Bengaluru: The Karnataka High Court has quashed a state government order that had granted permission to initiate criminal proceedings against a private company for alleged labour law violations during the Covid-19 lockdown, observing that the government must apply its independent mind and provide valid reasons before authorising prosecution under labour laws.
The order was passed by a single-judge bench of Justice Anant Ramanath Hegde while hearing a petition filed by International Trimmings and Labels India Private Limited, a company located in Bengaluru‘s Peenya Industrial Area. The company had challenged the state’s decision permitting criminal action under the Industrial Disputes Act, 1947, over the temporary termination of workers during the nationwide lockdown.
The High Court observed that the government cannot mechanically approve prosecution merely on the basis of a complaint or a report submitted by the Labour Department. Instead, authorities must independently examine the facts and circumstances of each before arriving at a decision.
The court further held that whenever the government decides either to grant or deny permission for criminal prosecution against an organisation, it is mandatory to record clear and cogent reasons in the order. Such decisions, the court noted, must reflect an independent application of mind rather than a routine endorsement of departmental recommendations.
In its observations, the bench pointed out that a crucial issue in the present case was whether the Covid-19 pandemic and the resulting lockdown could be treated as a “natural calamity” that justified the company’s actions regarding its workforce. The court noted that this aspect was already under examination before the Labour Court and therefore required careful consideration.
Justice Hegde observed that the state government had failed to provide any independent reasoning while approving prosecution and had instead mechanically accepted the Labour Department‘s recommendation. Such an approach, the court said, was legally unsustainable and contrary to established principles governing prosecution sanctions.
Consequently, the High Court set aside the government’s December 7, 2020 order granting permission to prosecute the company. At the same time, the court granted liberty to the state government to reconsider the matter afresh in accordance with law and pass an appropriate order within three months after independently evaluating all relevant materials.
Background of the case
The dispute dates back to May 2020, when the Covid-19 lockdown severely disrupted industrial operations across the country. During that period, the petitioner company reportedly terminated 61 employees out of its workforce of 112 workers.
Aggrieved by the decision, a labour union lodged a complaint before the Labour Commissioner, alleging violations of labour laws. Based on a report submitted by the Labour Department, the Karnataka government subsequently granted approval under Section 34 of the Industrial Disputes Act, 1947, to initiate legal proceedings against the company.
Challenging the validity of that order, the company approached the Karnataka High Court, contending that the government’s approval had been granted without proper consideration of the facts and legal issues involved in the case.
Allowing the petition, the High Court has now ruled that prosecution orders must be backed by independent reasoning and cannot be issued in a mechanical manner, reinforcing the requirement of procedural fairness in government decision-making.
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