Government Must Record Reasons Before Granting Sanction U/S 34 ID Act; Mere Allegation Of Violation Not Sufficient For Prosecution: Karnataka High Court
The Bench formulating the principles also observed that application seeking prosecution is maintainable even before adjudication of the industrial dispute.
Justice Anant Ramanath Hegde, Karnataka High Court
The Karnataka High Court has held that a mere allegation of violation of the provisions of the Industrial Disputes Act, 1947 does not automatically require the appropriate Government to grant sanction for prosecution under Section 34 of the Act.
The Court said that the grant or rejection of sanction is not an empty formality and that the Government must arrive at an independent satisfaction based on the material placed before it. The Bench further clarified that any order granting, rejecting, or deferring permission to prosecute must disclose reasons, and laid down guiding principles governing the exercise of powers under Section 34 of the Act.
Accordingly, the Court quashed the authorization order dated December 07, 2020 and directed the Karnataka Government to reconsider the application afresh in accordance with law within three months.
Justice Anant Ramanath Hegde allowed in part a petition filed by M/s International Trimmings and Labels India Pvt. Ltd., which challenged a government order authorizing its prosecution for allegedly violating Section 25M of the Act during the COVID-19 pandemic. It observed, “Mere allegation of violations of the provisions of the Act, 1947 by itself does not mandate the appropriate Government to accord sanction to prosecute. The grant of sanction or rejection of application under Section 34 of the Act, 1947 is not an empty formality. The appropriate Government is required to arrive at an independent satisfaction before passing orders on such application. The reason/s for granting or rejecting such application must be forthcoming in the order”.
Advocate Prashanth B.K. appeared for the petitioner and M. Rajakumar, AGA appeared for the respondent.
The dispute arose after the company laid off 61 workmen in May 2020 amid the pandemic. The employees' union alleged that the lay-off was effected without obtaining prior permission under Section 25M of the Act. Based on a report submitted by the Labour Commissioner, the Karnataka Government granted authorization under Section 34 to prosecute the establishment.
The company contended that the COVID-19 pandemic constituted a “natural calamity” and therefore prior permission was not required. It further argued that since the validity of the lay-off was already pending adjudication before the Labour Court under Section 10 of the Act, criminal prosecution could not be initiated until the dispute was decided.
Rejecting the contention that prosecution must invariably await adjudication, the Court held that proceedings under Sections 10 and 34 can, in appropriate cases, run simultaneously.
The Court formulated guiding principles, holding that while applications under Section 34 are maintainable even before adjudication, the Government must record reasons for granting, rejecting, or postponing consideration of such requests.
The Bench recorded the following principles:
-The application under Section 34 of the Act, 1947 seeking authorisation to initiate criminal proceedings is maintainable, even before the adjudication takes place on the allegations relating to violation of the provisions of the Act, 1947 which attract penal consequences under the Act, 1947.
-In deserving cases, the appropriate Government may take a view that the application seeking permission to prosecute the concerned, for the violation of the provisions of the Act, 1947, relating to alleged violation, has to be allowed or rejected pending consideration before the adjudicating authority/Court/Tribunal. Such an order must be supported by the reason/s.
-In deserving cases, the appropriate Government may take a view that the application seeking permission to prosecute for the violation of the provisions of the Act, 1947, for the reasons to be recorded has to be deferred, pending consideration of the dispute relating to alleged violation pending before the adjudicating authority/ Court/Tribunal.
-In which case, the application under Section 34 of the Act, 1947 has to be allowed, or rejected or deferred cannot be explained exhaustively. Such consideration depends on the materials placed before the appropriate Government alleging violation or denying the allegation of violation. In any case, the order under Section 34 of the Act, 1947 has to be supported by the reason/s.
“In the instant case, the appropriate Government has not assigned the reasons for allowing the application except recording a statement that the application is perused in detail, in addition to referring to the report dated 24.08.2020 of the Labour Commissioner. There is no independent application of mind and independent reasons assigned for passing the impugned order. Hence, the impugned order has to be set aside”, the Bench, thus, noted.
Cause Title: M/s International Trimmings and Labels India Private Limited v. Additional Chief Secretary to Department of Labour & Ors. WP No. 229 of 2021
Appearances:
Petitioner: Prashanth B.K., Advocate.
Respondent: M. Rajakumar, AGA, G.V.P. Reddy, Advocate.