Karnataka High Court sets aside prosecution sanction in COVID-era layoff case
The petitioner company argued that the COVID-19 pandemic was a ‘natural calamity’, so the decision to lay off does not require prior permission.
The Karnataka High Court orally said, “A citizen of another country is raped here, it is a very serious offence". The Karnataka High Court recently quashed an order passed by the state government sanctioning the initiation of criminal prosecution against a company that had laid off 61 workers during the COVID-19 pandemic.
In an order dated June 2, Justice Ananth Ramanath Hegde, while partly allowing the petition filed by International Trimmings and Labels India Private Limited, said, “The appropriate Government has not assigned reasons for allowing the application. There is no independent application of mind, independent reasons not assigned for passing the impugned order. Hence, the impugned order has to be set aside.”
The court, though, has directed the government to reconsider the application seeking sanction for criminal prosecution afresh and pass appropriate orders within three months.
The background
The petitioner, a manufacturing company, had about 157 employees, and 112 among them were workmen. On May 5, 2020, it laid off 61 workmen. Following this, an industrial dispute was raised, and its adjudication is pending before the labour court.
Pending adjudication of the dispute, the workers’ union moved an application under Section 25M of the Industrial Disputes Act, 1947. Meanwhile, acting on the labour commissioner’s report, the government issued the impugned order sanctioning prosecution under Section 34 of the Industrial Disputes Act.
Section 25M of the Act provides for the prohibition of lay-off of workmen, unless such lay-off is due to a shortage of power or to a natural calamity.
‘Natural calamity’
The company argued that the Covid-19 pandemic was a ‘natural calamity’, so the decision to lay off does not require prior permission. It was also submitted that the impugned order could not have been passed when the question relating to the validity of lay-off is pending adjudication before the labour court.
The government opposed the petition, submitting that prior permission under Section 25M of the Act is mandatory to lay off workmen. It, therefore, claimed that criminal prosecution can be initiated independently, irrespective of the proceedings pending before the labour court.
The bench in its order noted that under the Industrial Disputes Act, there is no provision that expressly provides for simultaneous criminal prosecution and adjudication of a claim or liability. Similarly, no provision specifically bars simultaneous criminal prosecution pending adjudication of any claim or liability by any other authority/ tribunal/ court under the 1947 Act.
The court observed that “one of the objectives of the Act is to provide an efficacious remedy to the workmen against the violations of the provisions of the Act, 1947. At the same time, among others, the Act also aims in securing industrial peace.”
“The application seeking authorisation to initiate criminal proceedings is maintainable, even before the adjudication takes place on the allegations relating to the violation of the provisions of the Act. But mere allegation of violations of the provisions of the Act, 1947, by itself does not mandate the appropriate Government to accord sanction to prosecute,” it further held.
Emphasizing that the grant of sanction or rejection of the application is not an ‘empty’ formality, the bench said, “The appropriate government is required to arrive at an independent satisfaction before passing orders, and the reasons for granting or rejecting such application must be forthcoming in the order.”
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