Holding

The mere activity of buying and distributing milk does not constitute "dairy farming"; consequently, the employment is not covered by the Minimum Wages Act, 1939.

Summary

The appellant, a cooperative society registered under the Kerala Co-operative Societies Act, purchased milk from its members and distributed it. The respondent worked as a milk tester for two hours daily and was paid a fixed monthly wage of Rs.350. He claimed minimum wages under the Minimum Wages Act, 1939, and the Deputy Labour Commissioner allowed his claim. The High Court’s single judge held that the Act did not apply because the society was not engaged in "dairy farming," but a Division Bench reversed that decision, finding the employment fell within the Act. The Supreme Court examined whether the society’s activity of buying and distributing milk constituted "dairy farming" as defined in Schedule II of the Act. It held that without rearing milch cows or any farming activity, the society’s operations do not amount to dairy farming, and therefore the employment is not scheduled under the Act. The Court set aside the High Court’s order and allowed the appeal, confirming that the respondent’s claim under the Minimum Wages Act is not maintainable.

Issues considered

Whether the activities of a cooperative society that merely purchases milk from its members and distributes it constitute "dairy farming" within the meaning of Schedule II of the Minimum Wages Act, 1939.
Whether the employment of a milk tester in such a society falls within the scheduled employments under the Minimum Wages Act.

Legislation cited

Kerala Co-operative Societies Act, 1969

Subjects

Minimum Wages Actdairy farmingcooperative societyscheduled employmentlabour lawwage claim

Judgment

SECRETARY, PADIPPU K.S. SANGAM LRD. A
• v.
C. VARGHESE

MARCH 20, 2007

[DR. AR. LAKSHMANAN AND AL TAMAS KABIR, JJ.] B

Labour Law:

Minimum Wages Act, 1939:
c
'Dail)' Farming'-Co-operative Society engaged in purchasing milk

-
from its members and distribution thereof-Employed milk tester for two
hours daily on a fixed monthly payment-Employee claiming minimum wages
under the Act-Held, activities of Society do not constitute 'dairy farming'-
Employment in question does not attract provisions of the Act.
D·
Appellant-Co-operative Society was engaged in purchasing milk from
its members and its distribution. Respondent no. 1 was engaged as milk tester
for two hours from 6.30 a.m. to 8.30 a.m. all days, on a consolidated monthly
payment ofRs.350/-. Respondent no. J filed an application before the Deputy
Labour Commissioner claiming minimum wages. The application was E
allowed. The appellant approached the High Court and the single Judge
allowed the writ petition holding that the Minimum Wages Act was applicable
to the 'dairy farming' and was not applicable to the employment in question.
However, the Division Bench, in appeal, allowed the claim of respondent no.
l, and, therefore, the Society filed the appeal.
~ F
On the question: Whether the appellant-Society was engaged in 'dairy
farming':

Allowing the appeal, the Court

HELD: The mere activity of buying milk by the appellant-Society from G
its members and distributing it, will not constitute 'dairy farming' when there
is no rearing of milch cows and no agriculture or farming activity is carried
on by the Society. The Division Bench of the High Court ought to have held
that the appellant-society, which merely collects milk from its members and
241 H
242 SUPREME COURT REPORTS [2007) 4 S.C.R.

A distributes the same, is not engaged in any employment scheduled under the
Minimum Wages Act. !Para 91 (243-E-GI

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1497 of 2007.

B From the Final Judgment and Order dated 24.2.2006 of the High Court
of Kerala at Emakulam in W.A. No. 1578 of2004.

T.L.V. Iyer, Subramonium Prasad and Karun Mehta for the Appellant.

Dr. K.P. Kylasanatha Pillai and G. Ramakrishna Prasad for the Respondent.

C The Judgment of the Court was delivered by

DR.. AR. LAKSHMANAN, J. 1. Delay condoned.
•
2. Leave granted.

D 3. Heard Mr.T.L.V.lyer, learned senior counsel for the appellant and
Dr.K.P.Kylasanatha Pillai, learned counsel for the respondent.

4. This appeal has been filed against the judgment and order dt.24.02.2006
passed by the High Court of Kerala in Writ Appeal No.1578 of 2004.

E 5. The only question arises for our consideration in this appeal is
whether the appellant-society is engaged in 'dairy farming'.

6. The appellant is a co-operative Society registered under the Kerala
Co-operative Societies Act, 1969 and engaged in the collection of milk from
its members and distribution thereof. The respondent herein is a milk user in
F the appellant-society whose work, according to the appellant, is mainly between
6.30 a.m. and 8.30 a.m. on all days. As per the settlement arrived at before the
District Labour Officer Kasergod on September 20, 1990, the respondent was
being paid a consolidated pay of Rs.350/- per month from April l, 1990. The
Assistant Labour Officer, Kasergod also informed the appellant on 25.03.1998
G that the milk producing in co-operative Societies had not been included under
the Minimum Wages Act by any Notification and that there was no orders
fixing minimum wages for employees of such society.
-Y
7. In the meanwhile, the respondent filed an application before the
Deputy Labour Commissioner claiming payment of minimum wages under the
H
SECRETARY, PADIPPU K.S. SANGAM LRD. v. C. VARGHESE [LAKSl-IMANAN, J] 243
.+ Minimum Wages Act for the period 01.01.1993 to 31.12.1994 as ifthe said Act A
was applicable to co-operative Societies engaged in mere purchase of milk
from members and distribution thereof. The application was allowed despite
appellant's contest. The appellant challenged the decision before the High
Court in writ proceedings contending that the employment in the Society was
not a scheduled employment under the Act and, therefore, the second
respondent was not competent to pass such an order for payment of minimum
B
wages under the Act.

8. The learned Single Judge of the Kerala High Court accepted the
contention and after a detailed reasoning held that the Act was not applicable
to the employment in question which applied, inter alia, only to 'dairy farming'.
This judgment has, however, been reversed by the Division Bench of the
c
High Court with a view that even distribution of milk by a Society like the
appellant will attract the provisions of the Act.

9. We have heard extensive arguments advanced by the learned senior
counsel for the appellant and learned counsel for the respondent-workman. D
In our view, the impact of the order passed by the Division Bench on the
-r
~
appellant is very serious. Admittedly, the first respondent was employed only
as a milk tester. It is also not in dispute that the appellant-society is engaged
in purchasing milk from its members and distributing it. It is also not in
dispute that the appellant-society does not own cattle milch and they buy
milk for the purpose of production of milk and 'dairy farming'. The contention E
of Dr.K.P.Kylasanatha Pillai, learned counsel for the respondent, is that the
sale of milk does form part of the process of the production of milk which
constitute 'dairy farming'. We are unable to countenance the said submission
because it is only a part of the process of distribution of milk. In our view,
)_
the mere activity of buying milk from its members and distributing it will not F
constitute 'dairy farming' when there is no rearing of milch cows and no
agriculture or farming activity is carried on by the Society. The High Court,
in our opinion, ought to. have held that the appellant-society which merely
collects milk from its members and distributes is not engaged in any employment
scheduled under the Act. This apart, the respondent's claim that it falls within
the purview of 'dairy fanning' in Schedule II cannot also be accepted and we G
are unable to accept the submission made by the learned counsel for the
respondent and the reasoning given by the Division Bench of the High Court.
"'f·
We are, therefore, set aside the order passed by the High Court and allow the
appeal filed by the appellant-society.
H
244 SUPREME COURT REPORTS (2007) 4 S.C.R.

A I 0. During the pendency of the proceedings, the respondent was paid
some salary including minimum wages. We make it clear that the amount
which has already been paid shall not be recovered from the respondent. The
appeal stands allowed accordingly.

11. No costs.
B
RP. Appeal allowed.