Penalty As Per India Labour Law

Hi Seniors, This side Anand Working in a Manufacturing Organization, here in my Organization Management fire the senior employee (As per designation) within 3 months of his joining and also like to put 50K penalty on his full & Final settlement. So Is it possible, that management fire the employee & also deduct 50K amount as a penalty from his full & Final salary, I am confused, according to me only one penalty may be imposed, either termination or penalty (Salary deduction), Pl. guide me as per labour law. Thanks

An employee can be terminated from his service for any misconduct committed by him, provided that such misconduct is proved beyond doubt by way of conducting a domestic enquiry by appointing an impartial outsider giving full opportunity to the employee to defend his case in observances of principle of natural justice. Otherwise, the termination itself becomes bad in law.
If there is any misappropriation of fund or damage of any property or any such misconduct which lead to financial loss and such misconduct was again proved through domestic enquiry, then in that case the employer can adjust the amount of loss from full and final settlement.
Without studying the entire case history in details, it is really very difficult to give opinion.

Normally an inquiry into the matter is called.Employee is given chance to be heard.The complete investigation of the case with all the documentation and proof needs to be collected.Management should ensure that all the activities/ proceedings be done with in the frame work of Policies and Legal Bindings.The Fact of the matter here is not Punishing and penalty.The whole process should be acceptable to the parties so that neither employee not employer should face problems later. Generally a Committee is set up for such matters to resole the matters internally which includes members from Union, employees, Management etc.
How ever unless the case is Known thoroughly, it is difficult to give any opinion.