AHMADI, J.

1. The short question which arises in this appeal by special leave is whether the departmental enquiry entrusted to and conducted by a bank official stands vitiated if the said official proceeds with the enquiry and concludes the same after his superannuation during the pendency of the enquiry The High Court of Karnataka has held that such an enquiry is incompetent and without jurisdiction and, therefore, such null and void. The facts giving rise to this appeal, briefly stated, are as under:

2. Paragraph 9.14 of the Memorandum of Bi-partite Settlement dated October 19, 1966 empowers the Chief Executive Officer, etc. of the Bank to decide which officer(s) would be empowered to hold enquiry and take disciplinary action in the case of each office or establishment. Accordingly Shri U.B. Menon, Special Officer, was appointed an Enquiry Officer under the Chief Executive Officers Order dated January 9, 1979, which reads as under:

By a subsequent circular dated January 17, 1979 all offices of the Bank were informed about the appointment. Shri U.B. Menon was intimated about the same by the Assistant General Managers letter dated January 23, 1979. The said Enquiry Officer conducted the departmental enquiry against the respondent. However, during the pendency of the departmental enquiry he trained from service on January 31, 1979. Notwithstanding his retirement he continued to function as an Enquiry officer and concluded the enquiry against the respondent by the end of 1979. He then gave an opportunity to the respondent to be heard on the question of punishment and then passed the impugned order of discharge on January 14, 1980. The respondents departmental appeal was also dismissed on June 17, 1980. The respondent did not raise any objection against the continuance of the enquiry by the said Shri U.B. Menon at any time during the pendency and till the disposal of the departmental appeal preferred by him. Suffice it to say that he raised this objection for the first time in Writ Petition No. 18140 of 1980 filed against the impugned order of discharge in the High Court.

3. A learned Single Judge of the High Court by his order dated January 18, 1988 came to the conclusion that on the retirement of Shri U.B. Menon he was nobody in the hierarchy of authorities to impose punishment on the respondent and hence the order imposing punishment was clearly incompetent and without jurisdiction. The argument that since the impugned order of discharge got merged in the appellate order, the initial defect, if any, stood removed, was repelled by the learned Judge on the ground that as the original order was without jurisdiction or competence, there was nothing for the Appellate Authority to confirm. The learned Single Judge, therefore, allowed the writ petition, quashed the impugned order of punishment and directed that the respondent be paid all consequential benefits. The appellant preferred a letters patent appeal against the said order of the learned Single Judge. The Division Bench of the High Court which heard the appeal dismissed it by a one line order : no ground for interference is made out. It is against this order that the appellant has approached this Court under Article 136 of the Constitution.

4. Shri Narain Shetye, the learned counsel for the appellant strongly urged that the High Court ought not to have permitted the respondent to question the competence or jurisdiction of Shri U.B. Menon to act as an Enquiry Officer as well as a Disciplinary Authority after his superannuation since he had participated in the enquiry throughout without a demur. According to him, by conduct the respondent was estopped from raising such a contention for the first time in a writ petition, more so because he had submitted to the jurisdiction of Shri U.B. Menon and there was no prejudice caused on him on that account. Lastly, he submitted that even otherwise the appellant could have appointed a non-official as an Enquiry Officer and therefore his decision could be saved on the de facto doctrine.

5. Taking the last submission first we think that in the facts and circumstances of this case the de facto doctrine can have no application. Under paragraph 19.14 of the bi-partite agreement the Chief Executive Officer was entitled to decide which officer should be empowered to hold an enquiry and take disciplinary action in the case of each office or establishment. Under this paragraph only an officer of the Bank could be empowered to hold an enquiry and take disciplinary action against a delinquent. The names of officers so empowered were required to be published on the Banks notice board. Accordingly, Shri U.B. Menon was appointed an Enquiry Officer/Disciplinary Authority under paragraph 19.14 of the bi-partite agreement while he was still in service. It is indeed surprising that an officer who was due to retire within a few days only was chosen to act as an Enquiry Officer and Disciplinary Authority by the order dated January 9, 1979. Shri U.B. Menon was intimated about his appointment by the letter of January 23, 1979, i.e. hardly a week before his superannuation on January 31, 1979. After his retirement from service he proceeded with the enquiry and concluded it by the end of 1979. The respondent was then served with a second show cause notice on the question of punishment and thereafter the impugned order of discharge was passed on January 14, 1980. There is nothing on the record to show that any formal decision was taken by the appellant to continue the services of Shri U.B. Menon as an official of the Bank. Shri Shetye is right when he contends than an Enquiry Officer need not be an officer of the Bank; even a third party can be appointed an Enquiry Officer to enquire into the conduct of an employee. See : Saran Motors (P) Ltd. v. Vishwanath ( 1964 (2) LLJ 139 [LQ/SC/1964/116] : 1964 (9) FLR 77 (SC)). But there can be no doubt that a non-official cannot act as a Disciplinary Authority and pass an order of punishment against the delinquent employee. It is for this reason that the learned Single Judge of the High Court observed that on retirement Shri U.B. Menon was nobody in the hierarchy of authorities to impose punishment on the delinquent. He, therefore, held that the order of punishment was clearly incompetent and without jurisdiction. The learned counsel for the appellant submitted that since the initial appointment of Shri U.B. Menon was valid, his actions and decisions could not be invalidated by his subsequent retirement. According to him he continued to function as an Enquiry Officer de facto and hence his actions and decisions were saved. The de facto doctrine has two requisites, namely, (i) the possession of the office and the performance of the duties attached thereto, and (ii) colour of title, that is, apparent right to the office and acquiescence in the possession thereof by the public. According to this doctrine the acts of officers de facto performed within the sphere of their assumed official authority, in the interest of the public or third parties and not for their own interest, are generally held valid and binding as if they were performed by de jure officers. This doctrine dates back to the case of Abbe de Fountaine decided way back in 1431 to which reference was made by Sir sutosh Mookerjee, J. in Pulin Behari Das v. King Emperor ((1911-12) 16 Cal WN 1105, 1120 : 15 CLJ 517). Mookerjee, J. held that as the complaint was made after complying with Section 196, Criminal Procedure Code, by the order of or under authority from local government which was de facto, the proceedings were valid. On the same principle it was further held that the Court of Sessions, assuming it was not the holder of a de jure office, was actually in possession of it under the colour of title which indicated the acquiescence of the public in its actions and hence its authority could not be collaterally impeached in the proceedings arising from the conviction of Pulin and his co-accused. Again, in Immedisetti Ramkrishnaiah Sons v. State of Andhra Pradesh 1976 AIR(AP) 193) the government nominated nine persons on a Market Committee which nomination was later set aside by the High Court. However, before the High Court pronounced its judgment, the Market Committee had functioned as if it had been properly constituted. Between the date of its constitution and the date of the High Court decision it had taken several decisions, issued notifications, etc. which were the subject matter of challenge on the ground that its constitution was ab initio bad in law. Chinnappa Reddy, J. relying on the observations of Mookerjee, J., in Pulin case ((1911-12) 16 Cal WN 1105, 1120 : 15 CLJ 517) concluded, that the acts of the Market Committee de facto performed within the scope of it assumed official authority, in the interest of the public or third persons and not for his own benefit are generally as valid and binding as if they were performed by a de jure Committee. The Allahabad High court in Jai Kumar v. State 1968 All(LJ) 877 upheld the judgments of the District Judges whose appointments were later struck down by this Court on the principle that the acts of officers de facto are not to be questioned because of the want of legal authority except by some direct proceeding instituted for the purpose by the State or by someone claiming the office de jure, or except when the person himself attempts to build up some right, or claim some privilege or benefit by reason of being the officer which he claims to be. In all other cases, the acts of an officer de facto are valid and effectual, while he is suffered to retain the office, as though he were an officer by right and the same legal consequences will flow from them for the protection of the public and of the third parties. This Court in Gokaraju Rangaraju v. State of A.P. ( 1981 (3) SCC 132 [LQ/SC/1981/237] : 1981 SCC(Cri) 652 : 1981 (3) SCR 474 [LQ/SC/1981/237] : 1981 AIR(SC) 1473) was required to consider the question of the effect of the declaration of this Court holding the appointment of an Additional Sessions Judge invalid on judgments pronounced by him prior to such declaration. This Court observed that the de facto doctrine is founded on good sense, sound policy and practical experience. It is aimed at the prevention of public and private mischief and the prevention of public and private interest. It avoids endless confusion and needless chaos. It, therefore, seems clear to us that the de facto doctrine can be invoked in cases where there is an appointment to office which is defective; but notwithstanding the defect to the title of the office, the decisions made by such a de facto officer clothed with the powers and functions of the office would be as efficacious as those made by a de jure officer. The same would, however, not be true of a total intruder or usurper of office.

6. In our view, the submission of Shri Shetye based on the de facto doctrine is clearly misconceived. Shri U.B. Menon can hardly be described as a person occupying or being in possession of an office to which certain duties affecting the members of the general public can be said to be attached. The de facto doctrine, as explained earlier, envisages that acts performed de facto by officers within the scope of their assumed official authority are to be regarded as binding as if they were performed by officers de jure. While the de facto doctrine saves official acts done by an officer whose appointment is found to be defective the private parties to a litigation are precluded from challenging the appointment in any collateral proceedings. But the doctrine does not come to the rescue of an intruder or usurper or a total stranger to the office. Obviously the doctrine can have no application to the case of a person who is not the holder of an office but is merely a bank employee, for that matter an ex employee. We, therefore, see no merit in this contention.

7. True it is that the respondent did not attribute any bias or mala fides to the Enquiry Officer nor did he complain that he was in any manner prejudiced on account of the said Enquiry Officer conducting the domestic enquiry but that will not cure the defect as to his competence. Where punishment is imposed by a person who has no authority to do so the very foundation on which the edifice is built collapses and with and it falls the entire edifice. It is a case more or less akin to a case tried by a court lacking in inherent jurisdiction. We are, therefore, of the opinion that absence of bias, prejudice or mala fides, is of no consequence so far as the question of competence is concerned. The two cases which were cited at the bar (i) Delhi Cloth and General Mills Co. Ltd. v. Labour Court, Tis Hazari ( 1970 (1) LLJ 23 [LQ/SC/1969/255] : 1969 (19) FLR 249 (SC)) and (ii) Saran Motors ( 1964 (2) LLJ 139 [LQ/SC/1964/116] : 1964 (9) FLR 77 (SC)) also have no application to the special facts and circumstances of this case.

8. Shri Shetye next submitted that if a third party non-official can validity be appointed an Enquiry Officer, though not Disciplinary Authority, his report up to the stage preceding the issuance of a second show cause notice could be saved because both sides to the proceedings had not raised any objection to the continuance of the enquiry by the said Enquiry Officer and therefore the High Court ought to have remitted the matter to the competent Disciplinary Authority to take a fresh decision based on the report of the Enquiry Officer. To put it differently, accordingly to the learned counsel for the appellant, the High Court should have remanded the matter with a direction that the competent Disciplinary Authority will proceed to dispose of the departmental enquiry from the stage of the report submitted by the Enquiry Officer. We would have considered it necessary to examine this submission had the delinquent not retired in the meantime on August 21, 1986. The High Court pronounced its judgment thereafter on January 18, 1988. No useful purpose, therefore, can be served by adopting the procedure suggested by Shri Shetye as the respondent had admittedly retired from service in 1986 and if the order imposing punishment is quashed he would ordinarily have to be paid his wages etc., up to the date of his retirement. We, therefore, do not think that, in the facts and circumstances of this case, the course suggested by Shri Shetye can be usefully adopted.

9. Lastly, Shri Shetye submitted that in any event the respondent succeeded in getting the order of punishment quashed on a mere technicality and that too on the contention belatedly raised before the High Court for the first time and, therefore, the High Court was in error in directing payment of all consequential benefits. We think there is merit in this contention. If the objection was raised at the earliest possible opportunity before the Enquiry Officer the appellant could have taken steps to remedy the situation by appointing a competent officer to enquire into the charges before the respondents retirement from service. It is equally true that the penalty has not been quashed on merits. On the contrary, if one were to go by the charge levelled against the respondent and the reply thereto one may carry the impression that the respondent himself was duped or not would be a different matter. The fact, however, remains that the impugned order of punishment has to be quashed not because the merits of the case so demand but because the technical plea of incompetence succeeds. In the circumstances, we think that the ends of justice would be met if instead of directing all consequential benefits the appellant is ordered to pay 50 per cent of the consequential benefits to which the respondent would be entitled on superannuation. For the above reasons, we are of the opinion that the High Court was right in quashing the impugned order of punishment but we think having regard to the special facts and circumstances pointed out earlier, it should not have ordered payment of all consequential benefits flowing from the declaration that the impugned order was bad in law. We, therefore, modify this part of the order by substituting the words 50 per cent in place of the word all in the penultimate paragraph of the learned Single Judges order. To put the matter beyond the pale of doubt we clarify that the respondent will be paid 50 per cent of the consequential benefits and not all the consequential benefits. Except for this modification, the rest of the order of the High Court will stand.

10. The appeal will stand allowed to the above extent but, in the facts and circumstances of this case, we think the parties should be directed to bear their own costs.