The Andhra Prabha Ltd. & Ors Vs.
Secretary, Madras Union of Journalists & Ors [1967] INSC 144 (4 May 1967)
04/05/1967 MITTER, G.K.
MITTER, G.K.
WANCHOO, K.N. (CJ)
CITATION: 1967 AIR 1869 1967 SCR (3) 901
CITATOR INFO :
R 1968 SC1002 (8) R 1969 SC 90 (8) RF 1970
SC1960 (3)
ACT:
Industrial Disputes-Company publishing
newspapers-Sale of rights of publishing newspapers to other companies-When
amounts to closure.
HEADNOTE:
On April 13, 1959, it was resolved by the
Board of Directors of the Express Newspapers (P) Ltd. that the company should
sell the proprietary rights of printing and publishing its daily and weekly
newspapers to the Indian Express (Madurai) (P) Ltd., Madurai, and to Andhra
Prabha (P) Ltd., Vijayawada. In the purchaser-companies, the chairman of the
Board of Directors of the vendor-company and members of his family held 4000
out of 4200 shares. On April 22, 1959 there was an agreement between Andhra
Prabha (P) Ltd. and the Express Newspapers whereby it was agreed that all the
employees employed by the vendor-company in connection with the publications
purchased by the purchaser-company would be taken into the service of the
purchaser company without any change in their conditions of service. The
workers of the Express Newspapers who were protesting against the sale to the
company at Vijayawada on the ground that at an earlier stage assurance had been
given that the publication of the papers would not be shifted from Madras to
Vijayawada, were informed of the sale to and the agreement with the company at
Vijayawada. They were also informed that the services of those workers who were
not willing to join the purchasercompany at Vijayawada would be terminated on
the usual terms a.% the Express Newspapers had no work to offer to them.
The workers then gave a notice of strike and
struck work from April 27, 1959. On April 29, 1959 the management of Express
Newspapers gave a notice of closure and closed the company, and on the next
day, the Government of Madras referred to the Industrial Tribunal the two
questions namely, (1) whether the transfer of the publication of the news paper
and weekly to Vijayawada was justified, and (2) whether the strike and lock-out
Were justified. Though the company closed its undertaking of publishing the
newspapers and weeklies on April 29 as it had very valuable property it
retained some persons, one of whom was a reporter. to look after the property,
and the teleprinter service in Madras continued to be used till the end of
October 1959 by the Madurai and Vijayawada companies.
The Tribunal held that there was no evidence
of the alleged assurance not to shift to Vijayawada and that the strike was
unwarranted. The Tribunal however held, that the suspension of business at the
inception, that is on April 29 was a lock out, but became a genuine closure
only by the end of October 1959.
The workers as well as the Management
appealed to this Court.
HELD : There was a genuine closure even on
April 29 and the scheme of dispersal of the original undertaking was not mala
fide. Ever) if there had been no strike there would 'have been a closure to
give effect to the scheme and the strike only precipitated matters. [912C-D]
The new company which was an independent legal entity could not be called a
daughter company or benemidar of the older Organisation, 902 merely because,
there was in both companies a person or family who could guide the destinies of
the two companies.
Further, the fact that there was a reporter
among the persons retained to look after the property could not Iea to the
inference that the company did not close down its business but kept it going to
take it up whenever it wanted. Similarly, the failure to inform the competent
authority under the Employs& Provident Fund Act of the termination of the
employment of 700 workers was an omission, but that could not mean that the
workers continued to be in the service of the company. With regard to the tele printer
service, it had been paid for upto October and the fact that the Madurai and
Vijayawada companies used it till the end of October, 1959 would not by itself
or in conjunction with other circumstances of the case justify the conclusion
that the company retained the tele printer service for its own use. [9t4 B-F]
CIVIL APPELLATE JURISDICTION : Civil Appeals
Nos. 1078 and 1079 of 1965 and 9 of 1966.
Appeals by special leave from the Award dated
July 31, 1963 of the Special Industrial Tribunal, Madras in Industrial Dispute
No. 1 of 1962.
N.C. Chatterjee and R. Ganapathy Iyer, for
the appellants (in C.As. Nos. 1078 and 1079 of 1965) and the respondents (in
C.A. No. 9 of 1966).
S.Mohan Kumarainangalam, M. K. Ramamurthi,
Shyamala pappu, Nagaratnam and Madan Mohan, for the appellant (in C.A. No. 9 of
1966) and respondents Nos. 1 and 2 (in C.As.
Nos. 1078 and 1079 of 1965).
R.Thiagarajan, for respondent No. 3 (in C.A.
No. 9 of 1966).
The Judgement of the Court was delivered by
Mitter, J. These are three appeals front an award dated July 31, 1963 made by
the Special Industrial Tribunal, Madras.
At the time when the reference was made, the
parties to this dispute were on the one hand, the workers and the staff and the
working journalists employed under the Express Newspapers (P) Ltd. and on the
other hand, the private limited company called the Express Newspapers (P) Ltd.
The latter, hereinafter referred to as the Company, owned and published
newspapers and periodicals from Madras. These may be split into three groups.
The first group comprised of the Indian Express (daily), Sunday Standard
(Weekly) and Screen (Weekly) : all these were published in English. The second
group consisted of Andhra Prabha (daily) and the Andhra Prabha Illustrated
Weekly (weekly) : these were published in Telugu language. The third group
consisted of two papers Dinamani (daily) and Dinamani Kadir (Weekly) :
these were in Tamil language. (One Ram nath
Goenka was the Chairman of the Board of Directors of the company incorporated
in 1946. He was also one of the directors of Express News paper 903 Ltd. which
owned and controlled a press and paper at Delhi.
The group of newspapers at Madras does not
seem to have prospered much before 1956. It started making sizable profits from
that year.
The reference which was made by the
Government of Madras on April 30, 1959 under S. 10(1) (d) of the Industrial
Disputes Act contained two questions :
(1)Whether the transfer of the publication of
'Andhra Prabha' and 'Andhra Prabha Illustrated Weekly' to 'Andhra Prabha (P)
Ltd.', in Vijayawada is justified and to what relief 'the workers and the
working journalists are entitled ? (2)Whether the strike of the workers and
working journalists from 27th April, 1959 and the consequent lockout by the
management of the Express Newspapers (P) Ltd. are justified and to what relief
the workers are entitled ? This was later transferred by an order dated
November 3, 1962 to the Special Industrial Tribunal which has made the award.
Before that date however the matter had come up to this Court in appeal from
Writ Petitions filed in the Madras High Court on the 1st May, 1959 and 5th May,
1959 challenging the validity of the order made under S. 10(3) and the
jurisdiction of the Industrial Tribunal to adjudicate upon the dispute on the
ground that there was no lockout but a closure of the company's business. This
Court in the Management of Express News papers Ltd. v. Workers and Staff (1)
held that the preliminary enquiry as to jurisdiction should be made by the
Industrial Tribunal itself taking into account all facts which are relevant and
material.
On the application of the workmen for addition
of parties, the Andhra Prabha Ltd., the Indian Express Newspapers (Madurai)
Ltd. and the Express Newspapers Ltd., a public company were added as parties
before the Special Tribunal.
As the dispute which the Special Tribunal had
to adjudicate upon was not the first of the kind between the company and it's
workers, it is necessary to take note of a few facts which are to be found in
the judgment of this Court dated August 2, 1962 mentioned above. This
narration, according to the Court in the former judgment, forms the background
of the present dispute between the parties. In March 1957, a dispute arose
between the parties on certain points including bonus. This was referred for
industrial adjudication ending in an award in 1957. In March 1958 the company
notified its intention to retrench 69 workmen and this led to another dispute
which was referred for adjudication. The unions made certain complaints to the
State Government (1) [1963] 3 S. C. R. 540.
p.167-14 9 04 which led to the intervention
by the Home Minister of the State but without any success. On October 30, 1958
the company gave notice to the workmen and working journalists that it was
going, to close down its business at Madras with effect from December 1, 1958
on the allegation inter alia that there were persistent labour troubles and
indiscipline on the part of labour. The Home Minister again intervened and this
time with success. Oil November 6, 1958 a settlement was arrived at between the
Management and the employees and journalists in the presence of the Labour
Commissioner of Madras. The terms of agreement were reduced into writing and
the only ones which may be noted are:
(1)All the employees retrenched on 30-4-1958
would be reinstated with continuity of service.
(10)In view of the settlement the Management
would withdraw the notice of closure and announce the same on the notice board.
The settlement was to be operative for 2 1/2
years.
According to the workers, Mr. Goenka gave an
assurance on 611-1958 that he would not shift the publication of any of the
papers mentioned from Madras to Vijayawada during the said period.
On the former occasion, when the matter was
before this Court reference was made to this assurance and this Court held that
this was a subject which the Industrial court would have to go into. According
to the Management it was felt in November 1958 that the Telugu papers should be
published from Vijayawada. an additional consideration for the same being the
suggestion, of the Press Commission in regard to the diffusion of control of
newspapers. Leaving out of consideration the intention of Ram nath Goenka at or
about that time, we may proceed to note the events which followed thereafter.
On January 17, 1959 notice was given of an extraordinary general meeting of the
shareholders of the company to consider certain resolutions. The meeting was
actually held on February 11, 1959 and one of the resolutions passed was that
the company should cease to carry on business as proprietors of the various
newspapers and that in pursuance thereof the company would close or transfer
and sell its various publications at Bombay, Madras, Madurai and Delhi to other
parties and sell, hire out or otherwise dispose of its printing plant and
machinery and equipment and also licence or lease out its premises at various
places. Another resolution authorised the directors -to take all steps
necessary for the closing or sale and transfer of various publications as they
may think fit and at such and on such terms as they might consider best. The
905 workers must have got scent of this and the Secretary of the Express
Newspapers Employees' Union (hereinafter referred to as the Secretary)
addressed a letter to the Chairman of the company on March 31, 1959 to the
effect that the employees had come to learn that four units of the rotary
machine at Madras had 'been dismantled and removed to Vijayawada with a view to
starting an edition of the Andhra Prabha there.
Reference was also made to the assurance
alleged to have been given before the Home Minister to drop the proposal to
shift the Andhra Prabha and a discussion with the addressee was asked for. It
appears that there was a reply to this letter on 2nd April which is however not
included in the record. On April 13, 1959 the Board of Directors of the company
passed certain resolutions. One of them was that the company would sell and
transfer and the Indian Express (Madurai) (P) Ltd. would purchase as a going
concern, the proprietary rights of printing and publishing The Madurai edition
of the English daily newspaper known as the Indian Express, the Madurai Edition
of the English weekly known as the Sunday Standard and the Madurai edition of
the Tamil daily known as Dinamani (inclusive of the Sunday edition).
Another resolution passed was to the effect
that the company would sell and the Andhra Prabha (P) Ltd. Vijayawada would
purchase as a going concern the proprietary rights of printing and publishing Andhra
Prabha and Andhra Prabha Illustrated Weekly together with the option to
purchase from the company the right to print, edit and publish the English
newspaper known as the Sunday Standard for circulation in the State of Andhra
Pradesh only on 'terms and conditions set out in the draft agreement. A third
resolution was to the effect that the company would sell to% the Andhra Prabha
(P) -Ltd. Vijayawada the items of machinery set out in the schedule to the
draft agreement for a price of Rs. 1,75,000/on the terms set out in the draft
agreement. On April 15, 1959 an agreement was actually entered into between the
company and the Andhra Prabha (P) Ltd. to the effect that the vendor had agreed
to sell and the purchaser had agreed to buy the goods set out in the schedule
thereto as soon as convenient and the price payable would be Rs.
1,75,000/within one week of the purchaser
getting the machinery. On April 20, 1959 the General Secretary of the Madras
Union of Journalists wrote to the Director of the company complaining that the
writer had not heard in regard to the issue raised in the letter of 31st March.
The letter proceeded to record that the journalists had not been told exactly
what the Management proposed to do but they had heard that a new company called
the Andhra Prabha (P) Ltd.
had, been registered at Vijayawada and
arrangements were being made to split up the other two Madras papers, namely,
the Indian Express and Dinamani into two separate companies.
According to the writer, this had created a
state of tension. 0n, the same 906 day, the Madras Union of Journalists at a
meeting passed a resolution condemning the action of the Management in
announcing and effecting the sale of the Andhra Prabha daily and the Andhra
Prabha Illustrated Weekly to a new company at Vijayawada which had been done
surreptitiously, and as a result thereof all the employees concerned might not
be absorbed by the new -company. A complaint was also made that the sale was
really benami and a threat was held out that unless the Management -desisted
from the above course of "mala fide closure and break-up of the Madras establishment
and purported sales to benami companies the employees would be compelled to go
on strike as and from a date to be fixed by the joint action committee set up
under the resolution." On 21st April a letter was sent to the Director of
the company from the Convener, Joint Action -Committee in which it was said
that unless a satisfactory reply -was sent regarding the matters mentioned in
the resolution within 72 hours, the joint action committee would be compelled
to carry -out the mandate of the workers calling for a strike.
On April 22, 1959 there was an agreement in
writing between Andhra Prabha (P) Ltd. and the company to the effect that the
,first named company had agreed to purchase and the company had agreed to sell
as a going concern the proprietary rights as ,editors, proprietors etc. of the
Andhra Prabha (Telugu daily) and the Andhra Prabha Illustrated Weekly together
with the option to purchase from the vendor the right to print, edit and
publish the English newspapers, the Indian Express and the English weekly, the
Sunday Standard. The consideration for the sale of the proprietary rights in
Andhra Prabha and Andhra Prabha Mustrated Weekly was fixed at Rs. 25,000/-.
Clause 11 of the agreement provided that :
"all employees now employed by the
vendor in connection with the aforesaid two publications shall be taken over
into the service of the purchaser company as and from the taking over
date." Clause 12 provided that the transfer of the two undertakings would
,be on the terms that every workman and employee who had been in continuous
service for not less than one year in the slid ,undertaking of the vendor
immediately before the taking over date would be taken over by the purchaser as
and from such date -on the terms and conditions that the services of the
workmen and the employees had not been and would not be deemed to be
interrupted by such transfer and the terms and conditions applicable to the
workmen and the employees after such transfer would not in any way be less
favourable to them than those applicable before the transfer and the purchaser
would be legally liable to pay the workmen and employees, in the event of
retrenchment, ,compensation on the basis that his or their services had been
conti907 nuous and uninterrupted by such transfer. On April 23, 1959 the
Director of the company wrote a letter to the Joint Action Committee to the
effect that the Management had sold their right of editing, publishing etc. the
Andhra Prabha daily and the Andhra Prabha Illustrated Weekly to a new company
in Vijayawada assigning the reason therefor that it was in the interest of the
Telugu speaking people that it should be produced and published from a Telugu
centre. The terms and conditions with regard to the absorption by the new
company of all staff and worker& connected with the business of the two
newspapers were also mentioned therein.
Lastly, it was said that with regard to such
of the staff as were not willing to go to Vijayawada their services with the
company would be terminated as the company bad no work to offer to them but
they would be paid all their dues. On April 24, 1959 the Convener, Joint Action
Committee, characterised the Director's reply of the 23rd as highly
unsatisfactory and stated that a resolution had been adopted to the effect that
the workers would go on strike at any time after the expiry of 24 hours. On the
next day the Director informed the Union that the contemplated strike would be
illegal and unjustified. On 27th April the Convener wrote to the Director
stating that the Management had rejected their demand to maintain the status
quo regarding the publication of the three newspapers from Madras specially
Andhra Prabha. In addition false charges of sabotage and threats and arrest had
been made and consequently the workers were compelled to give effect to the
decision of 24th April i.e. to go on strike. The watch and ward staff were
however instructed to stay on duty.
It is necessary to note at this stage that
according to the Management some acts of sabotage and gross indiscipline were
committed on April 26, 1959, namely, the mutilation and destruction of one full
page and two gallies of Dinamani matter and removal of switch keys from three
motor cars left in front of the office building. According to the' statement of
Ramnath Goenka before the Tribunal :
"During the whole of the 28th of April
the labourers demonstrated before the office and prevented ingress and egress
of staff members from the office building.
I then decided to close down and issued a
statement through the Hindu informing every one of this." A notice to the
above effect was published on the notice board of the company on the 27th and a
copy of it was sent by the Director to the Convener.
The strike of the workers started at 4.30
p.m. on 27th April and publication of all papers was stopped. Notice to the
above:
908 effect was given in the Hindu regarding
the Indian Express Dinamani and Andhra Prabha. On the 29th of April the closure
notice was published in the Hindu in which it was mentioned that the Management
had intimated the workers by letter dated 23rd April. that they had sold their
right of editing,, printing and publishing Andhra Prabha and Andhra Prabha
Illustrated Weekly to the Vijayawada company. The substance of the agreement
between the two companies with regard to the workers was also mentioned in this
notice.
The workers had been notified that the
Management had decided to close with immediate effect the undertaking and
publication of all the seven newspapers at Madras and to dispense with the
services of the workmen and the working Journalists. Notice was also given that
they would be paid their wages for the period during which they had worked,
besides one month's salary in lieu of notice prescribed under s. 25F. and
compensation as laid down under the Act.
Such ,compensation amounting to one of Rs. 7
lakhs was actually paid later on.
On the 30th April the Management informed the
Commissioner of Police with regard to the developments and published another
notice in the Hindu regarding the closure stating that most of the machinery
had already been sold for cash and the building of the company advertised for
rent. On the same day. -the Madras Government issued a notice under S. 10(3) of
the Industrial Disputes Act prohibiting the continuance of the strike ,and the
lockout. This was followed by the two Writ Petitions in the Madras High Court
already mentioned.
After the matter was decided by this Court in
August 1962.
the adjudication was taken up by the Special
Industrial Tribunal before which some witnesses including Ramnath Goenka were
examined and a large number of documents tendered in evidence. The central
question with regard to the first issue was, whether Ramnath Goenka had given a
verbal assurance in November 1958 that there would be no shifting of the venue
of the publication of any of the papers from Madras to Vijayawada for 2 1/2
years. The Tribunal scrutinised the evidence both oral and documentary in great
detail and observed that it was not satisfied that Ramnath Goenka had given any
verbal assurance imputed to him. The Tribunal further held that an assurance of
the nature could not be inferred from the circumstances of the case with the
result that the first part of the first issue was answered in the affirmative
with the necessary consequence that the workers could not be held entitled to
any relief because of the transfer of these two publications.
of the three appeals, the first two are by
the Andhra Prabha Ltd. and Indian Express Newspapers (Madurai) Ltd. and the 909
second by the public company styled the Express Newspapers Ltd. the third
appeal is by the employees of the Express Newspapers Ltd. against its
management.
No attempt was made before us to show that
the Tribunals conclusion about the absence of the verbal assurance or the
conference to be drawn in respect thereof from the circumstances was wrong. The
substance of the argument on behalf of the employees was that there was really
no closure but the transfer was in effect from a parent company to daughter
companies and in this connection reliance was placed on the judgment of this
court in Kays Constitution Co. v. Its Workers and the earlier decision in
Workmen v. Dahingeapar Tea Estate (2 ) In the Kay's Construction Co.'s(1) case
a private limited company was incorporated to continue and carry on the
business activities of a proprietary concern. The former proprietor, his wife
and the manager employed in the former business were three out of five
directors of the new company. The dispute in regard to the refusal by the new
company to continue some former employees in service was referred for
adjudication to an industrial tribunal. It was contended on behalf of the
workmen that the alleged closure by the : proprietor was not genuine or real
and that the new company was successor-in interest of the proprietor and hence
was bound to continue to employ the former workmen. It was also contended that
there was in effect a lockout and the workmen concerned were entitled to
reinstatement. The tribunal found 'hat the closure of the former business on
the alleged financial grounds was not genuine, and that the company, though in
law a separate entity, was formed to carry on and continue the former business
under a different name and the refusal by it to employ some of the old
employees amounted to a lockout with the result that a reinstatement of the
workmen was ordered. The appeal by the company to the Supreme Court was
dismissed. This Court held that a case like the one before it could not be
decided principally on the consideration of the abstract point of law -as to
whether and when a successor in business is bound to continue in employment the
workmen employed by the former owner and having regard to the material findings
of fact recorded by the tribunal, the validity of the award could not be
questioned on abstract legal grounds.
In the Dahingeapar Tea Estate case(2 ) there
was an agreement between Dahingeapara Tea company (the vendor) and Nikhli Jute
Baling Company Ltd. (the purchaser) whereby the vendor agreed to sell
absolutely and the purchaser -to buy a,% Ind from January 1, 1954 the entire
tea estate known as Dahingeapar tea estate with all its gardens, bushes,
machinery and appur(1) [1958] 2 L.L.J. 669.
(2) [1958] 2 L.L.J. 498.
910 tenances etc. at or for the sum of Rs.
9,50,000/-. The purchaser was to have the option of taking such members of the
staff as it would in its absolute discretion consider useful and sufficient for
running it. The members of the staff as would be selected by the purchaser would
be given fresh appointment and any liability whatsoever for their past
services, including bonus, gratuity etc. would be on the vendor's account. The
dispute which was referred for adjudication was, whether the transfer of the
management could put an end to the services of the staff of the tea estate and
whether the agreement of transfer would deprive -the members of the staff of
their rights of service under the original contracts of service and of
continuity of their services. The second question was, whether the outgoing
management was justified in proposing to terminate the services of the members
of the staff from the time when the management of the tea estate had changed
hands and whether the incoming management was justified in refusing to maintain
the continuity of service. The tribunal found that the garden was sold as a
going concern, that the services of the staff continued up to January 4, 1954,
that retrenchment had not been necessitated by or on account of reasons of
trade and that the transfer could not effect a change in the service conditions
of the staff. The result was that the purchaser was held to be not justified in
refusing to maintain the continuity of service. The award directed that those
of the members of the former staff who had been kept out of service in the
garden in question from the time the new management had taken over charge but
who would be willing to be reinstated in their former posts on the previous
terms and conditions of their service be reinstated in their former posts and
that those of the members of the old staff who had been kept out of service in
the garden and had not since taken any employment elsewhere be paid their
salaries for the period of their forced unemployment which was caused at the
instance of the purchaser. The Labour Appellate Tribunal set aside the award
made by the tribunal.
This Court in appeal did not find it
necessary to determine the larger question as to whether, on a transfer of
business as a going concern, the incoming management becomes a successor to the
outgoing management and if so, to what extent the incoming management must
recognise the right of labour already accrued as to gratuity bonus etc. and to
continuity of service. it was further observed that it was not the function of
the industrial tribunal to decide the abstract question of law, whether on a
transfer of management consequent on a sale, the services of workmen were
automatically put an end to. But it was held that there was a dispute which
could be referred for-adjudication and the reference being competent the
tribunal had jurisdiction to go into it and there was no reason for the
Appellate Tribunal displacing the findings of the Industrial tribunal.
91 1 It will be noticed that these two
decisions were given before the amendment of the Industrial Disputes Act by the
inclusion (of s. 25FF, and s. 25FFF. Now the two sections govern such cases.
Under s. 25FF where the ownership or management of an undertaking is
transferred, whether by agreement or by operation of law, from the employer in
relation to that undertaking to a new employer, every workman who has been in
continuous service for not less than one year in that undertaking immediately
before such transfer shall be entitled to notice and compensation in accordance
with the provisions of S. 25F as if the workman had been retrenched. This
section however is not to apply to a workman if his service had not been
interrupted by such transfer, the terms and conditions of his service after
transfer are not in any way less favourable to him than those applicable to him
immediately before the transfer and the new employer is, under the terms of
such transfer, legally liable to pay to the workman in the event of his
retrenchment, compensation on the basis that his service has been continuous
and had not been interrupted by the transfer.
Under s. 25FFF (1) where an undertaking is
closed down for any reason whatsoever, every workman who has been in continuous
service for not less than one year in that undertaking immediately before such
closure shall, subject to the provisions of Subsection (2), be entitled to
notice and compensation in accordance with the provisions of s. 25F as if the
workman had been retrenched. We are not concerned with sub-s. (2) in this case.
The result is that if there is in fact a closure, s. 25FFF will come into play.
In this case, however, it must be stated that the new company, Andhra Prabha
(P) Ltd. agreed to take over all employees at the time employed by the vendor
in connection with the two publications as and from the date of taking over
without any break in the continuity of their service and on the same term,,;
and conditions as before.
It is impossible to lay one's finger on the
exact cause for Ramnath Goenka making up his mind to transfer a part of the
undertaking to Vijayawada and another part to Madurai. It may be because he
really felt that the Telugu papers would do better if printed and published at
Vijayawada. It may also be that he wanted to circumvent the recommendation of
the Press Commission with regard to the wages payable by the bigger units of
newspapers. Again there can be no doubt that he did not like the agitation of
the employees and probably thought that by the dispersal of the units the scope
for agitation would be minimised. He was undoubtedly taking all steps in this
regard as the resolutions passed by the shareholders of the company in February
1959, followed by the resolution of the Board of Directors and the agreement
for sale of some machinery to the Andhra Prabha 912 (P)Ltd. on the 15th of
April 1959 would show. The workers probably were nettled by the fact that they
had not been consulted in regard to all this. While it is not possible to say
that the alleged acts of sabotage and indiscipline said to have taken place on
April 26, 1959 were of a very serious nature, Goenka stated in his evidence
before the tribunal that after the demonstration of the laborers before his
office on the 28th of April and their prevention of ingress and egress of the
members of the staff to and from the office building he decided to close down
his undertaking at Madras.
On the evidence before the tribunal 'Lo which
our attention was drawn by counsel on both sides, it appears to us that while
the Management might have taken into confidence the employees and discussed
with them the scheme for the dispersal of the undertaking the decision to co on
strike was unwarranted and disastrous. Even if there had been no strike on the
27th of April. it seems to us that the scheme of dispersal would have been given
effect to afterwards although it was the strike which precipitated matters.
The Tribunal has found that there was a
closure but that took place not in April 1959 but in November, 1959. In
arriving at this conclusion the tribunal relied on several factors. The first
of these is that Andhra Prabha Illustrated Weekly came to be printed at the
Dinamani press by the Indian Express (Madurai) Ltd. and located in the block of
buildings belonging to Express Newspapers Ltd.
situate in Mount Road Madras in pursuance of
an agreement dated 30th September 1960 between the Indian Express Madurai (P)
Ltd. and the Andhra Prabha (P) Ltd. The Tribunal further found that it was on
the 2nd of September 1960 that the offset rotary press and allied equipment
belonging to Express Newspapers (P) Ltd. and located in the Express Estate
Mount Road Madras were hired to the Indian Express Madurai (P) Ltd. From this
the tribunal concluded that "the Andhra Prabha daily and the Andhra Prabha
Illustrated Weekly as also the Indian Express Madurai edition and Dinamani
daily edition could have made use of the off-set rotary press at the Express
Estate Madras on occasions when the use of the off-set rotary press became
necessary till the, machines were hired to the Madurai company under Ex.
M-46".
In our opinion the existence of the off-set
rotary press at the Express Estate Madras until they were hired out to the
Indian Express Madurai (P) Ltd. does not warrant the conclusion that the
company could have made use of the rotary press when it wanted to. We have got
to judge things by what was done and not by what could have been done.
Again the circumstance that some of these
journals came to be published sometime after May 1959 under new declarations
913 made by publishers respectively on behalf of the Andhra Prabha (P) Ltd. and
the Indian Express Madurai (P) Ltd.
cannot be taken into consideration for
finding against the closure of the company's undertaking in April 1959. The
Tribunal appears to have placed some reliance on the fact -that Ramnath Goenka
admitted having advanced a sum of Rs. 3 lakhs to the Madurai Company as also
diverse sums totaling Rs. 27 lakhs to other companies including the, two
daughter companies (at Vijayawada and Madurai) up to the end of December 1960.
The Tribunal found that (a) ultimately the Indian Express Bombay Ltd. purchased
all the, shares of Andhra Prabha (P) Ltd. and Indian Express Madurai (P) Ltd.
and became a public company towards the end
of 1960 : ('b) Before the company became a public company, Ramnath Goenka and
the members of his family held 4000 out of 4200 shares :
(c) till May 1959 the company which owned the
entire group of newspapers published by the same Management at three branch
offices one in Delhi, a second in Madurai and the third in Bombay. As a result
of the splitting up, the position was that the Express Newspapers (P) Ltd. in
Delhi took Lip the Delhi publications, the Indian Express Bombay (P) Ltd. took
up the publications published by the company from Bombay the Indian Express
Madurai (P) Ltd. took up the publications issued from Madurai and Andhra Prabha
(P) Ltd.
Vijayawada took up the two Telugu
publications. According to the Tribunal "it was only the Madurai company
and the Vijayawada company that relied upon the support of the parent company
after May 1959 for printing and publishing the papers acquired by them."
The Tribunal further found that this position continued for some time after May
1959 inasmuch as "(1) The tele printer service installed in the Express
Estate building Mount Road continued to be used till the end of October 1959
and out of nine circuits comprised in the teleprinter service, seven were
routed through Madras and these were allotted to the Madurai company for a
period of three months commencing from 1st November 1959. (2) Photographic
materials used in the processing department maintained by the company up to
October 1959 were purchased by the public company for the benefit of the two
daughter companies; (3) Thirty-two of the former employees of the company including
a reporter were retained in the service of the company after April 1959; (4) No
intimation was sent to the Commissioner or other competent authority under the
Employees' Provident Fund Act of the termination of employment of 700 workmen
and working journalists, and (5) After April 1959 a common advertising
department for the two daughter companies was maintained at the Express Estate
building as could be seen from certain circulars issued in December 1959".
From all this the Tribunal inferred that the
suspension of the business was a lockout at the inception and became a genuine
914 closure only in October-November, 1959. Before us, reliance was placed by
Mr. Mohan Kumaramangalam on some of the above factors and the main plank of his
argument was that in fact the parent company launched and financially helped
the other companies which were really benamidars for the parent company. We do
not think that even in Industrial law a new company which is an independent
legal entity can be called a benamidar for another older Organisation because
there was in both companies a person or family of persons who could guide the
destinies of the two companies. The Express Newspapers (P) Ltd. was later
transformed into a public company and it would not be proper to describe the
relationship of the Vijayawada and the Madurai companies as daughter companies
or as benamidars of the company. We have to bear in mind that the company i.e.,
Express Newspapers (P) Ltd. did not come to an end in April 1959. It only
closed its undertaking of publishing several newspapers and weeklies. It had
very valuable property on its hands after April 1959 and some persons had to be
retained in service to look after the property. The fact that one of them was a
reporter cannot lead to the inference that the company did not close down its
business but could take it up whenever it wanted to. Further, the failure to
inform the Provident Fund authorities was an omission but that cannot mean that
the workers continued to be in the service of the company or were meant to be
taken back into its service as soon as they became submissive to Ramnath
Goenka. With regard to the tele printer service, we were told that it had been
paid for up to a certain date and the fact that the Madurai and Vijayawada
companies used the teleprinter service till the end of October 1959 would not
either by itself or taken in conjunction with the other circumstances, justify
the conclusion that the company retained the teleprinter service for its own
use, if necessary.
To all intents and purposes, the business of
the company was closed from the 29th of April 1959 and whatever might have been
the motive behind the closure it was an effective one from April 1959 and we
see no reason to hold with the Tribunal that the closure became effective
sometime in November 1959.
On behalf of the employees an application has
been made for leading additional evidence. In this application events which
took place after the publication of the award are relied on as going to show
that the discontinuance of the publications from Madras was a mere ruse and a
device adopted by the company to coerce and intimidate the employees and that
publication of the newspapers had been commenced soon after the publication of
the award. We do not think it necessary to go into this matter at any length
because a break of over four years had intervened in between and what the
company does after the lapse of this long 915 period cannot and ought not to be
taken into consideration in order to find out whether the closure was a real
one or was a mere device as suggested by the employees. The evidence on record
shows that Ramnath Goenka's plan was not to give up the business of newspaper
publications altogether but he wanted to distribute his business to different
places. Whatever may be the motive behind such plan, he had only carried out
that plan into effect after the publication of the award and this cannot lead
us to the conclusion that the closure was an assumed one. In our view, the
strike was not justified and the Management was entitled to close the
undertaking on 29th April, 1959.
In the result, there will be no order on this
application. The appeals by the companies are allowed and the finding on the
second issue and the award set aside.
Appeal No. 9 of 1966 by the workmen will have
to be dismissed in view of the above. There will be no order as to costs in all
the appeals.
V.P.S. Appeal No. 9 of '66, dismissed and
Nos. 1078 and 1079 of '65 allowed.
Back
