K. M. THAKER, J. ( 1 ) HEARD Mr. Munshaw learned advocate for the petitioner and Mr. Rathod learned advocate for the respondent. Rule. At the request of and with the consent of learned advocates, Rule is made returnable forthwith and the the petition is taken up for final hearing and disposal. Mr. Rathod learned advocate had waived service of notice of Rule. ( 2 ) BY the present petition the petitioner corporation has challenged an award dated 26. 11. 2001 passed by the Industrial tribunal, Nadiad in reference (ITN) No. 195 of 2001 by which the Industrial tribunal has set aside the departmental authority's order imposing penalty of levying interest @ 18% on the amount recoverable from the respondent. ( 3 ) THE respondent herein raised an industrial dispute upon being aggrieved by order of the departmental authority directing recovery of Rs. 37,472/- with interest at the rate of 18% on account of alleged negligence of respondent which resulted into loss or damages to the Corporation. The petitioner approached the Court on the premise that due to fault of someone else he was being penalized and the action and order of the respondent Corporation was arbitrary and without authority in law. ( 4 ) THE respondent Corporation contested the reference by filing its written statement and submitted that due to the gross negligence executed by the petitioner in discharge of his duty, another employee mr. Parghi got an opportunity to misappropriate amount of the Corporation. The Corporation contended that the said negligence of the petitioner resulted into loss or damages to the Corporation to the tune of Rs. 7,49,440/- which were misappropriated by another employee Mr. Parghi. In backdrop of such report and misconduct of the petitioner departmental inquiry was conducted by the Corporation against the petitioner. After conclusion of the departmental inquiry, the inquiry officer reported that the charges were proved. Hence, disciplinary authority imposed penalty of stoppage of increment for a period of six months with permanent effect and recovery of amount Rs. 57,145/ -. Aggrieved by the said order of disciplinary authority the petitioner preferred an appeal. The appellate authority modified the penalty order and substituted the same by penalty of ordering recovery of Rs. 37,472/- with interest @ 18 percent. In view of the said order, the Corporation started recovering amount from the salary of the petitioner. 57,145/ -. Aggrieved by the said order of disciplinary authority the petitioner preferred an appeal. The appellate authority modified the penalty order and substituted the same by penalty of ordering recovery of Rs. 37,472/- with interest @ 18 percent. In view of the said order, the Corporation started recovering amount from the salary of the petitioner. Aggrieved by the said action of the respondent Corporation petitioner approached Industrial Tribunal. The respondent Corporation contended before the learned Tribunal that the charges against the petitioner were proved and his negligence in discharge of duty was established. The negligence of the petitioner had resulted into loss or damages to the corporation. Thus, the action of the corporation was justified. ( 5 ) AFTER examining the evidence on record and submissions of contesting side, the industrial tribunal found that the penalty of charging interest at the rate of 18 percent was too harsh. Therefore, Industrial tribunal while setting aside penalty order of levying interest at the rate of 18 percent permitted Corporation to effect recovery and maintained the order of the Corporation to recover an amount of Rs. 37,472/- but set aside the order levying penalty of interest @ 18%. Aggrieved by said order of the learned Tribunal of not permitting corporation to charge interest, the corporation is before this Court. ( 6 ) MR. Rathod learned advocate for the respondent submitted that the petitioner was not guilty of misappropriation and the only charge against the respondent was of negligence in discharge of duty and therefore, the decision of imposing interest is, in any case, unjustified and arbitrary besides being excessive and harsh. Mr. Rathod learned advocate for the respondent also submitted that in fact the decision of effecting recovery from respondent's salary is also not justified, however, the respondent has accepted the said decision and has not challenged the same and the corporation has been effecting recovery of the amount from his salary. He, therefore, submitted that Industrial Tribunal is justified in setting aside decision of imposing penalty of charging interest. ( 7 ) MR. Munshaw learned advocate for the petitioner submitted that if the order of the learned Tribunal is maintained then there will not be any penalty on the respondent. He submitted that the charge of negligence has been proved and that therefore, as regards the proved misconduct there should be at least some penalty. ( 7 ) MR. Munshaw learned advocate for the petitioner submitted that if the order of the learned Tribunal is maintained then there will not be any penalty on the respondent. He submitted that the charge of negligence has been proved and that therefore, as regards the proved misconduct there should be at least some penalty. He submitted that the decision and action of the Corporation is wholly justified and the penalty of charging interest at the rate of 18 percent ought not be treated as harsh or unjustified. He, in alternative, submitted that if at all Court finds that the charging interest at 18 percent is harsh, then the rate of interest may be reduced but removing said penalty completely would not be justified. ( 8 ) AFTER taking into consideration the facts and circumstances of the case and the rival submissions, it is noticed that the only charge against the petitioner was that he had caused delay in forwarding the post which enabled the said other employee Mr. Parghi to misappropriate the amount in question which allegedly resulted into loss or damages to the Corporation. The case of the Corporation or the charge against the respondent was that if he had not neglected his duty and had he not caused delay then the said other employee Mr. Parghi would not have got opportunity to indulge into misappropriation of the amount. On such charge the Corporation has imposed penalty of charing interest at the rate of 18%. ( 9 ) THE Labour Court has taken into account the delay caused in imposing the penalty and has also taken into account that the rules of the Corporation do not permit or authorize the Corporation to impose penalty by way of charging interest. ( 10 ) THE reason taken into account by the industrial tribunal while interfering with the decision of the penalty is not wholly justified. If the Corporation can impose any higher penalty then, it can obviously impose a penalty which would be lesser than the maximum penalty and that therefore the tribunal is not justified in holding that the corporation does not have such authority to impose penalty by way of charging interest while recovering amount. However, in view of this Court, the rate of interest applied by the appellate authority appears on higher side. However, in view of this Court, the rate of interest applied by the appellate authority appears on higher side. Thus upon consideration of the overall facts and circumstances in view of this court penalty of recovery of lump-sum amount of Rs. 5,000/- from the respondent, over and above principal amount i. e. Rs. 37,472/- from the respondent would be just, sufficient and proper. Thus an amount of Rs. 5,000/- may be recovered by way of penalty or interest from the respondent. However with a view to rounding up the figure it is directed that it would be open for the petitioner Corporation to recover in all Rs. 42,000/- from the respondent instead of only Rs. 37,472/- as directed by the trial court. The award is modified to that extent. ( 11 ) WITH the above clarifications and observations and modification the petition is partly allowed and is accordingly disposed off. Rule made absolute to the aforesaid extent. No costs.