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26. In Torrent Power Ltd. v. Chelabhai Nathabhai Luhar Manu/GJ/0871/2017, the Gujarat High Court examined the relevant case law on the termination on the ground of loss of confidence and summarized the legal principles which are reproduced heruender: -

―10. The principle of law which emerges from the above cited judicial pronouncements can be summarized thus:

10.1. Once the employer has lost the confidence in the employee and the bona fide loss of confidence is affirmed, the order of discharge must be considered to be immune from challenge, for the reason that discharging the office of trust and confidence requires absolute integrity, and in such a case of loss of confidence, reinstatement cannot be directed. 10.2. The test to find out as to whether there was bona fide loss of confidence in the employee is thus:

10.5. Thus, if the facts constituting misconduct resulting in loss of confidence form the record of the employer, the employer in its discretion may invoke the power to discharge simpliciter for loss of confidence while dispensing with inquiry into the conduct of the workman.‖ The Gujarat High Court applied the aforesaid principles to the facts of that case and recorded the following findings:

―11. Keeping in view the above principles if the facts of the case in relation to loss of confidence are appreciated, it would appear that in the instant case, the management did not hold the departmental inquiry into the conduct of the workman. It rather opted to invoke Standing Orders-21 to terminate the services of the workman simpliciter. In the impugned order of termination, though it was sounded that the workman had misused the position and power resulting into loss of confidence, the order was not founded on the misconduct, but it was indicated to him that it was not in the interest of the company or consumer to retain him in services of the company. It was felt that retaining the workman in the company would be against the interest of the organization as a whole in the light of the post he was holding which demanded confidence of the management. With that the workman was relieved and offered a cheque in the sum of Rs.7600/- on account of one month's notice salary and he was also informed that final settlement will be made in due course.

11.1. In the light of settled legal position above referred, mere statement in the order of termination pointing out to the workman the facts leading to the loss of confidence i.e. misuse of the position and trust by him would not constitute an order which very clearly sounds to be an order simpliciter, as the order founded on misconduct. The departmental inquiry in such a case was not necessary. The courts below seem to have been swayed away by misconception of law that on mere allegation of facts which may constitute misconduct; departmental inquiry was necessitated and that without departmental inquiry, the order of termination simpliciter on loss of confidence was not a valid order. 11.2. The courts below seem to have failed to notice the authority of the management envisaged in clause-21 of the Standing Orders to effect termination simpliciter. Once the material justifying loss of confidence was available on the file of the employer its bona fide for losing of confidence could not have been doubted and if the employer had more than one procedure under the Standing Orders to resort to for dealing with such employee, there was no justification for the courts below to confine the authority of the employer to holding of the inquiry. Both the judicial authorities below failed to notice that the material justifying the loss of confidence was available with the employer and that it was permissible for him to report to one of the two fold powers to deal with the employee in such a situation i.e. (i) by terminating him simpliciter and (ii) by proceeding against him in a departmental inquiry to punish him.

11.3. The material in the form of the complaint of the consumer and his statement that illegal gratification was asked for by the workman, in the opinion of this Court was sufficient enough for the management to perceive the loss of confidence in the workman. No management would retain the association with the employee facing such serious complaint. If under such circumstances, it decides to terminate the services of the workman simpliciter, it's action cannot be said to be vitiated. Still, however, the evidence justifying the misconduct of the employee leading to loss of confidence in the workman was adduced, without any reservation from any quarters. It may be noted that the finding of the appellate Court that no plea seeking permission to adduce the evidence to justify the loss of confidence was advanced in the written statement is a perverse finding; inasmuch as this Court finds such application seeking a permission in the written statement itself. As indicated above, the material in the nature of complaint against the workman demanding illegal gratification was available with the employer. Such availability was never questioned by the workman. Demand of illegal gratification by the workman to the prejudice of the employer's interest would, undoubtedly, lead to loss of confidence by the employer in the employee justifying dispensing with his service. Furthermore, it was misconception of law to say that for the said purpose, a separate application ought to have been made by the management. While no such specific provision is pointed out by the learned Counsel for the workman, the procedure for giving an opportunity to justify the termination or any penalty imposed by employer on the workman, has emerged not from the specific provision under the labour laws, but by judicial pronouncements noted in paragraph 5.3 above.