Express Newspapers (P) Ltd vs Michael Mark And Another

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal Nos. 294 and 295 of 1961

Decision Date: 25 July 1962

Coram: J.R. Mudholkar, P.B. Gajendragadkar, S.K. Das

The case was titled Express Newspapers (P) Ltd versus Michael Mark and Another and was decided on 25 July 1962 by the Supreme Court of India. The judgment was authored by Justice J. R. Mudholkar, with Justices P. B. Gajendragadkar and S. K. Das forming the bench. The petitioner in the proceedings was Express Newspapers (P) Ltd and the respondents were Michael Mark and another individual. The date of the judgment was recorded as 25/07/1962 and the bench composition was reiterated as Justice J. R. Mudholkar, Justice P. B. Gajendragadkar and Justice S. K. Das. The case citation appears as 1963 AIR 1141 and 1963 SCR Supl. (3) 405, with citator references R 1972 SC 277 (8) and R 1979 SC 582 (6). The matters in dispute related to the provisions of the Payment of Wages Act, 1936 (section 15), particularly issues concerning a strike by employees in enforcement of their demands, the refusal of those employees to return on a date specified by the employer, the question of whether such refusal could be characterized as abandonment of employment, and the consequences of premature termination of employment without notice. The relevant standing order was Standing Order 25(1). The headnote summarized that the employees of the appellant had made certain demands which the appellant did not accept, leading the employees to go on strike. The appellant issued notices stating that any employee who did not return to work immediately would be deemed to have abandoned his employment. The strike continued, and a further notice dated 14 January 1957 stated that workers who had not attended work since 31 December 1956, despite several requests to resume work, were having their names removed from the muster roll as of 2 p.m. on that day, on the basis that they had left the service of their own accord. The notice also indicated that arrangements would be made to fill the vacancies caused by what was termed desertion and that any dues, if payable, would be settled. The strike was eventually called off on 26 March 1937, and a number of employees could not be reinstated because their vacancies had already been filled. The first respondent in Civil Appeal No. 94 and the first ninety‑seven respondents in the other appeal, who were among those not taken back, applied, together with others, for relief before the authority under the Payment of Wages Act, but their application was dismissed. Most of the affected employees then approached the High Court under Article 226 of the Constitution, and their writ petitions were allowed. Standing Order 25(1) provided that the employment of permanent employees on a monthly rate could be terminated by giving one month’s notice or by paying one month’s wages (including all allowances) in lieu of notice. The Court held that this standing order contemplated termination of employment only by the employer, and in the present cases there was no doubt that the appellant had terminated the respondents’ employment by removing their names from the muster roll without giving any notice. The Court further observed that where employees absent themselves from work because of a strike in enforcement of their demands, there can be no question of abandonment of employment by them, and that management cannot, by unilaterally imposing a new term of employment, convert such absence into abandonment.

The Court explained that an employer could not treat a lawful strike as abandonment of employment. Only if the strike were illegal could the appellant lawfully invoke the Standing Order to discipline and dismiss the strikers, and in such a case the workers would lose any entitlement to compensation under Standing Order 25. The Court observed that the appellant had not taken that course; the appellant had not dismissed the workers under the Standing Order, nor had it sought to deny them compensation. Consequently, the respondents were entitled to the relief they claimed. The judgment concerned Civil Appeal Nos. 294 and 295 of 1961, filed under the civil appellate jurisdiction. Both appeals arose from judgments and orders of the Bombay High Court dated 4 September, 5 September and 6 October 1958, issued in Special Civil Applications Nos. 1426 and 3190 of 1958 respectively. Counsel for the appellants were A. V. Viswanatha Sastri, G. Gopalakrishnan and V. J. Merchant, while counsel for the respondents were K. T. Sule and Janardan Sharma. The judgment was delivered on 25 July 1962 by Justice Mudholkar. The Court noted that the two appeals were decided on identical facts and therefore a single judgment would govern both appeals.

The factual background began with the first respondent in Appeal 294 and the first ninety‑seven respondents in the companion appeal, all of whom were employees of Express Newspapers Ltd., the appellants, in Bombay. On 31 December 1956 the employees went on strike because three demands presented on the preceding day had not been met. On that same day the appellants displayed two notices on the notice board addressed to the striking workmen. The first notice warned that the strike contravened the Industrial Disputes Act, described the strike as uncalled‑for and unjustified, and warned that management would take any action it deemed appropriate if the workers did not resume work immediately. The second notice reiterated that unless the workers resumed work unconditionally and without delay, management would arrange replacements for the vacancies created by their absence and would discipline those who had encouraged others to strike. On the following day a third notice was issued directing any worker who wished to resume duty to report at 10 a.m. on 2 January 1957. That notice further declared that failure to report by the specified time would be deemed a voluntary relinquishment of employment, and the workers’ names would be removed from the muster roll as having left of their own accord. A letter also appears to have been sent to the workers’ union on 31 December 1956; the union’s General Secretary replied on 2 January, acknowledging the strike as a legal response to unmet demands and affirming the workers’ intention to continue the strike until their demands were satisfied.

In a reply dated 2 January 1957, the General Secretary of the workers’ union explained that the employees had commenced a strike because the management had failed to satisfy their demands and that the strikers saw no other viable means of obtaining those demands. The union secretary further asserted that the strike was entirely lawful and that the successive notices issued by the employers would not weaken the workers’ determination to maintain the strike until their demands were fulfilled. Subsequently, on 14 January 1957, the General Manager of the employers dispatched, by registered post, a letter to each employee who was participating in the strike. The letter referred to the earlier notices dated 1 January 1957 and 3 January 1957 and informed the recipients that, because they had remained absent from work since 31 December 1956 despite repeated requests to return, their names were being removed from the muster roll effective at 2 p.m. on that day, on the ground that they had voluntarily left the service. The letter also indicated that the employers had arranged for replacements to fill the vacancies created by the workers’ desertion and that arrangements would be made for payment of any dues, if applicable. An identical notice was displayed on the notice board at the employers’ premises. The strike was formally called off on 26 March 1957. It is noteworthy that not all of the employers’ employees joined the strike; some of those who had initially participated returned to work before the strike was terminated. Nevertheless, a substantial number of vacancies remained filled, preventing certain employees from being reinstated even after the strike ended. One workman subsequently filed an application under section 15 of the Payment of Wages Act, 1936, seeking thirty days’ wages in lieu of notice, twenty days’ wages in lieu of leave, two months’ wages as compensation, and full pay from 26 March 1957; he later withdrew the claims for the last two items. On 12 September 1957, the Payment of Wages Authority granted the reliefs concerning the first two items. The employer challenged this order by filing a writ petition in the High Court of Bombay, which was allowed on 26 November 1957. In addition to this workman, sixteen other employees—including the first respondent in case CA 294 of 1961 and the first ninety‑seven respondents in another matter—had filed similar applications before the Authority, and these applications remained pending until the High Court rendered its decision. Following the High Court’s view on the contested application, the Authority dismissed all one hundred sixteen applications. Most of the dissatisfied employees then instituted writ petitions before the Bombay High Court, and the High Court permitted those petitions. The two appeals now before this Court arise from the High Court’s decision.

Counsel for the appellants argued with great force that the respondents, by participating in an illegal strike, had not merely deserted their posts but had actually abandoned their employment. According to this submission, the abandonment meant that the respondents ceased to be workmen as of 14 January 1957, and therefore they could not claim any of the reliefs that they had previously sought from the Payment of Wages Authority. Counsel pointed out that Standing Order 25 provides relief to an employee only when the employee’s service is terminated by the employer. He maintained that where, as in the present case, the service was not terminated by the employer but was instead abandoned by the employee, the employee was not entitled to any right under Standing Order 25. Both parties accepted that the respondents’ claim was based on that standing order. The High Court appeared to hold that, having accepted on both sides that the employment of an employee had come to an end, Standing Order 25(1) would apply and the employee would be eligible for compensation under it. Counsel contended that this interpretation was not correct, observing that Standing Order 25 distinguishes clearly between termination of employment by the employer and termination by the employee, and that compensation is provided only for termination by the employer. He further asserted that, in the present circumstances, it was the appellants who had terminated the respondents’ services. The respondents’ decision to go on strike was, in his view, an indication that they wished to continue their employment while demanding better terms, an attitude that, far from showing abandonment, underscored the continuation of their employment as far as they were concerned.

Counsel also submitted that a person who deliberately absent himself from work should not be entitled to wages and therefore should not be regarded as being in service when the absence is attributable to an illegal strike. The Court observed that it need not express an opinion on whether the strike was legal or illegal for the purposes of this case; the only point to be decided was whether employees who absent themselves from work in order to press their demands could be deemed to have abandoned their employment. The counsel further referred to a series of notices issued by the management, which warned that workers who failed to return to duty by a specified date would be deemed to have abandoned their employment. In the Court’s view, the management could not, by imposing a new term of employment, unilaterally convert the striking employees’ absence into abandonment of their employment. It was acknowledged that, under the standing orders, the appellants might, if the strike were indeed illegal, take disciplinary action against the strikers and even dismiss them; in such a scenario the strikers would not be entitled to compensation under Standing Order 25. However, the appellants had not served a charge‑sheet on any of the respondents, and their attempt to treat the strikers’ absence as abandonment did not amount to a lawful termination of employment.

In this matter the Court observed that the respondents could not have claimed any compensation under Standing Order 25 because the appellants had not actually pursued the course of action contemplated by that provision. The appellants had not issued a charge sheet against any of the respondents; instead they attempted to obtain the effect of disciplinary action without conducting any inquiry by characterising the strikers’ absence as abandonment of employment. The notices issued by the appellants, and in particular the notice dated 14 January, stated that the names of those workers who had failed to report for duty would be struck off the muster roll at 2 p.m. on that day, that is, on 14 January 1957. Consequently, according to the terms of that notice the striking workers remained employees of the appellants up to 2 p.m. on the said date, and only after that time did they cease to be workmen of the firm. The cessation of their status as workmen occurred because their names were removed from the muster roll, an act which the Court identified as equivalent to the termination of their employment. The Court then reproduced the operative clause of Standing Order 25(1), which provides that the employment of a permanent employee paid on a monthly basis may be terminated either by giving one month’s notice or by paying one month’s wages, inclusive of all allowances, in lieu of such notice. Applying this provision, the Court concluded that the respondents were entitled to the reliefs they had sought before the Payment of Wages Authority, since the appellants’ removal of their names from the muster roll on 14 January 1957 amounted to a termination of service without the statutorily required notice. Accordingly, the Court held that both appeals failed, ordered them dismissed with costs, noted that the two appeals had been heard together and therefore only one hearing fee would be payable, and entered the order that the appeals were dismissed.