Judgment

RANGANATH MISRA, J.:- This appeal by special leave seeks to assail the Award of the Presiding Officer of the Labour Court III, Delhi, dated November 24, 1981. The Delhi Administration referred the following dispute between respondent 1 Management and the appellant-workman for adjudication :

"Whether the termination of services of Shri Chandu Lal is illegal and / or unjustified and if so, to what relief is he entitled and what directions are necessary in this respect?"

2. The appellant-workman maintained that he was in permanent employment of respondent 1 having been first appointed on September 20, 1971. While he was continuing in service in February-March 1974, certain baseless allegations were levelled against him and by letter dated March 13, 1974, his services were terminated. He claimed reinstatement with full back wages.

3. Respondent 1 alleged that on February 19, 1974, two aluminium foot lockers with BKK (Bangkok) destination tag had been received at the Palam airport with its flight. It was the appellant who had got the tags changed by substituting the New Delhi tags and the two items had been delivered to one Lakshman by Williams, an employee of the respondent. The management pleaded that the entire basis of its business operation was of confidence and once the customs authorities lost or doubted the same, operational hazards were apprehended as respondents aircrafts as also pilots were liable to be detained by customs authorities now and then. Like all other employees of the respondent, the appellant was. also required to behave in a manner keeping with maintenance of such confidence.

4. Parties led evidence before the Labour Court and it held that the management had reasonable grounds to be satisfied that the appellant was involved in an act of smuggling, and, therefore, instead of exposing him to prosecution, the respondent was justified in terminating his services for lack of confidence.

5. The order of termination which was communicated to the appellant in a letter, as far at relevant, read thus:

"Having regard to recent happenings, we regret that we have lost confidence in you and cannot retain you in service any more."

Admittedly there was no domestic enquiry and the appellants services were terminated by relying upon the provisions covered by a settlement regulating the terms of service.

6. On November 21,1984, this Court gave the following directions :

"Mr. Anand Prakash, learned counsel for the respondent agreed to pay retrenchment compensation as if the appellant was in service and retrenched today i.e. 21st November 1984.

The matter is adjourned for six weeks.

The Labour Court is directed to proceed to decide the question whether termination of service of the appellant constituted retrenchment in law. If any additional affidavit is filed, by the respondent the same may be taken on record. If the appellant wants to file a rejoinder liberty is reserved for the same.

This order is made without prejudice to the contentions of both the parties."

7. The Labour Court received affidavits from the parties and returned a finding dated January 9, 1985, to the effect that the termination of the service of the appellant amounted to retrenchment in law.

8. It is difficult to agree with the finding of the Labour Court that when service to terminated on the basis of loss of confidence the order does not amount to one with stigma and does not warrant a proceeding contemplated by law preceding termination. Want of confidence in an employee does point out to an adverse facet in his character as the true meaning of the allegation is that the employee has failed to behave up to the expected standard of conduct which has given rise to it situation involving loss of confidence. In any view of the matter this amounts to a dereliction on the part of the workman and, therefore, the stand taken by the management that termination for loss of confidence does not amount to a stigma has to be repelled. In our, opinion it is not necessary to