Holding

The sanction under Section 34 is valid as the authority considered all relevant facts and was prima facie satisfied of a violation of the Industrial Disputes Act, and the workmen's remedy is under Section 29.

Summary

MIS Mysore Structurals Ltd. terminated three workmen, prompting an industrial dispute. The Labour Court awarded reinstatement with back wages, an award that became final but was not implemented by the company. The workers' union sought and obtained sanction under Section 34 of the Industrial Disputes Act to prosecute the management, a sanction upheld by the Karnataka High Court. The company appealed, contending that it had been closed, its licence surrendered and its land donated, and that these material facts were ignored in granting the sanction. The Supreme Court held that the sanction was valid because the authority had considered all relevant facts and was prima facie satisfied of a violation of the Act, and that the workmen's remedy lies under Section 29. The Court further observed that the management may raise all contentions, including impossibility of compliance, as a defence in the prosecution. The appeals were dismissed.

Issues considered

Whether the sanction granted under Section 34 of the Industrial Disputes Act, 1947, to the workers' union for prosecuting the management is valid despite alleged omission of material facts such as the company's closure and licence surrender.
Whether the award of the Labour Court can be enforced through prosecution under Section 34, or whether the workmen's remedy is limited to provisions of Section 29 (or 33C) of the Act.
Whether the sanction constitutes an illegal exercise of power by the Labour Commissioner.

Legislation cited

Industrial Disputes Act, 1947s. 29, s. 33C, s. 34

Subjects

industrial disputeSection 34 sanctionaward enforcementreinstatementIndustrial Disputes Actworkers' unionmanagement liabilitylabour law

Judgment

MANAGEMENT OF MIS. MYSORE STRUCTURALS LTD. AND ORS. A
v.
STATE OF KARNATAKA AND ANR.

- OCTOBER 30, 2001

[D.P. MOHAPATRA AND K.G. BALAKRISHNAN, JJ.] B

Labour Law:

Industrial Disputes Act, 1947-Section 34-Validity of-Sanction for
prosecuting the management-Granted after taking relevant facts into consid-
eration and authority satisfied that there was violation of the provisions of the
c
Act-Held, such sanction valid.

Appellant-company terminated the services of their workmen which
led to an industrial dispute. An award was passed by the Labour Court
directing the appellants to re-instate the workmen. Award became final, D
but was not implemented. Thereafter, on an application of the second
<... Respondent-workers Union, Labour Commissioner exercising power un-
der Section 34 of the Act gave sanction to the workers Union to launch
proceedings against the Appellants. Both the Single Judge and the Division
Bench of the High Court confirmed the order. Hence the present appeals. E

Disposing of the appeals, the Court

HELD : 1. Sanction granted to the workers Union to prosecute the
management of the first appellant by the Labour Court is not an illegal
exercise of power since the authority took all relevant facts into considera- F
tion and was prima .facie satisfied that there was violation of the provisions
contained in the Industrial Disputes Act, 1947. The award passed by the
Labour Court has become final and the remedy available to the workmen
is under Section 29 of the Act. [578-D]
G
2. However it is open to the management to raise all contentions
including the contention that it was impossible for them to grant relief to
the workmen as directed by the Labour Court in the processings launched
against them as a consequence of grant of sanction under section 34 of the
Act. [578-E] H
575
576 SUPREME COURT REPORTS [2001] SUPP. 4 S.C.R.
'A Feroz Din & Ors. v. State of West Bengal, AIR (1960) SC363, relied
on.

..
Raj Kumar Gupta v. Lt. Governor, Delhi & Ors., (1997] 1 SCC 556,
referred to.
B '
Gookulchand Dwarakadas v. The King, 75 Indian Appeals 30 =AIR
(1948) PC 82, cited.

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 7388-7390 of
2001.
c
From the Judgment and Order -dated 18.12.98 of the Karnataka High
Court in W.A. Nos. 2479, 4332 and 4333 of 1998.

K.C. Sudarshan, Raghavendra Srivatsa for M.A. Chinnasamy for the
appellants.
D
Ms. Indira Jaisingh, Bharat Sangal, Ms. Asha Pathak, Sanjay R. Hegde
(NP), Ms. Sangeeta Panikkar and N.N. Ojha for the Respondents. ,_,... -

The Judgment of the Court was delivered by
E
K.G. BALAKRISHNAN, J. Leave granted.

Judgment of the Division Bench of the Kainataka High Court is chal-
lenged in these appeals. The first appellant is a public limited company and
appellants 2-5 are Directors thereof. The appellants challenged the order passed
F
under Section 34 of the Industrial Disputes Act, 1947 [for short, "the Act"] I
.
whereby the first respondent gave sanction for prosecuting the appellants for
alleged violation of the provisions contained in the Act. By judgment dated
26.3.1998 the learned Single Judge declined to interfere with the order and the
judgment of the learned Single Judge was subsequently confirmed by the
G Division Bench.

Relevant facts for the purpose of these appeals are thus. Services of three
workmen, who were the employees of the first appellant-company were
terminated by the appellant company and those workmen raised an industrial
H dispute. An award was passed in favour of the workmen and the appellant-
MANAGEMENT OF MIS MYSORE STRUCTIJRALS LTD. v. STATE [BALAKRISHNAN, J.) 577

company was directed to reinstate them with continuity of service and full A
back-wages. The appellant-company challenged the award before the High
Court of Karnataka by filing writ petition, which was later dismissed. The
award passed by the Labour Court became final. The appellant-company,
however, did not implement the award. Initially, the workmen filed an appli-
cation for contempt of court before the High Court. That application was B
rejected by the High Court with the observation that the remedy under Section
29 or Section 33C of the Act was available to the workmen. Thereupon, the
second respondent-Workers Union sought sanction of the Government for
prosecution of the appellants. The Labour Commissioner exercising power
under Section 34 of the Act gave sanction to the Workers Union to launch
proceedings against the management of the first appellant.
c
As pointed out earlier, the two courts have found that the order passed
by the Labour Commissioner is not vitiated by any illegality. The appellants
contended before us that the company had already been closed as early as
31.8.1982 and the factory license was surrendered. It has also been urged D
before us that the land owned by the company was donated to a charitable trust
and that in this view of the matter the appellants are not in a position to
implement the award passed by the Labour Court. It was argued that the
sanction for prosecution was given without considering these material facts.

It is true that the authorities while granting sanction for prosecution E
should take into account all material facts, which are relevant for the purpose
of such decision. This Court in Feroz Din & Ors. v. State of West Bengal,
AIR (1960) SC 363, relying· on an earlier decision reported in Gokulchand
Dwarakadas v. The King, 15 Indian Appeals 30 =AIR (1948) PC 82, held as
under: F
"The Judicial Committee in the case above-mentioned itself observed
that the sanction would be good if it was proved by the evidence that
it has been granted after all the necessary facts had been placed before
the sanctioning authority though these facts might not have been stated
G
on the face of the sanction itself. It therefore seems to us that the
' \ sanction in the present case is unobjectionable."

In the instant case also, the sanction was granted for prosecution after
taking all relevant facts into consideration. We do not propose to go into the
Mguments advanced before us as any consideration of these contentions may H
578 SUPREME COURT REPORTS [2001] SUPP. 4 S.C.R.
A eventually put fetters on the defence that may be taken by the appellants.
Whether the appellants were in a position or whether it was impossible for them
to grant relief to the workmen as directed by the Labour court in the award
would necessarily be a matter for consideration by the court that would be
seized of the proceedings.
B As observed by this Court in Raj Kumar Gupta v. Lt. Governor, Delhi
,& Ors., [1997] 1 SCC 556, the provisions of Section 34 of the Act are in the
· nature of a limitation on the entitlement of a workman or.a trade union or an
employer to complain of offences under the Act. It was pointed out that they
should not, in the public interest, be permitted to make frivolous, vexatious or
c otherwise patently untenable complaints, and to this end Section 34 requires
that no complaint shall be taken cognizance of unless it is made with the
authorization of the appropriate Govt.

The order passed by the Labour Court cannot be said to be an illegal
D exercise of power. The authority was prima facie satisfied that there was
violation of the provisions contained in the Act. The award passed by the
Labour Court has become final and the remedy available to the workmen is
under Section 29 of the Act. As for the appellants, it is open to them to raise
\
all these contentions in their defence in the proceedings launched against them
as a consequence of grant of sanction under Section 34 of the Act. Without
E prejudice to the right of the appellants to raise such contentions, we dispose
ofthese appeals. It is made clear that the observations made by the High Court
would not stand in the way for raising such contentions.

Parties to bear their own costs.
F N.J. Appeals disposed of.

1'

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