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

1. These are three appeals from 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 Ramnath Goenka was the Chairman of the Board of Directors of the company incorporated in 1946. He was also one of the directors of Express Newspapers Ltd. which owned and controlled a press and paper at Delhi. The group of news papers at Madras does not seem to have prospered much before l956. It started making sizable profits from that year.2. 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 twoWhether the transfer of the publication of "Andhraand "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 arewas 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 Tribual to adjudicate upon the dispute on the ground that there was no lockout but a closure of the companys business. This Court in the Management of Express Newspapers Ltd. v. Workers and Staff, 1963 (3) SCR 540   = (AIR 1963 SC 569  ) held that the preliminary enquiry as to jurisdiction should be made by the Industrial Tribunal itself taking into account all facts which are relevent and material.3. 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.4. As the dispute which the Special Tribunal had to adjudicate upon was not the first of the kind between the company and its workers, it is necessary to take note of a few facts which are to he 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 industrial adjudication ending in an award in 1957. In March 1958 the company notified its intention to retrench 69 work men and this led to another dispute which was referred for adjudication. The unions made certain complaints to the State Government 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. The Home Minister again intervened and this time with success. On 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 agree ment were reduced into writing and the only ones which may be notedAll the employees retrenched onwould 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 noticesettlement was to be operative for 21/2 years. According to the workers, Mr. Goenka gave an assurance onthat he would not shift the publication of any of the papers mentioned from Madras to Vijayawada during the saidAs the dispute which the Special Tribunal had to adjudicate upon was not the first of the kind between the company and its workers, it is necessary to take note of a few facts which are to he 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 industrial adjudication ending in an award in 1957. In March 1958 the company notified its intention to retrench 69 work men and this led to another dispute which was referred for adjudication. The unions made certain complaints to the State Government 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. The Home Minister again intervened and this time with success. On 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 agree ment were reduced into writing and the only ones which may be notedl the employees retrenched onwould 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 noticesettlement was to be operative for 21/2 years. According to the workers, Mr. Goenka gave an assurance onperiod.5. 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 Ramnath 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 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 prices and on such terms as they might consider best. The workers must have got a 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 beings 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. On the same 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 andof 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 matter 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.6. 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 Illustrated Weekly was fixed at Rs. 25,000. Clause 11 of the agreement providedemployees 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 over12 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 said 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 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 continuous 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 workers 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 had 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 Directors 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.7. 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 thethe 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 ofnotice 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.8. 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 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 months salary in lieu of notice prescribed under S.and compensation as laid down under the Act. Such compensation amounting to one of Rs. 7 lakhs was actually paid later on.9. 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.10. 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 21/2 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.11. Of the three appeals, the first two are by the Andhra Prabha Ltd. and Indian Express Newspapers (Madurai) Ltd. and the second by the public company styled the Express Newspapers Ltd., while the third appeal is by the employees of the Express Newspapers Ltd. against its management.

Court's reasoning:
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.