Section 34 sanction needs independent reasons

The Karnataka High Court examined the scope of Section 34 of the Industrial Disputes Act, 1947 in the context of a prosecution authorisation granted against an establishment for an alleged violation of Section 25M.

The petitioner had laid off 61 workmen during the COVID-19 period. That lay-off was already the subject of an industrial dispute pending before the Labour Court/Tribunal. Separately, on a complaint by the Union, the Labour Commissioner submitted a report and the appropriate Government granted authorisation under Section 34 to prosecute the petitioner.

The principal question was whether Section 34 authorisation could be sought before the underlying industrial dispute was adjudicated, and whether the Government could defer consideration of the prosecution request until the Section 10 proceedings were decided.

The Court held that simultaneous proceedings are not barred in absolute terms. In appropriate cases, prosecution under Section 34 can proceed even while adjudication under Section 10 is pending. The Court therefore rejected the broad submission that the prosecution request must always await the outcome of the industrial dispute.

At the same time, the Court stressed that the appropriate Government cannot act mechanically. It must independently consider the nature of the allegation, the defence, the pendency of adjudicatory proceedings, the questions raised there, and whether a prima facie case exists for grant or rejection of prosecution authorisation. The Court also noted that the Government must decide whether the matter should be deferred until adjudication under Section 10.

On the facts, the impugned order failed that test. The Court found that the Government had not assigned reasons for granting sanction, except for stating that the application had been perused and referring to the Labour Commissioner’s report dated 24.08.2020. There was no independent application of mind and no independent reasoning.

The Court relied on the Full Bench decision in S. N. Hada & Others v. The Binny Limited Staff Association, which held that an order granting sanction to prosecute under Section 34 must be supported by reasons.

Accordingly, the writ petition was allowed in part and the authorisation order dated 07.12.2020 was quashed. The appropriate Government was directed to reconsider the application afresh in accordance with law within three months.

Practical takeaway: Section 34 authorisation can move ahead before adjudication, but the Government must record its own reasons and cannot simply adopt the Labour Commissioner’s report.