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PETITIONER: THE ANDHRA PRABHA LTD. & ORS.

       Vs.

RESPONDENT: SECRETARY, MADRAS UNION OF JOURNALISTS & ORS.

DATE OF JUDGMENT: 04/05/1967

BENCH: MITTER, G.K. BENCH: 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 purchasercompany 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  purchaser- company 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

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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 butkept  it  going  to take it  up  whenever  it wanted. Similarly, the failureto  inform the  competent authority under the Employs& ProvidentFund   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 teleprinter  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 teleprinter service for its own use. [9t4 B-F]

JUDGMENT: 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

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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 (Madu- rai) 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 adjudica- tion.   The  unions  made certain complaints  to  the  State Govern- (1) [1963] 3 S. C. R. 540.

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p.167-14 9 04 ment  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 6- 11-1958  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

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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

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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  Mus- trated  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 conti-  907 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 regard- ing  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 des- truction 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

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             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

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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  agree- ment  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

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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  con- tinuous  service  for  not  less  than  one  year  in   that undertaking  immediately before such closure shall,  subject

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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

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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 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 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

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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. 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

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application.The  appeals by the companies are allowed and the finding onthe  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. 916