2025 (1) TMI 1622 - SC - Indian Laws

Suspected bias alone did not nullify selections; cancelling appointments without notice breached audi alteram partem, matter remitted for fresh hearing

SC held that suspected bias alone did not vitiate the selections where recusal resolution and nonparticipation suggested only suspicion of nemo judex. ... Validity of appointments made for the post of school teachers (Shiksha Karmi Grade III) in Janpad Panchayat - appointments were cancelled without affording them any hearing and without arraying them as a party in the challenge - violation of the first limb of the principle of natural justice (rule against bias) - right to a fair hearing (audi alteram partem). Whether the selection is vitiated for violation of the first limb of natural justice i.e. rule against bias? - HELD THAT:- A five-judge constitution bench of this Court in Ashok Kumar Yadav v State of Haryana [1985 (5) TMI 243 - SUPREME COURT] endorsed the decision in Javed Rasool [1984 (2) TMI 368 - SUPREME COURT] 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 - Similarly, in Jaswant Singh Nerwal v State of Punjab [1991 (2) TMI 434 - SUPREME COURT], 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. 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. 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? - HELD THAT:- 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 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. In Bank of Patiala v SK Sharma [1996 (3) TMI 526 - SUPREME COURT], 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. 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 - 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. 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. Whether the breach of the principle of audi alteram partem at the original stage can be cured, at the Revisional stage? - HELD THAT:- 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). 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 - in a case involving a trade union dispute, Lord Denning in Annamunthodo v Oilfield Workers’ Trade Union, ruled that a flaw in natural justice during the initial hearing could not be remedied by an appeal. Thus, 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. 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 - 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. The matter stands allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether the selection of candidates is vitiated by violation of the rule against bias (nemo judex in causa sua) arising from membership of relatives in the selection committee. 2. Whether there was a breach of the principle of audi alteram partem (right to a fair hearing) in setting aside appointments without affording the selected candidates notice and opportunity to be heard, and whether demonstration of prejudice is necessary to sustain such a claim. 3. Whether a breach of natural justice at the initial/adjudicatory stage can be cured by a revisional or appellate authority that subsequently affords hearing or conducts reassessment, or whether the initial defect renders the decision a nullity requiring fresh proceedings. ISSUE-WISE DETAILED ANALYSIS - I. Rule against bias (nemo judex) Legal framework: The rule against bias requires decision-makers to be impartial; where a statute prescribes the composition of a selection committee, statutory procedure supplements common law norms. The doctrine of necessity and situational modifications (small-jurisdiction contexts) are recognized exceptions. Precedent treatment: Indian jurisprudence consistently applies the 'real likelihood' or 'reasonable apprehension' test for bias; prior authorities permit recusal as a sufficient protective measure where a member abstains from participating when a relative is considered; doctrine of necessity has been applied in small communities where persons inevitably know each other. Interpretation and reasoning: The Rules mandated particular persons and 'all members from the Standing Committee' to be on the selection committee; the Panchayat passed a unanimous recusal resolution requiring members with close relatives to recuse and for the Chief Executive Officer to exercise their marking role. Relevant statutory definition of 'relative' existed but was not applied by lower authorities. The record showed recusal and that the concerned members did not award marks or participate in interviews of their relatives. Given recusal, the small-community context, and absence of proof of participation or influence, the Court concluded that reasonable likelihood of bias could not properly be inferred on the record before the adjudicatory authorities. Ratio vs. Obiter: Ratio - where recusal is effected and there is no participation or awarding of marks by interested members, reasonable likelihood of bias cannot be automatically inferred; doctrine of necessity may justify inclusion of known persons in small jurisdictions provided adequate safeguards (recusal, delegation) are followed. Obiter - observations on how statutory definitions of 'relative' should be applied in fine distinctions among relatives not specifically considered by lower courts. Conclusion: The selection was not vitiated on account of the rule against bias on the material before the Court; allegations of bias, in absence of foundational facts shown after affording a hearing, could not be sustained. ISSUE-WISE DETAILED ANALYSIS - II. Right to fair hearing (audi alteram partem) and prejudice Legal framework: Audi alteram partem is a core facet of natural justice and constitutional procedural fairness; statutory provisions (including a provision requiring an opportunity to show cause before removal) and Rule 9 (power of appellate/revisional authority to act 'after giving an opportunity to parties to be heard') impose an obligation to give notice and hearing where adjudicatory action affects persons' rights. Precedent treatment: The Court reviewed established authorities distinguishing total denial of hearing ('no opportunity') from inadequate hearing ('no adequate opportunity'). Earlier decisions hold that non-observance of natural justice is itself prejudice, but a line of cases also recognises narrow exceptions where facts are admitted/indisputable or where necessity compels otherwise. Authorities show divergence but emphasize that where statutory procedure requires hearing, that procedural requirement is not lightly dispensed with. Interpretation and reasoning: The Collector and Revisional Authority set aside specific appointments without impleading the selected candidates or issuing notices; they relied on the submission that appointments were not made 'according to scheme' and thus hearing was unnecessary. The Court emphasized that this was a case of disputed facts (e.g., marks, recusal resolution, statutory definition of 'relative') where affected persons were not given any opportunity to explain or place evidence. Rule 9 and the express statutory protections were not complied with at the original stage. The Court held that an administrative authority may not presume that hearing would be futile or that no prejudice will result; that determination must be reached after hearing, not instead of it. The Court distinguished cases where only a facet of hearing was missing (where prejudice inquiry is necessary) from cases of total non-service of notice, where the defect is fundamental. Ratio vs. Obiter: Ratio - total denial of notice and hearing to identified affected persons is a fundamental breach of audi alteram partem and invalidates the decision unless exceptional, demonstrable circumstances justify deviation; prejudice need not be independently proved where there has been no opportunity at all. Obiter - discussion of academic authorities and policy reasons supporting the humanising value of hearing and comments on how prejudice exceptions operate in various contexts. Conclusion: There was a gross violation of the audi alteram partem principle because the selected candidates were not impleaded nor given notice and opportunity to be heard; non-grant of hearing at the original stage rendered the orders invalid irrespective of later submissions regarding prejudice. ISSUE-WISE DETAILED ANALYSIS - III. Curability of initial breach by appellate/revisional authority Legal framework: The question turns on whether a later fair appellate/revisional hearing can cure an earlier nullity caused by denial of natural justice at the trial/initial stage; statutory scheme, scope of appellate power and the nature of the proceedings (full rehearing versus limited review) are material considerations. Precedent treatment: Authorities are divided. Some decisions hold that a fair appeal can cure an earlier procedural defect (Australian Bowen line), whereas other authorities (Leary, followed in multiple Indian decisions) hold that a failure of natural justice at the initial hearing cannot ordinarily be validated by a subsequent fair appeal; Indian jurisprudence has generally applied the 'Leary/Institute of Chartered Accountants' approach, with narrow exceptions (Calvin principle) only where substantial public interest or exceptional circumstances render remediation justifiable. Interpretation and reasoning: The Court examined the revisional process in this matter and found the Collector's and Commissioner's orders practically identical and made without impleading affected candidates initially; Rule 5(b) limited revision to questions of law (not facts) which further undermines the capacity of revision to cure factual non-joinder. The Court held that where the initial decision is tainted by total procedural nullity, the appellate/revisional authority may not simply cure the defect by later hearing in a way that deprives the person of the right to an effective primary hearing and/or the right of appeal from a valid primary decision. The Court acknowledged exceptional situations in which Calvin-type reasoning may apply, but found none on the facts of the case. Ratio vs. Obiter: Ratio - a failure of natural justice at the initial stage cannot, as a general rule, be cured by a subsequent appellate or revisional hearing; where the initial proceeding was a nullity, remedies should ordinarily revert the matter for fresh proceedings at the original/adjudicatory stage (subject to narrow, exceptional, well-justified circumstances). Obiter - commentary on underlying policy, institutional constraints, and the limited circumstances in which the Calvin exception may be invoked. Conclusion: The denial of hearing at the initial stage could not be cured by the revisional process in the circumstances of this case; the ex-parte decision to set aside the selections therefore stood vitiated for want of any prior opportunity to be heard to the affected appointees. FINAL CONCLUSIONS AND DISPOSITION (as determined by the Court) 1. The allegation of bias could not be conclusively sustained on the existing record because the relevant members had recused, had not participated in interviews or awarded marks, and because the statutory definition of 'relative' and the recusal resolution were not properly examined by the adjudicatory authorities; accordingly, the rule against bias did not, on the material before the decision-makers, invalidate the selection. 2. There was a fundamental breach of the audi alteram partem principle because identified selected candidates were not impleaded nor afforded any opportunity to be heard before their appointments were set aside; such a total denial of hearing is a substantive procedural infirmity that cannot be ignored or cured by after-the-fact reassessment except in narrow and exceptional cases not present here. 3. The initial procedural nullity infected subsequent orders; a revisional or appellate process that did not rectify non-joinder and did not conduct a proper factual enquiry could not validate the earlier ex-parte action. Consequently, the Court allowed the appeal from the decision which had set aside the appointments and upheld the view that the ex-parte cancellation was invalid for want of hearing, while rejecting the contrary view that bias alone justified the cancellations on the record before the authorities.