Delhi High Court
A.K.S. Rathore vs Union Of Inida & Anr on 3 June, 2016
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on : 23.02.2016
Pronounced on: 03.06.2016
+ W.P.(C) 2280/2015
A.K.S. RATHORE ..... Petitioner
Through: Mr Amit Khemka with
Mr Rishi Sehgal, Advocates.
versus
UNION OF INIDA & ANR ..... Respondents
Through: Mr.Ruchir Mishra with
Mr.Mukesh Kumar Tiwari,
Advocates for UOI.
Mr Inderbir Singh Alag,
Mr J.S. Lamba, Mr. Ram Singh Bisht,
Mr. Shahrooz Ahmad and
Mr. Dashrath Raghav, Advocates.
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MR. JUSTICE NAJMI WAZIRI
NAJMI WAZIRI, J
W.P.(C) 2280/2015 & CM No.4084/2015 (stay)
1. By this petition under Article 226 read with Article 227 of the
Constitution of India, the petitioner impugns the order dated 02.02.2015
passed by the learned Central Administrative Tribunal, Principal Bench, New
Delhi in O.A. No. 3186/2012.
2. The petitioner, an economist, joined the Respondent No.2 viz,
National Small Industries Corporation Limited, on 1st March 1995 as General
Manager (Economic Studies) in its Delhi Head Office through direct
selection. During the period 1995-2006, the petitioner held different posts,
additional assignments and responsibilities in the Corporation. It is his claim
that from the time he joined till 2001-2002 (obviously including the period
between 1996 to 1998) the overall ratings of his Annual Performance Reports
had remained either "Very Good" or "Excellent". However, in terms of
Order No. 3/58/SIC/VIG/2006 dated 02.03.2006 he was put under
suspension, apropos certain allegations pertaining to the period between
1996-98.
3. The petitioner contends that the suspension order was not accompanied
by any Charge Sheet and that the Charge Sheet was served upon him only in
January, 2007. The charges against him were:
"i) failure to use his delegated powers with regard to treating
all the three associate units namely M/s Morgan Tectronics Pvt.
Ltd. (MTPL), M/s Pragya Overseas (P) Ltd. (POPL) and M/s
Shaloo Exports as a single account for the purpose of fixing
their limit as well as for sanction of funds under RMA Scheme,
as required under the guidelines/instructions of Corporation
issued vide letter dated 11.05.1994;
ii) showing undue favours to the aforementioned units by
repeatedly sanctioning the funds for raw material assistance to
them under the RMA Scheme of the Corporation on the basis of
Proforma invoices of little known firms without obtaining any
evidence of the actual delivery of the raw material against the
said Proforma invoices in utter disregard to the aforementioned
guidelines'
iii) showing undue favour to M/s. MTPL and M/s. POPL by
sanctioning of funds and allowing the payment of same through
cheques favouring Punjab & Sind Bank a/c M/s. POPL
respectively for making payments t the bank for retiring the
documents covering imported raw material under the RMA
Scheme without insisting upon the party for having imported the
raw material and received of the same in the factory;
iv) showing undue favours to M/s MTPL by sanctioning the
funds for RMA despite of knowledge of bouncing of their
cheques covering the interest charges, service charges and
repayments against loans, without keeping the financial
interests of the Corporation in mind;
v) showing undue favours to M/s MTPL and M/s POPL by
sanctioning amounts under RMA Scheme in excess of the value
of securities available with the MSIC Ltd."
4. An inquiry was ordered by the Corporation, which was conducted by
the Inquiry Officer in the month of November, 2010. The Inquiry report was
submitted to the Disciplinary Authority on 18th November, 2010; it found the
aforementioned charges-I & IV as not established, while Charges II, III and
V were found to be partly established.
5. As no decision was taken by the Corporation on the basis of the
Report, the petitioner petitioned the Central Administrative Tribunal
(hereinafter "Tribunal') impugning the proceedings through O.A. No.
1886/2012. During the pendency of the Tribunal proceeding, the Board of
Directors (BOD) of the Corporation passed an order dated 19.07.2012
imposing a penalty of compulsory retirement upon the petitioner. Aggrieved
by this order and to avoid multiplicity of litigation, the petitioner withdrew
O.A. No. 1886/2012 and filed a fresh O.A bearing number O.A. 3186/2012
before the Tribunal.
6. The contention of the Petitioner before the Tribunal, inter alia, was
that as the order of penalty dated 19.07.2012 was passed by the Appellate
Authority, it was ex facie violative of the principles of natural justice as it
vitiates his right to an appeal. The petitioner had also argued before the
Tribunal that, in any case, the order dated 19.07.2012 was a non-speaking
order and thus non-est in the eyes of law; that the order wrongly relied on the
report of the Inquiry Officer instead of discounting the same and holding a
fresh inquiry; that the schedule and guidelines issued by the CVC were not
followed and that principles of natural justice were violated.
7. The Tribunal observed that, as per Circular No. SIC/Pers.1/10 (10)/08
dated 03.10.2010, for the post of General Manager held by the Petitioner at
the time of issuance of the Charge-Sheet, the Chairman-cum-Managing
Director was the Disciplinary Authority and the appeal was maintainable
before the BOD. The Tribunal quashed the order of penalty of compulsory
retirement imposed by the BOD and remitted the matter to the Disciplinary
Authority to take an appropriate decision after due application of mind. For
the sake of convenience, the relevant portion of the impugned order is
reproduced herein:
"19. In the present case admittedly the penalty order has been
passed by the Appellate Authority and the applicant is deprived
of his substantive right to prefer the appeal, Thus, the same is
liable to be quashed and set aside and the matter needs to be
remitted back to the Disciplinary Authority. Since the penalty
order is not found to be sustainable on the ground of being
passed by the Appellate Authority, we deem it appropriate to not
examine the other grounds taken by the applicant."
8. It is the case of the petitioner before us today that while the Tribunal
agreed with his contention that the order of penalty dated 19.07.2012 was
passed by an Appellate Authority thereby extinguishing his right to appeal,
the order of the Tribunal to remand the matter to the junior authority i.e. the
Disciplinary Authority is a fruitless exercise; that no junior authority will
have the courage to independently apply its mind to the matter without being
influenced by a previous order of its senior.
9. The Learned Counsel appearing on behalf of the Petitioner relies on
the case of Surjit Ghosh v. Chairman & Managing Director, United
Commercial Bank & Ors.1 which reads as follows:
"It will not be fruitful to send the matter back to the bank for
rehearing of the matter by the named disciplinary authority
(1995) 2 SCC 474
since the appellate authority which is higher authority has
already taken a decision in the matter and it cannot be expected
that the lower authority will take a different decision."
10. The petitioner contends that the impugned judgment dated 02.02.2015
has been passed without application of mind to the material on record; that
the defect of passing of penalty order by the Appellate Authority was a
defect which goes to the root of the matter and cannot be now repaired; that
the Petitioner cannot be punished for the acts and omissions of Respondent
No.2 who has violated the principles of natural justice.
11. We have heard arguments from both the sides in detail. The
petitioner had submitted that the charges against him are cropped up and are
stale as they relate to 1996-98 and were almost 20 years old. The petitioner
has suffered personally, professionally and financially continuously for the
last 10 years. In January, 2016, the petitioner had superannuated. The
question of delay in the departmental proceedings has not been specifically
adverted to and examined in the impugned order. It appears that this
contention was neither raised nor pressed. In the grounds in the present writ
petition impugning the order passed by the Tribunal, this facet is not
highlighted. The petitioner has been charge sheeted by the CBI and is facing
prosecution under section 13(2) read with section 13(1)(d) of the Prevention
of Corruption Act, 1988 read with Sections 120 and 120-B of the Indian
Penal Code, 1860. The said criminal case was registered on 20 th March,
2003. It appears that the incriminating facts had then come to the notice.
The petitioner was put under suspension on 2nd March, 2006 as a criminal
case had been registered and disciplinary proceedings were contemplated.
Thereafter, charge sheet was issued on 27th December, 2006. The
disciplinary proceedings had culminated in the order of punishment of
compulsory punishment with effect from 19th July, 2012. The disciplinary
proceedings had certainly taken a long time. However, there are two aspects
raised by the respondents. Firstly, it is stated that the petitioner had
submitted his defence statement belatedly on 20 th September, 2010. The
delay the petitioner claims was for the reason that relevant documents
relating to the lis were not furnished. The respondents state that this was a
lame excuse. The respondent and the petitioner had also contested the
appointment of the defence officer.
12. One of the primary issues, which had arisen, before the Tribunal was
whether the Chairman-cum-Managing Director was the disciplinary
authority as the petitioner was holding the post of General Manager at the
time of issue of charge sheet. In the event, the Chairman-cum-Managing
Director was the disciplinary authority, an appeal was maintainable before
the BOD. The stand of the respondent was that the BOD was the
Disciplinary Authority. In the impugned order, the Tribunal has held that
the Chairman-cum-Managing Director was the disciplinary authority and not
the BOD. It is in this context that they have set aside the order passed by the
BOD, for the Chairman-cum-Managing Director was the disciplinary
authority and the BOD was the appellate authority. The Tribunal has held
that the penalty order passed by the appellate authority had deprived the
petitioner of his right to appeal. The right to appeal against the order of the
Disciplinary Authority cannot be curtailed or circumvented.
13. In Surjit Ghosh (supra), the Supreme Court had ruled that when a
higher authority passes an order of punishment, the employee concerned is
deprived of a substantive right of appeal, if provided and given to him by the
Rules/Regulations. It held:
"6. ....... It is true that when an authority higher than the
disciplinary authority itself imposes the punishment, the order of
punishment suffers from no illegality when no appeal is provided
to such authority. However, when an appeal is provided to the
higher authority concerned against the order of the disciplinary
authority or of a lower authority and the higher authority passes
an order of punishment, the employee concerned is deprived of
the remedy of appeal which is a substantive right given to him by
the Rules/Regulations. An employee cannot be deprived of his
substantive right. What is further, when there is a provision of
appeal against the order of the disciplinary authority and when
the appellate or the higher authority against whose order there is
no appeal, exercises the powers of the disciplinary authority in a
given case, it results in discrimination against the employee
concerned. This is particularly so when there are no guidelines
in the Rules/Regulations as to when the higher authority or the
appellate authority should exercise the power of the disciplinary
authority. The higher or appellate authority may choose to
exercise the power of the disciplinary authority in some cases
while no doing so in other cases. In such cases, the right of the
employee depends upon the choice of the higher/appellate
authority which patently results in discrimination between an
employee and employee. Surely, such a situation cannot
savour(sic) of legality."
The ratio in Balbir Chand vs. Food Corporation of India Ltd. and Ors.2 is
similar. It held:
"3. The learned Counsel for the petitioner has raised the
contention that since the petitioner was required to be dismissed
by the disciplinary authority, namely, Zonal Manager, who alone
is competent to remove him, the order of dismissal passed by the
Managing Director is bad in law. In support thereof, he placed
reliance on a judgment of this Court in Surjit Ghosh v. Chairman
and Managing Director, United Commercial Bank AIR 1995 SC
1053 . It is an admitted position that as a joint enquiry was
conducted against all the delinquent officials, the highest in the
hierarchy of competent authority who could take disciplinary
action against the delinquents was none other than the Managing
Director of the Corporation. In normal circumstances where the
Managing Director being the appellate authority should not pass
the order of punishment so as to enable the delinquent employee
AIR 1997 SC 2229
to avail of right of appeal. It is now well settled legal position
that an authority lower than the appointing authority cannot take
any decision in the matter of disciplinary action. But there is no
prohibition in law that the higher authority should not take
decision or impose the penalty as the primary authority in the
matter of disciplinary action. On that basis, it cannot be said that
there will be discrimination violating Article 14 of the
Constitution or causing material prejudice. In the judgment
relied on by the counsel, it would appear that in the Rules, officer
lower in hierarchy was the disciplinary authority but the
appellant authority had passed the order removing the officer
from service. Thereby, appellate remedy provided under the
Rules was denied. In those circumstances, this Court opined that
it caused prejudice to the delinquent as he would have otherwise
availed of the appellate remedy and his right to consider his case
by an appellate authority on question of fact was not available.
But it cannot be laid as a rule of law that in all circumstances the
higher authority should consider and decide the case imposing
penalty as a primary authority under the Rules, In this case, a
right of second appeal/revision also was provided to the Board.
In fact, appeal was preferred to the Board. The Board
elaborately considered the matter through the Chairman. It is not
violative of Article 14 of the Constitution."
14. Relying on the two judgments, the Tribunal quashed the order of
penalty of compulsory retirement passed by the BOD and has remanded the
matter to the Disciplinary Authority for the following reasons:
"16. Merely because the review preferred by the Appellate
Authority could be decided as appeal, it cannot be held that the
imposition of penalty by the Appellate Authority has not caused
any prejudice to applicant, as the disposal of appeal by a
different and superior authority and the disposal of review by the
same authority which passed the order under review cannot be
placed on identical footings. When in disposal of appeal by the
superior authority not only the mind of a different body or
authority is applied but the scope of fair and open examination of
the order under appeal s much broader, the scope of review of an
order by the same authority may be by applying the yardsticks as
applicable to appeal would still be very limited. It may be one of
the arguments that once it is the Appellate Authority, which has
to finally examine the correctness of the order of the Disciplinary
Authority, even if the penalty order was passed by the Appellate
Authority, no prejudice can be said to be caused to the charged
official, the same may not be acceptable for the simple reason
that the Disciplinary Authority which is in better position to
appreciate the work and conduct of an employee subject to its
direct disciplinary control may take apt decision regarding
imposition of the penalty. The Appellate Authority, which is
comparatively distant from the day to day work and affair of the
charged officer may not be so equipped to take decision
regarding imposition of penalty as the Disciplinary Authority
having direct control over the work and conduct is equipped.
Besides once the law provides for an opportunity to an employee
to test t he order of Disciplinary Authority before the Appellate
Authority, such remedy cannot be taken away by imposition of
penalty by the Appellate Authority.
xxxx
21. Thus, the order of penalty of compulsory retirement imposed
upon the applicant is quashed. The matter is remitted back to the
Disciplinary Authority, i.e., CMD and NISC to take appropriate
decision after due application of mind. If the applicant so
chooses to do so, it will be open for him to put forth all the
grounds available to him before the Disciplinary Authority by
way of written submission within one week. Such written
submissions, of any made by the applicant to the Disciplinary
Authority would be examined by it while taking the final decision.
The treatment of the intervening period would abide by the
decision required to be taken by the Disciplinary Authority . In
view of the aforementioned order passed by the High Court, in
the event, the order of imposition of penalty of compulsory
retirement is again passed by the Disciplinary Authority, the
same would relate back to the date of the order of punishment
under challenge. No costs"
15. The core argument of the Petitioner is that though the matter is now
remitted to the Disciplinary Authority, i.e, CHAIRMAN-CUM-MANAGING
DIRECTOR of the NSIC, he cannot be expected to take a decision which is
different from the decision already taken by the senior authority, i.e., the BOD
and that any decision of the Disciplinary Authority will be influenced by the
previous order. The dictum of the Supreme Court in Surjit Ghosh (supra) is
that since the Appellate Authority, which is the higher authority, has already
taken a decision on the matter, it cannot be expected that the lower authority
would take different decision and, therefore, sending the matter to the lower
authority would serve no purpose.
16. We have referred to the factual matrix and also the defence raised by
the respondent before the Tribunal that the BOD was the Disciplinary
Authority and the Tribunal has held that the stand of the respondent was
erroneous and the Chairman-cum-Managing Director was the Disciplinary
Authority and appeal would lie before the BOD. This being the position, we
cannot equate the present case with that of Surjit Ghosh (supra). In that case,
the Supreme Court after setting aside the order of dismissal on the question
whether an order of remand should be passed, had observed as under:-
"8. The question, however, is what consequential order should
be passed in the present case. It will not be fruitful to send the
matter back to the Bank for rehearing of the matter by the named
disciplinary authority since the appellate authority which is the
higher authority has already taken a decision in the matter and it
cannot be expected that the lower authority will take a different
decision. These proceedings have been pending against the
appellant right from the year 1982 till this day and the appellant
has been out of employment for all these years. At one stage, the
appellant had offered to forego all the arrears of his salary
provided he was reinstated in service on the post to which he
would be entitled at present on the basis of his continuous service
till date. We had suggested to Shri Gupta appearing for the
respondent-Bank to take instructions in the matter. The
respondent-Bank, however, has chosen to reject the offer and has
instead suggested that the Bank would like to pay compensation to
the appellant since it has lost confidence in him. We have
considered the charges against the appellant and we find that apart
from the fact that much can be said in favour of the appellant in
support of his contention that the charge has been trumped up
against him. The inquiry also prima facie suffers from defects as
pointed out above, though we must add that we have not gone into
the merits of the said defects. The appellant is an ex-Army Officer.
What is further, the compensation amount, if directed to be paid
would come to about Rs 20 lakhs. The Bank is a nationalised Bank
and the money belongs to the public. A huge amount on this scale
cannot be paid to anyone for doing no work during this long
period just because the Bank feels that it has lost confidence in the
employee. He can certainly be placed in a department where he
has nothing to do with the monetary transactions of the Bank, such
as the establishment section, etc., even assuming that the Bank has
reasons to lose confidence in him.
9. We are informed at the Bar that the post to which he would
be entitled would be in Grade Scale IV with the basic pay of Rs
5350 per month which is on par with the contemporary existing
officers of the Bank who have been promoted to Grade Scale IV
on and from 29-5-1993. We, therefore, direct as follows (a) the
appellant should be paid a compensation of Rs 50,000 in lieu of
his claim for arrears of salary; (b) he should be reinstated in
service with continuity of service and without loss of seniority in
the post to which he would be entitled today on the basis of his
continuous service, within four weeks from the date of receipt of
this order..."
17. A reading of the aforesaid paragraphs would indicate that there were
several reasons why an order of remit was not passed. This included the fact
that the disciplinary proceedings had remained pending since 1982 and the
appellant before the Supreme Court,was out of employment. The appellant
had agreed to forgo his salary arrears, provided he was reinstated in service.
The employee/ bank did not agree. The Supreme Court felt that
compensation should not be paid as the bank was a nationalized bank and
money belonged to the public. Moreover, the appellant could be placed in a
department where he would have nothing to do with the monetary
transactions, assuming that the bank had lost confidence. The rank held by
the employee mattered A reading of the aforesaid reasons in the case of Surjit
Ghosh (supra) would indicate that the Supreme Court had not laid down any
specific legal ratio, though there was certainly an observation that remitting
the matter for re-hearing might be futile, for earlier the decision was taken by
higher authority and the Court did not expect that the lower authority would
take a different decision. Apparently, the said observations were made in the
view stand taken by the bank wherein they had refused to reengage the
appellant on the ground that they had lost confidence even when the appellant
had agreed to rejoin without back wages.
18. In Brij Bihari Singh v. Bihar State Financial Corporation and Ors.3,
while dealing with a case that involved a similar argument on the question
of remit, the Supreme Court after referring to Surjit Ghosh (supra) had held:
"14. In Amar Nath Chowdhury v. Braithwaite and Co. Ltd. and
Ors. : (2002) 2 SCC 290, a similar case came for consideration
before this Court. In that case, the Appellant who was an
employee of Braithwaite and Company Ltd., a Government of
India undertaking, was subjected to disciplinary proceedings.
The enquiry committee submitted its report to the disciplinary
authority who was the Chairman-cum-Managing Director of the
Company. The disciplinary authority passed an order of removal
of the Appellant from service. The Appellant moved the Board of
Directors who was the appellate authority. When the appeal was
taken up by the Board, the said Chairman-cum-Managing
Director participated in the deliberation of the meeting of the
Board which heard and dismissed the appeal. On these facts, this
Court held that the proceeding of the Board was vitiated on
account of participation of the disciplinary authority while
deciding the appeal preferred by the Appellant. Similar view has
been taken in the case of Institute of Chartered Accountants of
India v. L.K. Ratna and Ors. : (1986) 4 SCC 537.
15. In the case of K. Chelliah v. Chairman Industrial Finance
Corporation of India and Anr.: AIR 1973 Mad. 122, an
employee of the IFCI was dismissed from service. The decision to
terminate the employee was taken up by the Chairman who was
also a Member of the Board which considered the appeal. The
2016(1) AJR 560
High Court held that the entire proceeding was vitiated by non-
observance of principles of natural justice.
16. After giving our anxious consideration in the matter, we are
of the definite view that the procedure adopted by the
Respondents in removing the Appellant from service is erroneous
and suffers from serious discrimination and bias. Further, the
Enquiry Officer conducted the enquiry without following the
procedure and without giving sufficient opportunity to the
delinquent to place his case. Enquiry is also vitiated in law.
17. For the reason aforesaid, we find that the appeal deserves to
succeed. The orders passed by the Board of Directors and the
impugned judgments passed by the High Court are liable to be
set aside. The matter is, therefore, sent back to the Disciplinary
Authority to proceed from the stage of the enquiry afresh and
pass a reasoned order in accordance with law after giving full
opportunity of hearing to the Appellant. Needless to say if the
Appellant is aggrieved by the final order that may be passed by
the Disciplinary Authority, he shall have a right to appeal before
the appellate authority.
(emphasis supplied)
19. The aforesaid decision is a complete answer to the contention raised by
the petitioner. It cannot be laid as a proposition or precept that in no case or
order of remand should be passed, where there is a lapse of the nature
indicated in the case of Surjit Ghosh (supra). A decision on remand would
depend upon the factual matrix of each case.
20. In the light of the abovementioned judgment of the Hon'ble Supreme
Court, we see no reason to interfere with the impugned order in the facts of
this case. The matter is, therefore, sent back to the Disciplinary Authority who
shall hear the matter afresh and pass a reasoned order in accordance with law,
uninfluenced by the earlier order, after giving full opportunity of hearing to
the petitioner. If the petitioner is aggrieved by the final order that may be
passed by the Departmental Authority, he shall have a right to appeal before
the Appellate Authority.
21. The respondents have intimated the Court by way of affidavit of the
composition of the Board of Directors. The Composition of the present Board
of Directors is as follows:
S. Name Particulars Details
No.
1. Shri Chairman Chairman cum-Mg.
Ravindra cum-Mg. Director, NSIC Ltd., NSIC
Nath Director, Bhawan, Okhla Indl.
NSIC Limited Estate, New Delhi
2. Shri Govenment Secretary, National
Amarendr Nominee Commission for
a Sinha Director Minorities, Formerly
Special Secretary &
Development
Commissioner, Ministry of
MSME, Nirman Bhawan,
New Delhi
3. Shri S.N. Govenment Additional Secretary,
Tripathi Nominee Ministry of MSME, Udyog
Director Bhawan, New Delhi
4. Shri P. Director (Plg. Director (Plg. & Mkg.),
Udayakum & Mkg.), NSIC Ltd., NSIC Bhawan,
ar NSIC Ltd. Okhla Indl. Estate, New
Delhi
5. Shri Independent Independent Director
Rakesh Director
Rewari
6. Shri Rajiv Independent Independent Director
Chawla Director
22. The Court notes that the Appellate Authority comprises two
independent directors and two Government of India appointees. Therefore,
two-thirds of the Appellate Authority comprises outside members or
persons who are employees of the respondent corporation. They could be
trusted to take an independent and a fair view in case of an appeal from the
order of the DA. However, the Court notes that the Chairman-cum-
Managing Director, who is the assigned Disciplinary Authority, is also a
member of the BOD and thus a part of the Appellate Authority. The
participation of the Disciplinary Authority in the appeal, if preferred, will be
against the principles of natural justice. This view has also been taken by
the Hon'ble Supreme Court in Amar Nath Chowdhury v. Braithwaite and
Co. Ltd. and Ors.4 which held:
6. One of the principles of natural justice is that no person shall
be a judge in his own cause or the adjudicating authority must be
impartial and must act without any kind of bias. The said rule
against bias has its origin from the maxim known as 'Debt esse
Judex in Propria Causa', which is based on the principle that
justice not only be done but should manifestly be seen to be done.
This could be possible only when a judge or an adjudicating
authority decides the matter impartially and without carrying
any kind of bias. Bias may be of different kind and form. It may
be pecuniary, personal or there may be bias as to the subject-
matter etc. In the present case, we are not concerned with any of
the aforesaid form of bias. What we are concerned with in the
present case is whether an authority can sit in appeal against its
own order passed in the capacity of Disciplinary Authority.
In Financial Commissioner (Taxation) Punjab and Ors. v.
Harbhajan Singh -- [1996]3SCR812 , it was held that the
Settlement Officer has no jurisdiction to sit over the order passed
by him as an Appellate Authority. In the present case, the
subject-matter of appeal before the Board was whether the order
of removal passed by the Disciplinary Authority was in
conformity with law. It is not disputed that Shri S. Krishnaswami,
the then Chairman-cum-Managing Director of the Company
(2002) 2 SCC 290
acted as a Disciplinary Authority as well as an Appellate
Authority when he presided over and participated in the
deliberations of the meeting of the Board while deciding the
appeal of the appellant. Such a dual function is not permissible
on account of established rule against bias. In a situation where
such a dual function is discharged by one and the same
authority, unless permitted by an act of legislation or statutory
provision, the same would be contrary to rule against bias.
Where an authority earlier had taken a decision, he is
disqualified to sit in appeal against his own decision, as he
already prejudged the matter otherwise such an appeal would be
termed an appeal from Caesar to Caesar and filing of an appeal
would be an exercise in futility. In that view of the matter, in the
present case, fair play demanded that Shri Krishnaswami, the
then Chairman-cum-Managing Director of the Company ought
not to have participated in the deliberations of the meeting of the
Board when the Board heard and decided the appeal of the
appellant.
7. Learned counsel appearing for the respondent, however,
pressed into service the "Doctrine of Necessity" in support of
his contention. He contended that the rule against bias is not
available when, under the regulations framed by the Company,
the Disciplinary Authority who happened to be Chairman-cum-
Managing Director of the Company was required to preside over
the meeting of the Board and, therefore, the then Chairman-cum-
Managing Director of the Company was not disqualified to
preside over and participate in the meeting of the Board which
dismissed the appeal of the appellant. We find no merit in the
argument. Rule 3(d) of the Company's Conduct, Discipline and
Appeal Rules (in short 'CDAR') defines 'Board' in the following
terms:
"Board means the properties 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."
8. In view of the aforesaid definition of the expression 'Board',
the Board could have constituted a committee of the
Board/Management or any officers of the Company by excluding
Chairman-cum-Managing Director of the Company and
delegated any of its power, including the appellate power, to the
such a committee to eliminate any allegation of bias against such
an appellate authority. It is, therefore, not correct to contend that
rule against bias is not available in the present case in view of
the 'doctrine of necessity'. We are, therefore, of the view that
reliance of the doctrine of necessity in the present case is totally
misplaced."
23. For this reason, if the petitioner chooses to file an appeal against the
fresh order of the Disciplinary Authority, the Chairman-cum-Managing
Director shall recuse himself from the composition of the Appellate
Authority.
24. The impugned order stands modified accordingly. The petition stands
disposed-off in the above terms. We have refrained from making
observations on the allegations against the petitioner. Nothing stated in this
order would be construed as a binding finding on the merits of the subject
matter of the allegations in the charge sheet. There will be no order as to
costs.
NAJMI WAZIRI, J
SANJIV KHANNA, J
JUNE 03, 2016
