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Ernakulam Co-operative Milk Supply Union Ltd. Vs. Government of India (Represented by Secretary, Department of Social Security) and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKerala High Court
Decided On
Judge
Reported in(1968)IILLJ666Ker
AppellantErnakulam Co-operative Milk Supply Union Ltd.
RespondentGovernment of India (Represented by Secretary, Department of Social Security) and anr.
Excerpt:
- - under this wide definition it seems to me perfectly possible to successfully contend that the process of bottling of the milk produced from the members amounts to 'manufacture' or manufacturing process' since it certainly amounts to 'pacing' of the article......traancore-cochin co-operative societies act which is engaged in the business of supply of milk and milk products tot he public, the requisite milk being collected from the members of the society.2. in december 1964, respondent 2 who is the regional provident fund commissioner, kerala, informed the society that the employees' provident funds act, 1952, and the scheme framed thereunder had become applicable to the society with effect from 30 april 1962, inasmuch as the society came within the scope of entry 22 in appendix i wherein the classes of establishments to which the act has been made applicable under section 1(8)(b) of the act have been enumerated. respondent 2 accordingly called upon the society to remit the contribution and to submit the returns with effect from 1 may, 1962.3......
Judgment:

V. Balakrishna Eradi, J.

1. This petition has been preferred by a co-operative society registered under the Traancore-Cochin Co-operative Societies Act which is engaged in the business of supply of milk and milk products tot he public, the requisite milk being collected from the members of the society.

2. In December 1964, respondent 2 who is the Regional Provident Fund Commissioner, Kerala, informed the society that the Employees' Provident Funds Act, 1952, and the scheme framed thereunder had become applicable to the society with effect from 30 April 1962, inasmuch as the society came within the scope of entry 22 in appendix I wherein the classes of establishments to which the Act has been made applicable Under Section 1(8)(b) of the Act have been enumerated. Respondent 2 accordingly called upon the society to remit the contribution and to submit the returns with effect from 1 May, 1962.

3. Entry 22 in appendix I which was introduced by a notification of Central Government dated 7 March 1962 reads as follows:

Trading and commercial establishments engaged in the purchase, sale or storage of any goods including establishments of exporters, importers, advertisers, commission agents and brokers and commodity and stock exchanges, but not including banks or warehouses established under any Central or State Act.

4. By the time respondent 2 issued his above communication to the petitioner dated 10 December 1964, referred to above, an amendment had been made in Schedule I of the Act, by virtue of which a new entry 'milk and milk products industry' was introduced in the schedule. This was by notification dated 27 November 1964 with effect from 31 December 1964.

5. In view of the aforesaid amendment of Schedule I, the petitioner-society, in its reply to respondent 2, raised the contention that the appropriate head under which the society should be covered under the Act is only under the item 'milk and milk products industry' added in Schedule I. Since respondent 2 was not prepared to accept this stand taken by the petitioner as correct, the petitioner-society submitted an application dated 20 July 1965, to the Central Government under Section 19A of the Act praying that a decision should be rendered by the Central Government removing the doubt as to the exact head under which the petitioner's establishment should be covered under the Act and upholding the contention of the petitioner-society that they are liable to be covered only under the entry already referred to appearing in Schedule I as amended. The Central Government passed orders on the matter on 20 January 1966 holding that the petitioner's establishment is covered under the head 'ending and commercial establishments,' thereby negativing the petitioner's claim to be governed by the entry 'milk and mild products industry' appearing in Schedule I. The petitioner has come forward with this writ petition seeking to quash the aforesaid order of the Central Government, a copy of which has been produced and marked as Ex. P. 1.

6. The facts of the case are not in dispute. The petitioner-society is admittedly engaged in the business of procurement, supply and sale of milk and milk products, the procurement of the raw material, the milk, being from the members of the society. As an integral part of the business they are engaged, admittedly, in the manufacture of milk products such as curds, buttermilk, butter and ghee which products are also being sold by them as such to the public. The milk collected by the society from the producers is tested, cleaned and filled by them into what they claim to be hygienic containers (battles) having pilfer-proof seals. It may be stated that the society has no case that the milk is subject to any process of pasteurization before bottling.

7. On the facts stated above, the main question that arises for decision is whether the petitioner's establishment can be said to be a factory engaged in 'milk and milk products industry' so as to fall within the scope of that entry in Schedule I of the Act. The expression 'factory' has been defined in Section 2(g) of the Act as meaning

any premises, including the precincts thereof, in any part of which a manufacturing process is being carried on or is ordinarily so carried on, whether with the aid of power or without the aid of power.

The expressions 'manufacture' and 'manufacturing process' have been defined in Section 2(a) as meaning.

any process for making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing or otherwise treating or adopting any article or substance with a view to its use, sale, transport, delivery or disposal.

Under this wide definition it seems to me perfectly possible to successfully contend that the process of bottling of the milk produced from the members amounts to 'manufacture' or manufacturing process' since it certainly amounts to 'pacing' of the article. It is not however necessary for me to rest my decision of this case on this ground. As already stated, it is not in dispute that as an integral part of the petitioner's activity, milk is being converted in the premises into curds, butter butter-milk and ghee. Such process of conversion of milk into milk products would certainly constitute a manufacturing process and hence there can be no doubt that the petitioner's establishment is a 'factory' as defined in Section 2(g).

8. The further question which then arises is whether this factory is engaged in any one of the industries specified in Schedule I. As already noticed, the relevant entry in the schedule which is relied on by the petitioner is milk and milk products industry'. It is difficult to see how it can be possibly contended on the facts and circumstances mentioned above that the petitioner's factory does not come within the scope of that entry, since it is clear that they are engaged in the business of manufacture of milk products, and the procurement, packing and sale of milk. The conclusion appears to me to be inescapable that the petitioner's establishment is one covered by the abovementioned entry in Schedule I and that therefore it comes within the scope of Section 1(3)(a). In this connextion it is necessary to extract the relevant portion of Section 1(3) which runs as follows:

1.(3) Subject to the provisions contained in Section 16, it (the Act) applies-

(a) to every establishment which is a factory engaged in any industry specified in Schedule I and in which twenty or more persons are employed, and

(b) to any other establishment employing twenty or more persons or class of such establishments which the Central Government may, by notification in the official gazette, specify in this behalf: * * *

A careful reading of the section shows that Section 1(3)(b) is a residurary provision in the sense that it will take in only establishments which are not covered by Sub-section 3(a); in other words when once it is found that an establishment comes within the scope of Sub-section 3(a) there can be no question of its being covered by Sub-section 3(b), since by reason of its inclusion within the scope of Clause (a) the applicability of Clause (b) stands automatically excluded. I say this particularly because of the expression 'any other establishment' occurring in Sub-section (3)(b). On this interpretation of the section, it must necessarily follow from my finding that the petitioner's establishment comes within the scope of Section 1(3)(a) that it cannot fall within the ambit of Section 1(3)(b).

9. The entry.

trading and commercial establishments engaged in the purchase, sale or storage of any goods including establishments of exporters, importers, advertisers, commission agents and brokers and commodity and stock exchanges, but not including banks or warehouses established under say Central or State Act.

relied on in Ex. P.1 occurs in appendix I which contains the list of establishments to which the Act ahs bee made applicable under Section 1(3)(b). When the applicability of Sub-section (3)(b) is ruled out by reason of petitioner's establishment being one falling within Sub-section (3)(a), the aforesaid entry occurring in appendix I cannot obviously govern the petitioner's establishment. The view taken by the Central Government in Ex P. 1 that the petitioner's establishment continues to be governed by the head 'trading and commercial establishments' with effect from 30 April 1962, even after the amendment effected in Schedule I by the introduction of the entry 'milk and milk products industry' is therefore erroneous and cannot be sustained.

10. Although the petitioner's counsel initially raised a large contention that even with respect tot he period prior to 31 December 1964 when alone the amendment referred to above introducing the entry 'milk and milk products industry' in Schedule I came into force, the petitioner's establishments did not fall within the scope of the entry 'trading and commercial establishments' occurring in the appendix, this plea was not seriously pursued. The language of Section 1(3)(b) is wide enough to take in every establishment other when those coming within the scope of Sub-section (3)(a) 'employing twenty or more persons' which has been specified by the Central Government in that behalf by notification in the official gazette. There is no contention raised before me that the petitioner's establishment is not a trading and commercial establishment engaged in the purpose or sale of goods.

11. Hence, the position that emerges is that till 31 December 1964, that is the date on which the amendment to Schedule I introducing the new entry 'milk and milk products industry' became operative, the petitioner's establishment was covered by the entry 'trading and commercial establishments' occurring in appendix I, and for the period subsequent to 31 December 1964 it is governed only by the entry in Schedule I under the head 'milk and milk products industry.' Exhibit P.1 is therefore quashed.

12. The original petition is allowed in the manner and to the extent indicated above. The parties will bear their respective costs.


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