The Supreme Court on Tuesday (July 30) quashed criminal proceedings initiated under Section 29 (penalty for breach of settlement or award) of the Industrial Disputes Act, 1947 (ID Act) observing that the complaint did not contain specific pleading regarding breach of settlement or award binding on the accused employers.
A bench of Justice Abhay Oka and justice Augustine George Masih set aside the order of the Allahabad High Court dismissing the appellants’ petition under Section 482 of CrPC to quash a complaint alleging violation of an agreement under the ID Act.
“Section 29 can be attracted when any person commits a breach of any term of any settlement or award which is binding on him under the ID Act. Therefore, in the complaint alleging commission of offence punishable under section 29 Of ID Act, there has to be a specific averment regarding settlement or award, which is binding on the accused under the ID Act which has been breached”, the court held.
The complaint was filed under Section 29 of the ID Act, which pertains to penalties for breaches of settlements or awards, alleging non-payment of dues by the employer. The complainant also accused the appellants of violating the provisions of Section 9A of the ID Act, which requires employers to provide notice before changing the service conditions of workmen.
The complaint was sanctioned by an order passed on March 4, 2022, by the Deputy Labor Commissioner, who conducted an inquiry and found that the company had failed to give the necessary notice, thus violating Section 9A.
The High Court while refusing to quash the complaint had noted that the employers were adamant and refused to pay the complainant his dues beyond his salary amounting to approximately Rs. 8,80,000. This order was challenged in the Supreme Court.
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During the proceedings, the counsel for the appellants denied the existence of any settlement. He noted that the complaint and the sanction order did not refer to any specific settlement or award.
The court then asked about the definition of a settlement under Section 2(p) of the ID Act, which includes an agreement signed by both parties during conciliation proceedings.
The appellants’ counsel argued that the authority to file a complaint under Section 34 of the ID Act did not allow a private party to initiate the complaint, as it had to be done by or under the authority of the appropriate government.
The counsel for the complainant insisted that there was a breach of a settlement and award, referring to an affidavit filed before the Allahabad High Court on December 9, 2015.
The court repeatedly asked whether the settlement is mentioned in the complaint. The counsel referred to a joint affidavit of the parties filed before the Allahabad High Court on December 9, 2015. However, he failed to show any reference to the settlement in the complaint.
The Court emphasized that a valid complaint under Section 29 requires specific averments about the breach of a settlement or award, neither of which was present in the complaint.
The Supreme Court highlighted several deficiencies:
1. The complaint did not reference any settlement or award as defined under the ID Act.
2. The sanction order issued under Section 34 of the ID Act only mentioned a violation of Section 9A, not Section 29.
3. The statements recorded under Section 200 (of the complainant) and Section 202 (of a witness) of CrPC did not substantiate the alleged breach of any settlement or award.
The Supreme Court noted that the joint affidavit referred to a memorandum of settlement dated August 30, 1996, but this memorandum was neither produced nor relied upon in the complaint.
The Court said that no valid settlement within the meaning of Section 2(p) of the ID Act between the parties that bound the appellants was produced. Furthermore, the complaint did not make any case for the breach of an award. Consequently, the magistrate could not have issued the process, the court held.
The Supreme Court set aside the High Court’s order, quashed the proceedings initiated under the complaint and the summoning order issued by the Chief Metropolitan Magistrate, Kanpur Nagar. However, the Court clarified that this decision does not preclude the second respondent from pursuing any other remedies available under the law.
Case No. – SLP (Crl) No. 4965/2023
Case Title – Yugal Sikri and Ors. vs. State of UP and Anr.
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