in mind, the order passed by the Learned Single Bench was set aside and the

writ petition filed by the Appellant under Article 226 of the Constitution was dismissed.

562002 AIR 678


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The Appellant subsequently preferred an appeal against this order and judgement of theDivision Bench of the Calcutta High Court, before the Supreme Court of India. He filed a

Special Leave Petition under Article 136 of the Constitution of India, which was allowed

by the Honble SC.

2.2) FINDINGS AND DECISION OF THE SUPREME COURT

The matter came up for hearing before the Honble Division Bench of the Supreme Courtconsisting of Justice V.N. Khare and Justice Ashok Bhan.

The Bench admitted Special Leave Petition filed by the appellant, from which the appealarose and passed the following interim order: "Issue notice confined to the question as to

why the case may not be remanded to the appellate authority."

In the subsequent hearings, P.P Rao, the learned Senior counsel appearing on behalf ofthe Appellant, argued that Shri S. Krishnaswami, the Chairman-cum-Managing Director

of the was functioning as the quasi-judicial authority at two levels-first at the initial stage

as the Disciplinary Authority which passed the order of removal of the Appellant fromservice and second, at the appellate level, where he, in his capacity as a member of the

Board of Directors, presided over the matter and dismissed the appeal. The order of the

Appellate Authority passed on 31.08.1984, thus, stood vitiated on the ground of legal

bias.

The Bench accepted the arguments advanced by Shri Rao as his claims were supportedby undisputed facts- that Shri Krishnaswami, the Chairman-cum-Managing Director of

the Company, was the first Disciplinary Authority who passed the order of removal

against the Appellant and that he was also a part of the Board of Directors, the first

Appellate authority in all such matters as per the Rules of the Company, which dismissed

the appeal of the Appellant.The question, therefore, arose was whether the proceedingsof the Board was vitiated on account of participation of the Disciplinary Authority while

deciding the appeal preferred by the appellant.

The Honble Bench of the Supreme Court, in its judgement, stated that one of thePrinciples of Natural Justice required that no person should be a judge in his own cause.

In other words, it is required that the adjudicating authority, while excercising his

functions in this regard, must act impartially without any preconceived notion or bias

regarding the issue at hand. This rule had its origin in the maxim Debet esse Judex in

Propria Causa, which is based on the principle that justice should not only be done but

also seen to be done.

The Bench further held that the above could only be achieved if the judge or theadjudicating authority was functioning impartially, without any kind of bias. It went on to

classify three types of bias-i) pecuniary, ii) personal, or iii) with regard to subject matter.

It went on to hold that this matter did not pertain to any of the three forms of bias

mentioned above. The question in this case was whether an authority can sit in appeal

against its own order passed in the capacity of Disciplinary Authority.


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The Bench relied on the judgement of the Honble Supreme Court in the case ofFinancial Commissioner (Taxation) Punjab & Ors. vs. Harbhajan Singh

57, where it held

that it was held that the Settlement Officer has no jurisdiction to sit over an appeal against

the order passed by him as an Appellate Authority.

The Bench held that the dual functions performed by Shri S. Krishnaswami, theChairman-cum-Managing Director of the Company, were not permissible because of the

existing rule against bias. The same could only be allowed if there was a legislative or

statutory provision allowing the same. In its absence, such dual functioning would vitiate

the existing Rule against Bias.

Where an authority earlier had taken a decision, he is disqualified to sit in appeal againsthis 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 the light of the above, the Honble Bench held that Shri S. Krishnaswami, the thenChairman-cum-Managing Director of the Company, ought not to have participated in thedeliberations of the Board Of Directors functioning as the First Appellate Authority

before which a decision passed by him in his capacity as the Disciplinary Authority had

arrived for adjudication.

The counsel for the Company(Respondents) argued that the Doctrine of Necessity couldbe applied here. It was contended that the Rule against bias was not available when,

under the regulations framed 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.

The Honble Bench of the Supreme Court rejected this argument. It took the support ofRule 3(d) of the Companys Conduct, Discipline and Appeal Rules, which stated as

follows: "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 powers."

In view of the above rule, the Bench opined that a Committee could have beenconstituted consisting of Board members or other officers excluding the Chairman-cum-

Managing Director to stave off allegations of bias. Thus, the Doctrine of Necessity is

misplaced and does not apply to the given case. The Bench, thus, set aside the order and judgement in challenge along with order of the

Appellate Authority of the Company. It sent back the matter to the Appellate Authority to

be decided by it in accordance with law, by a speaking order.

571996 (9) SCC 281


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It further ordered the Company not to take any steps to recover money paid to theAppellant on his superannuation till the matter is finally decided by the Appellate

Authority.

The appeal was thus admitted. The Bench decided against passing an order with regard tocosts.

2.3) PERSONAL VIEWS ON THE JUDGEMENT

The Honble Division Bench of the Supreme Court was completely justified in passing the above

order and giving the above judgement, which is well reasoned and concise.

The Bench rightly observed that the given case did not fall within the purview of the three

traditional forms of bias i.e., pecuniary, personal or with regard to subject matter, of which courts

across the world have traditionally taken cognizance. Instead, it recognized the question of law in

this case as to whether an authority can preside over an appeal against its own order passed in the

capacity of Disciplinary Authority. By doing so, the Court has not restricted the purview of bias

to only the three traditional forms and has instead paved the way for the Courts to take

cognizance of matters where any form of bias is caused or is likely to be cause, thus upholding

the essence of the PNJ.

The given case is clearly a case of pre-conceived notion bias. If one were to apply the test of

reasonable suspicion or apprehension of bias, this case would fit the mould. The Chairman-cum-

Managing Director of the Company, Shri S. Krishnaswami, first acted in his capacity as the

Disciplinary Authority and passed an order of removal of the Appellant. When the Appellant

preferred an appeal to the Board Of Directors, Shri Krishnaswami presided over the meeting inhis capacity as the Chairman-cum-Managing Director. This would undoubtedly raise a suspicion

or cause apprehension of bias in the minds of any reasonable person. That there might be a

certain pre-conceived notion in the mind of Shri Krishnaswami, who was performing dual

functions in this case, cannot be ignored. It would be a foolhardy to expect him, as an Appellate

Authority, to reverse an order passed by him in his capacity as Disciplinary Authority. If this

were to be allowed, the appeal preferred by the Appellant before the Board of Directors would be

an act in futility and would go against the Rule Against Bias. The Honble Bench of the Supreme

Court took due cognizance of the above principle and also took into consideration the principle

of Debet esse Judex in Propria Causa, according to which justice should not only be done but

also be seen to be done, and passed an order in favour of the Appellant. It relied on the case lawof Financial Commissioner (Taxation) Punjab & Ors. vs. Harbhajan Singh

58, where the Supreme

Court held the Settlement Officer has no jurisdiction to sit over an appeal against the order

passed by him as an Appellate Authority.

581996 (9) SCC 281


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The Honble Bench rightly held that Shri S. Krishnaswami ough t not to have presided over an

appeal against an order passed by him in his capacity as the Disciplinary Authority, as it would

vitiate the entire purpose of the Appeal and go against Rule against Bias, a pillar of the PNJ. It

also correctly rejected the arguments of the Company which applied the Doctrine of Necessity,

which is an exception to the Rule against Bias. Rule 3(d) of the Companys Conduct, Discipline

and Appeal Rules clear provides for the formation of a committee with the sanction of the Board

Of Directors to remove any apprehension of bias that would arise. This was not done. Shri S.

Krishnaswamis dual functions was not backed by any statutory sanction. Thus, the argument

could not be accepted.

In its final order, the Honble Division Bench rightly remanded the matter to the Appellate

Authority within the Company to adjudicate the matter judiciously without any bias. It also

stressed on the necessity of a speaking order to be passed the Appellate Authority after it

concluded with proceedings. This was justified with a view to prevent arbitrariness, which goes

against the tenets of the Rule of Law. Thus, having done so, the Supreme Court of Indiaperformed its role as the ultimate server of justice in the country, and were in total conformity

with principle ofDebet esse Judex in Propria Causa-justice was not only done but seen to be

done.


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3) CONCLUSIONThe Rule against Bias is one of the basic tenets of the PNJ, which are the essence of any legal

proceedings at any level and have to be conformed with at any cost. The Supreme Court through

this judgement upheld the sanctity and supremacy of these principles through this judgement.

With regard to the Rule against Bias, every kind of preference is not sufficient to vitiate an

administrative action. If the preference is rational and unaccompanied by consideration of

rational interest, pecuniary or otherwise, it would not vitiate the decision. Similarly, there must

be a real likelihood and not a mere suspicion of bias, before the proceedings can quashed on the

ground of bias. There is, according to some authors, a thin line of difference between the two

tests i.e real likelihood of bias and reasonable suspicion of bias. But these tests yield the same

result when applied to particular situation. So, it can be said that these two tests are same in

effect. In the Indian circumstances also, the courts have no doubt applied these tests in various

cases. But they have been very cautious in its application. It is judged from a healthy, reasonableand average point of view and not a mere apprehension and a vague suspicion of whimsical,

capricious and unreasonable people.59

The proper approach for a court in such cases is not look

inside its ownself and ask-Am I biased?-but to look into the mind of the party before it. The

court must look at the impression which would be given to the other party. Therefore the test is

not what actually happened but the substantial possibility of that which appeared to have

happened. As the justice is rooted in the minds of the people and it is destroyed when right

minded people go away thinking that the judge was biased.

59PAUL CRAIG, ADMINISTRATIVE LAW 419 (6

thed., 2008)

Amarnath Choudhary V. Braithwaite and Co. Ltd.- Case Analysis

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