Chandrasekhara Menon, J.
1. The petitioner was the factory manager of the Nylon Net Factory, which is run by the Kerala Fisheries Corporation Ltd. This Corporation is run by the Government of Kerala, Department of Fisheries. It is a statutory organisation, and as the petitioner has contended, it can very well be taken to be an instrumentality of the Government in the development of fisheries.
2. The petitioner was served with a memo of charges on 6th September, 1980, which contained allegations that he failed to prevent the commission of fraud by one of his assistants, who was found engaging himself in a Nylon Net Factory owned by a private individual. The petitioner submitted a detailed explanation to the memo of charges. An enquiry was conducted in the matter. The Enquiry Officer reported the petitioner guilty of all the three charges levelled against him. A copy of the enquiry report was furnished to the petitioner and he was asked to show cause why punishment of removal from service should not be imposed on him. The petitioner submitted his explanation but it was rejected by the Managing Director and he was issued with an order imposing upon him a penalty of removal from service. Ext. P-3 is a copy of that order.
3. The petitioner filed an appeal in the matter to the Board of Directors of the Corporation as enjoined by rules. He contended in his appeal that the report of enquiry was based on no evidence and he was being unnecessarily victimised. The appeal was dismissed as per Ex. P-5 order. It is seen that, on behalf of the Corporation, Ex. P-5 was passed by the Managing Director which states that the Hoard of Directors had considered the matter and confirmed his removal from service.
4. The petitioner questions this order of removal from service confirmed by the appellate decision on various grounds. One of the grounds urged is that the enquiry report is not supported by any evidence. What he states is that the alleged person in whose factory the petitioner was alleged to have been found himself working, has not even been examined. According to the medical certificate produced by the petitioner, on the concerned day he was an in-patient in a reputed hospital in the city. But this medical certificate has not been considered. I do not think that this ground will in any way enable this Court to interfere in the matter, really going by the petitioner's contentions in that it would appear to be a contention based on appreciation of facts. However, the petitioner is on a firmer ground in the contention that he has taken that the appellate order of the Board of Directors is vitiated by violation of the principles of natural justice on the ground that the Managing Director, who bad imposed the punishment on the petitioner, bad himself participated in the meeting of the Board of Directors as one of the members of the Board of Directors and taken part in the decision confirming his original decision. It is contended on behalf of the petitioner that the disposal of the appeal against an order made by an important member of the Board of Directors has been done by the involvement and active participation of the same member sitting in the Board of Directors. It is totally opposed to all principles of natural justice, fairplay and impartiality. Therefore, Ex. P-5 appellate order is unsustainable in law and it really being violative of the principles of natural justice it should be taken to be non est in law.
5. In Khainuk's case : 1SCR457 , the Supreme Court has considered the scope and object of the rules of natural justice. There, what happened in the case was that the Chief Conservator of Forests of the State;, who had been appointed as one of the members of the selection board for selection of forest officers to the Indian Forest Service became himself an applicant for selection. How far his participation in the selection board would vitiate the decision of the Board? There were members of the selection board other than the particular person, who was one of the applicants for selection, and each one of them separately filed affidavit swearing that the particular officer in no manner influenced their decision in making the selection. The Supreme Court said that in a group deliberation each member of the group is bound to influence the others; more so, if the member concerned is a person with special knowledge. His bias is likely to operate in a subtle manner. It is no wonder that the other' members of the selection board are unaware of the extent to which his opinion influenced their conclusions. It is impossible to consider that the members of the selection board function as computers. The Supreme Court pointed out that the aim of the rules of justice is to secure justice or to put it negatively to prevent miscarriage of natural justice. These rules operate only in areas not covered by any law validly made. They do not supplant the law of the land but supplement it. The concept of natural justice has undergone a great deal of change in recent years. In the past it was thought that it included just two rules, namely, (1) no one shall be a judge in his own cause, and (2) no decision can be given against a party without affording him a reasonable hearing, But, very soon thereafter, a third rule was envisaged and that is that quasi-judicial enquiries must be held in good faith without bias and not arbitrarily or unreasonably In the course of years, many more subsidiary rules came to be added to the rules of natural justice. Till very recently it was the opinion of the courts that unless the authority concerned was required by the law under which it functioned to act judicially there was no room for the application of the rules of natural justice. The Supreme Court said that if the purpose of the rules of natural justice is to prevent miscarriage of justice one fails to see why those rules should be made inapplicable to administrative enquiries. No doubt the rules of natural justice are not embodied rules. What particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances of the case, the framework of the law under which the enquiry is held and the constitution of the Tribunal or body of persons appointed for that purpose. Whenever a complaint is made before a court that some principle of natural justice had been contravened the court has to decide whether the observance of that rule was necessary for a just decision on the facts of that case.
6. The decision of the Court of Appeal of England in Regina v. Barnley Metropolitan Borough Council, Ex Parte Hock (1976) 1 WLR 1052, has some relevance here. In that case, the applicant, who was a stall-holder in an ancient town market under an oral licence from the borough council, the owners, had his licence terminated by letter from the market manager. His appeals to two Council Committees were dismissed without any specific reasons being given to him. It would appear that in the appeal hearing the market manager and the prosecutor was present throughout the proceedings, while the appellant was not. The Court of Appeal, setting aside the Divisional Court's decision in the matter which had dismissed the application for certiorari by the appellant on the ground that the Council's decision was administrative and within its powers, said, allowing the appeal, that where the council was exercising its discretionary powers under a statute to regulate the common law public right to buy and sell in a market, it was not merely dealing with the contractual relationship but also with the common law right of a man to earn his living in the market; that in those circumstances it was under a duty to act judicially; and that the appeal hearings had been conducted in the presence of the market manager, which was violative of the principles of natural justice and the Council's decision would have to be interfered with and would have to be set at naught. Lord Denning in his judgment in the case said that when the committee discussed the case and came to their decision, the market manager was there all the time. His presence at all their deliberations was enough to vitiate the proceedings. This view was agreed to in the concurrent judgment of Lord Justice Scarman. The Court of Appeal there has referred to the decision in Reg v. London County Council, Ex Parte Akkersdyk (1892) 1 QB 190, in which case the members of the committee, whose presence vitiated the decision of that committee, took no part in the final voting, but they were there and had participated in the first decision from which the appeal was being taken. Their presence there was held to vitiate the final decision. Another case in point is that of Cooper v. Wilson (1937) 2 All ER 726. The plaintiff in that case was a sergeant in the Liver-pool city police force, who tendered his resignation to the Chief Constable, who accepted it. Before the acceptance was communicated to the plaintiff, certain complaints were made against him. The Chief Constable retracted his acceptance of the resignation and held an inquiry, as a result of which he purported to dismiss the plaintiff from the police force. The plaintiff appealed to the watch committee, who upheld the Chief Constable's decision. The plaintiff questioned this decision. One of the grounds raised was that the confirmation by the watch committee of the Chief Constable's decision was invlaid, because of the presence of the Chief Constable in the committee when the decision was taken. Lord Justice Greer pointed out that the plaintiff was entitled to complain that the presence of the Bench, when they were deliberating as to whether they would or would not affirm his sentence, of one of the respondents to his appeal was contrary to natural justice and that such presence invalidated the decision of the watch committee. Agreeing with this Lord Justice Scott said that the Chief Constable was in effect the respondent to the appeal before the watch committee. He was of opinion that the complaint that the Chief Constable and his assistant were allowed to sit in a position which gave them the appearance of at least being the members of the committee which was considering the case, was sustainable and it was wrong. He pointed out (at p. 742):
But, even if the presence of the respondent sitting on all appearances amongst the members of the Tribunal could be said not to vitiate the proceedings, the fact that he remained with the in when the court was cleared for the commitee to consider its decision is fatal to the validity of the proceedings. It make; no difference whether he then discussed the case with them or not: the risk that a respondent may influence the court is so abhorrent to English notions of justice that the possibility of it, or even the appearance of such a possibility, is sufficient to deprive the decision of all judicial force, and to render it a nullity.
7. I may also refer to the decision of the Bombay High Court in V.D. High School v. Deputy Director of Education (1981) 2 SLR 692. There, the Court said that a Headmaster who had himself complained against the conduct of a teacher cannot participate in an enquiry committee constituted for the purpose. In the light of these decisions I hold that the decision of the Board of Directors of the respondent Corporation in the meeting held on 29th July, 1981, is vitiated by the violation of principles of natural justice and void. The Board of Directors would consider the appeal afresh in accordance with law after due notice to the petitioner. The Original Petition is disposed of as above. I make no order as to costs.
8. This case was posted for being spoken to as Mr. S. Parameswaran, learned Counsel for the respondent, one or two days after the judgment was delivered, represented to me that he was not able to put forward the case on behalf of his client for reasons beyond his control and as I was satisfied it was not his fault that he was not able to be present at the time of hearing, 1 heard the counsel on both sides again and I am not persuaded that I should take a different view from what I have taken in the judgment that I have pronounced.
9. Mr. Parameswaran said that the Kerala Fisheries Corporation Ltd., is a corporate body registered under the Companies Act, 1956, and, therefore, it cannot be a State coming within the ambit of Article 12 of the Constitution of India. As admitted by him, the Corporation, though registered under the Companies Act, is fully owned by the Government. It is really an instrument of the State created for the development of fisheries. In a modern State especially a welfare State, such activities really partake of Government functions. Therefore, the Corporation will come within the ambit of the word 'State'. In any view, proceedings under Article 226 will certainly lie against such an authority.
10. As regards the presence of the Managing Director who imposed the punishment as per Ext.P-3 on the petitioner in the meeting of the Board of Directors when the decision on the petitioner's appeal from Ext. P-3 order was taken, Mr. Parameswaran would contend that nothing has been shown by the petitioner that the other members of the Board were in any way induced to reject the appeal merely because of the Managing Director's presence. As per Article 77 of the articles of the Corporation, the Chairman of the Board shall be appointed by the Governor and it will be for a specific period and it will be such Chairman who normally presides over the meeting of the Board. The Managing Director attended the meeting of the Board which was held on 29th July, 1982, only as a member of the Board which he is entitled to do as per the relevant regulations of the Corporation. Therefore, Mr. Parameswaran would argue that the allegation of the petitioner that the impugned order is violative being contrary to the principles of natural justice, fair play, impartiality, etc., is bereft of bona fides, substance and merit.
11. Why the order is violative of the principles of natural justice, I have already explained in the judgment rendered. Mr. Parameswaran was not able to point out any error in the reasoning there. I would here draw support to what I have already said in the judgment by the following-passages of Professor II.W.R. Wade's Administrative Law (Fourth Edition), at pages 412 to 414. In the footnotes in these pages of the book the relevant cases are referred to:
In some situations mere membership, without participation may invalidate the adjudication. Thus where a local education authority had to decide whether to prohibit the dismissal of a school teacher, whom the governors of the school had rsolved to dismiss, the Court of Appeal found objectionable bias because three members of the local authority's sub-committee, which resolved not to prohibit the dismissal, were governors; yet those members had not attended the governors' meeting which resolved upon the dismissal. It was observed that members of a body such as a board of governors might be thought to have a built-intendency to support their colleagues, and ought not therefore to sit in judgment on their decisions. In a contrasting case, where a student at a teachers' training college was expelled for having a man living with her in her room, the Court of Appeal upheld the expulsion, even though it was effected by the Board of Governors who had themselves referred the case to the disciplinary committee which recommended expulsion. Yet the procedure was strongly criticised, and had the court been sympathetic to the plaintiff it could easily have found in her favour...
Where functions are delegated or entrusted to committees or sub-committees, an overlap of membership may be objectionable on grounds of bias. This was plainly so where the London County Council used a committee for hearing applications for music and dancing licences and these members of the committee not only sat as members of the Council (though taking no part) when considering the committee's adverse recommendation, but also instructed lawyers to oppose the application before the Council. The House of Lords followed this decision in a similar situation where justices referred a licence application to the compensation authority and instructed a lawyer to oppose it before that authority; three of the same justices not only sat but also voted as members of the compensation authority, and the decision of the authority was accordingly set aside.
A particularly clear case of irregularity is where a person sits with an appellate body to hear an appeal against a decision of his own as did the Chief Constable in the Liverpool police case mentioned earlier. Likewise a county valuation officer ought not to sit with an assessment committee while they deliberate on an objection to the valuation list. Many rating cases have revealed other objectionable intermixtures of functions, for example, where an employee of a town council, who took the minutes of its rating committee, acted also as a clerk to the assessment committee.
12. Therefore, I see no reason to review or revise the judgment already rendered. This will form part of the judgment and in the circumstances of the case the respondent can take this day as the date of the judgment for the purpose of appeal in the matter if he is to take up the case in appeal.