Case: The Andhra Prabha Ltd. &amp; Ors Vs. Secretary, Madras Union Of Journalists &amp; Ors

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 4,000 out of 4,200 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 up 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 sometime after May 1959 inasmuch as:"(1) The teleprinter 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 tier, 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 Funds 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".20. From all this the Tribunal inferred that the suspension of the business was a lockout at the inception and became a genuine 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 teleprinter 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.21. 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 1959.22. 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 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 Goenkas 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.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 1

Reasoning from the judgment:
1[ds]12. No attempt was made before us to show that the Tribunals conclusion about the absence of the verbal assurance or the inference to be drawn in respect thereof from the circumstances was wrong.It will be noticed that these two decisions were given before the amendment of the Industrial Disputes Act by the inclusion of S.FF. Now the two sections govern such cases. Under Sectionwhere 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.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 continues and had not been interrupted by the transfer.We are not concerned with(2) in this case. The result is that if there is in fact a closure, S.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 terms and conditions as before.16. It is impossible to lay ones 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 talking 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 (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 labourers 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 decide to close down his undertaking at Madras.17. On the evidence before the tribunal to 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 go 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 precipiatedour opinion the existence of theoffset rotary pressat 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.19. Again the circumstances that some of these journals came to be published sometime after May 1959 under new declarations 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 companys undertaking in Aprildo 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 teleprinter 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, ifdo 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 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 Goenkas 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.