DECISION This appeal is directed against an order of the learned Fifth Labour Court, made on 1st July, 1980, allowing an application under section 34, I. R. 0., preferred by the respondent-Union, and directing the appellant-Corporation to establish workers' participation fund under the Companies Profits (Workers' Participation) Fund Act, 1968, hereinafter referred to as the said Act, and to make payments towards the fund as per prescribed rate against profits earned by the appellant- Corporation during the financial years 1974-75 to 1977-78,
2. The admitted facts are that the respondent-Corporation is a Limited Company, incorporated under the Companies Act, 1913. According to its Memorandum and Articles of Association the main object for which the Corporation has been established is to carry on the business of export of rice from Pakistan, including all operations connected with its procurement, milling, cleaning storage, packing and sale for export. It appears from the Annual Reports of the Corporation for the years 197576, which were produced before the learned Labour Court, that the Corporation made considerable profits during these years. It, however, made no provision for Workers' Participation Fund as it was of the view that the Corporation was not an "industrial undertaking" for the purposes of the Act and hence it was not required to establish or contribute to such fund. This position was challenged by the respondent-Union and it appears that the matter was also referred to the Ministry of Law for advice and opinion. As the Corporation was not persuaded to alter its view the respondent-Union, on behalf of the workmen, preferred an application under section 34, I. R. 0., which has been allowed by the learned Labour Court.
3. I have heard Mr. Obaidur Rehman Khan, the learned counsel for the appellant-Corporation, and Mr. Mahmood Mobassir who appeared for the respondent-Union. Mr. Mahmood Mobassir strongly supported the impugned decision of the learned Labour Court while Mr. Obaidur Rahman assailed the same on the grounds-
(i) that the appellant-Corporation is not an "industrial undertaking" for the purposes of the scheme framed under the said Act and consequently it is not required to establish or contribute to the Workers' Participation Fund ; and
(ii) that any claim relating to the benefits of the scheme under the said Act are to be settled in the manner provided in the Act itself and not by means of an application under the I. R.
0. To a Labour Court.
4. Elaborating his arguments in support of his first contention Mr. Obaidur Rehman Khan submitted that only such companies to which the scheme under the said Act applies are required to establish Workers' Participation Fund. The scheme applies to all companies engaged in "industrial undertakings" which satisfy any one of the conditions specified in paragraph 1 of the Scheme and to such other companies as the Federal Government may by the Notification in the official Gazette specify in this behalf. The prescribed conditions for the application of the scheme are-
(i) that the number of workers employed by the Company at any one time during the year is 50 or more ; or
(ii) that the paid-up capital of the Company as on the last day of its accounting year is Rs, 20 Laks or more ; or
(iii) the value of the fixed assets of the Company (at cost) as on the last day of the accounting year is Rs, 40 Laks or more.
5. It was not disputed by Mr. Obaidur Rehman that the respondent-Corporation fulfils each one of the above conditions though it would be enough if it fulfils any one of those conditions. He, however, contended that an additional and essential requirement for the application of the scheme to a company is that it should be engaged in an "industrial undertaking" as defined scheme. According to the learned counsel the appellant-Corporation is not engaged in any such undertaking as its essential function is merely to market rice which is procured through the Government Agencies and the only operations which it undertakes are the refining and purification of rice which operations do not constitute "industrial undertaking" for the purposes of the Act. The learned counsel contended that these processes neither change the original condition of the commodity nor add to its value. He frankly admitted that the process of refining and purification carried on by the appellant-Corporation involves the use of electrical and other forms of energy, but submitted that these operation do not subject the commodity to any manufacturing, assembly of finishing process, whether artificial or natural, and that further they do not change the original condition of the commodity or add to its value. He also relied upon paragraph 1 (a) (iv) of the scheme in support of his contention that the processes of refining and purification constitute an "industrial undertaking" only in case of the companies engaged in the works or which deal with the commodities referred to in paragraph 1 (a) (iv) of the Scheme. In order to appreciate the arguments of the learned counsel it would be appropriate to set down the provisions of paragraph 1 (a) (i) and 1 (a) (iv) of the scheme. They are as follows :- "1. The scheme applies to all companies engaged in industrial undertaking which satisfy any one of the following conditions, and to such other companies as Central Government may, by notification in the official Gazette, specify in this behalf namely:-
(i) .........................
(ii) ..................................
(iii) .........................
(a) "industrial undertaking" means an institution, organization, enterprise or establishment which involves the use of electrical, mechanical, thermal, nuclear or any other form of energy transmitted mechanically and not generated by human or animal agency and which is engaged in any one or more of the following operations, namely :-
(i) the subjection of goods or material to any manufacturing, assembly, finishing or other artificial or natural process, which changes their original condition or adds to their value ; (ii)
(iii)
(iv) the working of mine, oilwell or any other source of mineral deposit, including blending, refining and purification of oils and gases ; and includes companies engaged in the carriage of men or goods by sea or air, and any other institution, organization, enterprise or establishment which the Central Government may by notification in the official Gazette declare to he an industrial undertaking for the purposes of this Scheme.
6. A perusal of the above provisions indicates that in order that company should be at industrial undertaking for the purposes of paragraph I (a) (i) of the Scheme it must fulfil the following essential conditions :-
(a) It must be an institution, organization enterprise or establishment.
(b) It should make use of electrical, mechanical, thermal, nuclear or any other form of enery, transmitted mechanically and not generated by human or animal agency.
(c) It must be engaged in the subjection of goods on material to any manufacturing, assembly, finishing or other artificial or natural process.
(d) The process should be such as changes the original condition of the commodity or goods or adds to their value.
7. It is not disputed that the appellant-Corporation is an organization and establishment. It is further not disputed that it makes use of electrical and other forms of energy transmitted mechanically and not produced by human or animal agency. There is also adequate material on the record to establish that the appellant-Corporation is engaged in the subjection of a commodity, i,e, rice to various processes. No doubt the appellant-Corporation purchases rice and exports rice but there is substantial change both in the appearance and the value of the rice bought, sold and exported. The rice which is bought from the producer is mixed with all sorts of impurities including species. Furthermore, it contains rice which are partly polished or still which remains full of their cloak of husk. The rice bought is also mixed with substantial quantity of broken rice. In order to improve quantity of rice, fit for export, the corporation subjects the rice purchased from the producers to certain processes and for this purpose it had installed as its own godown sites at Pipal and Landhi a number of machines which are operated by electricity and mechanical power these include separator and cleaning machines, other separating machines, paddy separator machines husk separators, rotary sieves and other sophisticated machines the details thereof are given by Muhammad Akhtar, the Secretary of the appellant-Corporation in his evidence before the learned Labour Court. The processes involved in the establishments of the appellant Corporation include rice cleaning, paddy separation from the solution and evidently corporation grading and standardizing. The above processes being undertaken appellant- Corporation are strictly in accordance with the Memorandum and Articles of Association which entitle it to carry out all operations connected with the procurement, milling, cleaning, storing, packing and export of rice. These operation, which involve substantial amount of labour and expenditure would not have been undertaken unless they add to the value of the commodity and further make it acceptable to the international market. Prices are an expression of the consensus on the values of different things and every society that Permits exchanges among men has prices.
Any operation, therefore, that increases the prices of a commodity ordinarily is to be presumed to increase its market value. As already pointed out, one of the processes to which the rice purchased by the appellant-Corporation is being admittedly subjected is grading. This process is carried out in most of the modern markets for the purposes of securing uniformity of the article or commodity and substantially increases its value. According to the Concise Commercial Dictionary by Osborn and Grandage grading" means "subdividing commercial common into classes or grades by reference to their quality, size etc." If rice of different qualities, sizes, grades and shades are mixed up together not only there is likelihood of difficulty arising in the cooking but the appearance and taste of each kind of rice is likely to be different. As such graded rice would be preferred and accordingly fetch greater value as against rice of mixed quality and grades. I am, therefore, of the view that though the commodity of rice still basically remains the same but its value is substantially enhanced by the various processes, including grading, etc., undertaken by the appellant-Corporation.
8. Coming next to the second limb of argument of Mr. Obaidur Rehman Khan that the appellant is merely engaged in the process of refining and purifying the rice, which operation is deemed to be an industrial undertaking only if carried out in respect of oil and gas, as provided in clause 1 (a) (iv) of the Scheme, I regret that I find little force in the same. Although the processes undertaking by the appellant-Corporation, which are limited to removing impurities from rice, obviously result in purifying the rice, the main object is to base price of a and are quality free from admixtures, broken rice and grains of different types, qualities and grades of rice. Furthermore, clause 1 (a) (iv) of the scheme in my opinion, is restricted in its application only to the special operations and commodities referred to in that clause and does not limit the scope or applicability of the other clauses in the scheme. In other words, take the view that if refining and purifying a product results either in adding to its value or changing its original condition, then the organization undertaking such processes would be an "industrial undertaking", if it fulfils the other requirements of the scheme though it may not be covered by clause 1 (a) (iv) of Scheme or be dealing in the commodities referred to in that clause. The said clause deals with special types of undertaking like working of mines, oil wells and other sources of mineral deposits and cannot be made to apply to food and other agricultural establishments. I am, accordingly, in agreement with the view taken by the learned Labour Court that the appellant-Corporation is an industrial undertaking for the purposes of the Scheme under the said Act.
9. It next falls to be considered whether the respondent Union's application is not maintainable. In support of his contention on this issue, Mr. Obaidur Rehman Khan submitted that where a statute creates a right and sets up a machinery or provides the forum for its enforcement then the right can be enforced only in the manner provided in that Statutes and not in any other manner. The learned counsel invited my attention to subsection (2) of section 7 of the Act, which reads as follows :-
(2) All claims of a worker relating to the benefits of the scheme, whether against the Board or the Company, shall be settled in the same manner as is provided for in the Payment of Wages Act, 1936 (IV of 1936), for the settlement of claims arising out of deductions from wages."
10. The issued involved in the present proceedings, however, is not the claim of workers for the benefits of the Scheme but the question to be considered is whether the scheme is applicable to it, the workers would naturally be entitled to the benefits of the scheme. However, as I construe subsection (2) of section 7 of the said Act, its application is limited to individual claims of workers under the scheme, i. e. After the scheme is made applicable to a company and not determination of the issue whether the scheme is or is not applicable to the Company. Mr. Obaidur Rehman Khan very fairly brought to my notice a decision of the Division Bench of the Karachi High Court, which is reported as Employees' Union v. Moono Motors . In that case, their Lordships observed that subsection (2) of section 7 of the said Act pre-supposes that the fund in accordance with the scheme has already been established for the remedy provided is only to secure benefits derived under it to a workman. They accordingly repelled the contentions that the said subsection was a1 bar to the raising of an industrial dispute relating to the establishment of the workers participation fund under Act XIII of 1968 or that the worker's Union was not entitled to seek it remedy either by way of adjudication and/or endorsement by the Labour Court. The decision in the Moono Motors' case thus is a complete answer to the contention raised by Mr. Obaidur Rehman Khan.
11. For the reasons stated by me above, I find no force in this appeal and dismiss the same. PLD 1975 Kar. 811