Section 34 Sanction Invalid Without Independent Reasons | HC

Case Details: International Trimmings and Labels India (P.) Ltd. vs. Additional Chief Secretary to Department of Labour [2026] 187 taxmann.com 473 (HC-Karnataka)

Judiciary and Counsel Details

• Anant Ramanath Hegde, J.
• Prashanth B.K., Adv. for the Petitioner.
• M. Rajakumar, AGA & G.V.P. Reddy, Adv. for the Respondent.

Facts of the Case

In the instant case, the petitioner-establishment laid off workmen during the COVID-19 pandemic without prior permission under Section 25M of the Industrial Disputes Act, 1947, asserting that the pandemic was a ‘natural calamity’ exempting it from the requirement of prior permission.
The Lay-off became the subject of an industrial dispute pending adjudication before the Tribunal/Labour Court under Section 10 of the Industrial Disputes Act, 1947.

On a complaint by the respondent-Union alleging violation of Section 25M of the Industrial Disputes Act, 1947, the Labour Commissioner submitted a report to the appropriate Government. Acting on that report, the appropriate Government granted authorisation under Section 34 of the Industrial Disputes Act, 1947, to prosecute the petitioner for alleged contravention.
The petitioner challenged the said order contending that sanction order suffered from non-application of mind as the appropriate Government mechanically relied on the Labour Commissioner’s report without independently assessing whether a prima facie case for the prosecution was made out; that lay-off occurred during a ‘natural calamity’ and therefore did not require prior permission under Section 25M of the Industrial Disputes Act, 1947; and that consideration of a Section 34 of the Industrial Disputes Act, 1947 application ought to await adjudication of same dispute under Section 10 of the Industrial Disputes Act, 1947.

It was noted that the application under Section 34 of the Industrial Disputes Act, 1947, seeking authorisation to initiate criminal proceedings, is maintainable even before adjudication takes place on allegations relating to violations of the Act that attract penal consequences under the Act.
Further, it was noted that the mere allegation of violations of the provisions of the Act does not mandate the appropriate Government to accord sanction to prosecute.

The High Court observed that the grant of sanction or rejection of the application under Section 34 of the Industrial Disputes Act, 1947, is not an empty formality, and the appropriate Government is required to arrive at an independent satisfaction before passing orders on such an application.
Further, the High Court observed that, in deserving cases, the appropriate Government may take a view that an application seeking permission to prosecute for violation of provisions of the Act, for reasons to be recorded, has to be deferred, pending consideration of a dispute relating to alleged violation pending before the adjudicating authority/Court/Tribunal.

High Court Held

The High Court held that, since the appropriate Government had not assigned reasons for allowing the application except recording a statement that the application was perused in detail, there was no independent application of mind and independent reasons assigned for passing the impugned order. Hence, the impugned order was to be set aside.

List of Cases Reviewed

• Bhushan Power and Steel Ltd. v. Grid Corporation of Orissa [Appeal No. 226 of 2015],
• Halliburton Offshore Services Inc. v. Vedanta Ltd. [2020] 116 taxmann.com 259 (Delhi) /2020 SCC OnLine Del 542,
• Papnasum Labour Union v. Madura Coats Ltd. [1995] 1994 taxmann.com 2491 (SC) /AIR 1995 SC 2200 (para 38)
• Management of Mysore Structurals Ltd. v. State of Karnataka 2001 taxmann.com 4965 (SC)/2002 (1) SCC 477 (para 42)distinguished
• S. N. Hada v. Binny Ltd. Staff Association ILR 1987 Kar 3762 (para 45) followed

List of Cases Referred to

• Radheshyam Kejriwal v. State of West Bengal [2011] 12 taxmann.com 107/108 SCL 406 (SC) (para 14)
• P. Jayappan v. S.K. Perumal, First ITO [1984] 19 Taxman 1 (SC) (para 14),
• Bhushan Power and Steel Ltd. v. Grid Corporation of Orissa [Appeal No. 226 of 2015] (para 35),
• Halliburton Offshore Services Inc. v. Vedanta Ltd. [2020] 116 taxmann.com 259 (Delhi) (para 36),
• Papnasum Labour Union v. Madura Coats Ltd. [1995] 1994 taxmann.com 2491 (SC) (para 37),
• Management of Mysore Structurals Ltd. v. State of Karnataka 2001 taxmann.com 4965 (SC) (para 41)
• S. N. Hada v. Binny Ltd. Staff Association ILR 1987 Kar 3762 (para 45).