S. Rengarajan vs Srirangam Janopakara Bank Ltd. and Another

Veeraswami, J.—The petitioner was employed under the first respondent bank as its secretary with effect from 17th October, 1953. On

16th May, 1954, the Board of Directors framed certain charges against him and pending enquiry kept him under suspension. In response to a

show-cause notice, the petitioner submitted his explanations on 19th May, 1954, and 24th May, 1954. On 10th June, 1954 at 12 noon he was

informed that the Board of Directors would hold an enquiry at 6 p.m. There was a controversy as to whether the petitioner was actually present at

the enquiry. By a resolution of that date the petitioner was found to be guilty of all the charges and he was removed from service. This order was

communicated to him on 12th June 1954. The petitioner filed an appeal against the order u/s 41(2) of the Madras Shops and Establishments Act,

1947. The appeal in the first instance was allowed on the ground that the Board of Directors had held no enquiry, and that the charges were not

borne out by the evidence. Against the appellate order the Bank successfully applied to this court in W.P. No. 200 of 1956. This Court, while

making the rule absolute, observed that in effect the Additional Commissioner had to rehear the appeal and dispose of it according to law. By his

revised order dated 8th May 1959, the Additional Commissioner dismissed the appeal. This petition is directed against the order of the Additional

Commissioner for Workmen''s Compensation.

Three points have been urged in support of this petition: (1) The proceedings of the Board of directors culminating in the removal of the

petitioner violated the principles of natural justice; (2) no evidence was recorded at the enquiry as is required by Section 41(1) and the findings of

the Board of directors were, therefore, not based on evidence; and (3) in any case, the Additional Commissioner exceeded his jurisdiction in

taking additional evidence in disposing of the appeal on that basis.

Under the first point it is said that out of thirteen directors of the Board, two had admittedly given statements in support of the charges. It

appears to be also a fact that two other directors including the ad hoc president gave additional evidence before the Commissioner. In such

circumstances the argument is that these directors were liable to be charged with bias and at any rate their participation in the enquiry was likely to

raise the petitioner''s apprehension as to whether he could at all have an impartial and objective enquiry and decision. A further point also is made

that since the statements of the two directors were taken behind the petitioner''s back and he was not supplied with copies thereof and as only a

short time was given on 10th June, 1954 to get ready for his defence, he has had no reasonable opportunity to defend himself against the charges.

It seems to me that every one of these contentions is well founded.

It is undeniable that no Tribunal can be a Judge in its own cause, and that any person who sits in judgment over the rights of others should be

free from any kind of bias and must be able to bring to bear an impartial and objective mind to the questions in controversy. Where a person who

discharges a quasi judicial function has by his conduct shown that he is interested or appears to be interested, that will disentitle him from acting in

that capacity. In such a case it is not required that bias should be actually proved. This is because justice must not only be rendered but must

appear to be rendered. It is no doubt true that a distinction is made between pecuniary interest and other kinds of interest. In the case of the former

as observed by the Supreme Court in Manak Lal Vs. Dr. Prem Chand, , pecuniary interest would at once wholly disqualify a person from acting

as a judge. But in the other kinds of alleged bias, it may be necessary to consider whether there is a reasonable ground to consider the possibility

of bias and whether it is likely to produce in the minds of the litigant or the public at large a reasonable doubt about the fairness of the

administration of justice. That was a case in which a member of the Bar Council Tribunal had appeared in a criminal proceeding for a person

whose conduct was in question before the tribunal. On that account it was held that the Tribunal was not properly constituted, though actually the

decision of the Supreme Court in the case went upon another point. Dealing with the question of bias the Supreme Court observed:

It is well settled that every member of Tribunal that is called upon to try issues in judicial or quasi judicial proceedings must be able to act

judicially; and it is of the essence of judicial decisions and judicial administration that judges should be able to act impartially, objectively and

without any bias. In such cases the test is not whether in fact a bias has affected the judgment; the test always is and must be whether a litigant

could reasonably apprehend that a bais attributable to a member of the tribunal might have operated against him in the final decision of the tribunal.

It is in this sense that it is often said that justice must not only be done but must also appear to be done.

U. P. States v. Mohd. Nooh, AIR 1958 SC 86, was a case of a Deputy Superintendent of Police, who conducted the disciplinary enquiry,

himself giving testimony. It has held that the act of the presiding officer in having his testimony recorded in the case indubitably showed a state of

mind which clearly disclosed a considerable bias against the person against whom the enquiry was held. Such instances, the Supreme Court

observed, were shocking to the mind of judicial propriety and fair play.

It is not disputed in this case that statements were given by two of the directors, before the actual enquiry had, if any, started and that they

participated at the enquiry. It is impossible to imagine that the two directors who had given such statements, did not and could not have influenced

the decision of the Board of directors to terminate the services of the petitioner. Having given statements against the petitioner in relation to the

charges framed, it is obvious that they could not form part of the tribunal to sit in judgment over those very charges. On that ground alone the order

of the Board of directors, should be set aside.

The other grievance of the petitioner that he was not given a reasonable opportunity to defend himself also appears to be well founded. The

statements of the two directors were never brought home to the petitioner. No copies of them were given to the petitioner and not even an

indication was given to him that those statements were going to be relied on against him. Naturally therefore, he could not ask for cross-examining

the directors in respect of them. It seems to me that in such circumstances it cannot be said that the petitioner had a reasonable opportunity.

Reasonable opportunity means not only framing of charges and asking for explanation but much more. He must be apprised of the material on

which the charges were framed so that he could have a proper opportunity of testing or challenging that material so far as would be possible for

him. Moreover, though the point has not been actually taken in the affidavit, from the statement of facts it appears that it was only at noon on 10th

June 1954, that the petitioner was informed that an enquiry would be held into the charges at 5 p.m. that day. I consider that this was too brief a

time to say that the petitioner had a reasonable opportunity to prepare himself for his defence. I, therefore, accept the first ground urged for the

petitioner.

The second ground equally appears to be well founded, namely, that no evidence was actually recorded at the enquiry held on 10th June 1954.

Section 41(1) reads:

No employer shall dispense with the services of a person employed continuously for a period of not less than six months, except for a reasonable

cause and without giving such person at least one month''s notice or wages in lieu of such notice, provided, however, that such notice shall not be

necessary where the services of such person are dispensed with on a charge of misconduct supported by satisfactory evidence recorded at an

enquiry held for the purpose.

This section implies that the charge of misconduct should be supported by satisfactory evidence and that it should be recorded at an enquiry held

for the purpose. Enquiry under this sub-section obviously means an enquiry at which evidence is recorded and not the investigation stage at which

ex parte statements were recorded from possible witnesses behind the back of the person charged with misconduct. The sub-section contemplates

that any material gathered outside the enquiry, of not at the enquiry cannot be the foundation for finding a charge to be proved. It is not the case of

the first respondent that any evidence worth the name was at all recorded at the enquiry. In fact the proceedings of the first respondent dated 10th

June, 1954 made this clear. At the outset of the record of the proceedings the only materials in support of the resolution passed referred to are the

charges, replies of the petitioner and ""the notes of the interim president thereon"". Against charge 3 it is seen that the statements of two of the

directors were relied on in proof of it. It is therefore clear beyond doubt that the findings on the charge were not based on any evidence recorded

at the enquiry held for the purpose. It follows that the resolution of the first respondent removing the petitioner from service was not in conformity

with the requirements of Section 41(1). On this ground too the resolution will have to be quashed.

The further ground of the petitioner has also to be upheld. That turns upon the scope of Sub-section (2) of Section 41 the question being

whether the Additional Commissioner was competent to record additional evidence and dispose of the appeal on that basis. In Sri Venkateswara

Bank Ltd. Salem v. Krishnan, 1960 Mad WN 94 an identical question fell to be considered by Rajagopala Aiyangar, J. (as he then was). The

learned Judge considered the scope of Section 41 and observed.

Section 41(2) was not intended to convert the appellate authority into a forum where an original enquiry into the misconduct of the employee

justifying his dismissal could be conducted. It is only when at the original enquiry held by the employer that the charges are held by him to have

been proved that the appellate authority is directed to enquire as to whether the charge of misconduct could be taken to have been properly

established.

In other words, in the opinion of the learned Judge, the appellate authority was not competent to take additional evidence as if it were an

original authority and dispose of the appeal on the basis of such evidence. I am in respectful agreement with this view particularly in view of the

language of Sub-section (1). What is contemplated by that subsection is that the original authority should find the charge of misconduct to be

proved by satisfactory evidence recorded at an enquiry held for the purpose. The function of the appellate authority is to find whether the person

held guilty was not guilty of misconduct as held by the employer. To put it differently, the appellate authority has to enquire whether there was

satisfactory evidence before the original authority to support a charge of misconduct. The two sub-sections read together make it clear that

evidence which is required to be satisfactory is to be taken not at the appellate stage but at the original stage. To my mind it is not possible to

understand the two sub-sections as permitting the appellate authority to take additional evidence and dispose of the appeal on that basis. But my

attention has been drawn to Rule 9(2) framed u/s 49, which states that the Commissioner for Workmen''s Compensation shall record briefly the

evidence adduced before him and then pass orders giving the reasons therefor. Section 49 which confers the rule making power enables the State

Government to frame rules to carry out the purposes of the Act. The purpose of the Act in relation to dismissals has to be gathered from Section

If that is so, as I think it should be, it is difficult to see how such a rule is at all authorised by Section 49. Rajagopalan, J. in Davey Sons,

Madras v. Additional Commissioner for Workmen''s Compensation, 1960 2 MLJ 254 referred to Section 41(2) and Rule 9(2) and considered

that in the face of these provisions he was unable to accept as correct the contention that the appellate authority had no jurisdiction to take further

evidence. But with due respect, in arriving at this conclusion, the effect of Sub-section (1) does not appear to have been considered, as was done

by, if I may say so with respect again, Rajagopala Aiyangar, J. in 1960 Mad WN 94. Nor was the question considered in 1960 2 MLJ 254 as to

whether Rule 9(2) was competent in view of the specific scope of Section 49 read with Section 41(1). In my opinion Section 4.1 does not enable

the appellate authority to take or admit additional evidence and decide for himself whether there was satisfactory evidence to support the charge of

misconduct. In as much as the Additional Commissioner has taken additional evidence and disposed of the appeal on that basis, his order cannot

stand.

The result is the order of the first respondent dated 10th June, 1954 communicated to the petitioner on 12th June 1954, as well as the revised

order of the Additional Commissioner dated 8th May, 1959 are hereby quashed. The petition is allowed and the rule nisi is made absolute. The

effect is the first respondent will, if it so chooses, be at liberty to proceed with the enquiry from the stage of the charges and the explanations

submitted with reference thereto and according to law and this judgment. There will be no costs in this petition. Rule made absolute.