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The Management of Odeon Cinema, Madras 14, represented by R. Chetty, manager Vs. the Workers of Sagar Talkies, represented by the South Indian Cinema Employee's Association, Madras 2 and Ors. (04.05.1954 - MADHC) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Case NumberWrit Petn. No. 590 of 1953
Reported inAIR1954Mad1045; (1954)IILLJ314Mad
ActsIndustrial disputes Act, 1947 - Sections 2, 10(1) and 18; Transfer of Property Act, 1882 - Sections 8 and 107; Constitution of India - Article 226
AppellantThe Management of Odeon Cinema, Madras 14, represented by R. Chetty, manager
RespondentThe Workers of Sagar Talkies, represented by the South Indian Cinema Employee's Association, Madras
Appellant AdvocateV.C. Gopalaratnam and ;L.V. Krishnaswami Aiyar, Advs.
Respondent AdvocateSpecial Govt. Pleader, ;V.N. Shama Rao and ;S. Mohankumaramangalam, Advs.
DispositionAward quashed
Cases ReferredBommanji v. Secretary of State
labour and industrial - jurisdiction - sections 2, 10 (1) and 18 of industrial disputes act, 1947 and article 226 of constitution of india - undertaking transferred - transferee did not absorb all employee of transferor undertaking - unabsorbed employees raised industrial dispute - tribunal entertained dispute and passed award - whether tribunal was justified in entertaining dispute - tribunal can entertain only industrial dispute within meaning of act which can be raised by workmen - employees who were not absorbed by transferee undertaking were not workmen within meaning of act - dispute was not industrial dispute - tribunal had no jurisdiction to entertain dispute. - .....counsel for the petitioners. the first is that even on the findings of the tribunal there was no 'industrialdispute' which could have been referred to it foradjudication and therefore, both the reference to the tribunal as well the award passed by it areentirely without jurisdiction. secondly it is urged that the reasoning of the tribunal and its consequent decision are vitiated by error apparent on the face of the record. on these grounds learned counsel for the petitioner contends that thiscourt should quash the award of the tribunal.9. i shall consider these two points in thatorder. under the terms of section 10(1)(c), industrial disputes act, it is clear there must be an 'industrial dispute' either 'in praesenti' or apprehended before the appropriate government has power or.....

Rajagopala Ayyangar, J.

1. This is a petition for the issue of a writ of certiorari to call for the records in Industrial dispute No. 23 of 1952, before the Industrial Tribunal, Madras, and the Labour Appellate Tribunal, on appeal therefrom and to quash the proceedings thereof.

2. The petition arises out of a dispute between a cinema concern by name the Odeon Cinema and certain workmen of the Sagar Talkies, represented by the South Indian Cinema Employees' Association. The facts giving rise to this dispute are as follows:

3. In premises No. 8-A in woods Road, Roya-pettah, the owners of the building thereon were carrying on a cinema business under the name of Sagar Talkies having fitted it up with the furniture, talkies equipment, electrical machinery etc. They had on their rolls a number of workmen, who are collectively the first respondents in this writ petition. While so a firm by name Ishwaradas Sahni and Brothers, who are carrying on the business of running cinemas in several places in India under the name of Odeon Cinema, approached the owners of these premises for a lease of the building to enable them to conduct their own cinema business in the said place.

The negotiations were started towards the end of March 1952 and finally resulted in an agreement for a lease, under which the owners of the theatre building agreed to lease the premises and its equipment to Messrs. Ishwaradas Sahni and Brothers for a period of five years, with a covenant for renewal for a further period of five years. It was part of the agreement that the owners of the buildings should get transferred to their lessees the electrical licence as well as the licence under the Cinematograph Act for the purpose of conducting the cinema, and this was made a condition precedent to the agreement of lease becoming operative.

A formal lease deed was finally executed on 3-5-1952 to be effective as and from 1-5-1952 and under the terms thereof Rs. 25,000 was paid to the lessors as security for the proper return of the equipment and accessories and the lessees agreed to pay a rent of Rs. 4250 per mensem for the building and the premises and the hire of the furniture, electrical fittings, machinery and cinema equipment, etc. out of this sum of Rs. 4250, Rs. 2000 was allocated as rent for the premises, Rs. 1000 as hire for the furniture and Rs. 1250 as hire for the machinery, electrical fittings. There are other terms and conditions in the lease of these buildings and equipment, but is unnecessary to set them out as none of them have any bearing or relevance to the matters arising for consideration in this writ petition.

4. In accordance with the terms of the agreement the lessors intimated to the Commissioner of Police the fact of their entering into this lease and requesting that the electrical certificate and the licence might be transferred to the name of the lessees and these were got transferred.

5. The lessees effected some repairs and alterations to the structure of the theatre, after their entry into possession of the demised premises on3-5-1952 and started their business on and from 22-6-1952. Meanwhile on 1-5-1952 a list of the staff, who were till then in the employ of the lessors was handed over to the lessees and on 3-5-1952 it is stated that these members of the previous staff were introduced to the lessees at the theatre, premises. The lessees according to their case, intimated to the workers previously in the employ of the lessors that they would absorb into their service as many as were needed by them for their business, and they called upon the staff to apply to them for employment.

This gave rise to some misapprehensions on the part of the workmen and some of the workers addressed the lessees a letter on 13-5-1952, in which they informed these lessees that the lessors had been giving out that the services of the entire staff have been transferred to the lessees, and requesting that their services might be continued with the existing pay, allowances and amenities which they were enjoying theretofore. They also 'sought the assistance of the South Cinema Employees' Association to safeguard their rights.

The President of this Trade Union intervened with a letter to the labour Officer dated 15-5-1952 wherein he pointed out that the staff had been informed by the lessors that their services had been transferred to and would be continued under the lessees, that the lessees refused to entertain the staff, without fresh application for appointments, and requesting the officer to hold an enquiry into the matter, and advice the lessees to retain all the workers. A letter similar to the above and praying for similar action was addressed to the lessees. The Labour Officer Wok action on this and had a discussion with the lessees, who assured him that their intention was not to victimise any worker.

The secretary of the Trade Union met the lessees and after a discussion found out that they were prepared to take such of the staff as they required but without any continuity from previous service. He, therefore, requested the Labour Officer to initiate proceedings for conciliation of this dispute. The conciliation officer reported to the Government by a communication dated 20-6-1952 that the conciliation failed and that while the lessees were prepared to take in all the old workers, except two women ticket collectors and two scavenger women and a gate servant they would not agree to treat service under the lessors as part of the service under them for the purpose of promotion, gratuity etc.

The claim of the lessees was that the five workers, whom they refused to employ were supernumerary to their requirements, and on that account they refused to take them over. This was treated as an industrial dispute and the Government of Madras referred this dispute to the Industrial Tribunal, Madras, for adjudication in G. O. Ms. No. 3361, Development, dated 4-8-1952. The matter referred to for adjudication was whether the workers of the Sagar Talkies were entitled to be continued in the service of the Odeon Cinema under their old service conditions and if they were not, to what compensation were they entitled from the Odeon Cinema?

6. The parties appeared before the Industrial Tribunal, and the lessees raised the contention that there was no 'industrial dispute' between them and those workers which was capable of being referred for adjudication to a tribunal under Section 10(1)(c). The Industrial Tribunal took evidence on the matter which was in the form of the correspondence, which passed between the workers and the lessors and between them find the lessees as also copies of certain lettersaddressed by the lessors to the Commissioner of Police, etc. The workers also examined four witnesses in proof of their case,

7. The Tribunal, after setting out the facts,examined the point raised by the employers that there was really no Industrial dispute betweenthem and the other party before the Tribunal. The findings of the Tribunal may be summarisedthus. There was no transfer of the business by the Sagar Talkies to the Odeon Cinema as ad-mittedly the new management have not succeeded to the assets and liabilities of the old business. There is, therefore, no legal continuity so far asthe management is concerned. But there wasevidence in the case that the lessees assured the lessors that they would absorb the staff of the previous concern. They also gave similar assurances to the members of the staff. In the words of the Tribunal,

'On the materials placed before me it looks quite patent that the lessee did give an oral undertaking to continue the staff under his management also.'

The Tribunal further continues, 'Even assuming for a moment that there was really no arrangement or understanding between the parties to the lease to continue the staff of Sagar Talkies in the employ of the Odeon Cinema under the pre-existing conditions, that would mean that the staff has no contractual rights to enforce against the management of the Odeon Cinema for its continuance in service. It does not mean that the staff possesses no other right legal or equitable to claim continuance of service under the new management.'

On this finding, the Tribunal stated:

'I am of the opinion that the management of the A Odeon Cinema is under an obligation, legal and contractual to continue the staff under its old service conditions except to the extent to which any member of the staff has already agreed to serve under different conditions',

and the Tribunal passed an award accordingly. This has been affirmed by the Labour Appellate Tribunal and it is this award that is beingchallenged before me as incompetent and in excess of jurisdiction.

8. Two points are raised by the learned counsel for the petitioners. The first is that even on the findings of the Tribunal there was no 'industrialdispute' which could have been referred to it foradjudication and therefore, both the reference to the Tribunal as well the award passed by it areentirely without jurisdiction. Secondly it is urged that the reasoning of the Tribunal and its consequent decision are vitiated by error apparent on the face of the record. On these grounds learned counsel for the petitioner contends that thisCourt should quash the award of the tribunal.

9. I shall consider these two points in thatorder. Under the terms of Section 10(1)(c), industrial Disputes Act, it is clear there must be an 'industrial dispute' either 'in praesenti' or apprehended before the appropriate Government has power or jurisdiction to make a reference to a Tribunal for adjudication. In other words, the existence of prospect of an 'industrial dispute' is an essential pre-requisite for the exercise by Government of their power under the provision. The expression 'industrial dispute' is defined by Section 3(k) of the Act as meaning

'any dispute or difference between employers and employers or employers and workmen, or between workmen and workmen, which is con-nected with the employment or non-employ-ment, or the term of employment or the conditions of labour of any person.' As in the present case, the portion of the provision which could possibly apply is 'a dispute between employers and workmen' reference may be made to the definition of 'workman' which is in these terms:

'Workman means any person employed (including an apprentice) in any industry to do any skilled or unskilled manual or clerical work for hire or reward and includes, for the purposes of any proceedings under this Act in relation to an industrial dispute, a workman discharged during the dispute but does not include any person employed in the naval, military or air service of the Government.' The finding of the Tribunal on the evidence adduced before it is thaE the petitioners assured the workers that all the previous employees under the lessors would be entertained and taken in their own employment but that in breach of this promise, they subsequently refused to employ all these persons and offered to take in only a certain number of them and on terms of service different from what these persons would have enjoyed if their previous employment had been continued under the petitioners (LESSORS?). The petitioners are attacking this finding but for the purpose of considering the first point it has to be assumed that this finding is correct.

10. In order that there might be an industrial dispute, there must be differences between employers and workmen -- to mention that part of the definition, which is relevant to the present context. In other words there must at some stage exist a relationship of employer and workmen between the disputants before there can be an Industrial dispute. If such a relationship once existed but is subsequently terminated the manner of its termination might conceivably give rise to an industrial dispute. That is to say an industrial dispute might exist (1) between an employer and workmen employed under him on the date of the proceedings; (2) it might also arise between employers and persons who had at one time been employed under them but whose services have been terminated.

But the question is can there be an industrial dispute between an employer and a person who merely desires to get employed under the former or a person who has been promised employment; in other words, between an employer and a would be workman? It is true that in cases where a person has once been employed, and the dispute relates to his non-employment, the Courts have held that there is power in Tribunals to direct the re-instatement of such employee, and that the expression 'connected with the non-employment of any person' is apt to confer upon the Tribunals power to make such an order of re-in-statement.

But in a case where the employment has not started at all, but is merely in the stage of a contract, which is the most that can be put forward by the workers in the present case, can there be an industrial dispute between an employer and a person whom he has agreed to take into his employ, but whom he has never employed: I am clearly of the opinion that it would be straining the language of Section 2(k) to say that in such a case an industrial dispute exists. A mere contract to employ the workers which is in substance the basis of the present award does not constitute the person who is agreed to be taken into employ a workman within the meaning of Section 2(s).

In my judgment, a dispute between employers and workmen would include disputes between employers and their present workmen; between the employers and their ex-workmen but not between employers and would be or future workmen. The mere existence of- a contract to employ does not constitute a relationship of master and servant between the employer and the person who has been promised employment. Until this contract is performed and the servant is actually employed, the relationship of employer and workmen is not constituted with the result that any differences between the parties to the contract must be resolved in the ordinary courts by a suit for damages, and does not give rise to an industrial dispute.

Accepting therefore the finding of the Tribunal as on a question of fact, that there was an understanding between the petitioners and the workers under the lessors that the latter would be employed in the business of the former, the staff are not converted into workers under the lessees under Section 2(s) nor can there be any industrial dispute between them and these workers under Section 2(K). I, therefore, hold that there was no industrial dispute within the meaning of the Industrial Disputes Act which could have been referred to a tribunal for adjudication; nor could the Tribunal have jurisdiction to adjudicate upon such a dispute.

11. The next point that is raised is that the award of the Industrial Tribunal is vitiated by error apparent on the face of the record. These matters in respect of which this contention is raised are two. On a reference to a letter dated 10-3-1952 written by the lessee and marked as W. 21 as proving that the lessees had agreed to take over the staff and the second the use of letters addressed by the lessors to the South India Cinema Employees' Association to prove that the petitioners had undertaken to continue in their service the staff of the Sagar Talkies, on the same terms without any break in the continuity of their service.

In the view which I have expressed above regarding the absence of any industrial dispute and the want of jurisdiction in the Government and the Tribunal to have an adjudication upon such dispute, these contentions regarding the errors in the award might not arise for consideration. But as the point has been argued, I desire to express my opinion on these contentions.

12. The letter dated 10-3-1952 was addressed by the lessees to a friend of theirs and is in these terms:

'Unfortunately I have lost the address of the owners of the Sagar Talkies and cannot write to them direct. However you may please convey to them that I am only interested to take over the theatre if the owner is prepared to accept Rs. 4000 a month for five years' lease with an option of renewal for another five years. I cannot pay anything more than this. We shall have the complete control of the theatre without any interference, whatsover.. The staff etc. will be paid by us direct; in other words the cinema will be leased to us. If the owner is agreeable I am quite prepared to tafee a flight to Madras and settle everything personally.'

This document has been used by the Tribunnal for the purpose of drawing the inference that the lessees agreed to continue the old staff under the new management. I agree that there is force in the contention raised by Mr. Gopalaratnam for the petitioners that the Tribunal has committed an error both in understanding this document, as well as utilising it for the purpose of construing the obligations undertaken by the lessees under the instrument of lease.

13. In the first place the only proper construction of this document is that the writer does not desire to take a lease of a theatre, where the staff under the control of the lessors and expresses a desire that the staff, which would be employed in the theatre, would be his own staff. It is incapable of the construction that he desired to takeover the old staff as part of the equipment or paraphernalia of the business premises of which he took a lease.

14. In the second place, when once the terms of a contract are reduced to the form of a document, particularly to the form of a registered lease deed, as in the present case, nothing is better settled than that the contract must be construed according to its terms, and cannot be explained or interpreted by antecedent negotiation that led upto it. See -- 'Bommanji v. Secretary of State', AIR 1929 PC 34 (A). There is, therefore, error in the award of the Tribunal in relying upon this document for the purpose of construing the obligations of the lease (lessees?) under the deed of lease dated 3-5-1952.

15. The second item referred to by the learned Counsel for petitioners under this head is that the Tribunal improperly took into account certain letters, written by the lessors to the Trade Union in the course of which it was stated that the lessees had undertaken to continue the then existing staff. These letters were addressed behind the back of the lessors and certainly they cannot be used against them, and the Tribunal was in error in treating them as evidence, which could be taken into account to determine their obligations under the lease deed.

16. The Industrial Tribunal has cited a number of decisions of other Industrial Tribunal, in the course of which it has been held that where there is a transfer of a business of one management to another, the rights and obligations which existed as between the old management and their workers continue to exist, 'vis-a-vis' the new management, after the date of the transfer. The learned counsel for the petitioners does not challenge the correctness of these decisions, which really are an application of the principle embodied in Section 18(c), Industrial Disputes Act. But these decisions and the principle settled by them are inapplicable to the present case, because here there is admittedly no transfer of business, no taking over of the assets and liabilities, but only a new business is being conducted in the same premises where theretofore another separate business was being conducted by another individual. There is thus a complete hiatus between the one management and the other, and there is no link to connect the two managements except the fact that a somewhat similar business is being carried on in the same premises. In my judgment this does not enable the workers to contend that there is such a continuity as to constitute the lessees the successors in business of the lessors.

17. If continuity is eliminated the only ground upon which the claim of the workers could be sustained is on the basis of actual employment and not merely a contract to employ which is the utmost they can put forward on the facts of the present case. As I have mentioned above, this is wholly insufficient to enable an industrial dispute being raised to compel an employer to admit into his employ persons who never occupied in relation to him the position of a workman.

18. When the petitioners took the matter in appeal to the Labour Appellate Tribunal, it was dismissed on the ground that no point of law arose for consideration so that we have an award of the Industrial Tribunal, which is now sought to be enforced. In view of what I have stated before, it follows that this award is without jurisdiction.

19. The writ petition succeeds and the award of the Industrial Tribunal, Madras, in I. D. No. 23 of 1952 is quashed. The petitioners are entitled to their costs from the first respondent, which is fixed at Rs. 100/-.

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