An employer may terminate the services of an employee for neglect of duty, even if entrustment is not proved, if the termination is a bona fide exercise of power and not a mala fide or colourable exercise.

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. 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 Colli