An employer's power to terminate an employee's services under a rule like Rule 18(a) of the Standing Orders is subject to the scrutiny of industrial courts, and the industrial court has the right to inquire into the causes that might have led to termination of service and set aside such termination if it is satisfied that the action taken was a colourable exercise of power, not bona fide, or a result of victimisation or unfair labour practice.

Judgment

WANCHOO, J. : This is an appeal by special leave in an industrial matter. The brief facts necessary for present purposes are these. The appellant is saw-mill carrying on business in Kozhikode in the State of Kerala. One Sankaran was in the employ of the appellant as a cross-cutter. It IS said that on June 21, 1958, Sankaran came drunk to the mill and abused the Engineer, the Secretary and other and threatened them with physical violence. He was caught hold of by other workmen and taken outside. It is said that he came again a short time later at 4-30 p.m. and abused the same persons again. Thereupon the appellant served a chargesheet on Sankaran on June 24, 1958 setting out the above facts and asked him to show cause why his services should not be terminated on account of his grave indiscipline and misconduct. Sankaran gave an explanation the same day denying the allegations of fact made against him, though he admitted that he had come to the mill at the relevant time for taking his wages for that week. On June 25, 1958 Sankaran was informed that in view of his denial, a departmental inquiry would be held and he was also placed under suspension pending inquiry. The same day Sankaran protested against his suspension and requested that in any case the departmental inquiry should be expedited. As no inquiry was held till July 2, 1958, Sankaran again wrote to the appellant to hold the inquiry as early as possible. On July 8, 1958, the appellant terminated the services of Sankaran under R. 18(a) of the Standing Orders without holding any departmental inquiry and the order was communicated to Sankaran the same day. In that order the appellant informed Sankarar that the proposed inquiry, if conducted, would lead to further friction and deterioration in the rank and file of the employees in general and also that maintenance of discipline in the undertaking would be prejudiced if he was retained in the service of the appellant, and therefore it considered that no inquiry should be held. A dispute was then raised by the union which was referred to the industrial tribunal for adjudication by the Government of Kerala in October 1958. The tribunal held that something seemed to have happened on the afternoon of June 21, 1958 but there was no evidence to prove what had actually happened. It further held that the appellant had intended to take disciplinary action against the workman but subsequently departmental proceedings were dropped and action was taken under R. 18(a)of the Standing Orders. The tribunal was of the view that this was a colourable exercise of the power given under R. 18(a) to the appellant and therefore its action could not be upheld as a bona fide exercise of the power conferred. The tribunal also pointed out that no attempt was made before it to defend the action taken under U. 18(a) by proving the alleged misconduct. Two witnesses were produced before the tribunal in connection with the alleged misconduct, but the tribunal did not rely on them on the ground that the important witnesses, namely, the Engineer, the Secretary and other members of the staff whose evidence would have been of more value had not been produced and no explanation had been given why they were not produced. The tribunal therefore held that on the facts it could not come to the conclusion that Sankaran had come drunk to the mill and abused or attempted to assault either the Engineer or the Secretary or other officers. In the result the order of discharge was set aside and Sankaran was ordered to be reinstated. The appellant thereupon applied for special leave which was granted; and that is how the matter has come up before us.

2. The main contention of the appellant is that it is entitled under, R. 18(a) of the Standing Orders to dispense with the service of any employee after complying with its terms. Rule 18 (a) is in these terms :-

"When the management desires to determine the services of any permanent workman receiving 12 as, or more as dai