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"8.. It is difficult to agree with the findings of the Labour Court that when servece is 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 a 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 and 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 support our conclusion by reference to precedents or textual opinion as a common sense assessment of the matter is sufficient to dispose of this aspect. 'Retrenchment' is defined in Section 2(00) of the Industrial Disputes Act and excludes termination of service by the employer as a punishment inflicted by way of disciplinary action. If the termination in the instant case is held to be grounded upon conduct attaching stigma to the appellant, disciplinary proceedings were necessary as a condition precedent to infliction of terminations a measure of punishment. Admittedly this has not been done. Therefore, the order of termination is vitiated in law and cannot be sustained.
9. Ordinarily, when the order of termination is quashed a declaration follows that the workman continues to be in employment and is, therefore, reinstated in service with full back wages as was held by this Court in Hindustan Tin Works (Pvt) Ltd. v. Employees of Hindustan Tin Works (Pvt.) Ltd., . This Court held in Jitendra Singh Rathor v.
Baidyanath Ayurved Bhawan Ltd., that under Section 11A of the Act advisedly wide discretion has been vested in the Tribunal in the matter of awarding relief according to circumstances of the case. In Hindustan Steels Ltd., Rourkela v. A.K. Roy, , this Court has held that the Labour Court has discretion to award compensation instead of reinstatement if the circumstances of a particular case make reinstatement inexpedient or improper. In this case it has been the stand of the respondent that the management had lost confidence in the appellant and there has been some pleading about the importance of the role of confidence in the business set up of the respondent. Without examining the tenability of the stand on loss of confidence as a defence to reinstatement and accepting the allegations advanced by respondent that there has been loss of confidence, we are of the view that while the termination of service of the appellant is held to be bad, he may not be reinstated in service. On the other hand he should be adequately compensated,"

It is to be noted that in the facts and circumstances involved in the case it was held by the Supreme Court that the documents mentioned in paragraph-7 of the reported decision could bo relied upon by the Bank to justify the order of termination on the ground of loss of confidence.

28. In Kanhaiyalal Agrawal and Ors, v. Factory Manager, Gwalior Sugar Company Ltd., , Supreme Court laid down that for refusal of reinstatement on the ground of loss of confidence in an employee what must be pleaded and proved is that (i) the workman holds a position of trust and confidence, (ii) by abusing such position, he commits acts which results in forfeiting the same and (iii) to continue him in service would be embarrassing and inconvenient to the employer or would be detrimental to the discipline or security of the establishment. It was held that loss of confidence cannot be subjective based upon the mind of the Management. Objective facts which would lead to a definite inference of apprehension in the mind of the Management regarding trustworthiness or reliability of the employee must be alleged and proved. In Kanhaiyalal Agrawal case (supra) the workmen were charged that when Kanhaiyalal Agarawal was on duty on trailer weighbridge of the factory gate, in collusion with Centre-in-charge and some other workmen conspired to allow one trailer sugarcane requisition slip in the name of one Chatura for bringing sugarcane by bullock cart at Sunwai Depot on false payment slip, wrote gross weight and did help him in making payment without the arrival of sugarcane in the company for their respective benefits. Each of the workmen was dismissed after enquiry. Applications ware filed by the workmen before Labour Court challenging their termination from service. The Labour Court held that for loss of confidence in the concerned workmen, those workmen cannot be reinstated. Against the orders passed by the Labour Court the workmen preferred appeals before the Industrial Court. The Industrial Court held that the employees had not committed any misappropriation of money but were negligent in performing their duties and the finding recorded by the Labour Court is in order.

and (iii) to continue him in service would be embarrassing and inconvenient to the employer or would be detrimental to the discipline or security of the establishment. All these three aspects must be present to refuse reinstatement on the ground of loss of confidence. Loss of confidence cannot be subjective based upon the mind of the Management. Objective facts which would lead to a definite inference of apprehension in the mind of the Management regarding trustworthiness or reliability employee must be alleged and proved. Else, the right of reinstatement ordinarily available to the employee will be lost.