JUDGMENT : S.C. Misra, C.J. 1. The petitioners are employers in relation to Mudidih Colliery of Messrs Burrakar Coal Company Ltd., P.O. Sijua, in the district of Dhanbad, engaged in the business of mining coal. They employ a large number of workers for carrying on their business. The petitioners maintain and run a store where necessary materials are stocked. The petitioner's store contained articles of value exceeding rupees one lac. Four employees were engaged for running the store: (1) a store keeper; (2) an assistant store keeper and (3) two store mazdoors. Since articles of considerable value are stocked in the store room, the persons in charge of the store room are supposed to be men of integrity and thoroughly reliable. On the 4th of February, 1966, three pairs of 75 H.P. haulage bearings (brass) and two pairs of counter shaft bearings of the same haulage, in all five pairs, were in stock of the store room as duly verified by the company's engineer J.P. Sarkar. On the 23rd of April, 1966, however, when these bearings were needed, four out of the five pairs were found missing. The value of the missing bearings would be about Rs. 4,000/-. A diligent search was made to find out the missing articles but when efforts for that purpose proved unavailing, a first information report was lodged at the police station on the 28th of April, 1966. The police submitted charge sheet in that case against all the four workers employed in the store room, under Section 408, Indian Penal Code. The persons concerned were Sudhir Roy, store keeper, Jagdish Narain Lal, assistant store keeper, Gopi Shaw and Badri Chamar, store mazdoors. 2. The petitioners also after preliminary investigation issued charge sheets to all the four workers on the 13th of May, 1966. A copy of the charges is Annexure one to the petition. It is further alleged in the petition that the workers refused to accept the charge sheet and also the notices of enquiry. They did not submit any explanation to the charges brought against them at any stage. The management held domestic enquiry ex parte, examining as many as seven witnesses on behalf of the management. The enquiry officer took into consideration the materials placed before him and was satisfied that the charges against the petitioner's aforesaid employees were established. They did not submit any explanation to the charges brought against them at any stage. The management held domestic enquiry ex parte, examining as many as seven witnesses on behalf of the management. The enquiry officer took into consideration the materials placed before him and was satisfied that the charges against the petitioner's aforesaid employees were established. The charges related to (1) theft, fraud and dishonesty in connection with company's properties and/or abetment of such theft, fraud and dishonesty and (2) neglect of duty. 3. When the matter, however, was submitted to the management for consideration, it gave the employees the benefit of doubt in respect of the charge of theft and fraud and thought in proper to confine the finding to neglect of duty, in any event, which led to the loss of confidence of the management in the employee and, taking recourse to the Standing ORDER :, passed the ORDER :of discharge. The ORDER :s of discharge are Annexures 2, 2(a) and 2(b). It is stated that the learned Magistrate, who was trying the criminal case against the workers, by ORDER :dated the 6th of March 1967, discharged the workers giving them the benefit of doubt. 4. The three workmen out of four, however, being Jagdish Narain Lal, Gopi Shaw and Badri Chamar, after over three months of the ORDER :of the Magistrate and after eight months of the termination of their services, addressed a letter to the Assistant Labour Commissioner (Central), Dhanbad, seeking his intervention, on the ground that the termination of their services was illegal and unjustified. The Assistant Labour Commissioner (Central), Dhanbad held proceedings thereafter but it failed. Thereafter the Union Government in the Ministry of Labour Employment and Rehabilitation by ORDER :No. 2/135/67-L.R.II, dated the 2nd December, 1967, referred the matter for adjudication by the Central Government Industrial Tribunal, Dhanbad, under the Industrial Disputes Act, 1947. The reference was in these terms: Whether the action of the management of Mudidih Colliery Post Office Sijua, district Dhanbad of Messrs Burrakar Coal Company Limited, Post Office Sijua, district Dhanbad are Managing Agents, in rendering idle Shri Jagdish Narain Lall, Store Clerk, Gopi Shaw and Badri Chamar, Store Mazdoors with effect from the 30th April 1966, then suspending them with effect from the 13th May, 1966 and subsequently terminating their services with effect from the 7th October, 1966 were justified? If not, to what relief are the workmen concerned entitled? It was registered as Reference No. 72 of 1967 and the parties were asked to submit their respective written statements. After having considered the evidence both oral and documentary led before him by the parties, the Tribunal found that the articles in question were in fact stocked in the store as was alleged by the management and to that extent the case of the workmen that they were not so stored was not accepted as true. The Tribunal nevertheless declared the ORDER :of discharge as illegal on the ground that the management was not able to prove actual entrustment of the articles to the workmen concerned. In the result, therefore, their services could not be terminated. The employers, therefore, have moved this Court for quashing the ORDER :of the Industrial Tribunal (Central), Dhanbad. 5. Learned Counsel for the petitioners has urged that the Industrial Tribunal clearly erred in holding that unless entrustment was established, the workmen could not be held responsible in any manner for the loss of the articles. If the Industrial Tribunal agreed with the finding of the enquiry officer that the articles in question were stocked in the store room within the knowledge, of the three workmen and during the two crucial dates they did not bring the matter of loss to the notice of the management, the latter would be justified even in drawing an adverse inference either of theft and fraud or, at the minimum, in taking the view that these persons who were entrusted with looking after the store room could not be relied upon to discharge their duties properly in safe keeping of the goods concerned. It has been contended on behalf of the workmen, however, that if the enquiry officer found the workmen guilty of fraud and theft, it was not open to the management not to act upon it in its entirety but to reduce it to a finding of lesser gravity in so far as it was held that the workmen were, in any case guilty of neglect of duty and thus they lost the confidence which would justify recourse to the Standing ORDER :s for terminating the services of the employees. In my opinion, the argument is without any substance. In my opinion, the argument is without any substance. In fact, there were two charges against the workmen and they were found guilty both of misconduct and neglect of duty. If the management did not think it proper to proceed against them for theft and fraud, there was nothing to stop them from accepting the second finding, i.e., employees' liability at least for neglect of duty. If the management had come to a conclusion finding the workmen guilty of acts with which they were not charged before the enquiry officer, the argument on behalf of the workmen might have substance. As it is, however, charge sheet included, both, misconduct by way of theft and theft with collusion and also for neglect of duty. It is unnecessary, however, to dwell on this matter at greater length inasmuch as it is covered by a number of decisions. An identical question was raised before the Bombay High Court in (1) Maharashtra State Road Transport Corporation, Nagpur, V. Madhukar Narayanrao (1970 LabIC 225). That too was a case of termination of the service of an employee of the Maharashtra State Road Transport Corporation. A charge sheet was issued to the employee alleging that he had committed fraud in connection with the property of the Corporation. The enquiry officer after having recorded the statement of the employee and examined witnesses, reported that the respondent employee was in league with the person who had removed the property mentioned in the charge-sheet. The report, however, was submitted to the officer on special duty who had to award punishment. He stated his opinion as follows:-- We are, however, taking a lenient view of the whole matter. Though, therefore, we had earlier proposed to dismiss you, we are not taking that action advisedly against you. Your contract of service is hereby terminated with effect from 23.4.1963 A.M. by giving you one month's salary in lieu of notice in view of the fact that in the circumstances narrated above it is impossible for us to retain any confidence in you. Further, it was observed:-- You are required to note that this is a pure and simple termination of contract of employment as said in the para above and you shall be free any time within the reasonable time from today to appear before us and convince us of your being innocent. Further, it was observed:-- You are required to note that this is a pure and simple termination of contract of employment as said in the para above and you shall be free any time within the reasonable time from today to appear before us and convince us of your being innocent. It was urged in the writ application before the High Court that in substance it was an ORDER :of dismissal and since it was a measure of punishment as referred to in Clause (ii) of Standing ORDER :11, it was a case of infringement of Clause (iii) thereof. This contention was overruled. It was held that it was a case of termination of service and the learned Judge further observed as follows:-- Dismissal from employment is an extreme punishment which can be given by an employer and before resorting to this punishment, the employer may as well decide to terminate the relationship of employer and employee without prejudicing the prospects of the employee in any other employment. If such a view is taken in case of an employee, albe it after issuing a charge-sheet, holding an enquiry and reaching a finding against the employee we do not see anything in Standing ORDER :9 or Standing ORDER :11 which prevents the employer from using this discretion in having recourse to Standing ORDER :9. To accept the argument urged on behalf of the respondent no. 1 in this case would lead to a result which we are clear could never have been intended by the framers of the Standing ORDER :s. The argument which has been advanced before us by learned Counsel for the workmen was advanced in the High Court of Bombay also in the above case. I am in respectful agreement with the conclusion arrived at by the learned Judges of that Court. Their Lordships also referred in that connection to a decision of the Supreme Court in (2) Assam Oil Company V. Its Workmen [A.I.R. 1960 SC 1264]. The principle which was laid down in that case and was also followed in the subsequent decisions is that whenever an employer purports to terminate the services of his employee by virtue of the powers conferred on him by the terms of contract, Industrial Tribunal cannot question its validity, propriety or legality. The principle which was laid down in that case and was also followed in the subsequent decisions is that whenever an employer purports to terminate the services of his employee by virtue of the powers conferred on him by the terms of contract, Industrial Tribunal cannot question its validity, propriety or legality. The recourse to exercise of the power of termination of service, however, must be a bona fide exercise of such power and not a mere device for a punitive action for some other activity of the employee which would be doubted as a mala fide exercise of the power. Reference has also been made to some other decisions such as (3) Tata Oil Mills Company Ltd. V. Their Workmen (1966 II LLJ 602). In that case also it was laid down that an employer may in a proper case be entitled to exercise his power to terminate the services of his employee in accordance with the contract of employment or provisions in Standing ORDER :s authorising an industrial employer to terminate the services of its employees after giving notice of one month or paying salary for the month in lieu of notice. But where an industrial dispute has been raised, it is not the form of the ORDER :but the substance of it which the Industrial Tribunal has to examine. If it is satisfied that the ORDER :of discharge is punitive or that it is mala fide or that it amounts to victimisation or unfair labour practice, it is competent to the Industrial Court to set aside the ORDER :and in a proper case direct reinstatement. The test always has to be whether the act of the employer is bona fide or not. If the act is mala fide or appears to be a colourable exercise of the powers conferred on the employer by the terms of the contract or by the Standing ORDER :s, then, notwithstanding the form of the ORDER :, industrial adjudication would examine the substance and direct reinstatement in a fit case. Acting on this principle, it must be held that since in the present case also the management only took a lenient view and stated that they lost confidence in the workmen and terminated their services, it cannot be said that it was a mala fide exercise of power. Acting on this principle, it must be held that since in the present case also the management only took a lenient view and stated that they lost confidence in the workmen and terminated their services, it cannot be said that it was a mala fide exercise of power. On the contrary, the circumstances indicate that it was a bona fide exercise of power; and even the Industrial Tribunal has not stated that it was not a bona fide exercise of power but only that unless entrustment was proved such a power could not be exercised. In taking that view the Tribunal has clearly gone wrong and against the principle of law laid down in the above cases. 6. It has also been urged that since the Workmen were charged before a Criminal Court with theft and criminal breach of trust and they were acquitted of the charge, the enquiry before the domestic tribunal could not be supported as valid. This point, however, has been answered against the contention of the workmen by a Division Bench of the Gujrat High Court in (4) Motising Chhagasing Vaghela V. Mehta (1966 I LLJ page 55) holding that there is no legal basis for the contention that a departmental enquiry is barred on the same facts on which an ORDER :of acquittal has been recorded by a Criminal Court. There is no constitutional bar to a departmental proceeding being instituted on an ORDER :of acquittal being recorded. In this JUDGMENT : reference was also made to a JUDGMENT : of the Calcutta High Court in (5) Suresh Chandra V. Himangshu Kumar Roy (A.I.R. 1953 Cal 316). Apart from the fact that in the present case the subject-matter of the charge against the workmen in the criminal trial was different from the scope of the enquiry before the domestic tribunal which reported that the workmen were guilty both of theft and criminal breach of trust or collusion and neglect of duty, in any case, the Criminal Court had nothing to do with the neglect of duty which was the basis of the employers' loss of confidence in the workmen's capacity to be reliable custodians of the articles stocked in the store room. In any view, therefore, this contention is devoid of any force and must fail. In the result, therefore, the application must be allowed and the ORDER :of the Industrial Tribunal quashed. In any view, therefore, this contention is devoid of any force and must fail. In the result, therefore, the application must be allowed and the ORDER :of the Industrial Tribunal quashed. In the circumstances, there will be no ORDER :as to costs. K.B.N. Singh, J. I agree. Application allowed.