Labour Law | Criminal Proceedings Cannot Proceed Without Adjudication of Termination Dispute: Gujarat High Court Quashes Criminal Case

Gujarat High Court quashed the criminal proceedings against MWV India Paperboard Packaging Pvt. Ltd. for alleged unfair labour practices under the Industrial Disputes Act, 1947. The court held that pending adjudication of the workmen’s termination dispute, no criminal action could be initiated. Criminal Case No. 372 of 2017, filed before the Judicial Magistrate First Class at Vapi, was set aside.
The dispute began when MWV India suspended five employees between November and December 2014. Following this, the Gujarat Rajya Kamdar Seva Sangh (GRKSS) lodged a complaint on January 29, 2015, accusing the company of coercing the workers to resign after they joined the union, constituting a breach of Section 25(F) of the Industrial Disputes Act. The company responded that the workers had only been suspended, not terminated, and were receiving subsistence allowances. Termination notices were issued in February 2016, after an inquiry.
A criminal complaint was later filed by the Labour Commissioner, leading to the Magistrate issuing summons under Section 204 of the Code of Criminal Procedure.
MWV India sought to quash the criminal proceedings, arguing that without a final adjudication of the termination dispute by the labour court, no criminal case could proceed. The petitioners referenced judicial precedents, asserting that a finding of unfair labour practice is a necessary precondition for such a prosecution.
The court agreed, ruling that the criminal complaint was premature as the workmen’s terminations had not yet been adjudicated. The Gujarat High Court noted that criminal prosecution for unfair labour practices under the Industrial Disputes Act requires a prior finding of misconduct through proper adjudication.
Justice Devan M. Desai found that the Magistrate had erred in taking cognizance of the complaint without adjudication of the termination dispute. The court stressed that proceedings under Section 25(T) of the Industrial Disputes Act cannot be initiated without first establishing unfair labour practices through due process.
The court cited several decisions, including Viratimalai Rane TRW Steering Systems Private Limited v. Government of Tamil Nadu, which emphasized that adjudication is required before invoking penalties for unfair labour practices.

The Gujarat High Court quashed the criminal case and dismissed the complaint against MWV India. The court ruled that continuing the criminal prosecution without adjudication would constitute an abuse of legal process and a waste of judicial time.
 

Date of Decision: September 23, 2024
MWV India Paperboard Packaging Pvt. Ltd. vs. State of Gujarat.