A) ABSTRACT / HEADNOTE

The appeal arises from the validity of appointments made in 1998 to the post of Shiksha Karmi (Grade III) in Janpad Panchayat, Gaurihar, Madhya Pradesh, where ten appellants (among 249 selectees) were alleged to be relatives of members of the Selection Committee. The Collector quashed the appointments without prior notice, concluding the recruitment was vitiated by bias / nepotism and relied on Section 40(c) and Section 100 of the Panchayat Raj Act Avam Gram Swaraj Adhiniyam, 1993; the Commissioner in revision affirmed that order. Writs filed in the High Court failed; a two-judge Bench of the Supreme Court produced a split verdict — one judge setting aside the selections for nemo judex breach, the other holding that the audi alteram partem violation (no notice/hearing) made the cancellation unsustainable.

A larger Bench considered three core issues:

(A) whether a reasonable likelihood of bias vitiated the selections;

(B) whether denial of audi alteram partem requires demonstration of prejudice; and

(C) whether an appellate/revisional process can cure an initial denial of hearing. The Bench held:

(i) on available facts including a unanimous recusal resolution passed by the Janpad Panchayat and the fact that recused members did not award marks a reasonable likelihood of bias could not be inferred;

(ii) the Collector’s ex-parte cancellation without notice was a gross violation of audi alteram partem and such denial ordinarily cannot be cured by an appellate body, save in exceptional circumstances; and

(iii) although defect at the initial stage vitiates the process, practical considerations (selection dating to 1998 and long continued service under interim orders) weighed against remanding the matter for fresh inquiry.

Keywords: Audi alteram partem; Nemo judex in causa sua; recusal; Section 40(c) Panchayat Raj Act; doctrine of necessity; prejudice; revisional jurisdiction.

B) CASE DETAILS

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The dispute concerns challenges to recruitment of Shiksha Karmis (1998) where certain selectees were alleged relatives of Selection Committee members. After the first select list was quashed, a fresh list (249 names) was published; unsuccessful candidate Archana Mishra challenged the appointments before the Collector alleging nepotism and bias. The Collector, relying in part on Hira Lal Patel v. CEO and Sections 40(c), 100 of the Adhiniyam, set aside the appointments without prior notice to the affected selectees. The Commissioner in revision affirmed. The Madhya Pradesh High Court declined relief to the selectees, applying State Bank of Patiala v. SK Sharma (prejudice test) and reading that opportunity had been afforded at revisional stage.

Two-Judge Bench of Supreme Court split: one judge (Maheshwari, J.) found reasonable likelihood of bias and upheld cancellation; the other (Vishwanathan, J.) found that denial of hearing made cancellation invalid. The larger Bench was convened to resolve the tension between nemo judex and audi alteram partem in administrative selections, and to clarify whether appellate cure is permissible where initial hearing was denied. The Bench examined statutory composition of the Selection Committee (Schedule II), a unanimous recusal resolution, record evidence of recusal and non-participation in marking, and the statutory definition of relative to test the real likelihood of bias in the context of a village-level appointment process where close acquaintance is common.

D) FACTS OF THE CASE

A fresh selection list was published on 16.9.1998 and appointment orders issued on 17.9.1998; ten appellants were among the selectees. Archana Mishra filed a challenge before the Collector under the Madhya Pradesh Panchayat (Appeal & Revision) Rules, 1995, alleging nepotism because several committee members had close relatives in the select list. The Collector, without issuing notice to the selectees, set aside their appointments on 2.6.1999 citing breach of Section 40(c) and prior High Court authority. The selectees filed revision under Rule 5; the Commissioner dismissed it (finding the appointments contrary to Section 40(c)).

A writ petition by selectees to the High Court was dismissed; Division Bench also dismissed the writ appeal on 15.12.2008. Before the Supreme Court the two-judge Bench split: one judge set aside appointments for bias; the other found the cancellation illegal for denial of hearing. The record shows the Janpad Panchayat had unanimously passed a recusal resolution directing members with close relatives to stay away and delegate marking to the Chief Executive Officer; the recused members allegedly did not award marks. The statutory definition of relative in Section 40(c) explanation sets out specific relations; not all alleged connections necessarily fell within that definition. The selectees had, since 1998, served continuously under interim orders for over twenty-five years.

E) LEGAL ISSUES RAISED

i. Whether the selection is vitiated by violation of the rule against bias (nemo judex in causa sua)?
ii. Whether denial of audi alteram partem in the original proceeding requires proof of prejudice to invalidate the order?
iii. Whether a breach of audi alteram partem at the original stage can be cured by a revisional or appellate authority?

F) PETITIONER / APPELLANT’S ARGUMENTS

The appellants contended that:

(i) they were never afforded notice or opportunity before the Collector;

(ii) the relatives who were alleged to influence selection had recused and did not participate in interviews or marking;

(iii) marks and comparative merit demonstrated a fair process;

(iv) setting aside without impleading or hearing them violated fundamental procedural fairness and statutory safeguards; and

(v) the revisional forum had full jurisdiction and in any event the defect of non-joinder could not justify ex-parte cancellation.

G) RESPONDENT’S ARGUMENTS

The respondents relied on Section 40(c) alleging office-bearers must not secure employment/pecuniary benefit for relatives and argued presence of relatives on the committee created reasonable likelihood of bias (invoking A.K. Kraipak). They further submitted that any audi breach was cured at revisional stage because appellants were given an opportunity before the Commissioner; prejudice therefore had not been established.

H) JUDGEMENT

The Bench analyzed:

(i) the real likelihood test for bias (Indian courts follow reasonable likelihood standard),

(ii) the statutory scheme governing selection and the explicit recusal resolution passed by the Janpad Panchayat, and

(iii) authorities on whether initial denial of hearing can be cured on appeal.

On the bias issue, the Bench held the facts disclose only mere suspicion of bias: the recusal resolution appointed the Chief Executive Officer to act when relatives appeared; recused members did not award marks; and the statutory definition of relative was not applied by lower forums, weakening the bias challenge. Given those facts, a reasonable likelihood of bias could not be inferred and the nemo judex ground failed.

On audi alteram partem, the Court held there was a gross violation where the Collector cancelled appointments without notice; total denial of hearing strikes at the core of procedural fairness and cannot be treated lightly. The Court declined the blanket rule that prejudice must always be shown: while prejudice is sometimes an exception, the non-service/no hearing situation is of a different order where the denial itself is a fundamental wrong (drawing on Ridge v Baldwin, SL Kapoor v Jagmohan, Dharampal Satyapal, and CORE). The Court emphasized that statutory provisions (e.g., Section 40 proviso) expressly require an opportunity to show cause and that the Collector’s assumption that appellants’ appointments were void ab initio without impleading them was impermissible.

On whether appellate cure is possible, the Bench surveyed English authorities (Leary, Calvin, Lloyd, Leary principle) and Indian application. The general rule (Leary) is that a failure of natural justice at trial cannot ordinarily be cured by a fair appeal; Calvin remains an exception in narrow circumstances. The Court held that while appellate authorities sometimes possess full jurisdiction, courts should retain discretion to remit to the original forum to secure an initial hearing; a defective ex-parte order taints subsequent orders and impairs meaningful review. Nevertheless, balancing the systemic and equitable consequences (the selection dates from 1998 and appellants have served for >25 years), the Court declined practical remand for fresh inquiry as unjust to long-serving appointees, and thus upheld the selections on equitable grounds while marking the Collector’s order as vitiated procedure.

a. RATIO DECIDENDI

(1) The real likelihood test for bias must be applied contextually; recusal and non-participation materially weaken inference of bias.

(2) Total denial of audi alteram partem (no notice/no hearing) is a fundamental procedural defect; prejudice need not always be separately shown in such cases.

(3) A defect at the original stage normally cannot be cured by an appellate forum; courts should have discretion to remit for hearing, but practical equity (longcontinued service) may guide final relief.

b. OBITER DICTA 

The Court discussed the doctrine of necessity as an exception to nemo judex where small local jurisdictions make complete stranger committees impractical; observations on proportionality and review of expert selections were reiterated (judicial interference limited to illegality, malafides, or procedural impropriety). The Court also indicated that statutory definitions (e.g., relative) must be applied, not assumed, when deciding bias.

c. GUIDELINES

• Where statutory committee composition is mandated, recusal with delegation is an acceptable safeguard against bias.

• No notice/no hearing is a fundamental breach: authorities must ordinarily provide opportunity to show cause/self-defence before cancellation under Section 40.

• Appellate/revisional bodies with full jurisdiction should consider remitting to the original forum where trial procedural defects deprived affected parties of hearing.

• Apply the statutory definition of “relative” strictly; not all alleged relationships trigger Section 40(c).

I) CONCLUSION & COMMENTS

The judgment reconciles two pillars of natural justice: it accepts that recusal mechanisms and non-participation in crucial acts (marking) materially reduce the inference of bias, but it equally reaffirms the primacy of audi alteram partem — an ex-parte cancellation without notice is fundamentally flawed. Practically the Court balanced legal correctness with equity: although procedure was vitiated, remanding a 1998 selection after 25+ years of uninterrupted service would impose disproportionate hardship.

The decision clarifies that:
(a) courts must scrutinize the actual role of allegedly interested members (participation/marking),

(b) appellate cure of trial defects is exceptional and requires careful discretion, and

(c) statutory safeguards (definitions; show-cause provisos) must be observed in spirit and letter.

For administrative bodies, the message is plain: adopt transparent recusal processes, document delegation when relatives appear, and always ensure notice and impleadment of affected parties when allegations of nepotism/bias arise.

J) REFERENCES

a. Important Cases Referred 

• A.K. Kraipak v. Union of India*, (1969) 2 SCC 262.

• State Bank of Patiala v. S.K. Sharma*, (1996) 3 SCC 364.

• Ridge v. Baldwin*, [1964] AC 40.

• SL Kapoor v. Jagmohan*, (1980) 4 SCC 379.

• Leary v. National Union of Vehicle Builders*, (1970) 2 All ER 713.

• Charan Lal Sahu v. Union of India*, (1990) 1 SCC 613.
  (Selection above reproduces and relies on authorities discussed within the attached judgment).

b. Important Statutes Referred

• Panchayat Raj Act Avam Gram Swaraj Adhiniyam, 1993 — Section 40(c), Section 100 (Explanation: “relative” defined).

• Madhya Pradesh Panchayat (Appeal & Revision) Rules, 1995 — Rules 5, 9 and Schedule II (composition and revision scope).