Delhi District Court
The Workmen vs . on 23 January, 2012
IN THE COURT OF SH. MAHAVIR SINGHAL: POIT,
KARKARDOOMA COURTS, DELHI
I.D. No. 207/10/05
The Workmen
Represented by Hindustan Times Employees Union, Hindustan Times
House, 18-20, Kasturba Gandhi Marg, New Delhi.
Vs.
The Management
1. M/s The Hindustan Times Ltd., Hindustan Times House, 18-20,
Kasturba Gandhi Marg, New Dehi.
2. M/s H.T. Media Ltd., Hindustan Times House, 18-20, Kasturba
Gandhi Marg, New Delhi
Date of institution 05.02.2005
Date of reserving award 06.01.2012
Date of award 23.01.2012
Ref : F.24 (188)/05/Lab. 983-87 dated 02.02.2005
AWARD
1. Workmen have raised the present industrial dispute through
Union and on failure of conciliation proceedings, GNCT of Delhi referred
the dispute to this Tribunal for adjudication in following terms of
reference:-
Whether the action of management of M/s Hindustan
I.D. No. 207/10/05 Page 1 of 50
Times Ltd. In transferring the ownership of its
Printing undertaking to M/s H.T. Media Ltd. w.e.f.
02.10.04 and terminating the services of workmen
whose names are given in Annexure A by invoking
the provisions of Section 25FF of Industrial disputes
Act 1947 is illegal and/or unjustified and if so, to
what relief are the workmen entitled and what
directions are necessary in this respect?
2. Statement of claim has been filed by the workmen, wherein it is
stated that the workmen are permanent employees and employed in
printing Undertaking of management no.1 and are members of Hindustan
Times Employees Union (Regd.) Delhi. It is stated that the workmen are
governed by the Wage Board, the Industrial Dispute Act, 1947, Working
Journalist and Other Newspaper Employees (Conditions of Service and
Miscellaneous Provisions) Act, 1955. The respondent no.1 acted in
collusion and connivance with the respondent no.2, and illegally and malafidely terminated the services of workmen in blatant violation of the provisions of Industrial Disputes Act. It is stated that management no.1 is a company incorporated under the Companies Act and is engaged in the business of publishing newspapers, journals and periodicals and other business. It is submitted that management no.1 publishes national dailies, popular journals/ magazines and used to print the same from printing undertaking at 18-20, Kasturba Gandhi Marg, H T House, New Delhi I.D. No. 207/10/05 Page 2 of 50 110001, where the present workmen were employed for the printing of these newspapers etc and for such purpose management no.1 had employed a number of journalists and non-journalists including the Claimants/ Workmen herein. It is stated that management no.1 is presently managed and controlled by few individuals i.e. the so called promoters/ Owners of the Company namely Sh. K.K. Birla, Smt. Shobhana Bhatia, Sh. Shamit Bhartia, Sh. S.M. Agarwal etc, all Directors of the Company. It is pertinent to mention that Mr. K.K. Birla, the Chairperson/ Director of the management no.1 is the father of Smt. Sobhana Bhartia, Moreover, Mr. Shamit Bhartia is the son of Smt. Sobhana Bhartia. It is submitted that the management and ultimate control of management no.1 company is in the hands of above named Birla Family, who are owners of management no.1.
3. It is stated that management no. 1 is the promoter/ owner/creator of management no.2 company. It is stated that management no.1, as a part of business strategy, formed a new company in the name and style of H.T. Media Ltd, management no.2 herein. It is stated that Smt. Shobhana Bhartia, Mr. KK Birla, Shamit Bhartia and Priyavarta Bhartia (son of Smt. Shobhana Bhartia) etc., who are the owners/ directors of management no.1, are also the owners/ directors of management no.2. I.D. No. 207/10/05 Page 3 of 50 It is stated that relationship of management no.1 with management no.2 is that of a holding and subsidiary company. It is stated that in the year 2004, management no.1 held 77% shares of management no.2. It is stated that employees of management no.1 and 2 used to work for each other for printing and publishing of National Dailies and other periodical sand magazines. It is stated that management of respondent no.1 and 2 is the one and the same.
4. It is stated that management no.1 had vide notice dated 07.02.2004 stated/ informed to the employees that as a business strategy, to meet the competition in the market, a new company HT Media Ltd (a subsidiary company of Hindustan Times Ltd) has been set up tot ake over the media business of Hindustan Times Ltd., management no.1 herein, on an on going basis under an agreement and it is further stated that management no.2 is willing to take over the services of all the employees of management no.1 on their existing terms and conditions of employment, on an ongoing basis. It is stated that apart from other facts, it was further mentioned that the Union declined to accept the transfer to management no.2, as it expressed its apprehension about the future of the new company. It is stated that such claim of management no.1 stated I.D. No. 207/10/05 Page 4 of 50 in the notice dated 07.02.2004 was a totally false claim. Moreover, it is stated that Claimants/ Workmen never declined any such offer, since there was no such offer. It is stated that Union vide letter dated 05.03.2004, responded to the said notice and clealry stated in its reply that "it was totally incorrect and misleading to state that the Union declined the offer to accept the transfer of Hindustan Times Employees to HT Media Ltd.
5. It is stated that management no.1 assured the Union vide letter dated 24.07.2000 that no printing work will ever be shifted to any outside agency except for exigencies of work and it will never declare the staff surplus on this account. However, despite the abovesaid assurance, management no.1 suddenly closed the printing undertaking at 18-20, Kasturba Gandhi Marg, New Delhi on 02.08.2004 on the ground that management no.2 had made its own arrangement for printing of newspapers. It is stated that in consequence to the above, the Union raised an industrial dispute relating to the illegal stoppage of the printing undertaking at 18-20 Kasturba Gandhi Marg, New Delhi and filed a claim statement dated 10.09.2004 before Conciliation Officer and the respondents filed their respective replies and also participated in conciliation proceeding. It is stated that on 03.10.2004, during the I.D. No. 207/10/05 Page 5 of 50 pendency of said industrial dispute before the Asst. Labour Commissioner, management no.1 in collusion with management no.2, illegally terminated the services of 362 employees including the workmen herein working in the printing undertaking at 18-20, Kasturba Gandhi Marg, New Delhi. It is stated that both the managements acted in collusion with each other and any transfer of printing establishment from management no.1 to management no.2 is false, fictitious and malafide because the two managements are under the management of same corporate house/ employer. It is stated that transfer of printing undertaking of management no.1 to management no.2 is not bonafide and genuine transfer and the same is not in tune with the intent, purpose and essential ingredients of provisions of ID Act, 1947 and especially section 25FF of the Act. It is stated that media business is an integrated business consisting of several divisions including the printing division. The various divisions in the media business cannot be separated and distinguished. Under section 25FF of the I.D. Act, the requirement is that the whole integrated business be transferred to a new separate and independent company.
6. It is stated that a meeting of Union was called on 06.10.2004, where a resolution was passed to raise another industrial dispute against I.D. No. 207/10/05 Page 6 of 50 the illegal notice/ order dated 03.01.2004 issued by management no.1 for termination of the services of workmen and transfer of printing undertaking. It is stated that another claim statement dated 13.10.2004 was moved before the Asst. Labour Commissioner in this respect. It is stated that management no.1 being the owner of management no.2, has never given any reasonable and justified ground of not taking over the services of workmen working in printing undertaking for last few decades. It is stated that the workmen are still ready and willing to join their duties in the printing undertaking. It is stated that the workmen are still unemployed. It is prayed that action of management no.1 in transferring ownership of its printing undertaking to management no.2 w.e.f. 2.10.04 and terminating services of workmen be declared illegal and accordingly reinstatement with full back wages and continuity of service be awarded to workmen.
7. In the WS filed by the management no.1, it is stated that reference is bad in law as it contemplates two employers and there cannot be two employers of workmen and that two employers cannot be directed to reinstate the workmen. It is further submitted that the reference does not disclose as to who is the employer in relation to the workmen. It is further submitted that some of the workmen as mentioned in Annexure A to the I.D. No. 207/10/05 Page 7 of 50 written statement have already taken their full and final settlement in respect of their disputes and thus, these workmen would not be covered by the reference nor entitled to any relief in the present reference. It is submitted that Sh. Rajesh Anand, who has signed the statement of claim claiming himself to be the authorised representative of the workmen, has neither any locus standi nor competent to put up any statement of claim on behalf of workmen and likewise Sh. Aita Ram also has no locus standi and competent to file the affidavit in support of the statement of claim filed by Sh. Rajesh Anand, who is stranger and not a party to the reference and as such the statement so filed, is not valid. Therefore, it is stated that the relief, in terms of reference, cannot be granted to the workmen and the statement of claim is liable to be dismissed.
8. It is submitted by management no.1 in its written statement that ownership of printing undertaking was transferred to management no.2 under section 25FF of Industrial Disputes Act and as per settled law, upon transfer of ownership of an undertaking, the transferor is legally entitled to terminate the employees after giving them compensation equivalant to the retrenchment compensation provided under the Industrial Disputes Act. It is submitted that admittedly, the said compensation has been paid to the employees.
I.D. No. 207/10/05 Page 8 of 50
9. It is further submitted by management no.1 that management no.1 is currently engaged in the business of real estate and investments. Earlier, it was engaged in the media business and was also the Printer and Publisher of the leading newspaper "Hindustan Times" an English daily amongst others. It is stated that management no.1 w.e.f. 1.7.03 sold and transferred its media business to management no.2 under two Business Purchase Agreements (hereinafter referred to as BPA) dated 15.8.03 and in terms of said BPAs the company was to take steps to transfer its assets to management no.2. It is stated that in accordance with the understanding of BPAs, the company managed the media business on behalf of management no.2 upto and untill 14.12.03, when the transfer of business was completed. It is stated that in terms of clause 7.1 of the BPA, the management no.2 agreed to take over the services of all the employees of the management no.1 on the same terms and conditions of employment as were offered by the company on continuity of service basis. It is stated that about 800 employees, who were members of Hindustan Times Employees Union, working at HT House, New Delhi declined to accept their transfer to HT Media Ltd, which included employees working in the printing undertaking of the company. It is stated that numerous I.D. No. 207/10/05 Page 9 of 50 meetings were held with the Union representatives from time to time and it explained to the Union representative that the media business had already been taken over by management no.2 and more than 2200 employees all over India including unionised employees at various locations had already accepted their transfer and joined the services of management no.2 and as such Union should also advise its members to accept their transfer to management no.2 as the transfer, did not in any manner, adversely affect their service conditions. The Union, however, firmly declined to accept the transfer of the employees to management no.2.
10. It is stated that despite the rigid stand taken by the Union, the management decided not to take any action resulting in their unemployment and instead issued a notice dated 7.2.04 confirming minutes of the meeting with the Union, wherein offers had been made to the Union to accept the transfer of all its members employees to management no.2 and since the union declined to accept the transfer of the employees to the new company, status quo shall be maintained and the concerned employees shall continue to remain employees of management no.1.
11. It is stated that clause 7.4 of the BPA, stipulated that if I.D. No. 207/10/05 Page 10 of 50 management no.1 was unable to transfer the employees to management no.2, for reasons beyond its control, then subject to compliance with applicable laws, the management no.1 while retaining all the employees on its toll, provided all the employees for the purpose of media business, to management no.2 on a contract basis and the management no.1 would be compensated for all actual costs associated with all the employees, including costs relating to the payment under the Voluntary Retirement Scheme, employees benefits, obligations, compensation as applicable for services provided by management no.1 pursuant to the contract arrangements executed in connection therewith.
12. It is further submitted by management no.1 that in order to avoid unemployment of the concerned workmen, the management no.1 entered into a Service Agreement dated 5.3.04 as per the clause 7.4 of the BPA for providing certain printing and news gathering services to HT Media Limited on contract basis.
13. It is submitted that on 31.7.04, the management no.2 informed the management no.1 that they would no longer require the printing services of the management no.1 as they had by them fully developed and made their own arrangements for printing of all its newspapers including the supplements which were being printed at the printing press situated at HT I.D. No. 207/10/05 Page 11 of 50 House, New Delhi. Management no.1, accordingly, issued a letter dated 2.8.04, informing the workmen and the Union about stopping of printing of newspapers at the Printing Undertaking at HT House, New Delhi. It is stated that the management no.1, therefore, started looking for alternatives and also sounded the Union as to whether the workmen would accept their transfer to management no.2 in case the said company decided to take over the ownership of printing undertaking. The Union, however, went on to pass a Resolution dated 5.8.04 to consider the Management's Letter dated 2.8.04 by which the concerned workmen were intimated about the stopping of printing of newspaper at the printing press at HT House, New Delhi. A reading of the Resolution would show that even on 2.8.04, when the management had issued the notice informing the workmen about the stopping of work, the Union continued to maintain its rigid stand that the services of employees can neither be transferred nor terminated on such a plea. It is submitted that in pursuance to the resolution passed by the Union, the Union also raised an industrial dispute and filed a statement of claim before the Asst. Labour Commissioner, NCT of Delhi on 10.9.04. Even in the statement of claim filed, the Union maintained the same stand that the services of workmen cannot be transferred. It is submitted that in para 4 of the said statement of claim, Union has admitted that MT Media I.D. No. 207/10/05 Page 12 of 50 Ltd is a new concern and further in para 6, Union has continued to maintain its rigid stand that the management has no right to transfer the services of employees to a new company, as there exists no relationship of employer and employee. Finally, management no.1 sold its printing undertaking to management no.2 for Rs.5 Crores. Thereafter, management no.1 issued a notice dated 3.10.04 to the workmen giving information to this effect and further informing that since management no.2 had not taken over the services of workmen working in Printing Undertaking, their services would come to an automatic end on the transfer of Printing Undertaking w.e.f 3.10.04 and thereafter individual letters in this regard were sent to the workmen by speed post alongwith cheques containing requisite compensation u/s 25 FF of ID Act, aggregating to Rs.6.21 crores.
14. It is submitted that management no.2 is a separate and distinct company having their own boards of directors. It is denied that ultimate control of both the companies rests in the hands of few persons like Mr. KK Birla, Ms. Shobhana Bhartia and Mr. SM Agarwal. It is submitted that management no.2 has on its board two representatives of M/s H. Anderson and City Corp as Directors and that management no.2 is paying rent to management no.1 for occupying space at HT House, Kasturba Gandhi I.D. No. 207/10/05 Page 13 of 50 Marg, New Delhi and, therefore, having offices at HT House, would not as well help the case of the workmen. It is denied that management no.1 is holding more than 77% share of management no.2. It is denied that management no.1 assured its employees vide letter dated 24.7.2000 that printing work will not be shifted to any other agency and that no staff will be declared surplus on this account. It is stated that settlement dated 12.8.04 has no relevant to the present case. It is submitted that in terms of BPA, all employees including those working in Printing Press were duly offered opportunities on more than one occasion to join services of management no.2 with continuity of service but they refused. Even at the time of transfer of Printing Undertaking the offer was once again repeated, but the same was not accepted, which is clearly evident from subsequent resolution passed by the Union and statement of claim filed before conciliation officer. It is submitted that workmen are gainfully employed elsewhere. Evenotherwise, they have received huge amounts running into lacs of rupees as compensation. All other allegations made in the statement of claim have been denied by the management no.1 in its WS.
15. Management no.2 M/s. HT Media Limited has filed separate written statement narrating similar facts as mentioned in the WS of management no.1. It is stated that it is the action of management no.1 I.D. No. 207/10/05 Page 14 of 50 which has been challenged and referred for adjudication and it is for the management no.1 company to justify its action and thus, management no.2 is not a necessary party in the present case. It is submitted that on admitted position, relationship of employer and employee never existed between workmen and management no.2. It is submitted that management no.2 took over the media business of management no.1, except the printing undertaking at New Delhi w.e.f. 1.7.03. It is submitted on 31.7.04, management no.2 informed management no.1 that it no longer required the printing services of management no.1, having made its own arrangements for printing of all its newspaper including once which were being printed at HT House, New Delhi. Thereafter, under an agreement dated 1.10.04, it took over the ownership of printing Undertaking against a consideration amount of Rs.5 crores without taking over the workmen and started printing some of its publications from the printing press at the printing undertaking for some time (till mid February 2005), which was thereby stopped due to non receipt of mandatory permission by government. Thus, management no.2 has nothing to do with alleged termination of services of the workmen. It is, therefore, prayed that reference as well as the statement of claim qua I.D. No. 207/10/05 Page 15 of 50 respondent no.2 be dismissed with costs.
16. Workmen have filed separate rejoinders to written statements of both the managements, wherein they have reiterated the stand taken in their statement of claim and denied the averments made in the written statement.
17. On the basis of pleadings of the parties, following issues were framed by Ld. Predecessor on 20.02.2009 :-
1. Whether HTML is the subsidiary company of HTL and managed by same management i.e. persons belonging to the same family, if so, its effect? OPW
2. Whether the transfer letters were issued to the workmen?
3. Whether decision of management no.1 in transferring of the ownership of Printing Undertaking to management no.2 is bonafide to protect the interest of workmen? If not, to what effect? OPM
4. Whether there was any refusal on the part of individual workmen to the said transfer of ownership from HTL to HTML? OPM
5. Whether management no.1 duly communicated the workmen about the transfer of printing undertaking to management no.2, if not , its consequences? OPM
6. Whether termination/ retrenchment of the workmen is in terms of relevant provisions of the ID Act i.e. Chapter 5B of the Act?
7. Whether the workman are bound by the unauthorised statement of the office bearer of the Union that workmen will not comply the order of transfer? OPM
8. Whether references are legally incompetent?
(OPM). Whether 315 workmen named in Annexure A have taken their full and final settlement. Whether the claim statement has been sent by competent person I.D. No. 207/10/05 Page 16 of 50 having locus standi? OPW
9. In terms of reference.
18. Vide order dated 07.08.09, following additional issues were framed by Ld. Predecessor:-
1. Whether any employer-employee relationship has ever existed between the claimants and the Applicant/Management no.2? OPW
2. Whether the claimants can claim any relief from the management no.2? OPW
3. Whether the Hindustan Times Employees Union represents the interest of the employees of the Management No.2 and is entitled to raise an industrial dispute against them? OPW
19. 282 witnesses have been examined in chief on behalf of workmen as WW 1 to WW 282, out of which only WW 1 Sh. Surya Mani Mishra has been cross-examined.
20. WW 1 in his affidavit, filed by way of examination-in-chief, has deposed that he is the workman no.246 in the present case. It is deposed that he was appointed in the management company on 1.5.1980 at the post of News Daftary (Packer) on 1st May, 1981. He has proved the copy of letter of management dated 24.7.2000 as Ex. WW1/B, assuring that with the easing of the situation, printing facility will be brought back to the HT house and no printing work will ever be shifted outside except for exigencies of work as also that it will never declared the staff surplus on I.D. No. 207/10/05 Page 17 of 50 this account. It is deposed that on 03.10.04, management no.1 held 77.1% shares of its subsidiary company i.e. HTML as reflected in the relevant annual reports placed on record. It is deposed that annual report for the year 2005-06 makes it clear that even after the illegal termination of workmen, management no.1 was doing media business and was actively involved in the process of News gathering and was getting revenue from HTML for providing services to them. This makes it evident that even after HTL claims to have sold the media business in the year 2003, it continued to carry out the same much thereafter and therefore, their claim that they were no longer doing media/ printing business after 2003 is false. It is deposed that even the pleadings submitted by HTL before Hon'ble High Court as late as 17.11.05 which is at page 1731, para 5 of vol. IV of the additional documents submitted by the Workmen makes it very clear that it is the admitted case of HTL that even after the year 2003-04, by when the entire Media business was alleged to have been transferred by HTL to HTML, most of the media business of printing and publishing of English daily, Hindustan Times continued with HTL and was being run jointly with HTML. Copy of the petition dated 17.11.05 has been proved as Ex. WW1/C. It is deposed that as per clause 7.1 of the said BPA, HTML agreed to take over the services of employees of management no.1 I.D. No. 207/10/05 Page 18 of 50 on the same terms on continuity of service basis. It is deposed that at page 12 of the said BPA, it is agreed that between 01.07.03 till final take over i.e. during the interrengnum period the Media business shall be conducted by HTL and operated for the benefit of HTML and that the media business shall belong to HTML from 01.07.2003. It is deposed that neither any transfer letter nor any offer letter to join HTML has been given by management no.1. It is deposed by WW 1 that no proof has been placed on record to suggest that he declined the transfer to HTML. It is deposed that without being given any opportunity and any offer to join HTML, his services were terminated. It is deposed that even if the case of HTL is to be believed for the sake of arguments, once HTML (which is a subsidiary of HTL and managed by the same management i.e. persons belonging to the same family), became the successor-in-interest of HTL as far as media business is concerned and automatically became the employer of the workmen. In the rest of his affidavit, WW 1 has more or less reiterated the contentions made in the statement of claim.
21. In his cross-examination, WW 1 has deposed that he was member of HTEU and he continued to be member of the union till today and during the period from 15.08.03 to 3.10.04, Mr. SN Sinha was the General Secretary of the Union. It is deposed that cases of all the 362 employees I.D. No. 207/10/05 Page 19 of 50 were taken up and raised by HTEU and demand notice was sent to the management by this Union. It is deposed that statement of claim dated 13.10.04 Ex. WW1/M1 was filed in the labour office and that he trusted the union, therefore, he personally did not read the statement of claim filed by the Union. It is deposed that he had given authorisation to the Union for raising the dispute vide claim dated 13.10.04 in writing. It is deposed that statement of claim Ex. WW1/M4 was filed by Aita Ram and Rajesh Anand and thereafter, the role of the Union was finished. It is admitted that after filing of third statement of claim, the management challenged the same before Hon'ble High Court by way of Writ Petition and after the order passed in the said writ petition, the fourth statement of claim was filed, which is Ex. MW1/M6 bearing signatures of Aita Ram and Rajesh Anand and that Sh. Rajesh Anand is an Advocate, who has been appearing for workmen as Authorised Representative. It is deposed that Sh. Anand Parkash was the President and Sh. Javed Fareedi was the General Secretary of the Union. It is deposed that he has authorised Sh. Aita Ram and Sh. Rajesh Anand to sign statement of claim. It is deposed that workmen authorised Sh. Aita Ram to sign statement of claim dated 15.1.07 vide resolution Ex. WW1/M7 and the said resolution was passed in first week of December, 2006 and there is no other resolution except the I.D. No. 207/10/05 Page 20 of 50 same. It is deposed that will the workers were informed by calling meeting for holding a meeting on 15.12.06, however, it is admitted that minutes of meeting of the said meeting have not been placed on record.
22. It is admitted by WW 1 in his cross-examination that Union has been authorised in this claim upto 15.12.06 and w.e.f. 15.12.06, the Union was removed from the case as it got sold. He did not know if about 2200 employees have accepted their transfer to HTML all over India after signing BPA dated 15.8.03. It is denied that he and other workmen in this reference have refused to take the employment with HTML. He has voluntarily stated that he was ready to join HTML earlier also ready and is ready even today. WW 1 did not know whether HTML was reimbursing his salary as well as salary of other workmen to HTL as per service agreement dated 5.3.04. It is denied that management had persuaded the workmen to join HTML as their service conditions were not going to be affected adversely as the same conditions shall prevail after transfer. It is denied that workmen refused to join HTML and, therefore, no transfer letter was issued to them. It is admitted that an agreement took place on 2.10.2004 between HTML and HTL regarding transfer of printing press and plant machinery. It is denied that workmen did not I.D. No. 207/10/05 Page 21 of 50 encash the cheques of retrenchment compensation but on the directions of Hon'ble High Court, they have received the said amount. It is denied that they have full knowledge that their services had been taken over by HTML.
23. In the cross-examination of WW 1, conducted by management no.2, it is deposed that there is no document to show that they have ever been the employees of HTML. It is voluntarily stated that business agreement itself is sufficient to show that his service were transferred to HTML. It is deposed that he did not receive letter dated 3.10.04 regarding termination of his services. Voluntarily, it has been stated that there was a public notice by HTL to the effect that HTML has refused to take the workmen including me in job, therefore, his services were terminated. It is admitted that he has never worked for HTML during the period w.e.f. 01.05.1980 to 03.10.2004. He is not aware whether HTML is a listed company with Stock Exchange. It is denied that presently, HTL is engaged in real estate business. WW 1 could not tell the number of co- workers who joined HTML after the business agreement dated 15.08.2003. It is denied that there was offer for every worker to joint HTML. It is denied that all the workers except unionised employees of Delhi Office had had agreed to be transferred to HTML. It is deposed that I.D. No. 207/10/05 Page 22 of 50 name of the Union was Hindustan Times Employees Union and at that time there were about 800 members of the Union. It is admitted that all the members of the Union were employees of HTL. WW 1 is not aware that M/s HTL and M/s HTML are two different companies registered under the Companies Act or that they are two distinct entities.
24. It is admitted by WW 1 that upon signing of the business purchase agreement dated 15.8.03, the entire media business of HTL all over India was taken over by HTML. A question was put to WW 1 that in the annexure to Schedule V of the business purchase agreement dated 15.8.03, the names of all employees of HTL were included and the same also included the names of all the employees as mentioned in the order of reference in present case. The reply to this suggestion is that "except my name, I cannot say about others".
25. Management has examined Sh. V K Charoria, Director and Company Secretary of Hindustan Times Ltd., as MW 1. In his affidavit, filed by way of examination-in-chief, he has reiterated the contentions made in the written statement of management no.1.
26. In his cross-examination, MW 1 has admitted that he is the Director in some of the subsidiaries of Hindustan Times namely Shraddhanjali Investment and Trading Ltd. He has deposed that he joined I.D. No. 207/10/05 Page 23 of 50 HTL in February 1994 and he again said that in April, 1994. MW 1 has deposed that he did not resign from HTL but on a continuity of service basis, he moved to HTML w.e.f. 1.7.03. It is deposed that it was Board of Directors who took the decision to move him from HTL to HTML. It is deposed that at the relevant time, Board of Directors consisted of Sh. SM Agarwal, DN Padudia, MD Dalmia, KK Birla, Priyavrat Bhartiya and Sobhna Bhartiya in HTL. It is deposed that Shobhna Bhartiya was vice-chairman of HTL at relevant time. He did not remember composition of board of directors of HTML in July, 03. It is deposed by MW 1 that he resigned from HTL before he joined HTML. He do not remember the date of resignation. It is deposed that by the time he joined HTML w.e.f. July, 03, he had already resigned from HTL but he does not remember the date exactly. He again said that he does not remember whether he resigned from HTL before joining HTML. MW 1 has deposed that he must have signed certain documents on behalf of HTL even after joining HTML because the process of handing over and taking over was going on. It is deposed that process of handing over and taking over was completed by 15.12.03 and even after 15.12.03, he might have executed the documents on behalf of HTL. It is deposed by I.D. No. 207/10/05 Page 24 of 50 MW 1 that word "media business" includes publishing, internet, radio, television business and that no media business was done by HTL after 14.12.03. It is denied that even after 14.12.03, HTL continued to do media business. It is admitted that as per business purchase agreement dated 15.8.03, workmen were to be transfered to HTML. MW 1 was not aware whether management no.1 wanted to transfer the workmen in this case to management no.2 without their consent. It is deposed that it was the HR Department of management no.1, which was involved in dealing with the workmen. It is deposed that documents mark C to G would suggest that offer for transfer was given to the workmen between the period 15.8.03 to 5.3.04. MW 1 has pointed out the documents/ letters mark F,I,J, Ex. MW1/7, Ex. MW1/7G stating that these were issued by workmen refusing to join the services of HTML. It is deposed that those workers, who accepted the transfer, were transferred to HTML and that out of 3500, more than 2600 accepted the transfer.
27. It is denied that HTL transferred its printing work in December 2003 from HT House to Noida and engaged contract workers for printing. MW 1 did not remember whether there was any document on record file to show that workmen in question had been informed about service agreement dated 5.3.04 prior to 2.8.04, as it is a matter of record. It is I.D. No. 207/10/05 Page 25 of 50 denied that HTL had installed new printing press in Noida in December 2003 and slowly transferred all printing work to Printing Press Noida and employed contract workers. It is denied that due to Wage Board recommendations, it was very expensive to continue employing workmen and therefore, a false ground of refusal to join service in HTML was created.
28. Sh. Manoj Bhargava, Dy. General Manager, Legal of HT Media Ltd. has been examined as MW 2. In his affidavit, filed by way of affidavit, it is deposed that pursuant to transfer of ownership of media business from management no.1 to management no.2, the relevant changes were effected by various government agencies/ departments and some documents issued by various government departments have been proved as Ex. MW1/3 to MW 1/11. In the rest of the affidavit, MW 2 has more or less reiterated the contentions made in the written statement of management no.2.
29. It is admitted that HTL is a majority share holder of HTML holding approximately 68.73 % shares in it. He did not know whether Priyavarat Bhartiya was authorised by both HTL and HTML to execute the business purchase agreement. A suggestion has been put to MW 2 as to whether HTML had made its own work arrangements for the workmen I.D. No. 207/10/05 Page 26 of 50 in question, to which it is replied that it appears from the record that it was the intent of the management to prove them work. It is admitted that agreement of 05.03.2004 was terminated prematurely. It was deposed by MW 2 that the media business of HTL was purchased by HTML as per the business purchase agreements dated 15.08.2003, which is on record.
30. Management no.2 has also examined Sh. Harish Nagpal as MW2/M-2. In his affidavit, filed by way of examination-in-chief he has deposed that he had been working as AVP (Supply Chain) with HT Media Ltd.. In his affidavit, he has reiterated the contentions made in the written statement filed by management no.2.
31. In his cross-examination, he has deposed that he is working with Hindustan Media Venture Ltd. 18-20, Kasturba Gandhi Marg, New Delhi. He is not aware whether Ms. Shobna Bhartiya and Priyavrata Bhartiya are directors of HTML. It is deposed that in November 2003 w.e.f 1.7.03, he was given the transfer order for joining HTML. He again said that he joined HTML in November 2003 accepting the offer given w.e.f. 1.7.03 and the transfer letter was given by HR Department. He again said that offer letter was given by HR department. He has deposed that until June, 2003, principal business of HTL was printing newspaper. In reply to the I.D. No. 207/10/05 Page 27 of 50 question whether in the year 2003, any new printing machines were purchased by HTML for Noida Newspaper Establishment at B 2, Sector 63, Noida, witness replied in negative. He has also deposed that in the year 2003, new printing machines were purchased by HTL and ownership of these machines, delivered on order, were transferred from HTL to HTML by virtue of BPA. MW 2/M-2 was not aware whether HTL continued to hold license for the factory premises at Noida under the Factory Act even after December 2003. It is deposed that there were newspaper establishment at 13 locations under the control of HTL at the time of execution of BPA. It is deposed that new printing machines were installed in Noida newspaper establishment in December 03. It is denied that agreements dated 15.8.03, 5.3.04 and 1.10.04 are false and prepared in collusion with HTL only to oust the workmen in question from their services.
32. Management no.2 has examined Sh. Sham Lal, official from Ministry of Information and Broadcasting as MW2/M-3. He has proved on record some guidelines and communications regarding the approvals granted to HT Media Ltd as Ex. MW2/M-3/1 to Ex. MW2/M-3/4. In his cross-examination, he has deposed that he cannot say whether management had filed documents Ex. MW2/M-3/1 to Ex. MW2/M-3/3 I.D. No. 207/10/05 Page 28 of 50 alongwith WS or at later stage.
33. Management has examined Sh. Peeyush Jain, Sr.Manager (Legal) of HT Media Ltd., as MW 2/M-4. He has proved on record certified copy of certain documents regarding annual return and capital structure of the company as Ex. MW2/M-4/1 to Ex. MW2/M-4/61. These documents were objected to on behalf of workmen as regards their relevancy to the case. In his cross-examination, MW2/M-4 has deposed that he has no personal knowledge of the contents of the documents Ex. MW2/M4/57 to 61. He has deposed that he joined services of HTML in September 2010.
34. I have heard arguments from Sh. Ashwin Vaish & Sh. Vinod Pandey, Ld. Counsels/ARs for workmen, Sh. S.K. Bhasin & Sh. Ajit Upadhyay, Ld. Counsels/ARs for management no.1. I have gone through the bulk written submissions and judgments filed by all the parties and have perused the entire record. My findings on the issues are as under:-
35. Findings on issue no.1.
Issue no.1 is Whether HTML is the subsidiary company of HTL and managed by same management i.e. persons belonging to the same family, if so, its effect? OPW
36. Section 4 of the Companies Act provides that a company would become subsidiary of another company if:
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(i) that other controls the composition of its Board of Directors;
(ii) that other holds more than fifty per cent of the nominal value of its equity share capital or more than fifty percent of the total voting power of the company; or
(iii) the company is subsidiary of another company, which is itself a subsidiary of some other company.
37. It is admitted by MW 2 that HTL is a majority share holder of HTML holding approximately 68.73 % shares in it. Further, document Ex. MW1/7, shows that management no.1 i.e. HTL was holding 84.62% shares in management no.2 (HTML). Such percentage of shares shows that HTL was having more than 3/4th share in HTML in the year 2004, when services of workmen were terminated. Thus, in view of definition u/s 4 of Companies Act, HTML is subsidiary company of HTL.
38. Question of consideration is whether HTML (HT Media Ltd.) is managed by the same management i.e. persons belonging to the same family. This issue can be answered only if corporate veil of the two companies can be allowed in law to be lifted. An incorporated company is clothed with distinct personality by fiction of law. The company, as a legal entity is separate and distinct from its promoters, share holders, directors, officers etc. of employees. With incorporation, the entity of the company I.D. No. 207/10/05 Page 30 of 50 becomes institutionalised. This principle of independent corporate existence of a registered company is well illustrated in Salomon vs. Salomon & co., 1897, A.C. 22.
39. Under the law, an incorporated company is a distinct entity, and although, all the shares may be practically controlled by one person, in law, company is distinct entity and it is not permissible or relevant to enquire whether the directors belonged to the same family or whether it is, as compendiously described a 'one man company'.
40. Principle of Lifting of Corporate Veil is found statutory recognition in certain provisions of Companies Act, 1956. The relevant sections are 45, 147, 212, 247, 554 of the said Act. The corporate veil is to be lifted when the court ignores the company and concerns itself directly with the members or managers.
41. Hon'ble Supreme Court in Tata Engineering Locomotive Company Vs. State of Bihar, AIR, 1965, SC 40 observed that the discretion of the court in the matter of lifting corporate veil will, however, depend on the social economic policies and moral factors operating in or through the corporation.
42. Hon'ble Delhi High Court in PNB Finance Ltd. Vs. Shri Sital Prasad jain 1983, (53), Comp. Cases, 66 observed as follows:- I.D. No. 207/10/05 Page 31 of 50
the doctrine of piercing the corporate veil may be invoked whenever necessary by the court in the interest of justice, to prevent the corporate entity from being used as an instrument of fraud and the fundamental principle of corporate personality itself may be disregarded having regard to the exigencies of the situation and for the ends of justice.
43. In India Western India Automobile Association Vs. Industrial Tribunal Bombay MANU/FE/0005/1949, Hon'ble Federal Court held that:
the jurisdiction of industrial tribunals is much wider and can be reasonably exercised in deciding industrial disputes with the object of keeping industrial peace and progress.
44. In Bidi, Bidi Leaves' and Tobacco Merchants Association Vs. The State of Bombay AIR 1962 SC 486, Hon'ble Supreme Court observed as follows:-
It is well settled that industrial adjudication under the provisions of the Industrial Disputes Act, 1947 is given wide powers and jurisdiction to make appropriate awards in determining industrial disputes brought before it. An award made in an industrial adjudication may impose new obligations on the employer in the interest of social justice and with a view to secure peace and harmony between the employer and his workmen and full co-operation between them. Such an award may even alter the terms of employment if it is thought fit and necessary to do so. In deciding industrial disputes the jurisdiction of the tribunal is not confined to the administration of justice in accordance with the law of contract.
It was further held that:-
Indeed, during the last ten years and more industrial adjudication in this country has made so much progress in determining industrial disputes arising between industries of different kinds and their employees that the I.D. No. 207/10/05 Page 32 of 50 jurisdiction and authority of industrial tribunals to deal with such disputes with the object of ensuring social justice is no longer seriously disputed.
45. It has been observed in The Bharat Bank Ltd., Delhi vs. Employees of the Bharat Bank Ltd., Delhi MANU/ SC 0030/1950 that:
The Tribunal "can confer rights and privileges on either party, which it considers reasonable and proper, though they may not be within the terms of any existing agreement. It has not merely to interpret or give effect to the contractual rights and obligations between them which it considers essential for keeping industrial peace.
46. Hon'ble Delhi High Court in Delhi Administration Vs. Yogender Singh, 1997 (1) AD (Delhi) 8 observed as follows:-
Industrial Tribunal is not bound by the rigid rules of law. The process which an Industrial Tribunal employs in coming to a decision is not a judicial process. It may confer rights and privileges on either party which it considers reasonable and proper, though they may not be within the terms of any existing document. It may even create new rights and obligations which it may consider essential for keeping industrial peace.
47. In the present case, a crucial question that arises for consideration is about applicability and non-applicability of Section 25 FF of Industrial Disputes Act. Management of HTL has dispensed with the services of large number of employees of HTL by invoking said Section 25 FF of ID Act. It is the case of workmen that the said provision of law could not be invoked by HTL as transferor HTL and transferee HTML are being controlled by the members of same family. I am of the considered view I.D. No. 207/10/05 Page 33 of 50 that in order to consider the rights of workmen under any welfare legislation, corporate veil can be lifted by Industrial Tribunal even if no fraud or ill will is apparent on record. There can be no doubt that Industrial Disputes Act is a welfare legislation. Hence, for considering applicability or non-applicability of secton 25 FF of Industrial Disputes Act in the present case, corporate veil of the two companies i.e. HTL and HTML can be lifted to know the real status and character of these two companies.
48. There is no dispute between the parties that business purchase agreement dated 15.08.2003 was entered into between HTL and HTML, wherein HTL was seller and HTML was purchaser in respect of media business. In the said agreement, it is mentioned that HTML i.e. purchaser is wholly owned subsidiary of HTL i.e. seller. This is recorded at point B in the introductory portion at page 1 of the agreement.
49. Para 2 of the said agreement relates to purchase and sale of media business. Para 2.1 of said agreement provides as below:
The seller has hereby agreed that it shall sell and transfer, subject to compliance with the Article 2.2 hereof, the Media Business, as a going concern and on slump sale basis, with effect from the Effective Date. This Business Purchase Agreement sets forth the broad understanding relating to transfer of the Media Business to the Purchaser. In order to expeditiously achieve Final Takeover, the Parties shall, on or prior to the Final I.D. No. 207/10/05 Page 34 of 50 Takeover Date or on such other date as may have been otherwise agreed in this Business Purchase Agreement, execute such deeds, delivery or possession letters or agreements as required to transfer legal title in each of the Media Business Assets, in compliance with applicable Laws.
50. Said agreement is signed by Ms. Shobhna Bhartiya as authorised signatory of seller i.e. HTL and by Priyavrat Bhartiya as authorised signatory of HTML. It is worth noting that MW 1 Sh. V K Charoria (Director and Company Secretary of HTL) in his cross-examination has deposed that at the relevant time, Board of Directors consisted of Sh. SM Aggarwal, Sh. DN Patodia, Ms. MD Dalmia, Sh. KK Birla, Sh. Priyavrat Bhartiya and Ms. Shobhna Bhartiya in HTL. It is worth noting that at the relevant time, Priyavrat Bhartiya was Director of HTL on the one hand and he was authorised signatory of HTML on the other hand. It is mentioned in evidence of MW 1 that Ms. Priyavrat Bhartiya, Director, is son of Ms. Shobhna Bhartiya, another Director. There is no dispute by managements on this fact. Thus, it is apparent that directors of two companies were interchangeable on continuity of service basis.
51. There is no dispute that agreement dated 1.10.04 was entered into between HTL and HTML. Introductory portion B of the said agreement provides that media business of HTL has been taken over and transferred to HTML. HTML took over printing and publishing business at 15 I.D. No. 207/10/05 Page 35 of 50 locations across the country and publishing business at Delhi, vide two separate sale agreements, both dated 15.8.03.
52. Point C of the introductory part of the said agreement inter-alia provides that HTML, while taking over media business of HTL, agreed to take over services of all the employees of HTL including employees working in printing press at HT House, New Delhi, with continuity of service and on their existing terms of employment. The disputed portion in the said introductory part is that the employees of printing undertaking i.e .Supervisors and Managerial Staff declined to accept their transfer to HTML. Para 2 of the said agreement relates to the transfer of printing undertaking. Para 2.1 of the said agreement provides as below:-
With effect from 2nd October, 2004, HT shall transfer the ownership of the Printing Undertaking by way of sale to HTML and HTML shall purchase the Printing Undertaking from HT, subject to the order of the Hon'ble High Court of Delhi.
53. Introductory point H of the said agreement provides as under:-
Whereas Hindustan Times Employees Union have moved to the Hon'ble High Court and prayed to the Court to restrain the Company from giving effect to a resolution to sell its Printing Undertaking at 18-20 K.G. Marg. The Hon'ble High Court did not grant the said order, but passed an order that "in the meanwhile, the resolution stated to have been passed in respect of agenda item no.6 of the notice of the Annual General Meeting of the Company held on 29th September, 2004 shall be subject to the result of the present application and suit.I.D. No. 207/10/05 Page 36 of 50
54. Para 2.3 of the said agreement dated 1.10.04 provides as below:
HTML, while taking over the ownership of the Printing Undertaking of HT, shall not take over the services of the workmen of HT working in the Printing Undertaking immediately before the Signature Date. HT shall, therefore, terminate the services of all the workmen working in the Printing Press on payment of one month's notice pay and compensation as per the provisions of Section 25 FF of the Industrial Disputes Act.
55. It is worth noting that business agreement between HTL and HTML including also agreement dated 1.10.04 are res gestae i.e. forming part of same transaction. Said principle of res gestae finds place in Section 6 of Indian Evidence Act. Accordingly, for the present purpose, not only agreement dated 1.10.04, but also other agreements including also agreement dated 15.8.03 are relevant. It is worth noting that MW 1 Sh. VK Charoria, Director and Company Secretary of HTL, in his cross- examination, has deposed that he did not resign from HTL, but on continuity of service basis, he moved to HTML w.e.f. 1.7.03. This shows that directors of holding company i.e. HTL and subsidiary company i.e. HTML were interchangeable.
56. In view of above discussion, on Lifting of Corporate Veil of the two companies i.e. HTL and HTML, I am of the considered view that substantial ownership and management of the two companies were the same for the following reasons:-
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1. HTML was wholly owned subsidiary of HTL at the relevant time.
2. Directors of the two companies were interchangeable on continuity of service basis.
57. Now, the matter for consideration is about effect of HTL and HTML being managed by the same management. Section 25 FF of Industrial Disputes Act provides as below:-
Where the ownership of management of an undertaking is transferred, whether by agreement or by operation of law, from the employer in relation to or that service for not less than one year in that undertaking immediately before such transferor shall be entitled to notice and compensation in accordance with the provisions of Section 25 F, as if the workman had been retrenched:
Provided that noting in this section shall apply to a workman in any case, where there has been a change of employers by reason of the transfer, if-
(a) the service of workman has not been interrupted by such transferor:
(b) the terms and conditions of service applicable to the workman after such transfer are not in any way less favourable to the workman than those applicable to him immediately before the transferor; and
(c) the new employer is, under the terms of such transfer or otherwise, legally liable to pay to the workman, in the even to this retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by the transfer.
58. In the situation of the present case, the word 'transfer' is of vital significance. When the ownership of management of two companies, one holding company and the other subsidiary company, is found substantially I.D. No. 207/10/05 Page 38 of 50 in holding company, it cannot be said that under any agreement to sell, transfer has taken place infact, though, in form it has taken place. When transferor and transferee are same set of companies, I am of the considered view that Section 25 FF of I.D. Act is not applicable. Issue no.1 is answered accordingly.
59. Findings on Issue No.2 Issue no.2 is : Whether the transfer letters were issued to the workmen?
60. In this regard, para 7 of statement of claim is reproduced as below: -
That the respondent no.1 had vide notice dated 07.02.2004 stated/ informed to the employees that as a business strategy to meet the competition in this market, a new company HT Media Limited (a subsidiary company of Hindustan Times Limited) has been set up to take over the media business of the Hindustan Times Ltd/ respondent no.1 herein, on an on going basis under an agreement. That it was further stated that HT Media Limited is willing to take over the services of all the employees of Hindustan Times Limited on their existing terms and conditions of employment, on an ongoing basis. Apart from other facts, it was further mentioned that the union however, declined to accept the transfer to HT Media Ltd as it expressed its apprehension about the future of the new company. Further, averments were also made in the said notice. It is submitted that the such claim of the management of the respondent no.1 stated in the notice dated 07.02.2004 was a totally false claim.
Moreover, it is pertinent to mention here that the Claimants/ Workmen never ever declined any such offer since there was no such offer. That the Union vide letter dated 05.03.2004 responded to the said notice and I.D. No. 207/10/05 Page 39 of 50 clearly stated in its reply that "it was totally incorrect and misleading to state that the Union declined the offer to accept the transfer of Hindustan Times employees to HT Media Ltd."
61. In the written statement, in corresponding para, it is stated as follows:-
Numerous meetings were held with the Union representatives from time to time when time and against it was explained to the Union representatives that the media business had already been taken over by HT Media Limited and more than 2,200 employees all over India including the unionized employees at various locations had already accepted their transfer and joined the services of HT Media Limited and, as such, the Union should also advise its members to accept their transfer to HT Media Limited as the transfer did not, in any manner, adversely affect their service conditions as HT Media Limited, Respondent No.2 company had agreed to take over their services with continuity of service on their existing terms and conditions and the employees were to be deployed in National Capital Region. It was also explained to the Union representatives that all legal dues in respect of the service put in by the employees of The Hindustan times Limited including those in relation to gratuity, provident fund and other benefits as applicable, will be payable by HT Media Limited. The Union, however, firmly declined to accept the transfer of the employees to HT Media Limited.
62. It is apparent that case of the workmen is that vide notice dated 07.02.2004, they were informed that as a business strategy to meet the competition in this market, a new company HT Media Limited (a subsidiary company of Hindustan Times Limited) had been set up to take over the media business of the Hindustan Times Ltd, on an on going basis I.D. No. 207/10/05 Page 40 of 50 under an agreement. However, there was no offer to workmen to join HT Media Limited. In corresponding reply para in the written statement, reproduced above, it is stated that in various meetings with the Union representatives, the fact of handing over of media business to management no.2 was informed. It has not been specifically pleaded in written statement that transfer letters were issued to the workmen. Thus, management has failed to rebut the claim of workmen that there was offer to them to join HT Media Ltd.
63. Hence, it is held that no transfer letters were issued to the workmen. This issue is decided accordingly.
64. Findings on issue no.3 Issue no.3 is : Whether decision of management no.1 in transferring of the ownership of Printing Undertaking to management no.2 is bonafide to protect the interest of workmen? If not, to what effect? OPM
65. As held vide issue no.1, management no.1 and 2 are not separate entities. HTML is the subsidiary company of HTL and managed by same management. HTML is extended version of HTL. Therefore, refusal by management no.2 to take services of workers of management no.1 engaged in printing undertaking does not seem to be justified. Hence, it is held that decision of management no.1 in transferring of the ownership of I.D. No. 207/10/05 Page 41 of 50 Printing Undertaking to management no.2 is not bonafide to protect the interest of workmen.
66. Findings on issue no.4 Issue no.4 is Whether there was any refusal on the part of individual workman to the said transfer of ownership from HTL to HTML? OPM
67. It is the case of both the managements in their written statements that management no.2 had made their own arrangement for printing work and thus, they did not require the services of workmen, engaged in printing undertaking of management no.1. Since, management no.2 itself had refused to take the services of workmen, they cannot be allowed to blow hot and cold in the same breath and cannot take the plea that it is the workmen, who refused to join management no.2. It is worth noting that workmen, during their evidence have given their willingness to join management no.2 even at this stage. Thus, there is no refusal on the part of individual workman to the said transfer of ownership from HTL to HTML. This issue is decided accordingly.
68. Findings on issue no. 5 Issue no.5 is Whether management no.1 duly communicated the workmen about the transfer of printing undertaking to management no.2, I.D. No. 207/10/05 Page 42 of 50 if not , its consequences? OPM
69. In conciliation proceedings before labour department, management took the stand that printing undertaking has been transferred to management no.2. Public Notice has also been given to this effect. Therefore, workmen became automatically aware of the fact of transfer of printing undertaking to management no.2. Thus, it is held that management no.1 duly communicated the workmen about the transfer of printing undertaking to management no.2. This issue is decided accordingly.
70. Findings on issue no. 6 Issue no.6 is Whether termination/ retrenchment of the workmen is in terms of relevant provisions of the ID Act i.e. Chapter 5B of the Act?
71. Section 10(4) of Industrial Disputes Act, provides as below:
Where in an order referring an industrial dispute to a labour court, Tribunal or National Tribunal, under this section or in a subsequent order, the appropriate Government has specified the points of dispute for adjudication, the Labour Court or the Tribunal or the National Tribunal, as the case may be, shall confine its adjudication to those points and matters incidental thereto.
72. In Delhi Cloth and General Mills Co. Ltd. and Workmen and others, 1969, AIR SC 243, Hon'ble Supreme Court observed as follows:-
From the provisions of Section 10 (1) (a) and 10 (4) of the Act it appears that while it is open to the appropriate government to I.D. No. 207/10/05 Page 43 of 50 refer the dispute or any matter appearing to be connected therewith for adjudication. The Tribunal must confine its adjudication to the points of dispute referred and matters incidental thereto. In other words, the Tribunal is not free to enlarge the dispute referred to it but must confine its attention to the point specifically mentioned and anything which is incidental thereto. The word 'incidental' means according to Webster's New World Dictionary;
"happening or likely to happen as a result of or in connection, with something more important; being an incident; casual, hence, secondary or minor, but usually associated."
"Something incidental to a dispute" must therefore mean something happening as a result of or in connection with the dispute or associate with the dispute. The dispute is the fundamental thing, while something incidental thereto is an adjunct to it. Something, incidental, therefore, cannot cut at the root of the main thing to which it is an adjunct.
73. This Industrial Tribunal can take judicial notice of the judgment of Hon'ble High Court of Delhi in Bhupat Singh and others Vs. Hindustan Times Ltd., decided on 9.5.06 in writ petitions no.2961 to 2963 of 2005. In those cases, the reference order of the present case was challenged and two points were considered: (1) Whether exclusion of 47 workmen from the reference is illegal? and (2) Whether exclusion of question related to illegal lock-out in the reference is illegal?
74. The Hon'ble High Court (Coram: His Lordship Hon'ble Mr. Justice Sh. S. Ravinder Bhatt) dismissed the petition under Article 226 of Constitution of India and observed as follows:-
In the course of proceedings arising out of the reference, therefore, it is open to the petitioners to contend that the I.D. No. 207/10/05 Page 44 of 50 transfer to HT Media Ltd was not bona fide, legal and justified. Equally, it would be open to the management to contend that the transfer was bona fide and justified. In the event of the petitioners succeeding to prove their case, the Tribunal can, as per Anakapalla Co-operative, decide that there is continuity of service, and draw such interferences as are permissible in law. In the event of the petitioners failing to establish that transfer was not bona fide, or that it was otherwise illegal or unjustified there can be no situation where an alternative case of lock out, illegal or otherwise, can be set up. Inherent in the concept of lockout is subsistence of the contract of employment. If the petitioners cannot succeed on the point of reference, the logical corollory would be that there was a legally sustainable transfer of undertaking, leading to the consequences envisaged under Section 25- FF.
75. In view of above observations of Hon'ble High Court, I am of the considered view that issue of termination/retrenchment of workmen in terms of relevant provisions of I.D. Act i.e. Chapter 5 B of the Act does not arise and is outside the purview of Section 10(4) of Industrial Disputes Act. This issue is answered accordingly.
76. Findings on issue no.7 Issue no.7 is Whether the workman are bound by the unauthorised statement of the office bearer of the Union that workmen will not comply the order of transfer? OPM
77. It is a general rule that nobody can be bound by any unauthorised statement of any one. Therefore, workmen cannot be bound by the unauthorised statement of the office bearer of the Union. Moreover, this I.D. No. 207/10/05 Page 45 of 50 issue has lost its relevance keeping in view the fact that management no.2 has refused to take the services of workmen. This issue is decided accordingly.
78. Findings on issue no.8 Issue no.8 is Whether references are legally incompetent? (OPM). Whether 315 workmen named in Annexure A have taken their full and final settlement. Whether the claim statement has been filed by competent person having locus standi? OPW
79. It is worth noting that no proof has been shown by management that the reference is legally incompetent or that 315 workmen have taken their full and final settlement. However, during arguments, it is agreed for workmen that 43 workmen have settled their disputes with management. It is directed that workmen will file before Labour Department/ other competent authority concerned with execution of award, names of 43 workmen, within one month of the date of enforcement of award, who have so settled their disputes and same will be binding under Section 18(1) of Industrial Disputes Act. Present dispute remains regarding 272 workmen.
80. Further, statement of claim filed, whether by one or two persons I.D. No. 207/10/05 Page 46 of 50 on behalf of workmen will be treated to have been filed legally and no fault can be found in this regard, except when objection is raised in this regard on behalf of workmen. Since, no objection has been raised by workmen in this regard, it is held that claim statement has been filed by competent persons having locus standi. Issue no.8 is decided accordingly.
81. Findings on additional issue no.1 and 2 framed on 07.08.09 Additional issue no.1 is : Whether any employer-employee relationship has ever existed between the claimants and the Management no.2? OPW. Additional issue no.2 is : Whether the claimants can claim any relief from the management no.2? OPW
82. It is the case of both the parties that workmen are employees management no.1 and not of management no.2. Thus, there is no question of workmen claiming relief from management no.2.
83. They cannot claim retrenchment compensation or re- employment from management no.2. Management no.1 has invoked Section 25 FF of Industrial Disputes Act. Section 25 H of ID Act is not applicable in this case as there is no retrenchment as defined under Section 2(oo) of Industrial Disputes Act. Hence, workmen can not seek relief from management no.2. Additional issues no.1 and 2 are decided accordingly.
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84. Findings on additional issue no. 3 framed on 07.08.09 Additional issue no.3 is : Whether the Hindustan Times Employees Union represents the interest of the employees of the Management No.2 and is entitled to raise an industrial dispute against them? OPW
85. As decided above, the workmen are employees of management no.1. Therefore, this issue is not relevant for the present purpose and has lost its significance. However, it is clarified that the said Union may represent interest of employees of management no.2, if they are member of the said Union. This issue is decided accordingly.
86. Findings on Issue no.9:-
Issue no.9 is As per terms of reference. Terms of reference are Whether the action of management of M/s Hindustan Times Ltd. in transferring the ownership of its Printing undertaking to M/s H.T. Media Ltd. w.e.f. 02.10.04 and terminating the services of workmen whose names are given in Annexure A by invoking the provisions of Section 25FF of Industrial disputes Act 1947 is illegal and/or unjustified and if so, to what relief are the workmen entitled and what directions are necessary in this respect?
87. In view of my findings on issue no.1, it is held that action of I.D. No. 207/10/05 Page 48 of 50 management of M/s Hindustan Times Ltd. in transferring the ownership of its Printing undertaking to M/s H.T. Media Ltd. w.e.f. 02.10.04 and terminating the services of workmen whose names are given in Annexure A by invoking the provisions of Section 25FF of Industrial disputes Act 1947 is illegal and unjustified.
88. This Tribunal can take judicial notice of the following observations of Hon'ble Delhi High Court (Coram: His Lordship Hon'ble Mr. Justice Sh. S. Ravinder Bhatt) made in its order dated 9.5.06 in case of Bhupat Singh and Others Vs. Hindustan Times Ltd. (supra), involving reference of the present case :-
The constitution bench of the Supreme Court in Anakapalla Co-operative (supra) held that if a transfer of a business Unit is fictitious or benami, then Section 25 FF of the Industrial Disputes Act will have no application at all and in such cases, there cannot be any change of ownership or management and despite an apparent transfer, the transferor employer continued to be the real employer and there has to be continuity of service under the terms and conditions of service as before and there can be no question of compensation. The proposition of law was followed by a Division Bench of Madras High Court in Spencer Group Aerated Water Factory Employees' Union and Anothers vs. The Presiding Officer, Industrial Tribunals and others, (1997) 1 LLJ 362.
(Equivalent citation: Anakapalla Co-operative Agricultural and Industrial Society Ltd. Vs. Workmen AIR 1963 SC 1489).
89. In view of above factual and legal position of law, workmen/ claimants (except 43 workmen/ claimants, who have settled I.D. No. 207/10/05 Page 49 of 50 their disputes u/s 18(1) of I.D. Act) are entitled to the relief of treating them in continuity of service under terms and conditions of service as before their alleged termination w.e.f. 3.10.04. They will not be entitled to any notice pay or compensation u/s 25 FF of Industrial Disputes Act. The said notice pay or compensation, if any, received by them, will have to be refunded by them.
90. Hence, by way of relief, it is directed that management of M/s Hindustan Times Ltd. will reinstate 272 workmen treating them in continuity of service under terms and conditions of service as before their alleged termination i.e. 03.10.04. Award is passed accordingly.
91. Copy of the award be sent to GNCT of Delhi for publication. File be consigned to Record Room.
Announced in open court
on 23.01.2012 (MAHAVIR SINGHAL)
Presiding Officer, Industrial Tribunal
Karkardooma Courts, Delhi.
I.D. No. 207/10/05 Page 50 of 50