1. The two petitions (MP. No. 136/72 and No. 161/72) arise out of the award given by the presiding Judge of the Labour Court, Gwalior on a reference made under section 10 of the Industrial Disputes Act. Miscellaneous petition No. 161/72 is at the instance of the Labour Union, known as 'Audyogik Sansthan Mazdoor Sangh, representating the case of the dismissed employee, whereas Misc. petition No. 136 of 1972 has been filed by the employer. M.P. Laghu Udyog Nigam Ltd. (State Government under taking). Since both these petitions arise out of the same award, they were heard together and this order shall govern the disposal of both the petitions.

2. The Labour Court found that the domestic enquiry held by the Management was proper and in accordance with the principles of natural justice. The Labour Court, however, held that the punishment of dismissal was too harsh and disproportionate to the charge. The learned Labour Judge was, however. of the opinion that since the charge involved defalcation by an employee in charge of the cash amount, the employer had naturally lost confidence and it would not be proper to compel the Management to retain such an employee in service and acc