# THE ANDHRA PRABHA LTD. & ORS v. SECRETARY, MADRAS UNION OF JOURNALISTS & ORS - **Citation:** [1967] 3 S.C.R. 901 - **Court:** Supreme Court of India - **Decided:** 1967-05-04 - **Case number:** ; Civil Appeals Nos. 1078 arid 1079 of 1965 - **Bench:** K. N. Wan'Choo, G. K. Mitter - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-andhra-prabha-ltd-ors-v-secretary-madras-union-of-journalists-ors-4037 - **Pages:** 15 ## Headnote Industrial Disputes---Company publishing newspapers-Sale of rights of .publishing· nelvspapers to oth!!r companies-When a1nounts to closure. ' On April 13, 1959', it was resolved by the Board of Directoni of the Express N_ewspapcrs (P) Ltd, that the company should sell the proprietary rig'hts of printing and publishing its daily and weekly newspapers to the Indian Ex~r... (Madurai) (P) Ltd., Madurai, and to Andbra Prabha (P) Ltd., Vijaxawada. In the purchaser-companies, the chair· mW! of the Board of Directors ·of the vendor-company nnd members of his family held 4-000 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 pufcbaser-company would be taken into th9 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 !lJ'Ound that at an earlier stage assurance bad 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. The).' were also informed that the services of those workC'rs who were not wdling to join the purchasercompany at Vijayawada would be terminated on the usual terms as ·the Exp~ess Newspar.rs had no work to offer to them. The workers then gave a notice o 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, tl10 Government of Madras referred to the Indus)rial Tribunal the two questions namely, ( 1) whetb.-r the transfer of the publication of ·the news11aper and weekly to Vijayawada was justified, and (2) whether the strike and lock-out were 1ustified. Though the compan¥ closed its -undertaking of publishing !he ne)"spapers and weeklies on April 29 as it had very valuable property 1t 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 compani~. The Tribunal held that there. was no evidence of the alleged assurance no~ to shift to Vijayawada and that the strike was unwarranted. The Trib~nal how~~er held, that the suspension of busiacss at the inception, that J.s on Apnl 29 was a lock out, but became a genuine closure only by the end of Ociober 1959. '" The workers as well as .. the Management appeaied to this Cou·rt. HELD : 'fhere was a ·genuine closure even on April '29 and the ~cheme of dispersal of the original undertaking "'as n·ot 11utln fide. Even tf there had Been no strike there "'"Otlld have been a closure . to give effect to the scheme and the strike only precipitated matters. [9!2C-DJ The nCw company which \Vas an independent legal entity could not be called a daughter COD]pany or benemidar of the older organisation, 902 SUPREME COURT REPORTS (1967] J S C.R rncrely because, there was in both companies a person or family \\:ho A 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 c0uld not l·.!ad to the inference that the company did not close down its business but kept it going to take it u1> whenever it wanted. Similarly, the failure to inform the competent authority under the· Employees' Provident Filild 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 B to the teleprinter ser\tice, it had been paid for opto 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 circum· stances of the case ju ## Text _Characters 0–39,265 of 41,721. This is a partial read: ask again with offset=39265 for what follows._ A B • c D E G H THE ANDHRA PRABHA LTD. & ORS .. v. SECRETARY, MADRAS UNION OF JOURNALISTS & ORS . . May 4, 1967 . [K. N. WAN'CHOO, C.J. AND G. K. MITTER, J.J Industrial Disputes---Company publishing newspapers-Sale of rights of .publishing· nelvspapers to oth!!r companies-When a1nounts to closure. ' On April 13, 1959', it was resolved by the Board of Directoni of the Express N_ewspapcrs (P) Ltd, that the company should sell the proprietary rig'hts of printing and publishing its daily and weekly newspapers to the Indian Ex~r... (Madurai) (P) Ltd., Madurai, and to Andbra Prabha (P) Ltd., Vijaxawada. In the purchaser-companies, the chair· mW! of the Board of Directors ·of the vendor-company nnd members of his family held 4-000 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 pufcbaser-company would be taken into th9 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 !lJ'Ound that at an earlier stage assurance bad 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. The).' were also informed that the services of those workC'rs who were not wdling to join the purchasercompany at Vijayawada would be terminated on the usual terms as ·the Exp~ess Newspar.rs had no work to offer to them. The workers then gave a notice o 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, tl10 Government of Madras referred to the Indus)rial Tribunal the two questions namely, ( 1) whetb.-r the transfer of the publication of ·the news11aper and weekly to Vijayawada was justified, and (2) whether the strike and lock-out were 1ustified. Though the compan¥ closed its -undertaking of publishing !he ne)"spapers and weeklies on April 29 as it had very valuable property 1t 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 compani~. The Tribunal held that there. was no evidence of the alleged assurance no~ to shift to Vijayawada and that the strike was unwarranted. The Trib~nal how~~er held, that the suspension of busiacss at the inception, that J.s on Apnl 29 was a lock out, but became a genuine closure only by the end of Ociober 1959. '" The workers as well as .. the Management appeaied to this Cou·rt. HELD : 'fhere was a ·genuine closure even on April '29 and the ~cheme of dispersal of the original undertaking "'as n·ot 11utln fide. Even tf there had Been no strike there "'"Otlld have been a closure . to give effect to the scheme and the strike only precipitated matters. [9!2C-DJ The nCw company which \Vas an independent legal entity could not be called a daughter COD]pany or benemidar of the older organisation, 902 SUPREME COURT REPORTS (1967] J S C.R rncrely because, there was in both companies a person or family \\:ho A 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 c0uld not l·.!ad to the inference that the company did not close down its business but kept it going to take it u1> whenever it wanted. Similarly, the failure to inform the competent authority under the· Employees' Provident Filild 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 B to the teleprinter ser\tice, it had been paid for opto 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 circum· stances of the case justify the conclusion that the company retained the teleprinter service for its own use. [914 B-F.l CIVIL APPELLATE JURISDICTION; Civil Appeals Nos. 1078 arid 1079 of 1965 and 9 of 1966. C Appeals by special leave from the Award dated July 31, 1963 i of the Special Industrial Tribunal, Madras in Industrial Dispute No. 1 of 1962. N. C. Chatterjee and R. Gmwpathy 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 Kumaramangalam, 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 Judgment of the Court was delivered by Mittl'r, J. These are three appeals from an award dated July 31, 1963 made by the Special Industrial Tribunal, Madras. At th.e time when the reference was made, the parties to this dispute were on the one hand, the workers and the staff and the working journalists employed under the Express Newspapers (P) Ltd. and on the other hand, the private limited company called the Express Newspapers (P) Ltd. The latter, hereinafter referred to as the Company, own~d 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 l and the Andhra Prabha Illustrated We.ekly (weekly) : these were published in Telugu language. The third group consisted of IW<1 papers Dinamani (daily) and Dinamani Kadir (Weekly) : the;s0 were in Tamil langua';~. (One Ramnath Goenka was the Chair· b • 1 . man of the Board of Directors of the company mcorporateu 111 1946. He was also one of the directors of Express Newspc•:'c'' D .E F G - ~ • H 1--- • r ANDHRA PRABHA I.TD. v. SECRETARY, M.U.J. (Mitter, J.) 903 A 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. lO(l)(d) of the Industrial Disputes B 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 Vi.iayawada 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 D 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 E that there was no lockout but a closure of the company's business. · This Court in the Management of Express Newspapers Ltd. v. Workers and StafJ( 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, F the Andhra Prabha Ltd., the Indian Express Newspapers (Madurai) Ltd. and the Express Newspapers Ltd., a public company were added as parties before the Special Tribunal. As the dispute which the Special Tribunal had to adjudicate upon was .. n?t the first of the kind between the company and its workers, 1t IS necessary to take note of a few facts which are to G be f 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 '.lJ, 1959 to the effect that the employees had come to learn that four units of the rotary machine at Madras had been dismantled and removed to Vijayawada with a view to starting an edition of the Andhra Prabha there. Reference was also made to the assurance alleged to have been given before the Home Minister to drop the proposal to shift the Andhra Prabha and a discussion with the addressee was asked for. It appears that there was a reply to this letter on 2nd April which is however not included in the record. On April 13, 1959 the Board of Directors of the company passed certain resolutions. One of them was that the company would sell and transfer and the Indian Express (Madurai) (P) Ltd. would purchase as a going concern the proprietary rights of printing and publishin~ 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 !lie 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 IJlustrated 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 'tenns 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 andi 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 Jetter 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. Accordin!J to the writer, this had created a state of tension. On the same 906 SUPRfil4E COURT REPORTS [1967) 3 S.C.R. .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 ManagemenL .desisted from the above cours.e of "ma/a fide closure and break-up ·Of the Madras establishment and purported sales to benami companies the employees would be compelled to go on strike as and from a date to be fixed by the joint action committee set up under the resolution." On 21st April a letter was sent to the Director of the company from the Convener, Joint Action Committee in which it was said that unless a satisfactory reply was sent regarding the matters mentioned in the resolution within 72 hours, the joint action committee would be compelled to carry .out the mandate of the workers calling for a strike. On April 22, 1959 there was an agreement in writing between Andhra Prabha (P} Ltd. and the company to the effect that the first ·named company had agreed to purchase and the company had agreed to sell as a going concern the proprietary rights as .editors, proprietors etc. of the Andhra Prabha (Telugu daily) and the Andhra Prabha Illustrated Weekly together with the option to purchase from the vendor the right to print, edit and publish the English newspapers, the Indian Express and the English weekly, the Sunday Standard. The consideration for the sale of the proprietary rights in Andhra Prabha and Andhra Prabha Illustrated· Weekly was fixed at Rs. 25,000/-. Clause 11 o.f 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 said undertaking of the vendor immediately before the taking over ·date woud 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 appli· cable 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 worknien and employees, in the event of retrenchment, compensation on the basis that his or their services had been con ti· A B c D E F G H ) A B c D E ANDHRA PRABHA LTD. v. SECRETARY, M.U.J. (Mitter, I.) 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 workers connected with .the business of the two newspapers were also mentioned therein. Lastly, it was said that with regard to such of the staff as were not willing to go to Vijayawada their services with the company would be terminated as the company had no work to offer to them but they would be paid all their dues. On April 24, 1959 the Convener, Joint Action Committee, characterised the Director's reply of the 23rd as highly unsatisfactory and stated that a reso!Ution had been adopted to the effect that the workers would go on strike at any time after the expiry of 24 hours. On the next day the Director informed the Union that the contemplated strike would be illegal and unjustified. On 27th April the Convener wrote to the Director stating that the Management had reJected their demand to maintain the status quo regarding the ·publication of the three newspapers from Madras, specially Andhra Prabha. In addition false charges of sabotage and threats and arrest had been made and consequently the workers were compelled to give effect to the decision of 24th April i.e. to go on strike. The watch and ward staff were however instructed to stay on duty. It is necessary to note at this stage that according to the Management some acts of sabotage and gross indiscipline were committed on April 26, 1959, namely, the mutilation and desF !ruction of one full page and two gallies of Dinamani matter and G H removal of switch keys from three motor cars left in front of • the office building. According to the statement of Ramnath Goenka before the Tribunal : "During the whole of the 28th of April the labourers demonstrated before the office and prevented ingress and egress of staff members from the office building. . . . . I then decided to close down and issued a · statement through the Hindu informing every one of this-." A notice to the above effect was published on the notice board of the company on the 27th and a copy of it was sent by the Director to the Convener. The strike of the workers started at 4.30 p.m. on 27th April and publication of all papers was stopped. Notice to the above 908 SUPREME COURT REPORTS [1967] 3 S.C.R. effect was given in the Hindu regarding the Indian Express. A Dinamani and Andhra Prabha. On \he 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 23rij. 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 B 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, C besides one month's salary in lieu of notice pr~cribed under s. 25F. and compensation as laid down under the Act. Such ·compensation amounting to one of Rs. 7 lakhs wiu; actually paid ~~ r On the 30th April the Management informed the Commis- ·sioner 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 Rarnnath Goenka were ·examined and a large number of documents tendered in evidence. The central question with regard to the first issue was, whether Rarnnath 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 2t 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 thei three appeals, the first two are by the Andhra Prabha Ltd. and Indian Express Newspapers (Madurai) Ltd. and the D E F G H A B c D E F G H • ANDHRA PRABHA LTD. v. SECRETARY, M.U.J. (Mitter, !.) 909 second by the public company styled the Express Newspapers Ltd. while the third appeal is by the employees of the Express Newspapers Ltd. against its management. No attempt was made before us to show that the Tribunal's conclusion about the absence of the verbal assurance or the inference 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 Construction Co. v. Its Workers(') and the earlier decision in Wo1•kmen v. Dahingeapar Tea Esta.te( 2 ). In the Kay's Construction Co.'s(') 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 tha.t 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 •ome 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 successoc in business is baund to continue in employment the workmen employed by the former owner ~nd h~ving regard to. t!te material findings of fact recorded by the tnbunal, the vahd1ty of the award could not be questioned on abstract legal grounds. In the Dahingeapar Tea Estate case(2) there was an agr.:ement between Dah ingeapara Tea company (the vendor) and Nikhli Jute Baling Company Ltd. (the purchaser) whereby the vendo.r agreed to sell absolute!¥ and the purchaser ·to buy as and from January I, 1954 the en!ire tea estate known as Dahingeapar tea estate with all its gardens, bushes, machinery and appur- (1) [1958] 2 L.L.J. 660, (21 [1958] 2 L.L.J. 498. .. 910 SUPREME COURT REPORTS [1967] 3 S.C.I<.. tenances etc. at or for the sum of Rs. 9,50,000/-. The purchaser was to have the option of taking such members of the staff as it would in its absolute discretion consider useful and sufficient for running it. The members of the staff as would be selected by the purchaser would be given fresh appointment and any liability whatsoever for their past services, including bonus, gratuity etc. would be on the vendor's account. The dispute which was referred for adjudication was, whether the transfer of the management could put an end to the services of the staff of the tea estate and whether the agreement of transfer would deprive the members of the staff of their rights of service under the original contracts of service and of continuity of their services. The second question was, whether the outgoing management was justified in proposing to terminate the services of the members of the staff from the time when the management of the tea estate had changed hands and whether the incoming management was justified in refusing to maintain the continuity of service. The tribunal found that the garden was sold as a going concern, that the services of the staff continued up to January 4, 1954, that retrenchment had not been nec~ssitated 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 anq conditions of their service be reinstated in their former posts and that those of the mempers 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 ~ 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 Jabour 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 Jaw, 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. A • B c D E F G H A B c D E G H ANDHRA fRABHA LTD. v. SECRETARY, M.U.J. (Mitter, /.) 911 It will be noticed that these two decisions were given before the amendment of the Industrial Disputes Act by the inclusion of s. 2SFF, 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 serYice 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 appHcable to him immediately before the transfer and the new emvloyer 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 t~e transfer. Under s. 25FFF ( 1) where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall, subject to the provisions of sub-section (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. 2SFFF will come into play. In this case, however, it must be stated that the new company, Andhra Prabha (P) Ltd. agreed to take over all employees at the time employed by the vendor in connection with the two publications as and from the date of taking over without any break in the continuity of their service and on the same terms and conditions as before. It is in1possible 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 reg~rd to the wages payable by the bigger units ot newspapers. Agam there can be no doubt that he did not like the agitation of the employees and probably thought that bv the dispersal of the units the scope for agitation would be minimised. . He was undoubtedly taking all steps in this regard as the res?lu!ions passed by the share~olders of the company in February 19:>9, followed by the resolution of the Board of Directors and the agreement for sale of some machinety to the Andhra Prabha 912 SUPREME COURT REPORTS [1967] 3 S.C,R. · (P) Ltd. on the 15th of April 1959 would show. The workers A probably were nettled by the fact that they had not been consulted jn regard to all this. While it is not possible to say that the .alleged acts of sabotage and indiscipline said to have taken place on April 26, 1959 were of a very serious nature, Goenka stated in his evidence before the tribunal that after the demonstration of the labourers before his office on the 28th of April and their B prevention of ingress and egress of the members of the staff to and from the office building he decided to close down his undertakin~ at Madras. On the evidence before the tribunal to ·which our attention was drawn by counsel on both sides, it appears to us that while the Management might have taken into confidence the employees C and discussed with them the scheme for the dispersal of the undertaking the decision to go on strike was unwarranted and disastrous. Even if there had been no strike on the 27th of April, it seems to us that the scheme of dispersal would have been given effect to afterwards although it was the strike which precipitated matters. D 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 E 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 F 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 lliustrated Weekly as also the Indian Express Madurai edition and Dinamani daily edition could have made use of the off-set rotary press at the Express Estate Madras· on occasions when the use of the off-set rotary press became necessary till the machines were hired to the Madurai G company under Ex. M-46". In our opinion the existence of the off-set rota1y 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 .iudge things by what was done and not by what could have been done. H Again the circumstance that some of these .iournals came to be published sometime after May 1959 under new declarations A B c D E F G H ANDHRA PRABHA LTD. v. SECRETARY, M.U.J. (Mitter, J.) 913 made by publishers respectively on behalf of the Andhra Prabha (P) Ltd. and the Endian 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 Goenk~ admitted having advanced a sum of Rs. 3 lakhs to the Madurai Company as also diverse sums totalling 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 5plitting up, the position was that the Express Newspapers (P) Ltd. in Delhi took up the Delhi publications, the Indian Express Bombay (P) Ltd. took up the publications published by the company from Bombay, the Indian Express Madurai (P) Ltd. took up the publications issued from Madurai and Andhra Prabha (P) Ltd. Vijayawada took up the two Telugu publications. Accordin~ 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 throuch Madras and these were allotted to the Madurai company for - a period of three months commencing from 1st November 1959. (2 ~ P~otographic materials used in the processing department mamtamed ~y the company up to October 1959 were purchased by ~he public c_ompany for the benefit of the two daughter comli'ames: (3) Thirty-two of the former employees of the company mcludmg_ a reporter wer~ r~tain~d in the service of the company after Apnl 1959; (4) No m!imat10n was sent to the Commissioner or other competent authority under the Employees' Provident Fund. Ac! of the. termination of employment of 700 workmen and ~~rkmg 1ournahsts, and (5) After April 1959 a common advert1smg department for the two daughter companies was maintained a~ the E~press _Estate building as could be seen from certain circulars issued m December 1959" . . From all this the Tribunal inferred that the suspension of the busmess was a lockout at the inception and became a genuine 914 SUPREME COURT REPORTS [1967] 3s.c.R. 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 compa11y 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 19 5 9 and some persons had to be retained in service A B c to look after the property. The fact that one of. them was a reporter cannot lead to the inference that the company did not D 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.