JUDGMENT - Mrs. SUJATA MANOHAR, J.:---The petitioner - The National Textile Corporation (South Maharashtra) Ltd. is a Company registered under the provisions of the Companies Act, 1956. By virtue of the provisions of the Textile Undertaking (Taking Over of Management ) Act, 1983, the management, inter alia of textile mills known as Finlay Mills and the Gold Mohur Mills - respondents Nos. 4 and 5 herein-is vested in the petitioners.

2. Respondents Nos.2 and 3, P.J.Kapadia and Mrs. H.R. Chokshi were the employees of the two mills respondents Nos. 4 and 5 , who were employed in the retail cloth shop of these mills. The 2nd respondent was employed as a salesman and the 3rd respondent was employed as a sales-girl. On 8th May, 1980 a charge-sheet was issued by the said mills to respondent No.2. on 20-5-1980 a charge-sheet was issued to respondent No. 3. Both the charge-sheet were in respect of a cash memo dated 12-4-1980 prepared by the 3 rd respondent at the instance of the 2 nd respondent. It seems that this cash memo, which was for 6 pieces of T/C Labamba quality of cloth, was prepared at the rate of Rs. 55/- per piece instead of the rate of Rs. 62/- per piece. It was alleged that thereby respondents Nos. 2 and 3 had caused a monetary loss to the Mills to the extent of Rs. 42/-. Respondents Nos. 2 and 3 were charge-sheeted for dishonesty and fraudulent behaviour . An enquiry was held against respondent Nos. 2 and 3 at which they were represented by the 1st respondent -union. The enquiry officer gave findings in respect of the 2nd respondent on 30-1-1981 holding that the charge was proved. Similarly the enquiry officer gave findings against respondent no. 3 on 18.2.1981 holding that the charge was proved. On 30-4-1981 orders of dismissal were passed against both these employees.

3. An industrial dispute was raised on behalf of the two workmen and a reference was made by the State Government to the Labour Court for adjudication being Reference (IDA) No.1126 of 1981. During the pendency of these adjudication proceedings Ordinance X of 1983 came into operation as a result of which the management of the undertaking, inter alia, of respondents Nos.4 and 5 mills was taken over by the Central Government. Thereafter by virtue of the Textile Undertaking (Taking Over of Management ) Act, 1983 the management of the textile undertakings of respondents Nos. 4 and 5 has been vested in the petitioners - The National Textile Corporation Ltd.- with effect from 18-10-1983. Thereafter on the application of respondents Nos. 2 and 3 the petitioner was impleaded as a party to the proceedings before the Labour Court. The petitioner also filed a written statement dated 30-9-1984 before the Labour Court. Ultimately an award dated 3-4-1986 has been passed directing the petitioner as well as respondents Nos. 4 and 5 to reinstate both the workmen with 50 per cent backwages. The Labour Court has held that the punishment of dismissal is shockingly disproportionate, although the charges are held to be proved against the respondents Nos. 2 and 3. The Labour Court, after examining the circumstances , has held that since the charges are proved against the workmen, they deserve some penalty but not the penalty of dismissal. Hence if only one half backwages are paid to the workmen, the ends of justice would be met. Accordingly the award directs the opponents, that is to say, the petitioner as well as respondents Nos. 4 and 5, to reinstate both the workmen immediately, to give them continuity of service with effect from 30-4-1981 for the purpose of pension and gratuity and to pay them half the backwages from 30-4-1981 till the date of reinstatement.

4. In the present petition this award of the Labour Court dated 3-4-1986 has been challenged.

5. The first ground of challenge relates to the punishment given to the workmen under the award. It has been contended by the petitioner that the order reducing the punishment of dismissal to reins

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