Holding

Vanaspati is essentially oil; therefore the appellant's establishment is an oil mill within the meaning of Item 5 of Part I of the Schedule to the Minimum Wages Act, making the convictions under Section 22A valid.

Summary

The appellants, directors of Morvi Vegetable Products Ltd., were convicted under Section 22A of the Minimum Wages Act for failing to maintain wage registers and related documents. They contended that their plant, which manufactured vanaspati (hydrogenated vegetable oil), was not an "oil mill" and therefore fell outside Item 5 of Part I of the Schedule to the Act. The Supreme Court examined the definition of "oil mill" and held that vanaspati, despite processing, remains essentially oil, and the company also sold unprocessed oil and oil cakes in the ordinary course of business. Consequently, the company qualifies as an oil mill, satisfying the three conditions for coverage under the Act, and was duly represented before the wage‑fixation committee under Sections 5 and 9. The Court affirmed the lower courts' findings and upheld the convictions and fines.

Issues considered

Whether employment in a vanaspati manufacturing concern falls within the meaning of "oil mill" under Item 5 of Part I of the Schedule to the Minimum Wages Act.
Whether the appellant company is covered by the Minimum Wages Act by satisfying the statutory conditions.
Whether the company is bound by the wage‑fixation committee proceedings under Sections 5 and 9 of the Act.
Whether the convictions under Section 22A of the Act are sustainable.

Legislation cited

Gujarat Minimum Wages Rules, 1961s. 26(1), s. 26(2), s. 26(5), s. 26B
Minimum Wages Act, 1948s. 22A, s. 2(e), s. 2(g), s. 5, s. 9

Subjects

Minimum Wages Actoil millvanaspatischeduled employmentwage fixationSection 22AGujarat

Judgment

440

;CHAMPAK LAL H. THAKKAR AND OTHERS
v.
STATE OF GUJARAT AND ANOTHER
August 18, 1980
[S. MuRTAZA FAZAL Au AND A. D. KoSHAL, JJ.]
Minimum Wages Act Section 22A read with Guj~rnt Minimum Wages Rules
1961 Section 2(e), 2(g) Item 5 of Part-I of Schedule thei'eto-"Employment in
any oi? mill"-Whether vanaspati is oil.
c The appellants were convicted and sentenced for two offences under Sec-
tion 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 : (!) 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 CJ
(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
E fulfilled : [445 F)
(a) he must be employing one or more employees in any schedufrd
employment; [445 G}
(h) minimum rates of wages for such scheduled employment must have
been fixed under the Act; . and [445 G]
0

(c) if a committee has been appointed by the Government u nder Sec·
F tion 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 HJ
(ii) Employment in an oil mill is a scheduled employment. ~446 A]

In the instant case it cannot be said that these conditions are n.ot satisfied.
[446 A]
G (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 <;lil unless its essential characteristics have
H 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
jt is clear that hydrogenated vegetable oil falls within the said term. [441\ C-G]
CHAMPAKLAL v. GUJARAT (Kasha[, J.) 441

The various processes, namely, neutralization, bleaching, deodbrisation, A
hardening and hydrogenation to which oil is subjected for being converted into
vanaspati leave its basic characteristics untouched, that is, it remains a cooking
medium with vegetable fat as its main ingredient. Neutralisation, bleaching and
. deodorisation are merely refining processes so that the colour, the odbur 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 charac-
teristics. Even ghee, for that matter, is nothing but a form of oil although B:
it is obtained from animal fat, being a derivative from milk. Whether it lique-
fies 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
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 it has come to be called
vegetable ghee is that in its finished form it resembles ghee. in appearance c
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 5 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. : [446 H, 447 A-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 repre~ented 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 ofl 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 aU 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'FJ
F'
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 direcited against H
a Ndgment of a Division Bench of the High Court of Gujarat dated
the 19th January 1979 upholding the conviction recorded· against and
442 SUPREME COURT REPORTS [19311 1 S.C.R.

A the sentences imposed upon the three appellants u.nder section 22A of
the Minimum Wages Act (hereinafter sailed 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
B the Morvi Vegetable Products Ltd., a limited company carfying 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 refer:':d , j
~u~co~~ -,
·c On May 2, 1973 Kumari J. G. Mukhi, who is a Government
Labour Officer-cum-Minimum Wages Inspector, visited the Company's
ei;tab1ishment and found that the following documents which, accord- -.._.
ing 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
D by it.
(a) Muster Roll in Form V as contemplated by rule 26(5).
(br'·Wage Register in Form IV-A as required by.rule 26(1).
(c) A~tendance cards in f9rm V-D as provided by rule 26(B).
(d) Wage slip in form IV-B prescrjbed by rule 26(2).
E
In consequence, two complaints were filed against the appellants +
by N. H. Dave, Labour Officer-cum-Minimum Wages Insp1~ctor, 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
F I
rules 26(1) and 26(5) 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:
G
(a) Different types of industries are covered by the Act but the -y·
Company does not run any such industry and is, H1creforc,
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
H 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
\

CHAMPAKLAL v. GUJARAT (Koshal; J.) 443

a major operation carried on by the Company but that opera- A
tion is merely incidental to the 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 Com-
pany. Vanaspati is manufactured by subjecting oil to the
processes of neutralization, bleaching, deo'dorisation, hardening, B
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 break- I
down of the machinery used for converting oil into vanaspati
OT when oil become surplus on account of a shift in the
c
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 conSlidered to be running an oil mill.
(c) Under section 5 of the Act committees were appointed by the D
Govepiment from time to time to hold inquiries and advise
it in respect of fixation or reviision of minimum rates of
wages for employees in various industries. No representative
of the vanaspati industry was taken on any of these com-
mittees nor was any. questionnaire issued to any of the manu-
facturers of vanaspati, with the result that the Company was E
not bound by the recommendations of those committees or
decisions taken in pursuance thereof by the Government.
(d) In respect of oil miUs rates of minimum wages were ·fixed
under the Act by the Government for three types of em-
ployees, namely, skilled, semi-skilled and un-skilled. Apart F
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, 1976. G
His findings were as follows:
(i) The Company no doubt manufactured oil from oil seeds and
subjected the same to further processes an 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 H
be1ing done not merely in .exigencies pleaded by the Company
but in the regular course, of business.
444 SUPREME COURT REPORTS [198:i] 1 S.C.R.

A (ii) One of the committees appointed by the Government under
section 5 of the Act had issued a questionnaire to the Com-
pany itself before making recommendations regarding fixa-
tion and revision of minimum wages for various kinds of
employees working in an oil JTiill and it was not, therefore,.
open· to the Company to contend that no opportunity was
B 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 5 of Part I of the Schedule to the
Act and the Act, therefore, is applicable to it.
c 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 a ppel\ants in each case.

5. The appellants filed before the Sessions Court two applications
D
for revis,ion 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 reitera-
ted on behalf of the appellants at the argument stage in the High
E Court but were ·again repelled with the result that both the applica-
tions were dismissed by the impugned judgment. The High Court took
mto consideration various provisions of the Act and came to the con-
clusion 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 5 aforesaid. In holding that tile factory run by the Company
F was such a "mill the High Court· made tbe following points:
(a) Vanaspati is nothing but hydrogenated vegetable oil and,
therefore, only vegetable oil which has been subjected to
certaiin processes. It remains an oil in spite of those processes
and is not essentially different therefrom.
G (b) The finding arrived at by the learned Magistrate that oiT,
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 b'ut in the regular course
of business i~ a finding of fact and cannot be called in ques-
tion in revision. Part of the mill is, therefore, in any case,
H an oil mill.
(c) The Company ~as issued a questionm\ire in its capacity as
an oil mill by the committee appointed by the Government.
CHAMPAKLAL v. GUJARAT (Koshal, J.) 445

It cannot, therefore, urge that it had no opportunity to pre- A
sent its case before the committee which made recommenda-
....... tions 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 emplo)ls one or B
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 5 of that c
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 D
suh-committees as it considers necessary to hold inquiries and advise
it in respect of such fixation OT revision. Section 9 deals with the com-
position of the aforesaid commiHees and reads thus:
"Each of the committees, sub-committees and the Advisory
Board ~hall consist of persons to be nominated by the appropriate E
Government representing employers and employees in the sche-
duled employments, who shall be equal in number, and indepen-
dent persons not exceeding one-third of its total number of mem-
hers; one of such independent persons shall be appo.inted the
Chairman by the appropriate Government."
F
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 con-
ditions must be fulfilled:
(a) he must be employing one or more employees in any
scheduled employment; G
(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 5 in respect of such scheduled employment
it must consist of persons representing employers and H
employees in the scheduled employment who shall be
equal in number.
8-647 S.C. Jndia/80
446 SUPREME COURT REPORTS [1981] 1 S.C.R.

A (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 5. The most important point to be determined in the case. there-
fore, is whether employment in a vanaspati manufacturing concern
B would fall within the ambit of item 5 of part I of the Schedule to the
Act. i.e., whether it isi 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 thfa contention we find to be without
force. Vanaspati, in our opinion, is essentially an oil although it is
c a diffierent 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
D wJll 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. The word 'oil' is. 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
E
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 tnat typically are unctuous
viscous combustible liquids or solids easily liquefiable on warm-
ing and are not miscible· with water but are soluble in ether,
F 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 ~heir types chiefly as lubricants,
fuels and illuminan~s as food. in soap and candles, and in perfumes
and flavouring materials".
G
All the ingreclients 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 processes, namely, neutralization,
bleaching, deodorisation, hardening and hydrogenation to which oil
H is subjected for being converted into vanaspati leave its basic charac-
teristics untouched, i.e., it remains a cooking medium with vegetable
fat as its main ingredient. Neutralisation, bleaching and deodorisation
CHAMPALAL v. GUJARAT (Kosha/, J.) 447

are merely refining processes so that the colour, the odour and foreign A
substances are removed from it before it is hydrogenated aild hardened
and even the two proce,sses last mentioned allow the oil to retain those
characteristics. Even ghee, for that n;iatter, 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., yel1ow oil, and it does not need an B
expert to point out that the viscosity of ghee depends upon the weather
because with the rising temperature during summer months it turns into
a liquid while the cold of December and January solidifies, it. Nonthekss
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 ·
c
'vegetable ghee' is a contradiction in terms, ghee being es.sentially an
animal fat. The reason why it 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 D
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
<Jr chemical properties or in food value. No such difference was
indicated and all that he said was that vanaspati would normally E
+ '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 tlhe
aforesaid item 5 in spite of all the processes to which the oil forming
F
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 cons.idered to be an oil, we have every
reason to answer that question in the affirmative in view of the finding G
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
l:he Company an oil mill even ir the bulk of the oil produced by H
jt is converted into vanaspatli and sold in that form. The reason
is obvious. It is not the case of the -company that the proportion
448 SUPREME COURT REPORTS [19811 1 S.C.R.

A 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 bussiness other than that
\Jf \selling oil.
B
10. The grouse of the Company that the prov1s10ns of sectioes
5 and 9 have not been complied with has for its basis the assumption
'tlhat 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 5 in Part I of the Schedule
c to' the Act. It is not disputed that if the Company is to be regarded
as an oil mill, sections 5 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 mil! and that the Company itself (as well as
other oil mills) was invited through a questionnaire to submit their
D 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
E
un-skilled 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 tbe committee's deliberations or the Government's attention. This
contention is also without substance. We asked the learned counsel
F 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.
G
12. lit 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 the result, therefore, both the appeals fail
and are dismissed.
H

Appeals dismissed.