JUDGMENT Untwalia & G.N. Prasad, JJ. The petitioner of this writ application is asking for the quashing of the order dated 8-3-1969 by the Managing Director, respondent no. 2, of the Bihar State Financial Corporation (hereinafter called 'the Corporation'), a copy of which order is Annexure 9 to the writ application, and of the resolution of the Board of Directors, respondent no. 1, of the said Corporation dated 21-4-1969, a copy of which is Annexure 13 to the supplementary affidavit. Since the order of the Board contained in the resolution aforesaid has to be quashed on a technical point, we would refrain from stating the facts in detail. Yet on the argument advanced before us, it is necessary to decide whether the order of respondent no. 2 is fit to be quashed in exercise of the powers of this Court under Articles 226 and 227 of the Constitution. At the out set it may also be stated that learned Advocate General appearing for respondents 1 to 3, respondent no. 3 being the Secretary of the Corporation, took a preliminary point that the authorities of the Corporation are not amenable to our writ jurisdiction as it is a Corporation constituted under State Financial Corporation Act, 1951 (Central Act 63 of 1951) which indulges in business activities and does not perform any governmental or administrative function and in this connection he placed reliance on a decision of Bombay High Court in (1) Pramodrai Shamaldas Bhavsar V. Life Insurance Corporation of India (A.I.R. 1969 Bombay 337). But at the conclusion of the argument of this case when we indicated that an order of respondent no. 2, Annexure 9, is not fit to be quashed in exercise of our power under Article 226 of the Constitution and that of the Board contained in Annexure 13 has got to be quashed because of a technical defect being there in that order, he eventually did not press this point in this case. For the purpose of this case, therefore, we shall proceed on the footing that the Corporation and its authorities are amenable to the writ jurisdiction of this Court. 2. The petitioner was appointed as a Darwan under the Corporation in the year 1959, Some incident happened between him and Shri Rajeshwar Singh a lower division assistant, who has been impleaded as respondent no. 4 in this writ case, in the year 1968. 2. The petitioner was appointed as a Darwan under the Corporation in the year 1959, Some incident happened between him and Shri Rajeshwar Singh a lower division assistant, who has been impleaded as respondent no. 4 in this writ case, in the year 1968. On the complaint of respondent no. 4, respondent no. 3, according to the case of the petitioner issued a show cause notice dated 22.2.1968, a copy d which is Annexure 4. The petitioner claims that he filed his written explanation before the Managing Director, respondent no. 2, on 28.2.1968. Eventually an order was passed against the petitioner on 17-4-1968, a copy of which is Annexure 5, imposing a fine of Rs, 10/- on him. According to the petitioner, this order was passed by the Secretary and not by respondent no. 2 as required by the Bihar State Financial Corporation (Staff) Regulations, 1965, framed under Section 48 of the State Financial Corporations Act, 1951 (hereinafter called the Regulations). In the first instance he had filed an application as also a reminder in April and May, 1968, before respondent no. 2 by way of appeal from the order which on its face purported to have been passed by respondent no. 3. But eventually he claims to have filed an appeal before the Board on 15.6.1968 taking, inter alia, a point therein that the Secretary had no jurisdiction to pass the order. It is stated on behalf of the Corporation that the file containing the relevant papers in connection with the service of the petitioner was with the Managing Director of the Corporation, respondent no. 2 on 18.6.1968. He left it on his table in his office room. On 19.6.1968 when he returned, he did not find the file. On a preliminary enquiry held on 19.6.1968 it was discovered that the petitioner had removed the file and had got it burnt. Thereupon a charge-sheet was framed against the petitioner on 3.7.1968, a copy of which is Annexure 7. Enquiry was entrusted to the Secretary of the Corporation, respondent no. 3. In this enquiry the petitioner has been held guilty by him. The finding has been accepted by respondent no. 2 who issued the second show cause notice on 19.11.1968, a copy of which is Annexure 8. The petitioner filed show cause in response to the second show cause notice on 18.1.1969, a copy of which is Annexure 17. 3. In this enquiry the petitioner has been held guilty by him. The finding has been accepted by respondent no. 2 who issued the second show cause notice on 19.11.1968, a copy of which is Annexure 8. The petitioner filed show cause in response to the second show cause notice on 18.1.1969, a copy of which is Annexure 17. Ultimately the order of dismissal was passed against him by respondent no. 2 on 8.3.1969. In accordance with Regulation 40 of the Regulations the petitioner preferred an appeal before the Board of Directors, but the appeal was rejected by a resolution of the Board passed on 21.4.1969. The petitioner's case is that Shri V.N. Prasad, Managing Director of the Corporation, who had passed the order dated 8.3.1969 was also present in the meeting of the Board and was a party to the resolution by which the petitioner's appeal was rejected. Apart from other grounds the resolution of the Board is attacked as it suffers from an incurable infirmity, in that, respondent no. 2 should not have been allowed to sit in appeal, along with others, from his own order. 3. Mr. Shreenath Singh, learned counsel for the petitioner, took us through the various papers of the previous proceeding resulting in an imposition of fine of Rs. 10/- on the petitioner and submitted that the petitioner had been made a scapegoat by the Secretary of the Corporation as he had challenged his order before the Board taking, inter alia, a plea that under the Regulations the Secretary had no authority to initiate the proceedings or to impose any punishment. He further submitted that the Secretary was biased against the petitioner and had no right to hold the inquiry. Counsel took us through his report and certain papers connected therewith in order to convince us that the report is a prejudicial report and the findings recorded therein are not sustainable. 4. We do not propose to express any opinion in this case on the merits of the petitioner's appeal filed from the order of dismissal passed against him. We do not propose in this judgment to examine in any detail the propriety or the correctness of the enquiry report or the order of dismissal passed against the petitioner. 4. We do not propose to express any opinion in this case on the merits of the petitioner's appeal filed from the order of dismissal passed against him. We do not propose in this judgment to examine in any detail the propriety or the correctness of the enquiry report or the order of dismissal passed against the petitioner. Suffice it to say however; that having considered the materials placed before us, we did not feel persuaded to take the view that the enquiry report or the order passed by respondent no. 2 on the basis of that report suffers from any infirmity of the kind which would justify its quashing in exercise of our powers under Article 226 of the Constitution. We were not concerned to examine the facts stated in the enquiry report as an appellate authority. We were not concerned to examine all the facts of the case. That is for the Appeal Board to examine. On a broad examination of the facts, however, we did not find anything either in the proceeding or in the order of dismissal passed against the petitioner to induce us to exercise our powers under Article 226 of the Constitution. As stated in the enquiry report when the petitioner was asked to show cause against the charge-sheet dated 3.7.1968, he did not submit any show cause. In spite of several notices and in spite of several petitions filed by him for time, he did not take part in the enquiry. At no state before the enquiry was held, he took the objection that respondent no. 3 was prejudiced against him and, therefore, being a biased officer, he was not competent to hold enquiry against the petitioner. So much so that even in the letter dated 25.7.1968 which was sent by the petitioner's advocate to the Board of Directors, a copy of which is Annexure A to the counter-affidavit, he did not specifically take this point. We are, therefore, not prepared to hold in this case that the Secretary was a biased officer and the enquiry held by him is illegal on the doctrine of bias. 5. Learned counsel for the petitioner then submitted that under Regulation 39 of the Regulations enquiry could not be entrusted by the Managing Director to the Secretary and the second show cause notice issued by respondent no. 5. Learned counsel for the petitioner then submitted that under Regulation 39 of the Regulations enquiry could not be entrusted by the Managing Director to the Secretary and the second show cause notice issued by respondent no. 2 in which no specific proposed punishment was mentioned was illegal and the order of dismissal passed against the petitioner after committing the illegality in the issue of the second show cause notice is also illegal and invalid. In our opinion, there is no substance in this argument. The relevant provision of Regulation 39 of the Regulations runs as follows: "39, Penalties.-(i) Without prejudice to the proceeding of the Regulations an employee who commits a breach of the regulations of the Corporation or who displays negligence, inefficiency or indolence or who knowingly does anything detrimental to the interest of the Corporation or in conflict with its instructions or who commits a breach of discipline or is guilty of any other act of misconduct or who is convicted of a criminal offence shall be liable to any or all of the following penalties:- (a) Reprimand, (b) Withholding or postponement of increment or promotion including stoppage at an Efficiency bar, if any, (c) reduction to a lower post or grade or to a lower stage in his incremental scale, (d) recovery from pay of the whole or part of any pecuniary loss caused to the Corporation by the employee, (e) fine, (f) suspension, (g) dismissal, (h) discharge, or (i) compulsory retirement. (ii) No employee shall be subjected to the penalties in Clauses (b), (c), (d), (e), (f), (g), (h) or (i) of Sub-regulation (i) except by an order or in writing signed by the Managing Director and no such order shall be passed without the charge or charges being formulated in writing and given to the said employee so that he shall have reasonable opportunity to answer them in writing or in person, as he prefers, and in the latter case his defence shall be taken down in writing and read to him, provided that the requirements of this. Regulation may be waived if the facts on the basis of which action is to be taken have been established in a Court of Law or where the employee has absconded or where it is for any other reason impracticable to communicate with him or where there is difficulty in observing them and the requirements can be waived without injustice to the employee. In every case where all or any of the requirements of this Regulation are waived, the reasons for so doing shall be recorded in writing." Regulation 39 requires that in case penalties as provided in Clauses (b) to (1) of Sub-regulation (i) are proposed to be inflicted, then in-that case an order in writing signed by the Managing Director is necessary and no such order can be passed without the charge or the charges being formulated in writing and given to the employee so that he shall have reasonable opportunity to answer them in writing or in person as he prefers. The regulation does not require that the enquiry in the charges framed and served has got to be held by the Managing Director. It is a well-known procedure of departmental or domestic enquiries in service cases that the enquiry can be entrusted by the punishing competent authority to any other authority. The punishing authority has also to apply his mind for imposing the punishment on the materials placed before him. He cannot pass the order mechanically. But no second show cause notice is necessary to be given in terms of Regulation 39(ii). Show cause notice is to be given only when the charge are framed. The explanation has to be submitted by the delinquent employee in response to the first show cause notice. He cannot boycott the enquiry held. He has to take part in it and when the matter goes to the punishing authority with the materials brought at the enquiry the punishing authority has to apply his mind and pass such order as he thinks fit and proper. In this case, therefore, we have no difficulty in holding that neither the enquiry entrusted to respondent no. 3 by respondent no. 2, nor his second show cause notice was illegal, inasmuch as, the enquiry could be entrusted to the Secretary and no second show cause notice was necessary to be issued by respondent no. 2. In this case, therefore, we have no difficulty in holding that neither the enquiry entrusted to respondent no. 3 by respondent no. 2, nor his second show cause notice was illegal, inasmuch as, the enquiry could be entrusted to the Secretary and no second show cause notice was necessary to be issued by respondent no. 2. On consideration of the enquiry report he had the jurisdiction to straight away proceed to impose the punishment as he thought fit and proper to do. In this case, however, even the second show cause notice was given although the proposed punishment was not indicated in it and thereby a further opportunity was given to the petitioner to explain his conduct. He did file his explanation and on consideration of the enquiry report and his explanation the punishment was imposed by respondent no. 2. 6. We have, therefore, come to the conclusion that the order of respondent no. 2 contained in Annexure 9 is not fit to be quashed in exercise of our powers under Article 226 of the Constitution. 7. It is undisputed that when the appeal of the petitioner filed before the Board of Directors was considered by them, respondent no. 2 also was present in the meeting and is a party to the resolution rejecting the petitioner's appeal. He must have, therefore taken part in the deliberation also. This was not permissible in law. When the Board of Directors were considering the appeal of the petitioner which was directed from the order of the Managing Director, the latter ought not to have sat at the meeting when the petitioner's appeal was taken up for consideration. Doctrine of bias, therefore, comes into play in this regard and it is violation of principles of natural justice that a person from whose order the appeal was being considered by the Board of Directors was also allowed to take part in the deliberations of the meeting. On that technical ground, therefore, we are constrained to set aside the order of the Board, a copy of which is annexed 13; the copy of the entire minutes being Annexure 18. While doing so we would reiterate, as we have said above, that it will be open to the Board to consider the facts of the petitioner's case in appeal and take such view of them as they may think fit and proper to take. While doing so we would reiterate, as we have said above, that it will be open to the Board to consider the facts of the petitioner's case in appeal and take such view of them as they may think fit and proper to take. It is hoped that any observation of ours in this judgment which was precisely meant for rejecting the petitioner's argument to quash the order of respondent no. 2 in exercise of our powers under Article 226 of the Constitution will not in any way fetter the discretion of the Board to take such view of the petitioner's appeal on merits as they may think fit and proper to take. 8. In the result, the application is partly allowed. The prayer of the petitioner to quash the order dated 8-3-1969 contained in Annexure 9 of respondent no. 2 is refused, but the order of the Board of Directors dated 21-4-1969, a copy of which is contained in Annexure 13 as also in Annexure 18, is set aside. The Board of Directors of the Corporation are directed to dispose of the petitioner's appeal before them in accordance with law. Application partly allowed.