An employer is required to disclose the reasonable cause for termination in the order of termination and conduct an enquiry into the charges against the employee before terminating his services.

1. The second respondent was employed as a Head Cashier in the Nagercoil branch of the petitioner at the relevant point of time. On 11th May, 1976, the petitioner issued a memo to the second respondent, which runs as follows :

"We understand that you have been indulging in a series of monetary transactions with Shri P. Muthiah Managing Director of Messrs. Tamil Nadu Bucket Industries, Pvt. Limited and that you were conducting a chit in the name of your wife and Mrs. Karpagavally Ammal, wife of Shri P. Muthiah and a guarantor to our advance to the unit, was also a subscriber to the same. Arising out of this, you resorted to legal action against the parties, one for eviction under the rent control Act and another for recovery of Rs. 30,200.

(2) Your reference is invited to the following aspects mentioned in the relative judgments received :

(i) The defendant has stated in the rent control petition that you were helping the party to obtain loans from banks and Government for his business and getting remuneration for the services rendered and you were acting as legal advisor to him.

(ii) After detailing the various benami and bogus transactions, the judge has remarked that a cashier in a bank like P.W.2 ought not to be a party of such a transaction.

(3) On a perusal of the copies of the judgments, we find that it has been established beyond doubt that you have entered into so many monetary transactions with the two persons, though you were doing the chit business in the name of your wife only to circumvent the provisions of the service rules and the income-tax provisions.

(4) As the Head Cashier of the branch and being well acquainted with the party and having known that the party is not reliable, dishonest and a litigant by nature and has once proceeded against Canada Bank on false charge you ought to have reported the matter to the Manager and discouraged granting of the advance.

(5) Similarly, as the Head Cashier of the branch, if there was any adverse trend in the financial position of the borrowers of the branch, you ought to have brought such developments to the notice of the Manager of the branch.

(6) You are, hence called upon to submit in writing to the undersigned within 15 days from the date of the memo, your explanation for the various lapses pointed out. In case, we do not receive any reply from you within the stipulated period, it will be presumed that you have no explanation to offer and the Bank will proceed to take such action against you as may be found proper and necessary.

(7) Meanwhile, please return the duplicate hereof duly signed and dated by you."

The second respondent replied on 10th June, 1976, repudiating the allegations in the said memo. The petitioner did not follow it up with any enquiry, but passed an order on 17th March, 1977 terminating the services of the second respondent at close of business on the 31st March, 1977 in terms of paragraph 522 of the Sastri Award. Aggrieved by the said order of termination, the second respondent moved the first respondent under S. 41(2) of the Tamil Nadu Shops and Establishments Act, 1947, hereinafter referred to as the Act, and the first respondent found a warrant for setting aside the order of termination passed by the petitioner against the second respondent and passed orders accordingly. The present writ petition is directed against the order of the first respondent dated 29-1-78/25-2-78.

2. Mr. S. Jayaraman, the learned counsel for the petitioner urges two grounds for invoking the writ jurisdiction of this Court to quash the said order. The first ground is that the proceedings under S. 41 of the Act before the first respondent are incompetent because the petitioner has passed the order of termination against the second respondent under paragraph 522(1) of the Sastri Award. His submission is not tenable because it cannot be disputed that so far as the employment in question is concerned, the provisions of the Act are definitely attracted. The petitioner satisfies th