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On the union of which, as -aforesaid, he was the secretary, having raised a dispute, alleging that the termination of his service was the result of victimisation and unfair labour practice,, the dispute was referred by the Government of Orissa to the Industrial Tribunal. After inquairy, the Tribunal rejected the union's allegation as to victimisation or unfair labour practice on account of any union

-activities carried -on by respondent 1. Nevertheless, the Tribunal held that it was improper on the part of the company not to have disclosed the said report to respondent 1 and not to have given him an opportunity to contest its contents and vindicate himself. The Tribunal held that though the said order was in form one of termination of service, it was in fact punitive in nature and considering the action taken against respondent I as disproportionate further held that it was a case of victimisation, that consequently the, order was illegal and unjustified and directed reinstatement with full 'back wages. The company filed a writ petition in the High Court for quashing the said order. Before the High Court the company urged (a) that the termination of the service of respondent 1 was in bona fide exercise of the employer's right to do so, (b) that it did so only because of the said adverse report and (c) that even if it was held that the said order was not legal or justified, the proper relief to be granted to the respondent in the circumstances of. the case was compensation and not reinstatement, which meant imposition of a workman against whom there was an adverse report and whom the company did not consider it desirable to retain in its service. The High Court rejected these contentions and held that the Tribunal was right in holding that the termination of service of respondent I was not in bona fide exercise of the power of the employer to terminate an employee's service, that it was punitive in character and was, therefore, not legal or justified. The High Court also held that ordinarily the relief against an illegal termina- tion of service was reinstatement though in some cases it may be considered inexpedient to do so, in which event a suitable compensation would be the proper relief. Lastly, it held that the present case was not one of those exceptions to the general rule of reinstatement and the Tribunal having exercised its discretion it could not interfere with the Tribunal's order.

Counsel for the appellant-company argued that even though he could not challenge, in view of the limited special leave granted to the company, the finding that the impugned order was not termination simpliciter in bona fide exercise of the employer's right to terminate the service of -an employee, he was entitled to agitate the question whether or not the High Court, on the facts of this case, should have interfered and ordered compensation in place of reinstatement, particularly because : (a) the concerned employee was posted in the blast furnace, -a crucial part of the company's works, in respect of which the company could not hazard any risk, (b) the Tribunal had given a clear and firm finding against the case that the workman had been victimised on account of his union activities, and (c) the Tribunal and the High Court had both set aside the company's order only because of their finding that it was punitive in nature and that the punishment was so disproportionate, that it amounted to victimisation. The proper order, counsel submitted,) was to award compensation instead of imposing the service of an employee whom the company considered risky to retain in its service. Mr. Garg, on the other hand, argued that the company's action involved an important principle, in that, an employer cannot be allowed to terminate the services of his employees on police reports which are not disclosed to the workmen or before the Tribunal, and therefore, are not open to the workmen to challenge. Such a course, he argued, would enable an employer to put an end to the service of a workman not because he is in fact a danger to the establishment but is merely a member of a party or an association whose views and policies such an employer does not like. In such a case, he submitted, the termination of service would be in violation of the constitutional right of association of an individual and would be clearly unjustified, -and therefore, it would not be a case for departure from the ordinary consequence flowing from an illegal order of termination of service. There can be no doubt that the right of an employer to discharge or dismiss -an employee is no longer absolute as it- is subjected to severe restrictions. In cases of both termination of service and dismissal, industrial adjudication is competent to grant relief, in the former case on the ground that the exercise of power was mala fide or colourable and in the latter case if it amounts to victimisation or unfair labour practice or is in violation of the principles of natural justice or is, otherwise not legal or justified.' In such cases, a tribunal can award by way of relief to the concerned employee either reinstatement or compensation. In the earlier stages the question whether one or the other of the two reliefs should be granted was held to be a matter of discretion for the tribunal. (see Western India Automobile Association v. Industrial Tribunal('), United Commercial Bank Ltd. v. U.P. Bank Employees Union('). The view then was that to lay down a general rule of reinstatement being the remedy in such cases would itself fetter the discretion of the tribunal which has to act in the interests of industrial harmony . and peace and that it might well be that in some cases imposition of the service of a workman on an unwilling employer might not be conducive to such harmony and peace. Later on, however, the earlier flexibility appears to have been abandoned -and it was ruled that although no hard and fast rule could be laid down and the Tribunal would have to consider each case on its own merits and attempt to reconcile the conflicting interests of the employer and the employee, the employee being entitled to security of service and protection Against wrongful dismissal, the normal rule in such cases should be reinstatement. (sea Punjab National Bank Ltd. v. Workmen('). This conclusion was adhered to, in some of the subsequent decisions. But in the case of Punjab National Bank Ltd.(') itself, as also in other subsequent cases, the rule was qualified to mean that in unusual or exceptional cases where it is not expedient to grant the normal relief of rein- statement, the proper relief would be compensation and that that would meet the ends of justice. The problem confronting industrial adjudication is to promote its two objectives, the security of employment and protection against wrongful discharge or dismissal on the one hand and industrial peace and harmony on the other, both leading ultimately to the goal of maximum possible production. As exceptions to the general rule of reinstatement, there have been cases where reinstatement has not been considered as either desirable or expedient. These were the cases where there ad en strained relations between the employer and the employee, where the post held by the aggrieved employee had been one of trust and confidence-or where though dismissal or discharge was unsustainable owing to some infirmity in the impugned order, the employee was found to have been guilty of an activity subversive of prejudicial to the interests of the industry. These cases are to be found in Assam Oil Co. Ltd. v. Workmen (4 ) Workmen of Charottar Gramodhar Sahakari Mandali Ltd. v. Charottar Gramo-

In the present case the facts are fairly clear. As aforesaid, the concerned workman Was trained for a period of 3 years at the cost of the company. On completion of his training the company engaged him as a skilled worker. He worked as such from September 1958 to December 1960. At the time of the termination of his service, he was working as a fitter in the blast furnace, a vital part of the company's works, where both efficiency and trust would matter. Even though he was said to have joined an illegal strike and a criminal case had been filed against him, no steps, even departmentally, were taken against him. Prima facie, there- fore, this was not -a case where, the employer could be said to be anxious to wantonly or unreasonably terminate his service. Even though he was an active member and the secretary of the union, the Tribunal found that the termination of his service was not due to victimisation or any unfair labour practice. There can also be no dispute that the company ordered the termination of his service only because of the, adverse report of the police against him. The report was called for 'by the company in accordance with its practice of verifying the workman's antecedents. The evidence was that such verification was made in the case of all workmen after they were engaged and that such verifi- cation was not made before appointing them as it was not practicable to do so. The practice was adopted at the instance of the Government and in accordance with the directions to that effect of the Board of Directors. The letter of the Deputy Inspector General of Police communicating the report made on the investigation by the police was produced but neither the report nor the source of information on which it was based nor the name of the person who conducted the investigation was disclosed either to the workman or the, Tribunal. The ground urged for such non- disclosure was that the report was confidential and if disclosed it would not be possible for the company to have such investigations in future. The reason appears to be that if the person conduct-

-discharge would itself be improper." This observation was not warranted in view of the Tribunal's clear finding that this was not a case of victimisation or unfair labour practice on account of the union activities of the workman. The High Court further was of the view that "even if the Management terminated the services of Sri A. K. Ray, simply on the ground that it received an adverse report against him, the order of such termination of services in the circumstances cannot be treated as legal or justified." It also observed that "it was not admitted by the opposite party that there was any -adverse police report against him." But the management had examined P. B. Kanungo, the Senior Personnel Officer, who had categorically testified that the management had received such an adverse report -and on the basis of that report the company's Security Officer had recommended the termination of service of the workman,. There was no cross-examination on this part of his evidence. The High Court, therefore, was not entitled to proceed on the basis as if the fact of such adverse report was any longer in- doubt. Indeed, the grievance was 'not relating to the factum of such report, but its non-disclosure and the Tribunal in consequence not being able to weigh its veracity. The fact of the Management having received the police report which was adverse was no more in dispute; nor the fact that the company's Security Officer on the strength of that report had recommended that it was not desirable to retain the workman in service. The termination of his service was by no means singular in any way, for, the evid- ence was that verification of antecedents of all workmen used to be similarly made and whenever the report was adverse an order of discharge used to be made. Since the special leave granted to the company is limited only to the question of the kind of, relief that the Tribunal ought to have given, we arenot in a position to go into the question whether the termination of service was legal or justified. We have, therefore, to proceed on the footing that the Tribunal's conclusion that it was not legal was right.