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PETITIONER: CHAMPAK LAL H. THAKKAR AND OTHERS

       Vs.

RESPONDENT: STATE OF GUJARAT AND ANOTHER

DATE OF JUDGMENT18/08/1980

BENCH: KOSHAL, A.D. BENCH: KOSHAL, A.D. FAZALALI, SYED MURTAZA

CITATION:  1980 AIR 1889            1981 SCR  (1) 440  1980 SCC  (4) 329  CITATOR INFO :  D          1985 SC1391  (3)  E          1989 SC1316  (13)

ACT:      Minimum Wages Act Section 22A read with Gujarat Minimum Wages Rules  1961 Section  2(e), 2(g)  Item 5  of Part-I  of Schedule  thereto-"Employment   in  any   oil  mill"-Whether vanaspati is oil.

HEADNOTE:      The appellants  were convicted  and sentenced  for  two offences under  Section 22A  of the  Minimum Wages  Act  for contravention of  rules 26(1),  26(2), 26(5)  and 26B of the Gujarat Minimum  Wages Rules,  1961. The sentence imposed in consequence was  a fine  of Rs. 50 on each of the appellants in each case. The trial court as well as the High Court took into consideration various provisions of the Act and came to the conclusion  that the  appellant’s mill  fell within  the ambit of Item 5 of Part-I of Schedule to the said Act.      Dismissing the appeal by special leave, the Court ^      HELD: (1)  The appellant’s Company would be an oil mill within the  meaning of  Item 5  of Part-I of the Schedule to the Act. [448 C]      (2)  The various  provisions of  the Minimum  Wages Act           make it clear:      (i)  For an  employer to  be covered  by the  Act three           conditions must be fulfilled; [445F]           (a)  he must be employing one or more employees in                any scheduled employment; [445 G]           (b)  minimum rates  of wages  for  such  scheduled                employment must  have been  fixed  under  the                Act; and [445 G]           (c)  if a  committee has  been  appointed  by  the                Government under Section 5 in respect of such                scheduled  employment   it  must  consist  of                persons representing  employers and employees                in the  scheduled  employment  who  shall  be                equal in number. [445 H]      (ii) Employment  in   an  oil   mill  is   a  scheduled           employment. [446 A] In the  instant case it cannot be said that these conditions

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are not satisfied. [446 A]      (3) Vanaspati  is essentially  an oil  although it is a different kind  of oil  other than  that oil (be it rapeseed oil, cotton-seed  oil, ground-nut  oil, soya-bean oil or any other oil) which forms its basic ingredient. Oil will remain oil if  it  retains  its  essential  properties  and  merely because it has been subjected to certain processes would not convert it  into a  different  substance.  In  other  words, although certain  additions have been made to and operations carried out  on oil,  it will  still be  classified  as  oil unless its essential characteristics have undergone a change so that  it would be a misnomer to call it oil as understood in ordinary  parlance. No  doubt,  the  word  ’oil’  is  not defined in  the  Act.  Taking  the  dictionary  meaning  for interpreting the  term ’oil  mill’, in this case it is clear that hydrogenated  vegetable oil falls within the said term. [446 C-G] 441      The   various    processes,   namely,   neutralization, bleaching, deodorisation,  hardening  and  hydrogenation  to which oil  is subjected  for being  converted into vanaspati leave its  basic  characteristics  untouched,  that  is,  it remains a  cooling medium  with vegetable  fat as  its  main ingredient. Neutralisation,  bleaching and deodorisation are merely refining  processes so that the colour, the odour and foreign  substances   are  removed  from  it  before  it  is hydrogenated and  hardened and  even the  two processes last mentioned allow  the oil  to retain  those  characteristics. Even ghee,  for that  matter, is  nothing but  a form of oil although it  is obtained from animal fat, being a derivative from milk.  Whether it liquefies in summer and solidifies in winter, nonetheless,  ghee remains  an oil  and it  makes no difference that  it is called ghee in ordinary parlance. The word ii  merely a  different name  for an  oil which  is not derived from  vegetables. From  that point  of view the term ’vegetable ghee’  is a  contradiction in  terms, ghee  being essentially an  animal fat. The reason why it has come to be called vegetable  ghee is  that  in  its  finished  form  it resembles ghee  in appearance  and by  viscosity and is also considered a more respectable form of cooking medium when so called, thus  catering to  the psychological satisfaction of the consumer.  Thus vanaspati must be regarded as an oil for the purpose  of Item  S in Part-I of the Schedule to the Act in spite  of the processes to which the oil forming its base has been  subjected in order to convert it into the finished product. [446H, 447A-D; F]      Further, in  the instant  case: (1)  there is  a  clear finding of  fact which  is no longer open to challenge, that the company  sells oil  as such  and also  oil  cakes  which brings the Company within the meaning of an oil mill (2) the Company  being  an  oil  mill  and  oil  Mills  having  been represented on  the Committee  formed by  the Government and opportunity having  been afforded  to the appellants by that committee to  represent their  case. Sections 5 and 9 of the Act are  not  applicable,  and  (3)  the  three  categories, namely,  skilled,   semi-skilled  and   unskilled  employees exhaust the  types of workers which would be employed in any undertaking (barring  of course  specialists  and  technical experts who  admittedly do  not fall  within the category of employees embraced  by the Act) and minimum wages were fixed for all  those three  categories. The appellants’ contention therefore, that  for any  of the  provisions of the Act were contravened is thus not tenable. [447 G-H, 448 D, E-F]

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JUDGMENT:      CRIMINAL APPELLATE  JURISDICTION: Criminal  Appeal Nos. 606 and 607 of 1979.      From the  Judgment and  order dated  19-1- 1979  of the Gujarat High Court in Criminal Revision Nos. 485-486/77.      V. B. Patel and S. C. Patel for the Appellant. G.      J. L.  Nain, Girish  Chander and  M. N.  Shroff for the Respondent.      The Judgment of the Court was delivered by      KOSHAL,  J.-By   this  judgment  we  shall  dispose  of Criminal .  Appeals Nos.  606 and  607 of 1979 both of which are directed  against a  judgment of a Division Bench of the High Court  of Gujarat dated the 19th January 1979 upholding the conviction recorded against and 442 the  sentences  imposed  upon  the  three  appellants  under section 22A of the Minimum Wages Act (hereinafter called the Act) in each of two cases by a Judicial Magistrate at Morvi.      2. Some  of the facts leading to the prosecution of the appellants are  not in  dispute and  may be  shortly stated. Appellant No.  3 is  the Morvi  Vegetable Products  Ltd.,  a limited company  carrying on the business of manufacture and sale of  vegetable oil and vanaspati in Morvi. Appellant No. 1 is the Managing Director and appellant No. 2 the Secretary of appellant  No. 3  which is hereinafter referred to as the company.      On May  2, 1973 Kumari J. G. Mukhi, who is a Government Labour  officer-cum-Minimum  Wages  Inspector,  visited  the Company’s  establishment   and  found   that  the  following documents which,  according to her, the Company was bound to maintain in  compliance with the provisions of section 18 of the Act  read with the relevant rules of the Gujarat Minimum Wages Rules, 1961, had not been maintained by it.      (a) Muster  Roll in  Form V  as  contemplated  by  rule 26(5).      (b) Wage  Register in  Form IV-A  as required  by  rule 26(]).      (c) Attendance  cards in  form V-D  as provided by rule 26(B).      (d) Wage slip in form IV-B prescribed by rule 26(2).      In consequence,  two complaints  were filed against the appellants by  N. H.  Dave, Labour officer-cum-Minimum Wages Inspector. Rajkot in the court of the trial Magistrate, each praying that  the appellants  be convicted and sentenced for an offence  under  section  22A  of  the  Act.  One  of  the complaints was  in respect  of the  contravention  of  rules 26(1) and 26(S) while the other embraced that of rules 26(2) and 26-B.  They were  registered as  Criminal Cases Nos. 674 and 675 of 1973 respectively.      3. At  the trial  the appellants  pleaded  not  guilty. Their defence consisted mainly of the following pleas:      (a)  Different types  of industries  are covered by the           Act but the Company does not run any such industry           and   is,    therefore.   not   liable   for   any           contravention of  the  Act  or  the  rules  framed           thereunder.  According   to  the  prosecution  the           factory run  by the  Company is  an oil  mill,  an           industry which  is certainly  covered by  the Act.           However, the  Company  is  running  a  mill  which           manufactures vanaspati and vanaspati is not an oil           but is vegetable ghee. Oil extraction is no doubt 443           a major  operation carried  on by  the Company but           that  operation   is  merely   incidental  to  the

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         preparation of  vanaspati. No separate licence for           the oil  expelling machinery  used by  the Company           has been  obtained from  the State  Government nor           has sales-tax  been paid  on the  oil extractor by           the  Company.   Vanaspati   is   manufactured   by           subjecting oil to the processes of neutralization,           bleaching,        deodorisation,        hardening,           hydrogenation,  etc.   and  is   a  product  quite           different from oil.      (b)  The Company does not carry on the business of sale           of  the  oil  manufactured  by  it  except  as  an           operation  incidental   to  the   manufacture   of           vanaspati, e.g.,  when there is a breakdown of the           machinery used  for converting  oil into vanaspati           or when  oil become  surplus on account of a shift           in  the   Government  policy   in  regard  to  the           percentage of oil to be , consumed by the Company.           In spite  of  the  sale  of  oil,  therefore,  the           Company  remains   a  vanaspati  manufacturer  and           cannot be considered to be running an oil mill.      (c)  Under  section   5  of  the  Act  committees  were           appointed by  the Government  from time to time to           hold  inquiries   and  advise  it  in  respect  of           fixation or revision of minimum rates of wages for           employees in various industries. No representative           of the  vanaspati industry  was taken  on  any  of           these committees  nor was any questionnaire issued           to any of the manufacturers of vanaspati, with the           result that  the Company  was   not bound  by  the           recommendations of  those committees  or decisions           taken in pursuance thereof by the Government.      (d)  In respect  of oil  mills rates  of minimum  wages           were fixed  under the  Act by  the Government  for           three types  of employees,  namely, skilled, semi-           skilled  and   unskilled.  Apart   from  these   a           vanaspati manufacturer  has  to  arrange  for  the           services of  other types  of employees which shows           that a  vanaspati manufacturing  mill is different           from an oil mill.      4. After  the trial the learned Magistrate repelled all the pleas  taken up  by the appellants in his judgment dated October 13, 1975. His findings were as follows:      (i)  The Company  no doubt  manufactured oil  from  oil           seeds and  subjected the same to further processes           in order  to produce  .  vanaspati.  However,  the           Company  was   selling  not   only  the  vanaspati           manufactured by it but also oil and refined oil as           such in  addition to oil cakes and de-oiled cakes,           which was  being done  not  merely  in  exigencies           pleaded by  the Company  but in the regular course           of business. 444      (ii) One of  the committees appointed by the Government           under  section   S  of   the  Act   had  issued  a           questionnaire to  the Company itself before making           recommendations regarding fixation and revision of           minimum  wages  for  various  kinds  of  employees           working in  an oil mill and it was not, therefore,           open to the Company to contend that no opportunity           was given  to it  to be  heard in relation to such           fixation and   revision.      (iii) The Company was an oil mill within the meaning of           that expression as used in item S of Part I of the           Schedule to  the Act  and the  Act, therefore,  is           applicable to it.

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    It was  in these  premises that  the learned Magistrate convicted the  three appellants,  in both the cases tried by him, of  an offence  under section  22-A  of  the  Act.  The sentence imposed in consequence was a fine of Rs. 50 on each of the appellants in each case.      5. The  appellants filed  before the Sessions Court two applications for  revision  of  the  order  of  the  learned Magistrate, one  pertaining to each case. Those applications where transferred  by the  High Court  to Its  own file  for reasons which  are not  relevant for  the purpose  of  these appeals. The pleas raised before the learned Magistrate were reiterated on behalf of the appellants at the argument stage in the  High Court  but were  again repelled with the result that both  the applications  were dismissed  by the impugned judgment. The  High Court  took into  consideration  various provisions of  the Act  and came  to the conclusion that the same would  apply to the Company only if it could be held to be running  an oil mill and thus falling within the ambit of item S  aforesaid. In  holding that  the factory  run by the Company was  such a  mill the  High Court made the following points:      (a)  Vanaspati is  nothing but  hydrogenated  vegetable           oil and,  therefore, only  vegetable oil which has           been subjected to certain processes. It remains an           oil in,  spite  of  those  processes  and  is  not           essentially different therefrom.      (b)  The finding  arrived at  by the learned Magistrate           that oil’,  refined oil,  oil cakes  and  de-oiled           cakes were being sold by the Company not merely as           an  operation   incidental  to   the  business  of           manufacturing vanaspati  but in the regular course           of business  is a  finding of  fact and  cannot be           called in  question. in revision. Part of the mill           is, therefore, in any case, an oil mill.      (c)  The Company  was issued  a  questionnaire  in  its           capacity as an oil mill by the committee appointed           by the Government. 445           It  cannot,   therefore,  urge   that  it  had  no           opportunity to  pre- A  sent its  case before  the           committee which  made recommendations in regard to           fixation and revision of minimum wages.      6. A  survey of  the various relevant provisions of the Act  may  be  useful  at  this  stage.  Section  2  contains definitions.  Clause   (e)  of   that  section   defines  an ’employer’ as  a person who employs one or more employees in any scheduled  employment in  respect of which minimum rates of wages  have been fixed under the Act. According to clause (g) of  the same  section a ’scheduled employment’ means any employment specified  in the  Schedule to  the  Act  or  any process or  branch of  work forming part of such employment. The Schedule  is in  two parts.  Part I  enumerates  various employment. Item S of that part reads:           "Employment in any oil mill" Section 5  lays down procedure for the fixation and revision of mini  mum rates  of wages  in respect  of  any  scheduled employment by  the Government which is authorised to appoint as many committees or subcommittee as it considers necessary to hold  inquiries and advise it in respect of such fixation or revision.  Section 9  deals with  the com position of the aforesaid committees and reads thus:           "Each of  the committees,  sub-committees and  the      Advisory Board shall consist of persons to be nominated      by the  appropriate Government  representing  employers      and employees  in the  scheduled employments, who shall

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    be  equal   in  number,  and  independent  persons  not      exceeding one-third of its total number of members: one      of such  independent persons  shall be  appointed the -      chairman by the appropriate Government."      7. The  following corollaries are immediately deducible from the provisions of the Act above noted:      (i)   For an  employer to  be covered  by the  Act  the           following conditions must be fulfilled:           (a) he  must be employing one or more employees in           any  scheduled employment;           (b) minimum  rates of  wages  for  such  scheduled           employment must have been fixed under the Act, and           (c) if  a committee  has  been  appointed  by  the           Government under  section S  in  respect  of  such           scheduled employment  it must  consist of  persons           representing  employers   and  employees   in  the           scheduled,  employment   who  shall  be  equal  in           number. 446      (ii)  Employment   in  an   oil  mill  is  a  scheduled employment.      8. It  is not  disputed that the company is not covered by any  of the items enumerated in Part I of the Schedule to the Act.  except item  S. The  most important  point  to  be determined in the case. there fore. is whether employment in a vanaspati  manufacturing concern  would  fall  within  the ambit of  item S of part I of the Schedule to the Act. i.e., whether it  is an employment in an oil mill or not. The only argument advanced  on  behalf  of  the  appellants  in  this connection is,  as it  was before the two courts below, that vanaspati is  a form  of ghee  which is not an oil; and this contention we  find to  be without  force. Vanaspati, in our opinion, is  essentially an  oil although  it is a different kind of  oil than  that oil (be it rapeseed oil, cotton-seed oil, ground-nut  oil, soya-bean  oil or any other oil) which forms its  basic ingredient.  Oil  will  remain  oil  if  it retains its  essential properties  and merely because it has been subjected  to certain  processes would  not convert  it into a different substance. In other words, although certain additions have  been made  to and  operations carried out on oil,  it  will  still  be  classified  as  oil  unless  it., essential characteristics have undergone a change so that it would be a misnomer to call it oil as understood in ordinary parlance. The  word ’oil’  i.: not  defined in  the Act  and therefore. its  dictionary meaning  may well be pressed into service for  interpreting the  term ’oil mill’. According to Webster’s Third  New International Dictionary (1966 edition) the word  ’oil’  has  different  connotations  in  different situations but  in the  context of  item .  5 aforesaid  the meaning to be given to it would be:           "any of  various  substances  that  typically  are      unctuous viscous  combustible liquids  or solids easily      liquefiable on  warming and are not miscible with water      but are  soluble in  ether, naphtha,  and often alcohol      and other  organic solvents,  that leave  a greasy  not      necessarily permanent  stain (as  on paper  or  cloth),      that may be of animal, vegetable, mineral, or synthetic      origin, and  that are  used according  to  their  types      chiefly as  lubricants, fuels  and illuminates as food.      in soap  and candles,  and in  perfumes and  flavouring      materials".      All the ingredients of this meaning are fully satisfied in the  case of hydrogenated vegetable oil. We may specially point out  that even  solids easily  liquefiable on  warming fall within  the meaning  given by  Webster. Now the various

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processes, namely, neutralization, bleaching, deodorisation, hardening and  hydrogenation to  which oil  is subjected for being   converted    into   vanaspati    leave   its   basic characteristics untouched,  i.e, it remains a cooking medium with vegetable  fat as  its main ingredient. Neutralisation, bleaching and deodorisation 447 are merely  refining processes so that the colour, the odour and foreign  A substances  are removed  from it before it is hydrogenated and  hardened and  even the  two processes last mentioned allow  the oil  to retain  whose  characteristics. Even ghee,  for that  matter, is  nothing but  a form of oil although it  is obtained from animal fat, being a derivative from milk.  It may  be of  use to  mention that  in  Persian language ghee  is known as ’raughan zard’, i.e., yellow oil, and it  does not  need an  expert  to  point  out  that  the viscosity of  ghee depends upon the weather because with the rising temperature during summer months it turns into liquid while the  cold of  December  and  January  solidifies,  it. Nonetheless it  remains an  oil and  it makes  no difference that it  is called  ghee in  ordinary parlance.  The word is merely a different name for an oil which is not derived from vegetables. From  that point  of view  the  term  ’vegetable ghee’ is a contradiction in terms, ghee being essentially an animal fat.  The  reason  why  i  has  come  to  be  called vegetable ghee  appears to  be that  in its finished form it resembles ghee  in appearance  and  viscosity  and  is  also considered a more respectable form of cooking medium when so called, thus  catering to  the psychological satisfaction of the consumer.      We pointedly  asked learned  counsel for the appellants if he  could indicate  any difference  between vegetable oil and vanaspati which would essentially distinguish the former from the  latter, either  in physical or chemical properties or in  food value.  No such difference was indicated and all that he  said was that vanaspati would normally be available in solid  state and  had the  appearance of ghee rather than that of  any oil.  This,  in  our  view,  is  a  superficial difference which  does not  at all  go to  the root  of  the matter. Accordingly  we hold that vanaspati must be regarded as an  oil for  the purpose of the aforesaid item 5 in spite of all  the processes  to which the oil forming its base has been subjected  in order  to convert  it into  the  finished product.      9. Although  the finding just above arrived at obviates the necessity  of our  determining the  question whether the Company would  be an  oil mill  even if  vanaspati were  not considered to be an oil, we have every reason to answer that question in  the affirmative  in view of the finding arrived at by  the learned  Magistrate that the Company sells oil in its unhydrogenated form not only when the exigencies pointed out by it arise but also otherwise and in the regular course of business.  That finding  being a  finding of  fact is  no longer open  to challenge;  and that being so, the operation of sale  of oil  as such  would make the Company an oil mill even if the bulk of the oil produced by it is converted into vanaspati and sold in that form The reason is obvious. It is not the case of the Company that the proportion 448 Of sales  of oil  to those  of vanaspati  is so low that the former should  be ignored. In this situation a sizeable part of the  activities of  the  Company  must  be  field  to  be connected  with   running  an  oil  mill  and  the  Company, therefore would  be liable  to be classified as such to that extent even  though it  also carries  on business other than

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that of selling oil.      10. The  grouse of  the Company  that the provisions of sections 5  and 9  have not  been complied  with has for its basis  the  assumption  that  it  is  not  an  oil  mill  an assumption which  must be  held to be ill-founded in view of the foregoing  discussion  and  the  classification  of  the company with  reference to  item S in Part I of the Schedule to the  Act. It is not disputed that if the Company is to be regarded as an oil mill, sections S and 9 do not come to its rescue because  representatives of  oil mills  did  man  the committee appointed by the Government for fixing the minimum rates of  wages in  respect of employment in an oil mill and that the  Company itself  (as well  as other  oil mills) was invited through  a questionnaire  to submit  their views and thus were  given the  opportunity to be heard in relation to the fixation of such wages.      11. The  only other  contention raised on behalf of the appellants was  that while  the relevant notification issued by the  Government has  fixed rates  of wages  in respect of skilled, semi-skilled and unskilled employees working in oil mills,  the  Company  employs  other  types  of  workers  in connection with  the process  of hydrogenation  of vegetable oil and  that such workers do not form the subject-matter of the committee’s deliberations or the Government’s attention. This contention  is also  without substance.  We  asked  the learned counsel for the appellants to point out which of the employees of  the Company  fell outside the three categories just  above  specified  and  he  was  unable  to  name  any. (obviously the  said three  categories exhaust  the types of workers which  would be employed in any undertaking, barring of course  specialists and  technical experts who admittedly do not fall within the category of employees embraced by the Act.      12. It  is not  disputed that  if the Company is an oil mill it  is guilty of all the contraventions of which it has been convicted.  Nor has  any argument  been advanced to the effect that  the sentences  awarded are  excessive.  In  he result, therefore, both the appeals fail and are dismissed S.R.                                          Appeals dismissed. 449