{"id":266618,"date":"1967-05-04T00:00:00","date_gmt":"1967-05-03T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/the-andhra-prabha-ltd-ors-vs-secretary-madras-union-of-on-4-may-1967"},"modified":"2017-11-03T16:59:14","modified_gmt":"2017-11-03T11:29:14","slug":"the-andhra-prabha-ltd-ors-vs-secretary-madras-union-of-on-4-may-1967","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/the-andhra-prabha-ltd-ors-vs-secretary-madras-union-of-on-4-may-1967","title":{"rendered":"The Andhra Prabha Ltd. & Ors vs Secretary, Madras Union Of … on 4 May, 1967"},"content":{"rendered":"
Supreme Court of India<\/div>\n
The Andhra Prabha Ltd. & Ors vs Secretary, Madras Union Of … on 4 May, 1967<\/div>\n
Equivalent citations: 1967 AIR 1869, 1967 SCR (3) 901<\/div>\n
Author: G Mitter<\/div>\n
Bench: Mitter, G.K.<\/div>\n
           PETITIONER:\nTHE ANDHRA PRABHA LTD. & ORS.\n\n\tVs.\n\nRESPONDENT:\nSECRETARY, MADRAS UNION OF JOURNALISTS & ORS.\n\nDATE OF JUDGMENT:\n04\/05\/1967\n\nBENCH:\nMITTER, G.K.\nBENCH:\nMITTER, G.K.\nWANCHOO, K.N. (CJ)\n\nCITATION:\n 1967 AIR 1869\t\t  1967 SCR  (3) 901\n CITATOR INFO :\n R\t    1968 SC1002\t (8)\n R\t    1969 SC  90\t (8)\n RF\t    1970 SC1960\t (3)\n\n\nACT:\nIndustrial  Disputes-Company publishing\t newspapers-Sale  of\nrights\tof  publishing newspapers  to  other  companies-When\namounts to closure.\n\n\n\nHEADNOTE:\nOn April 13, 1959, it was resolved by the Board of Directors\nof  the Express Newspapers (P) Ltd. that the company  should\nsell  the proprietary rights of printing and publishing\t its\ndaily and weekly newspapers to the Indian Express  (Madurai)\n(P)   Ltd.,  Madurai,  and  to\tAndhra\tPrabha\t (P)   Ltd.,\nVijayawada.  In the purchaser-companies, the chairman of the\nBoard of Directors of the vendor-company and members of\t his\nfamily\theld  4000 out of 4200 shares.\tOn  April  22,\t1959\nthere  was an agreement between Andhra Prabha (P)  Ltd.\t and\nthe  Express Newspapers whereby it was agreed that  all\t the\nemployees employed by the vendor-company in connection\twith\nthe publications purchased by the purchaser-company would be\ntaken  into the service of the purchasercompany without\t any\nchange\tin their conditions of service.\t The workers of\t the\nExpress\t Newspapers who were protesting against the sale  to\nthe  company at Vijayawada on the ground that at an  earlier\nstage  assurance had been given that the publication of\t the\npapers would not be shifted from Madras to Vijayawada,\twere\ninformed  of the sale to and the agreement with the  company\nat Vijayawada.\tThey were also informed that the services of\nthose  workers who were not willing to join  the  purchaser-\ncompany at Vijayawada would be terminated on the usual terms\na.%  the  Express Newspapers had no work to offer  to  them.\nThe  workers  then gave a notice of strike and\tstruck\twork\nfrom  April 27, 1959.  On April 29, 1959 the  management  of\nExpress\t Newspapers gave a notice of closure and closed\t the\ncompany,  and  on  the next day, the  Government  of  Madras\nreferred  to  the  Industrial  Tribunal\t the  two  questions\nnamely,\t (1) whether the transfer of the publication of\t the\nnews  paper and weekly to Vijayawada was justified, and\t (2)\nwhether the strike and lock-out Were justified.\t Though\t the\ncompany closed its undertaking of publishing the  newspapers\nand weeklies on April 29 as it had very valuable property it\nretained  some persons, one of whom was a reporter. to\tlook\nafter  the property, and the teleprinter service  in  Madras\ncontinued  to  be used till the end of October 1959  by\t the\nMadurai and Vijayawada companies.\nThe Tribunal held that there was no evidence of the  alleged\nassurance not to shift to Vijayawada and that the strike was\nunwarranted.  The Tribunal however held, that the suspension\nof business at the inception, that is on April 29 was a lock\nout, but became a genuine closure only by the end of October\n1959.\nThe  workers  as  well as the Management  appealed  to\tthis\nCourt.\nHELD : There was a genuine closure even on April 29 and\t the\nscheme of dispersal of the original undertaking was not mala\nfide.\tEver) if there had been no strike there would  'have\nbeen  a closure to give effect to the scheme and the  strike\nonly precipitated matters. [912C-D]\nThe new company which was an independent legal entity  could\nnot  be called a daughter company or benemidar of the  older\nOrganisation,\n902\nmerely\tbecause,  there was in both companies  a  person  or\nfamily\twho could guide the destinies of the two  companies.\nFurther,  the  fact  that there was  a\treporter  among\t the\npersons retained to look after the property could not Iea to\nthe  inference\tthat  the company did  not  close  down\t its\nbusiness butkept  it  going  to take it\t up  whenever  it\nwanted. Similarly, the failureto  inform the  competent\nauthority under the Employs& ProvidentFund   Act  of   the\ntermination  of\t the  employment  of  700  workers  was\t  an\nomission, but that could not mean that the workers continued\nto  be\tin the service of the company.\tWith regard  to\t the\nteleprinter  service, it had been paid for upto October\t and\nthe  fact that the Madurai and Vijayawada companies used  it\ntill  the  end of October, 1959 would not by  itself  or  in\nconjunction with other circumstances of the case justify the\nconclusion that the company retained the teleprinter service\nfor its own use. [9t4 B-F]\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL  APPELLATE JURISDICTION : Civil Appeals Nos. 1078\t and
\n1079 of 1965 and 9 of 1966.\n<\/p>\n
Appeals by special leave from the Award dated July 31,\t1963
\nof  the\t Special Industrial Tribunal, Madras  in  Industrial
\nDispute No.  1 of 1962.\n<\/p>\n
N.C. Chatterjee and R. Ganapathy Iyer, for the appellants
\n(in  C.As. Nos. 1078 and 1079 of 1965) and  the\t respondents
\n(in C.A. No. 9 of 1966).\n<\/p>\n
S.Mohan\t Kumarainangalam,  M.  K.  Ramamurthi,\t Shyamala
\npappu,\tNagaratnam  and Madan Mohan, for the  appellant\t (in
\nC.A.  No. 9 of 1966) and respondents Nos. 1 and 2 (in  C.As.
\nNos. 1078 and 1079 of 1965).\n<\/p>\n
R.Thiagarajan,\tfor  respondent No. 3 (in C.A. No.  9  of
\n1966).\n<\/p>\n
The Judgement of the Court was delivered by
\nMitter, J. These are three appeals front an award dated July
\n31,  1963 made by the Special Industrial  Tribunal,  Madras.
\nAt the time when the reference was made, the parties to this
\ndispute were on the one hand, the workers and the staff\t and
\nthe   working\tjournalists  employed  under   the   Express
\nNewspapers  (P)\t Ltd.  and on the other\t hand,\tthe  private
\nlimited company called the Express Newspapers (P) Ltd.\t The
\nlatter,\t hereinafter referred to as the Company,  owned\t and
\npublished newspapers and periodicals from Madras.  These may
\nbe  split into three groups.  The first group  comprised  of
\nthe  Indian  Express (daily), Sunday Standard  (Weekly)\t and
\nScreen (Weekly) : all these were published in English.\t The
\nsecond\tgroup  consisted of Andhra Prabha  (daily)  and\t the
\nAndhra\tPrabha\tIllustrated  Weekly (weekly)  :\t these\twere
\npublished in Telugu language.  The third group consisted  of
\ntwo  papers Dinamani (daily) and Dinamani Kadir\t (Weekly)  :
\nthese  were in Tamil language. (One Ram nath Goenka was\t the
\nChairman   of  the  Board  of  Directors  of   the   company
\nincorporated  in 1946.\tHe was also one of the directors  of
\nExpress News paper
\n 903<\/span>
\nLtd. which owned and controlled a press and paper at  Delhi.
\nThe  group  of newspapers at Madras does not  seem  to\thave
\nprospered  much\t before\t 1956.\tIt  started  making  sizable
\nprofits from that year.\n<\/p>\n
The reference which was made by the Government of Madras  on
\nApril 30, 1959 under S. 10(1) (d) of the Industrial Disputes
\nAct<\/a> contained two questions :\n<\/p>\n
\t      (1)Whether the transfer of the publication  of
\n\t      ‘Andhra Prabha’ and ‘Andhra Prabha Illustrated
\n\t      Weekly’  to  ‘Andhra  Prabha  (P)\t Ltd.’,\t  in
\n\t      Vijayawada  is  justified and to\twhat  relief
\n\t      ‘the  workers and the working journalists\t are
\n\t      entitled ?\n<\/p><\/blockquote>\n
\t      (2)Whether  the  strike  of  the\tworkers\t and
\n\t      working journalists from 27th April, 1959\t and
\n\t      the  consequent lockout by the  management  of
\n\t      the Express Newspapers (P) Ltd. are  justified
\n\t      and to what relief the workers are entitled ?\n<\/p><\/blockquote>\n
This  was  later transferred by an order dated\tNovember  3,
\n1962  to the Special Industrial Tribunal which has made\t the
\naward.\t Before that date however the matter had come up  to
\nthis Court in appeal from Writ Petitions filed in the Madras
\nHigh  Court  on\t the  1st  May,\t 1959  and  5th\t May,\t1959
\nchallenging  the validity of the order made under  S.  10(3)<\/a>
\nand   the  jurisdiction\t of  the  Industrial   Tribunal\t  to
\nadjudicate upon the dispute on the ground that there was  no
\nlockout but a closure of the company’s business.  This Court
\nin the Management of Express News papers Ltd. v. Workers and
\nStaff<\/a>\t(1)  held  that\t the  preliminary  enquiry   as\t  to
\njurisdiction  should  be  made by  the\tIndustrial  Tribunal
\nitself taking into account all facts which are relevant\t and
\nmaterial.\n<\/p>\n
On  the application of the workmen for addition of  parties,
\nthe Andhra Prabha Ltd., the Indian Express Newspapers (Madu-
\nrai) Ltd. and the Express Newspapers Ltd., a public  company
\nwere added as parties before the Special Tribunal.
\nAs the dispute which the Special Tribunal had to  adjudicate
\nupon  was not the first of the kind between the company\t and
\nit’s  workers, it is necessary to take note of a  few  facts
\nwhich  are to be found in the judgment of this\tCourt  dated
\nAugust\t2, 1962 mentioned above.  This narration,  according
\nto the Court in the former judgment, forms the background of
\nthe  present dispute between the parties.  In March 1957,  a
\ndispute\t  arose\t between  the  parties\ton  certain   points
\nincluding   bonus.    This  was\t referred   for\t  industrial
\nadjudication ending in an award in 1957.  In March 1958\t the
\ncompany\t notified its intention to retrench 69\tworkmen\t and
\nthis led to another dispute which was referred for adjudica-
\ntion.\tThe  unions  made certain complaints  to  the  State
\nGovern-\n<\/p>\n
(1) [1963] 3 S. C. R. 540.\n<\/p>\n
p.167-14
\n9 04
\nment  which led to the intervention by the Home Minister  of
\nthe State but without any success.  On October 30, 1958\t the
\ncompany\t gave notice to the workmen and working\t journalists
\nthat it was going, to close down its business at Madras with
\neffect\tfrom December 1, 1958 on the allegation\t inter\talia
\nthat there were persistent labour troubles and\tindiscipline
\non  the part of labour.\t The Home Minister again  intervened
\nand  this  time\t with  success.\t  Oil  November\t 6,  1958  a
\nsettlement  was\t arrived at between the Management  and\t the
\nemployees  and\tjournalists in the presence  of\t the  Labour
\nCommissioner of Madras.\t The terms of agreement were reduced
\ninto writing and the only ones which may be noted are:\n<\/p>\n
\t      (1)All  the employees retrenched on  30-4-1958
\n\t      would   be  reinstated  with   continuity\t  of
\n\t      service.\n<\/p><\/blockquote>\n
\t      (10)In  view of the settlement the  Management
\n\t      would  withdraw  the  notice  of\tclosure\t and
\n\t      announce the same on the notice board.\n<\/p><\/blockquote>\n
The  settlement\t was  to  be  operative\t for  2\t 1\/2  years.
\nAccording to the workers, Mr. Goenka gave an assurance on 6-
\n11-1958\t that he would not shift the publication of  any  of
\nthe  papers mentioned from Madras to Vijayawada\t during\t the
\nsaid period.\n<\/p>\n
On  the\t former occasion, when the matter  was\tbefore\tthis
\nCourt  reference was made to this assurance and\t this  Court
\nheld  that  this was a subject which  the  Industrial  court
\nwould  have to go into.\t According to the Management it\t was
\nfelt  in  November  1958 that the Telugu  papers  should  be
\npublished  from Vijayawada. an additional consideration\t for
\nthe  same being the suggestion, of the Press  Commission  in
\nregard\tto the diffusion of control of newspapers.   Leaving
\nout of consideration the intention of Ram nath Goenka at  or
\nabout  that  time, we may proceed to note the  events  which
\nfollowed  thereafter.  On January 17, 1959 notice was  given
\nof  an extraordinary general meeting of the shareholders  of
\nthe  company to consider certain resolutions.\tThe  meeting
\nwas  actually  held  on February 11, 1959  and\tone  of\t the
\nresolutions  passed  was that the company  should  cease  to
\ncarry  on business as proprietors of the various  newspapers
\nand  that  in pursuance thereof the company would  close  or
\ntransfer  and  sell  its  various  publications\t at  Bombay,
\nMadras,\t Madurai and Delhi to other parties and\t sell,\thire
\nout or otherwise dispose of its printing plant and machinery
\nand equipment and also licence or lease out its premises  at
\nvarious places.\t Another resolution authorised the directors\n<\/p>\n
-to  take  all steps necessary for the closing or  sale\t and
\ntransfer  of various publications as they may think fit\t and
\nat such and on such terms as they might consider best.\tThe
\n905<\/span>
\nworkers must have got scent of this and the Secretary of the
\nExpress Newspapers Employees’ Union (hereinafter referred to
\nas the Secretary) addressed a letter to the Chairman of\t the
\ncompany\t on March 31, 1959 to the effect that the  employees
\nhad  come to learn that four units of the rotary machine  at
\nMadras had ‘been dismantled and removed to Vijayawada with a
\nview  to  starting an edition of the  Andhra  Prabha  there.
\nReference  was\talso made to the assurance alleged  to\thave
\nbeen given before the Home Minister to drop the proposal  to
\nshift the Andhra Prabha and a discussion with the  addressee
\nwas  asked for.\t It appears that there was a reply  to\tthis
\nletter\ton  2nd April which is however not included  in\t the
\nrecord.\t  On  April 13, 1959 the Board of Directors  of\t the
\ncompany\t passed certain resolutions.  One of them  was\tthat
\nthe  company would sell and transfer and the Indian  Express
\n(Madurai)  (P) Ltd. would purchase as a going  concern,\t the
\nproprietary  rights of printing and publishing\tThe  Madurai
\nedition\t of the English daily newspaper known as the  Indian
\nExpress, the Madurai Edition of the English weekly known  as
\nthe  Sunday  Standard and the Madurai edition of  the  Tamil
\ndaily  known as Dinamani (inclusive of the Sunday  edition).
\nAnother resolution passed was to the effect that the company
\nwould sell and the Andhra Prabha (P) Ltd.  Vijayawada  would
\npurchase  as  a\t going concern\tthe  proprietary  rights  of
\nprinting  and  publishing- Andhra Prabha and  Andhra  Prabha
\nIllustrated Weekly together with the option to purchase from
\nthe company the right to print, edit and publish the English
\nnewspaper  known as the Sunday Standard for  circulation  in
\nthe  State of Andhra Pradesh only on ‘terms  and  conditions
\nset  out in the draft agreement.  A third resolution was  to
\nthe effect that the company would sell to% the Andhra Prabha
\n(P) -Ltd.  Vijayawada the items of machinery set out in\t the
\nschedule  to  the  draft  agreement  for  a  price  of\t Rs.
\n1,75,000\/- on the terms set out in the draft agreement.\t  On
\nApril  15,  1959  an agreement\twas  actually  entered\tinto
\nbetween\t the company and the Andhra Prabha (P) Ltd.  to\t the
\neffect that the vendor had agreed to sell and the  purchaser
\nhad agreed to buy the goods set out in the schedule  thereto
\nas  soon  as convenient and the price payable would  be\t Rs.
\n1,75,000\/-  within  one week of the  purchaser\tgetting\t the
\nmachinery.   On April 20, 1959 the General Secretary of\t the
\nMadras\tUnion  of Journalists wrote to the Director  of\t the
\ncompany complaining that the writer had not heard in  regard
\nto the issue raised in the letter of 31st March.  The letter
\nproceeded  to record that the journalists had not been\ttold
\nexactly\t what  the Management proposed to do  but  they\t had
\nheard  that a new company called the Andhra Prabha (P)\tLtd.
\nhad,  been  registered at Vijayawada and  arrangements\twere
\nbeing made to split up the other two Madras papers,  namely,
\nthe Indian Express and Dinamani into two separate companies.
\nAccording  to  the  writer,  this had  created\ta  state  of
\ntension. 0n, the same
\n906<\/span>
\nday,  the Madras Union of Journalists at a meeting passed  a
\nresolution  condemning\tthe  action  of\t the  Management  in
\nannouncing and effecting the sale of the Andhra Prabha daily
\nand the Andhra Prabha Illustrated Weekly to a new company at
\nVijayawada  which  had been done surreptitiously, and  as  a
\nresult\tthereof\t all the employees concerned  might  not  be
\nabsorbed  by  the new -company.\t A complaint was  also\tmade
\nthat  the sale was really benami and a threat was  held\t out
\nthat  unless the Management -desisted from the above  course
\nof   “mala   fide  closure  and\t break-up  of\tthe   Madras
\nestablishment  and purported sales to benami  companies\t the
\nemployees  would be compelled to go on strike as and from  a
\ndate to be fixed by the joint action committee set up  under
\nthe  resolution.”  On 21st April a letter was  sent  to\t the
\nDirector  of  the company from the  Convener,  Joint  Action\n<\/p>\n
-Committee  in which it was said that unless a\tsatisfactory
\nreply  -was  sent  regarding the matters  mentioned  in\t the
\nresolution within 72 hours, the joint action committee would
\nbe  compelled  to  carry -out the  mandate  of\tthe  workers
\ncalling for a strike.\n<\/p>\n
On April 22, 1959 there was an agreement in writing  between
\nAndhra\tPrabha (P) Ltd. and the company to the\teffect\tthat
\nthe  ,first  named company had agreed to  purchase  and\t the
\ncompany\t  had  agreed  to  sell\t as  a\tgoing  concern\t the
\nproprietary  rights  as ,editors, proprietors  etc.  of\t the
\nAndhra\t Prabha\t (Telugu  daily)  and  the   Andhra   Prabha
\nIllustrated Weekly together with the option to purchase from
\nthe vendor the right to print, edit and publish the  English
\nnewspapers,  the Indian Express and the English weekly,\t the
\nSunday\tStandard.   The consideration for the  sale  of\t the
\nproprietary  rights in Andhra Prabha and Andhra Prabha\tMus-
\ntrated\tWeekly was fixed at Rs. 25,000\/-.  Clause 11 of\t the
\n,agreement provided that :\n<\/p>\n
\t      “all  employees now employed by the vendor  in
\n\t      connection with the aforesaid two publications
\n\t      shall  be taken over into the service  of\t the
\n\t      purchaser company as and from the taking\tover
\n\t      date.”\n<\/p><\/blockquote>\n
Clause 12 provided that the transfer of the two undertakings
\nwould  ,be on the terms that every workman and employee\t who
\nhad been in continuous service for not less than one year in
\nthe  slid ,undertaking of the vendor immediately before\t the
\ntaking over date would be taken over by the purchaser as and
\nfrom  such  date  -on  the terms  and  conditions  that\t the
\nservices  of the workmen and the employees had not been\t and
\nwould  not be deemed to be interrupted by such transfer\t and
\nthe  terms and conditions applicable to the workmen and\t the
\nemployees  after such transfer would not in any way be\tless
\nfavourable to them than those applicable before the transfer
\nand the purchaser would be legally liable to pay the workmen
\nand  employees, in the event of retrenchment,  ,compensation
\non the basis that his or their services had been conti-\n<\/p>\n
 907<\/span><\/p>\n
nuous and uninterrupted by such transfer.  On April 23, 1959
\nthe  Director  of the company wrote a letter  to  the  Joint
\nAction Committee to the effect that the Management had\tsold
\ntheir  right of editing, publishing etc. the  Andhra  Prabha
\ndaily  and  the Andhra Prabha Illustrated Weekly  to  a\t new
\ncompany in Vijayawada assigning the reason therefor that  it
\nwas  in the interest of the Telugu speaking people  that  it
\nshould be produced and published from a Telugu centre.\t The
\nterms  and conditions with regard to the absorption  by\t the
\nnew  company  of all staff and worker&\tconnected  with\t the
\nbusiness of the two newspapers were also mentioned  therein.
\nLastly, it was said that with regard to such of the staff as
\nwere not willing to go to Vijayawada their services with the
\ncompany\t would be terminated as the company bad no  work  to
\noffer  to  them but they would be paid all their  dues.\t  On
\nApril  24,  1959  the  Convener,  Joint\t Action\t  Committee,
\ncharacterised  the  Director’s reply of the 23rd  as  highly
\nunsatisfactory and stated that a resolution had been adopted
\nto  the\t effect that the workers would go on strike  at\t any
\ntime  after  the expiry of 24 hours.  On the  next  day\t the
\nDirector  informed  the Union that the\tcontemplated  strike
\nwould  be  illegal  and\t unjustified.\tOn  27th  April\t the
\nConvener  wrote to the Director stating that the  Management
\nhad rejected their demand to maintain the status quo regard-
\ning  the  publication of the three newspapers  from  Madras,
\nspecially  Andhra  Prabha.   In addition  false\t charges  of
\nsabotage   and\tthreats\t and  arrest  had  been\t  made\t and
\nconsequently  the workers were compelled to give  effect  to
\nthe decision of 24th April i.e. to go on strike.  The  watch
\nand ward staff were however instructed to stay on duty.
\nIt is necessary to note at this stage that according to\t the
\nManagement some acts of sabotage and gross indiscipline were
\ncommitted on April 26, 1959, namely, the mutilation and des-
\ntruction of one full page and two gallies of Dinamani matter
\nand  removal  of switch keys from three motor cars  left  in
\nfront  of the office building.\tAccording to the’  statement
\nof Ramnath Goenka before the Tribunal :\n<\/p>\n
\t      “During  the  whole of the 28th of  April\t the
\n\t      labourers\t demonstrated before the office\t and
\n\t      prevented ingress and egress of staff  members
\n\t      from the office building.\n<\/p><\/blockquote>\n
\t      I\t then  decided to close down  and  issued  a
\n\t      statement\t through the Hindu  informing  every
\n\t      one of this.”\n<\/p><\/blockquote>\n
A  notice  to the above effect was published on\t the  notice
\nboard  of the company on the 27th and a copy of it was\tsent
\nby the Director to the Convener.\n<\/p>\n
The strike of the workers started at 4.30 p.m. on 27th April
\nand  publication of all papers was stopped.  Notice  to\t the
\nabove:\n<\/p>\n
908<\/span><\/p>\n
effect\twas given in the Hindu regarding the Indian  Express
\nDinamani  and  Andhra  Prabha.\tOn the\t29th  of  April\t the
\nclosure\t notice was published in the Hindu in which  it\t was
\nmentioned  that the Management had intimated the workers  by
\nletter\tdated 23rd April. that they had sold their right  of
\nediting,,  printing and publishing Andhra Prabha and  Andhra
\nPrabha\tIllustrated Weekly to the Vijayawada  company.\t The
\nsubstance  of the agreement between the two  companies\twith
\nregard\tto  the workers was also mentioned in  this  notice.
\nThe  workers  had  been notified  that\tthe  Management\t had
\ndecided\t to close with immediate effect the undertaking\t and
\npublication  of\t all the seven newspapers at Madras  and  to
\ndispense  with the services of the workmen and\tthe  working
\nJournalists.  Notice was also given that they would be\tpaid
\ntheir  wages  for the period during which they\thad  worked,
\nbesides\t one  month’s salary in lieu  of  notice  prescribed
\nunder  s. 25F<\/a>. and compensation as laid down under the\tAct.
\nSuch  ,compensation  amounting\tto one of Rs.  7  lakhs\t was
\nactually paid later on.\n<\/p>\n
On  the 30th April the Management informed the\tCommissioner
\nof  Police  with regard to the\tdevelopments  and  published
\nanother\t notice in the Hindu regarding the  closure  stating
\nthat  most of the machinery had already been sold  for\tcash
\nand the building of the company advertised for rent.  On the
\nsame  day. -the Madras Government issued a notice  under  S.
\n10(3)<\/a>  of  the\tIndustrial  Disputes  Act  prohibiting\t the
\ncontinuance  of\t the  strike ,and  the\tlockout.   This\t was
\nfollowed by the two Writ Petitions in the Madras High  Court
\nalready mentioned.\n<\/p>\n
After  the matter was decided by this Court in August  1962.
\nthe  adjudication  was taken up by  the\t Special  Industrial
\nTribunal  before  which\t some  witnesses  including  Ramnath
\nGoenka\twere  examined\tand  a\tlarge  number  of  documents
\ntendered  in evidence.\tThe central question with regard  to
\nthe  first  issue was, whether Ramnath Goenka  had  given  a
\nverbal\tassurance  in November 1958 that there would  be  no
\nshifting  of  the  venue of the publication of\tany  of\t the
\npapers\tfrom  Madras  to Vijayawada for 2  1\/2\tyears.\t The
\nTribunal scrutinised the evidence both oral and\t documentary
\nin great detail and observed that it was not satisfied\tthat
\nRamnath\t Goenka\t had given any verbal assurance\t imputed  to
\nhim.   The  Tribunal further held that an assurance  of\t the
\nnature\tcould not be inferred from the circumstances of\t the
\ncase with the result that the first part of the first  issue
\nwas   answered\tin  the\t affirmative  with   the   necessary
\nconsequence  that the workers could not be held entitled  to
\nany   relief   because\tof  the\t transfer   of\t these\t two
\npublications.\n<\/p>\n
of the three appeals, the first two are by the Andhra Prabha
\nLtd. and Indian Express Newspapers (Madurai) Ltd. and the
\n 909<\/span>
\nsecond\tby the public company styled the Express  Newspapers
\nLtd.  the  third appeal is by the employees of\tthe  Express
\nNewspapers Ltd. against its management.\n<\/p>\n
No  attempt  was made before us to show that  the  Tribunals
\nconclusion about the absence of the verbal assurance or\t the
\nconference   to\t be  drawn  in\trespect\t thereof  from\t the
\ncircumstances  was wrong.  The substance of the argument  on
\nbehalf of the employees was that there was really no closure
\nbut  the  transfer was in effect from a\t parent\t company  to
\ndaughter  companies  and  in this  connection  reliance\t was
\nplaced\ton the judgment of this court in  Kays\tConstitution
\nCo.  v. Its Workers  and the earlier decision in Workmen  v.
\nDahingeapar  Tea  Estate<\/a>  (2 )\tIn  the\t Kay’s\tConstruction
\nCo.’s(1) case a private limited company was incorporated  to
\ncontinue   and\tcarry  on  the\tbusiness  activities  of   a
\nproprietary  concern.  The former proprietor, his  wife\t and
\nthe  manager employed in the former business were three\t out
\nof five directors of the new company.  The dispute in regard
\nto  the refusal by the new company to continue\tsome  former
\nemployees  in  service was referred for adjudication  to  an
\nindustrial  tribunal.\tIt was contended on  behalf  of\t the
\nworkmen that the alleged closure by the : proprietor was not
\ngenuine or real and that the new  company was  successor-in-
\ninterest  of the proprietor and hence was bound to  continue
\nto  employ the former workmen.\tIt was also  contended\tthat
\nthere was in effect a lockout and the workmen concerned were
\nentitled  to  reinstatement.  The tribunal  found  ‘hat\t the
\nclosure\t of  the former business on  the  alleged  financial
\ngrounds was not genuine, and that the company, though in law
\na  separate entity, was formed to carry on and continue\t the
\nformer business under a different name and the refusal by it
\nto  employ some of the old employees amounted to  a  lockout
\nwith  the  result that a reinstatement of  the\tworkmen\t was
\nordered.  The appeal by the company to the Supreme Court was
\ndismissed.  This Court held that a case like the one  before
\nit could not be decided principally on the consideration  of
\nthe  abstract  point  of  law -as  to  whether\tand  when  a
\nsuccessor in business is bound to continue in employment the
\nworkmen\t employed by the former owner and having  regard  to
\nthe material findings of fact recorded by the tribunal,\t the
\nvalidity  of the award could not be questioned\ton  abstract
\nlegal grounds.\n<\/p>\n
In  the Dahingeapar Tea Estate case(2 ) there was an  agree-
\nment  between  Dahingeapara  Tea company  (the\tvendor)\t and
\nNikhli Jute Baling Company Ltd. (the purchaser) whereby\t the
\nvendor\tagreed to sell absolutely and the purchaser -to\t buy
\na,% Ind from January 1, 1954 the entire tea estate known  as
\nDahingeapar  tea  estate  with\tall  its  gardens,   bushes,
\nmachinery and appur-\n<\/p>\n
(1) [1958] 2 L.L.J. 669.\n<\/p>\n
(2) [1958] 2 L.L.J. 498.\n<\/p>\n
910<\/span><\/p>\n
tenances  etc.\tat or for the sum of  Rs.  9,50,000\/-.\t The
\npurchaser  was to have the option of taking such members  of
\nthe  staff as it would in its absolute\tdiscretion  consider
\nuseful\tand sufficient for running it.\tThe members  of\t the
\nstaff  as would be selected by the purchaser would be  given
\nfresh  appointment  and any liability whatsoever  for  their
\npast  services, including bonus, gratuity etc. would  be  on
\nthe  vendor’s account.\tThe dispute which was  referred\t for
\nadjudication  was,  whether the transfer of  the  management
\ncould  put  an end to the services of the staff of  the\t tea
\nestate\tand whether the agreement of transfer would  deprive\n<\/p>\n
-the  members of the staff of their rights of service  under
\nthe original contracts of service and of continuity of their
\nservices.   The\t second question was, whether  the  outgoing
\nmanagement  was\t justified  in proposing  to  terminate\t the
\nservices of the members of the staff from the time when\t the
\nmanagement  of the tea estate had changed hands and  whether
\nthe  incoming  management  was\tjustified  in  refusing\t  to
\nmaintain the continuity of service.  The tribunal found that
\nthe garden was sold as a going concern, that the services of
\nthe staff continued up to January 4, 1954, that retrenchment
\nhad  not  been necessitated by or on account of\t reasons  of
\ntrade and that the transfer could not effect a change in the
\nservice\t conditions of the staff.  The result was  that\t the
\npurchaser  was\theld  to be not\t justified  in\trefusing  to
\nmaintain the continuity of service.  The award directed that
\nthose  of the members of the former staff who had been\tkept
\nout  of service in the garden in question from the time\t the
\nnew  management\t had  taken over charge\t but  who  would  be
\nwilling\t to  be\t reinstated in their  former  posts  on\t the
\nprevious terms and conditions of their service be reinstated
\nin  their former posts and that those of the members of\t the
\nold staff who had been kept out of service in the garden and
\nhad  not since taken any employment elsewhere be paid  their
\nsalaries  for the period of their forced unemployment  which
\nwas  caused  at the instance of the purchaser.\t The  Labour
\nAppellate Tribunal set aside the award made by the tribunal.
\nThis Court in appeal did not find it necessary to  determine
\nthe larger question as to whether, on a transfer of business
\nas  a  going  concern, the  incoming  management  becomes  a
\nsuccessor  to  the outgoing management and if  so,  to\twhat
\nextent\tthe incoming management must recognise the right  of
\nlabour\talready\t accrued as to gratuity bonus  etc.  and  to
\ncontinuity  of service. it was further observed that it\t was
\nnot  the function of the industrial tribunal to\t decide\t the
\nabstract   question  of\t law,  whether\ton  a  transfer\t  of
\nmanagement  consequent\ton a sale, the services\t of  workmen
\nwere  automatically  put an end to.  But it  was  held\tthat
\nthere was a dispute which could be referred for-adjudication
\nand   the  reference  being  competent\tthe   tribunal\t had
\njurisdiction  to go into it and there was no reason for\t the
\nAppellate Tribunal displacing the findings of the Industrial
\ntribunal.\n<\/p>\n
 91 1
\nIt  will  be  noticed that these two  decisions\t were  given
\nbefore\tthe amendment of the Industrial Disputes Act<\/a> by\t the
\ninclusion  (of s. 25FF<\/a>, and s. 25FFF<\/a>.  Now the two  sections
\ngovern\tsuch  cases.  Under s. 25FF<\/a> where the  ownership  or
\nmanagement  of\tan undertaking is  transferred,\t whether  by
\nagreement  or  by  operation of law, from  the\temployer  in
\nrelation  to  that  undertaking to  a  new  employer,  every
\nworkman who has been in continuous service for not less than
\none  year  in  that  undertaking  immediately  before\tsuch
\ntransfer  shall\t be entitled to notice and  compensation  in
\naccordance  with the provisions of S. 25F<\/a> as if the  workman
\nhad  been retrenched.  This section however is not to  apply
\nto a workman if his service had not been interrupted by such
\ntransfer,  the\tterms and conditions of\t his  service  after
\ntransfer  are  not in any way less favourable  to  him\tthan
\nthose applicable to him immediately before the transfer\t and
\nthe  new  employer  is, under the terms\t of  such  transfer,
\nlegally\t liable\t to pay to the workman in the event  of\t his
\nretrenchment, compensation on the basis that his service has
\nbeen  continuous  and  had  not\t been  interrupted  by\t the
\ntransfer.\n<\/p>\n
Under  s. 25FFF<\/a> (1) where an undertaking is closed down\t for
\nany  reason whatsoever, every workman who has been  in\tcon-
\ntinuous\t service  for  not  less  than\tone  year  in\tthat
\nundertaking  immediately before such closure shall,  subject
\nto  the provisions of Subsection (2), be entitled to  notice
\nand compensation in accordance with the provisions of s. 25F<\/a>
\nas if the workman had been retrenched.\tWe are not concerned
\nwith  sub-s. (2) in this case.\tThe result is that if  there
\nis in fact a closure, s. 25FFF<\/a> will come into play.  In this
\ncase,  however,\t it  must be stated that  the  new  company,
\nAndhra Prabha (P) Ltd. agreed to take over all employees  at
\nthe  time employed by the vendor in connection with the\t two
\npublications as and from the date of taking over without any
\nbreak  in  the continuity of their service and on  the\tsame
\nterm,,; and conditions as before.\n<\/p>\n
It is impossible to lay one’s finger on the exact cause\t for
\nRamnath Goenka making up his mind to transfer a part of\t the
\nundertaking  to Vijayawada and another part to Madurai.\t  It
\nmay  be because he really felt that the Telugu papers  would
\ndo  better if printed and published at Vijayawada.   It\t may
\nalso  be that he wanted to circumvent the recommendation  of
\nthe Press Commission with regard to the wages payable by the
\nbigger\tunits  of newspapers.  Again there can be  no  doubt
\nthat  he  did not like the agitation of\t the  employees\t and
\nprobably  thought  that by the dispersal of  the  units\t the
\nscope for agitation would be minimised.\t He was\t undoubtedly
\ntaking all steps in this regard as the resolutions passed by
\nthe  shareholders of the company in February 1959,  followed
\nby  the\t resolution  of\t the  Board  of\t Directors  and\t the
\nagreement for sale of some machinery to the Andhra Prabha
\n912<\/span>
\n(P)Ltd.\t on the 15th of April 1959 would show.\tThe  workers
\nprobably  were\tnettled by the fact that they had  not\tbeen
\nconsulted  in regard to all this.  While it is not  possible
\nto  say that the alleged acts of sabotage  and\tindiscipline
\nsaid  to have taken place on April 26, 1959 were of  a\tvery
\nserious\t nature,  Goenka stated in his evidence\t before\t the
\ntribunal that after the demonstration of the laborers before
\nhis  office  on the 28th of April and  their  prevention  of
\ningress\t and egress of the members of the staff to and\tfrom
\nthe office building he decided to close down his undertaking
\nat Madras.\n<\/p>\n
On the evidence before the tribunal ‘Lo which our  attention
\nwas  drawn by counsel on both sides, it appears to  us\tthat
\nwhile  the Management might have taken into  confidence\t the
\nemployees  and\tdiscussed  with\t them  the  scheme  for\t the
\ndispersal  of the undertaking the decision to co  on  strike
\nwas  unwarranted and disastrous.  Even if there had been  no
\nstrike on the 27th of April. it seems to us that the  scheme
\nof  dispersal  would have been given  effect  to  afterwards
\nalthough it was the strike which precipitated matters.
\nThe  Tribunal  has found that there was a closure  but\tthat
\ntook  place  not in April 1959 but in  November,  1959.\t  In
\narriving  at this conclusion the tribunal relied on  several
\nfactors.    The\t first\tof  these  is  that  Andhra   Prabha
\nIllustrated Weekly came to be printed at the Dinamani  press
\nby  the\t Indian Express (Madurai) Ltd. and  located  in\t the
\nblock  of  buildings belonging to  Express  Newspapers\tLtd.
\nsituate\t in Mount Road Madras in pursuance of  an  agreement
\ndated 30th September 1960 between the Indian Express Madurai
\n(P)  Ltd.  and\tthe Andhra Prabha  (P)\tLtd.   The  Tribunal
\nfurther found that it was on the 2nd of September 1960\tthat
\nthe  offset rotary press and allied equipment  belonging  to
\nExpress\t Newspapers  (P)  Ltd. and located  in\tthe  Express
\nEstate\tMount Road Madras were hired to the  Indian  Express
\nMadurai (P) Ltd.  From this the tribunal concluded that “the
\nAndhra Prabha daily and the Andhra Prabha Illustrated Weekly
\nas  also  the Indian Express Madurai  edition  and  Dinamani
\ndaily  edition\tcould have made use of\tthe  off-set  rotary
\npress at the Express Estate Madras on occasions when the use
\nof  the\t off-set  rotary press became  necessary  till\tthe,
\nmachines were hired to the Madurai company under Ex.  M-46”.
\nIn our opinion the existence of the off-set rotary press  at
\nthe  Express Estate Madras until they were hired out to\t the
\nIndian\tExpress\t Madurai  (P)  Ltd.  does  not\twarrant\t the
\nconclusion  that  the  company could have made\tuse  of\t the
\nrotary press when it wanted to.\t We have got to judge things
\nby what was done and not by what could have been done.
\nAgain  the circumstance that some of these journals came  to
\nbe published sometime after May 1959 under new declarations
\n 913<\/span>
\nmade by\t publishers  respectively on behalf  of\t the  Andhra
\nPrabha (P)     Ltd. and the Indian Express Madurai (P)\tLtd.
\ncannot\tbe taken into consideration for finding against\t the
\nclosure\t of  the company’s undertaking in April\t 1959.\t The
\nTribunal  appears to have placed some reliance on  the\tfact\n<\/p>\n
-that Ramnath Goenka admitted having advanced a sum of Rs. 3
\nlakhs  to the Madurai Company as also diverse sums  totaling
\nRs. 27 lakhs to other companies including the, two  daughter
\ncompanies  (at\tVijayawada  and Madurai) up to\tthe  end  of
\nDecember  1960.\t The Tribunal found that (a) ultimately\t the
\nIndian\tExpress\t Bombay Ltd. purchased all  the,  shares  of
\nAndhra\tPrabha (P) Ltd. and Indian Express Madurai (P)\tLtd.
\nand  became a public company towards the end of 1960 :\t(‘b)
\nBefore\tthe company became a public company, Ramnath  Goenka
\nand the members of his family held 4000 out of 4200 shares :\n<\/p>\n
(c)  till May 1959 the company which owned the entire  group
\nof  newspapers\tpublished by the same  Management  at  three
\nbranch\toffices\t one in Delhi, a second in Madurai  and\t the
\nthird  in  Bombay.   As a result of the\t splitting  up,\t the
\nposition  was that the Express Newspapers (P) Ltd. in  Delhi
\ntook  Lip the Delhi publications, the Indian Express  Bombay
\n(P)  Ltd. took up the publications published by the  company
\nfrom Bombay. the Indian Express Madurai (P) Ltd. took up the
\npublications issued from Madurai and Andhra Prabha (P)\tLtd.
\nVijayawada  took up the two Telugu publications.   According
\nto  the\t Tribunal “it was only the Madurai company  and\t the
\nVijayawada  company  that  relied upon the  support  of\t the
\nparent\tcompany after May 1959 for printing  and  publishing
\nthe  papers  acquired by them.” The Tribunal  further  found
\nthat  this position continued for some time after  May\t1959
\ninasmuch  as “(1) The teleprinter service installed  in\t the
\nExpress Estate building Mount Road continued to be used till
\nthe  end of October 1959 and out of nine circuits  comprised
\nin the teleprinter service, seven were routed through Madras
\nand these were allotted to the Madurai company for a  period
\nof  three  months  commencing from 1st\tNovember  1959.\t (2)
\nPhotographic  materials\t used in the  processing  department
\nmaintained by the company up to October 1959 were  purchased
\nby  the public company for the benefit of the  two  daughter
\ncompanies;  (3)\t Thirty-two of the former employees  of\t the
\ncompany including a reporter were retained in the service of
\nthe company after April 1959; (4) No intimation was sent  to
\nthe  Commissioner  or other competent  authority  under\t the
\nEmployees’   Provident\tFund  Act<\/a>  of  the  termination\t  of
\nemployment  of 700 workmen and working journalists, and\t (5)
\nAfter April 1959 a common advertising department for the two
\ndaughter  companies  was maintained at\tthe  Express  Estate
\nbuilding  as could be seen from certain circulars issued  in
\nDecember 1959″.\n<\/p>\n
From  all this the Tribunal inferred that the suspension  of
\nthe  business  was a lockout at the inception and  became  a
\ngenuine
\n914<\/span>
\nclosure only in October-November, 1959.\t Before us, reliance
\nwas placed by Mr. Mohan Kumaramangalam on some of the  above
\nfactors and the main plank of his argument was that in\tfact
\nthe parent company launched and financially helped the other
\ncompanies  which  were\treally\tbenamidars  for\t the  parent
\ncompany.  We do not think that even in Industrial law a\t new
\ncompany which is an independent legal entity can be called a
\nbenamidar  for another older Organisation because there\t was
\nin  both companies a person or family of persons  who  could
\nguide  the  destinies  of the two  companies.\tThe  Express
\nNewspapers  (P)\t Ltd. was later transformed  into  a  public
\ncompany\t and  it  would\t not  be  proper  to  describe\t the
\nrelationship of the Vijayawada and the Madurai companies  as
\ndaughter companies or as benamidars of the company.  We have
\nto  bear in mind that the company i.e.,\t Express  Newspapers
\n(P)  Ltd.  did not come to an end in April  1959.   It\tonly
\nclosed its undertaking of publishing several newspapers\t and
\nweeklies.  It had very valuable property on its hands  after
\nApril 1959 and some persons had to be retained in service to
\nlook  after the property.  The fact that one of them  was  a
\nreporter  cannot lead to the inference that the company\t did
\nnot close down its business but could take it up whenever it
\nwanted to. Further, the failure to inform the Provident Fund
\nauthorities  was an omission but that cannot mean  that\t the
\nworkers\t continued  to be in the service of the\t company  or
\nwere meant to be taken back into its service as soon as they
\nbecame\tsubmissive  to Ramnath Goenka.\tWith regard  to\t the
\nteleprinter service, we were told that it had been paid\t for
\nup  to\ta  certain date and the fact that  the\tMadurai\t and
\nVijayawada  companies used the teleprinter service till\t the
\nend  of October 1959 would not either by itself or taken  in
\nconjunction  with  the\tother  circumstances,  justify\t the
\nconclusion that the company retained the teleprinter service
\nfor its own use, if necessary.\n<\/p>\n
To all intents and purposes, the business of the company was
\nclosed\tfrom the 29th of April 1959 and whatever might\thave
\nbeen  the motive behind the closure it was an effective\t one
\nfrom  April  1959  and we see no reason\t to  hold  with\t the
\nTribunal  that\tthe  closure became  effective\tsometime  in
\nNovember 1959.\n<\/p>\n
On behalf of the employees an application has been made\t for
\nleading\t additional  evidence.\tIn this\t application  events
\nwhich  took  place after the publication of  the  award\t are
\nrelied\ton as going to show that the discontinuance  of\t the
\npublications  from  Madras  was a mere\truse  and  a  device
\nadopted\t by  the  company  to  coerce  and  intimidate\t the
\nemployees  and that publication of the newspapers  had\tbeen
\ncommenced  soon after the publication of the award.   We  do
\nnot think it necessary to go into this matter at any  length
\nbecause a break of over four years had intervened in between
\nand what the company does after the lapse of this long
\n 915<\/span>
\nperiod\tcannot and ought not to be taken into  consideration
\nin  order to find out whether the closure was a real one  or
\nwas  a\tmere  device as suggested  by  the  employees.\t The
\nevidence on record shows that Ramnath Goenka’s plan was\t not
\nto give up the business of newspaper publications altogether
\nbut  he\t wanted\t to distribute\this  business  to  different
\nplaces.\t Whatever may be the motive behind such plan, he had
\nonly carried out that plan into effect after the publication
\nof the award and this cannot lead  us to the conclusion that
\nthe closure was an assumed one.In   our view, the strike
\nwas not justified and the Management was     entitled\t  to
\nclose the undertaking on 29th April, 1959.\n<\/p>\n
     In\t the  result,  there  will  be\tno  order  on\tthis
\napplication.The\t appeals by the companies are allowed and
\nthe finding onthe  second  issue and the award\tset  aside.
\nAppeal\tNo.  9\tof  1966 by the\t workmen  will\thave  to  be
\ndismissed  in view of the above.  There will be no order  as
\nto costs in all the appeals.\n<\/p>\n
V.P.S.\t\t\t  Appeal No. 9 of '66, dismissed and\n\t\t\t  Nos. 1078 and 1079 of '65 allowed.\n916<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India The Andhra Prabha Ltd. & Ors vs Secretary, Madras Union Of … on 4 May, 1967 Equivalent citations: 1967 AIR 1869, 1967 SCR (3) 901 Author: G Mitter Bench: Mitter, G.K. PETITIONER: THE ANDHRA PRABHA LTD. & ORS. Vs. RESPONDENT: SECRETARY, MADRAS UNION OF JOURNALISTS & ORS. DATE OF JUDGMENT: 04\/05\/1967 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-266618","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nThe Andhra Prabha Ltd. & Ors vs Secretary, Madras Union Of ... on 4 May, 1967 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/the-andhra-prabha-ltd-ors-vs-secretary-madras-union-of-on-4-may-1967\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Andhra Prabha Ltd. & Ors vs Secretary, Madras Union Of ... on 4 May, 1967 - 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