Is  principle of natural justice to be followed during demotion ???

Yes.

Thank you very much sir for the reply .... it would be really appreciable if you could answer some more queries ..... actually i have  a case study which deals with demotion of an employee when his probationary period for promotion to higher post i.e senior foremen is changed to demotion .... though his misconduct was that he couldnt complete his job and was involved in a part time job at his friends factory and the management was aware of the same still they dint say anything to him.... and at the end of his probationary period he was handed a demotion letter ....... i hope sir you will help me ...

and the principle of natural justice was not followed ...... he was given a letter 15 days before his probationary period has come to an end that to improve his productivity .....

waiting for the response eagerly..... 

Demotion is definetely a punishment. Therefore Management should give a proper notice and seeking explanation and after perusal of explanation to take action of demotion.

The above case is furnished in detail. As per you, the probation period is part of promotion to higher position and the position is Foreman. You friend is not putting all his abilities to perform the new higher position due to his interest in working in another job.

Double employment is prohibited under Factories Act and other acts.

Since this is a case of non-confirmation of services in the higher post during probation, Management might have taken shelter/recommendations  of internal performance assessment. Pl check at yound.

Ih this case apprently there was a specific misconduct and the probation rule could not be used as a short cut to the disciplinary process.

Is he a permanent workman or a probationer?  Were the production norms given to him?  How did he get to know that he had not given the target production?  In case he is a probationer also, if his performance was not upto the mark, reasons are to be given for his demotion.