Prosecution Under Section 34 of Industrial Disputes Act Permissible Pending Adjudication Subject to Reasoned Satisfaction

The Petitioner-Establishment laid off 61 workmen on May 5, 2020, during the COVID-19 pandemic

The Respondent-Union alleged a violation of Section 25M of the Industrial Disputes Act, 1947, as prior permission for the lay-off was not obtained

While an industrial dispute regarding the validity of the lay-off was pending adjudication under Section 10 [para. 5], the Labour Commissioner submitted a report to the State Government

Consequently, on December 7, 2020, Respondent No. 1 passed an order under Section 34 of the Act, granting authorization to prosecute the Petitioner

The Petitioner challenged this order, arguing that COVID-19 constitutes a "natural calamity" exempting it from the permission requirement and that prosecution cannot be sanctioned while the underlying dispute is sub-judice

The court examined Section 34 of the Industrial Disputes Act, 1947, which requires administrative authorization to lodge a criminal complaint for violations of the Act

It contrasted this with Section 276-C of the Income Tax Act, 1961, and Section 56 of FERA, 1973, which expressly allow simultaneous prosecution "without prejudice" to other penalties

The Court relied on P. Jayappan v. S.K. Perumal [1984 (Supp) SCC 437] and Radheshyam Kejriwal v. State of West Bengal [(2011) 3 SCC 581], establishing that adjudication and criminal proceedings are generally independent

the Court applied the Full Bench ruling in S. N. Hada & Others vs The Binny Limited Staff Association [ILR 1987 Kar 3762], which mandates that a sanction order under Section 34 must be supported by reasons

The Court reasoned that while the Act does not explicitly provide for simultaneous prosecution like FERA or the IT Act, it does not bar it either

The object of the Act is to provide efficacious remedies to workmen while maintaining industrial peace [para. 20]. Therefore, Section 34 applications are maintainable even during the pendency of Section 10 proceedings

However, the Court clarified that granting sanction is not an "empty formality" or a mechanical act based on a Commissioner’s report [para. 43(b)]. The Government must independently satisfy itself that a prima facie case exists

In cases like the present, where the defense hinges on whether COVID-19 is a "natural calamity" under Section 25M—a question currently before the Labour Court—the Government has the discretion to either grant, reject, or defer the sanction based on the materials provided

The Court found the impugned order legally unsustainable as it lacked independent reasoning and failed to address why the prosecution was sanctioned despite the pending adjudication of the "natural calamity" defense

Regarding the third issue, the Court held that the impugned order lacked reasons and independent application of mind [para. 46]. The Writ Petition was allowed in part; the order dated 07.12.2020 (Annexure-N) was quashed [Order (ii)]. The appropriate Government was directed to reconsider the application afresh, assigning specific reasons and considering whether to grant, reject, or defer the sanction pending the Section 10 adjudication, within three months