Through this single order, I propose to decide two matters (W.P.No.6618/2007 and W.P.No.9976/2011) as both carry almost similar questions of law and facts.
2. In Writ Petition No.9976/2011 the order dated 31.03.2010 passed by the Appellate Authority is under challenge, whereas, in writ petition No.6618/2007 the petitioner has assailed the decision dated 02.09.2006 passed by Board of Trustees, Employees Old Age Benefits Institution (hereinafter to be called as "Institution") in the capacity of appellate authority, the decision dated 29.11.2005 passed on the review petition of the petitioner and decision dated 26.09.2005 passed by Adjudicating Authority, Faisalabad on the ground that special allowance payable under Punjab Special Allowance (Payment) Act, 1988 is not covered under the EOB Act and secondly the petitioner is not responsible for the payment of Institution contribution with respect to the employees engaged through independent Contractors and wages as well as other dues paid to them by the said Contractors.
3. The learned counsel for the petitioner submits that Section 8 of the Punjab Special Allowance (Payment) Act, 1988 clearly speaks that special allowance shall not form part of wages of the workers for the purpose of any other law including the purpose of provident fund, gratuity and bonus and calculating wages for over-time work and it is special law which shall prevail over the general law. Adds that for the first time this issue was decided in the light of Social Security Ordinance vide judgment 1996 PLC 373 and 1999 SCMR 1466. Contends that there is hell of difference between the definition of employee, employer, etc in Social Security Ordinance and EOB Act. Further contends that at the most if it is decided that petitioner is liable to pay the amount of contribution on the special allowance under Punjab Special Allowance (Payment) Act, 1998 then it only could recover/pay from the date of judgment i.e. 1996 PLC 373, as it will not affect retrospectively and will be implemented prospectively in the light of rule of law decided by the apex Court. In case of employees engaged by the independent contractor, as the petitioner never paid the wages to those employees and it was the responsibility of the contractor to pay the wages to all the persons employed by him, for the same reason the petitioner could not be liable for the payment of contribution on behalf of those employees of the contractor and if any liability for payment is, that is on the shoulder of the contractor and further submits that case law under Social Security Ordinance, 1969 in respect of the contract employment could not support the respondents' stance as the definition of employee, employer, wages and contribution in EOB Act is different from Social Security Ordinance. Further adds that EOBI charge contribution only when the employee is registered before him and in the absence of any registration, no contribution could be claimed because the contribution is only with regard to the payment of pension to certain employees but when those employees do not exist and no record is available how they are entitled for the contribution on their behalf. The learned counsel for the petitioner in addition to the above grounds with reference to Noon Sugar Mills added that the Adjudicating Authority fixed the responsibility for certain period and for the remaining period left the matter open to be decided after checking of the record and this order was not assailed before the appellate authority by the EOBI but the appellate authority also added the amount for the period which was not earlier calculated after checking the record of the petitioner, which is not permissible under law, thus is liable to be set-aside. In support of his arguments, the learned counsel placed reliance on the case PLD 1968 SC 101, PLD 1991 SC 777, 2009 SCM R 1169, 1985 SCM R 257 and 1961 PLC 432 (Supreme Court of India.
4. The learned counsel representing the respondent submits that EOB Act being federal statute has overriding effect on provincial statute i.e. Punjab Special Allowance (payment) Act, 1988, and for the same reason Institution is competent to recover the amount received by the employee on the basis of Punjab Special Allowance (Payment) Act, 1988. Further submits that Hon'ble Supreme Court of Pakistan in its judgments only interpreted the law and no new law is created by the apex court, hence, the EOBI could receive contribution from the date of enactment of Punjab Special Allowance (Payment) Act, 1988. Further added that even if the petitioner's company obtained Labour through agent/third party, the petitioner is covered under EOB Act to pay the contribution on behalf of the Labour provided by the contractor. Reliance has been placed on 1999 SCM R 1477 and PLD 1988 SC 131. Lastly added that the respondent could charge statutory increase under section 13 of the EOB Act and with reference to Noon Sugar Mills contended that under Order 41 Rule 33 CPC the appellate court could increase the amount payable without respondents having gone into appeal.
5. I have heard the arguments of learned counsel for the parties at considerable length and perused the available record with reference to the relevant case law.
6. The issue with regard to special allowance payable under Punjab Special Allowance (Payment)
Act, 1988, has been decided by the Hon'ble Supreme Court of Pakistan in the case PLD 1999 SCM R 1477, to the effect that Punjab Special Allowance (Payment) Act, 1988 is provincial statute and the bar imposed under section 8 of the said Act that the special allowance shall not form part of the wages of workers for the purposes of any other law, have no overriding effect on federal statute and federal law would prevail on the principle of repeal by implication. The EOB Act is also federal statute and in case of any conflict between the two, federal statute will prevail. Similar was the situation with Social Security Ordinance and the Hon'ble Supreme Court in the above referred judgment considering the principle of adaptation having the constitutional mandate under Article 268 of the Constitution of Islamic Republic of Pakistan, 1973 with regard to conflict in federal and provincial statute, held that:- "Leave to appeal is granted to consider whether the special allowance being, paid to a workman in pursuance of the provisions of the Punjab Employees Special Allowance (Payment) Act, 1988 is to be treated as part of his wages for the purpose of computing the contribution which his employer is liable to make under the Social Security Ordinance, 1965, despite the specific exemption granted by section 8 of the aforementioned Act. The interim order already made on 17-1 1996. to continue during the pendency of the appeals on the same terms.
In a unitary form of Government, all the Legislative Powers. of necessity, vest in the legislature of the given country in the federal form of Government, however, the legislative powers vest in the respective legislatures in line with the dispensation under the Constitutional- document/concerned.
It is in the spheres of distribution of legislative powers in a federal set up that a conflict of sorts between the legislation by the Federal -Central Legislature and Provincial /State Legislature can arise for resolution by the Judiciary.
Articles 141,142 and 143 of 1973 Constitution respectively deal with (1) extent of Federal and Provincial Laws (2) subject matter of Federal and Provincial Laws and (3) inconsistency between Federal and Provincial Laws] Under Article 141 (ibid) (Majlis-e-Shoora (Parliament)] may make law for the whole or any part of Pakistan and a Provincial Assembly may make laws for the Province or any part thereof. Under Article 142 (ibid) Majlis-e-Shoora (Parliament) has exclusive powers to make laws with respect to any matter in the Federal Legislative List and [Majlis-e-Shoora (Parliament)] and': a Provincial Assembly also have powers to make laws with respect to any matter in the Concurrent List. Under clause (c) of Article 142 (ibid) a Provincial Assembly shall and [Majlis-e-Shoora (Parliament)], shall not, have power to make laws with respect to any matter"...not enumerated in either the Federal Legislative List or the Concurrent Legislative List'. Further in the event of any inconsistency between the Federal law and the Provincial Law, the; mandate of the Constitution, as contained in Article 143
(ibid) is that "...then the Act of Mallis-e-Shoora (Parliament, whether passed before or after the Act of the Provincial Assembly, or, as the case may be, the existing law, shall prevail and the Act of the Provincial Assembly shall, to the extent of the repugnancy, be void."
7. Hence, the same principle is applicable to the EOB Act and the special pay allowance payable under Punjab Special Allowance (Payment) act, 1988 could be included in the wages of employee for the purposes of contribution under EOB Act.
8. The above referred judgment of the apex Court was passed when consolidated judgment of this court passed in Writ Petition No.6186/1995 reported in 1996 PLC 373 was assailed and view of this Court was upheld and it was observed that the definition of wages provided in Social Security Ordinance includes special allowance. On the same principle the definition of wages as provided under EOB Act also does not exclude special allowance, hence, on the principle of law decided in 1996 PLC 373 by the High Court and in PLD 1999 SC 1477 by the Hon'ble Supreme Court of Pakistan after examining the Social Security Ordinance, is also applicable to the EOB Act and the petitioner is liable to pay the contribution on the basis of special allowance.
9. The stance of learned counsel for the petitioner is that the matter was for the first time decided in 1996 PLC 373, when the said judgment was passed on 26th of October, 1995 and as earlier this question of law was never decided, hence, before this date the contribution could not be recovered from the petitioner as it will be equated with retrospective implementation of statute. I have carefully considered the above argument and hold that the case law referred by learned counsel for the petitioner i.e. PLD 1965 SC 261 is distinguishable as in that case the Hon'ble Supreme Court did not accept the view of the settlement authorities that the exercise of delegated power under displaced persons Act 1958 was subject to revision, review and appeal and to avoid the inconvenience and disturbances that would necessarily follow, the Hon'ble Supreme Court in the case PLD 1968 SC 101, held that decision in JALAL DIN's case (PLD 1965 SC 261) was applicable from the date of delivery of judgment i.e. 2nd November, 1964. It was further held that the said judgment did not have the effect of altering the law as from commencement of the Act so as to render void of its own force all relevant orders of Settlement Authorities and the High Court. The other judgment referred by learned counsel for the petitioner i.e. PLD 1991 SC 777, is also with reference to PLD 1968 SC 261 and in the judgment reported in 2009 SCM R 1169, relied upon by learned counsel for the petitioner that retrospectively contribution could not be recovered, is also not beneficial to the petitioner because this view in this judgment was with reference to PLD 1990 SC 99 (judgment of Shariat Appellate Bench of Hon'ble Supreme Court of Pakistan), which declared the Land Reforms Regulations, 1972 against the injunction of Quran and Sunnah. The Hon'ble Shariat Appellate Bench of the Hon'ble Supreme Court itself specified the date on which the decision shall take effect as required under Article 203(d) of the Constitution of Islamic Republic of Pakistan, 1973 and could not support the petitioners. For the reasons discussed above, all the judgments referred by learned counsel for the petitioner are not applicable to his case for prospective recovery of amount with regard to special allowance under Punjab Special Allowance (Payment) Act, 1988.
10. Now, reverting to the EOB Act, it is the duty of the employer to pay the amount to the Institution in respect of an insured person and department acts later on for the recovery of contribution, if the employer fails to comply with the provisions of EOB Act. The law with regard to special allowance was promulgated in 1988 and at that time EOB Act was in field. It was duty of the petitioner to pay the amount and if he did not pay the same he could not get its benefit. High Courts and the Hon'ble Supreme Court of Pakistan only interpret the law and it will be applicable from the date when law is enforced. In this respect, I am fortified by a judgment reported in "MALIK ASAD ALI versus FEEDERATION OF PAKISTAN through Secretary, Law, Justice and Parliament Affairs, Islamabad and others" (PLD 1998 SC 161), wherein, it has been held that:- It is a well-settled law that a new or an amending statute touching the, vested rights of the parties operates prospectively unless the language of the legislation expressly provides for its retrospective operation. However, the presumption against the retrospective operation of a statute is not applicable to statutes dealing with the procedure as no vested right can be claimed by any 1 party in respect of a procedure. The only exception to the retrospective operation of a procedure law is that if by giving it a retrospective operation, the vested right of a party is impaired then to that extent it operates prospectively. The above principles applicable to a new or an amending statute, however, cannot be applied strictly to the law declared by the Courts through interpretative process i The Courts while interpreting a law do not legislate or create any new law or I amend the existing law. By interpreting the law, the Courts only declare the true I meaning of the law which already existed. Therefore, to that extent the law declared by the Court is applicable from the date the law is enacted."
It is not the case of the petitioners that earlier some different interpretation of the statute was available in the light of any other judgment of the High Court or that of Hon'ble Supreme Court of Pakistan. Hence, the only and sole interpretation of High Court and Supreme Court of Pakistan 1998 PLC 373 and PLD 1999 SC 1477 shall hold the field and will apply from the date when Punjab Special Allowance (Payment) Act, 1988 was promulgated.
11. Further, the controversy whether the petitioner is bound to pay contribution on the wages of workers provided by a contract or working through a contract or performing duties under an agent, is to be resolved keeping in view the definition of words "employee" and "employer" i.e. Section 2(bb) and 2(c) of the EOB Act, the relevant sections are reproduced hereunder:- "2(bb). "employee" means any person employed, whether directly or through any other person, for wages or otherwise, to do any skilled or unskilled, supervisory, clerical, manual or other work in or in connection with the affairs of an industry or establishment, under a contract of service or apprenticeship, whether written or oral, express or implied, and includes such person when laid off): Provided that a director of a limited company or of a corporation set up under any law shall not be treated as an employee under this Act, irrespective of his wages or emoluments];
(c) "employer", in relation to an industry or establishment, means any person who employs, either directly or through any other person, any employee, and includes--
(i) in the case of an individual, an heir, successor, administrator or assign;
(ii) a person who has ultimate control over the affairs of an industry or establishment, or where the affairs of an industry or establishment are entrusted to any other person (whether called a managing agent, managing director, manager, superintendent, secretary or by any other name), such other person; and
(d) "employment injury" means a personal injury to an insured person caused by an accident, or by such occupational disease as may be specified in the regulations, arising out of and in the course of his employment".
A bare reading of above definition clarify that "employee" is a person employed whether directly or through any other person for wages or otherwise and an "employer" with reference to Industry and establishment included any person who employees either directly or through another person an employee. Both these definitions when read together made it clear that all the workers performing duties through a contract or an agent, or services of those employees have been provided by a contract, their contribution shall be paid by the petitioner/employer. This matter was earlier decided by the apex Court in the case "Messrs BOLAN MINING ENTERPRISES versus BOARD OF TRUSTEES, EOBI and others" (2010 SCM R 1573) and it was held that:-
6. The language as employed to define "employee" is free from any ambiguity as it has been couched in a very simple and plain language and no scholarly interpretation whatsoever is called for. It cannot be stretched too far as suggested by Mr. Muhammad Humayoon, learned Advocate Supreme Court on behalf of appellant because the definition of "employer" has removed all the doubts if any which means any person who employs either directly or through any other person any employee meaning thereby that it would be immaterial to consider by whom an employee was got employed. The only question which needs determination would be with whom such employee is performing his duties. It is not disputed that the employees under question are performing their duties with Messrs Bolan Mining Enterprises (appellant) and are being paid as such. The 'learned Advocate Supreme Court on behalf of appellant has argued in oblivion of the fact that "employees'" contractor" and "employees got employed through contractor" are not synonymous because such employees are not performing their duties with the contractor who had just managed their employment with the Messrs Bolan Mining Enterprises (appellant). It can be thus inferred safely that the contractor had acted just an agent or a middle man by whom the services of such employees were secured. Besides that such employees have never been excluded from the definition of "employee". It is an admitted position that such employees are under the administrative and financial control of employer i.e. Messrs Bolan Mining Enterprises (appellant) and the contractor by whom such manpower was provided does not figure in. The learned Advocate Supreme Court was asked pointedly that how such employees got employed by the contractor can be deprived from the benefits as conferred upon them under the EOAB Act, 1976 which is a beneficial legislation and the question of preferential treatment or discrimination does not arise but no answer could be given and rightly so because there can be no answer as such employees by no stretch of imagination can be deprived of any benefit conferred under the EOAB Act, 1976. It is worth-mentioning that such employees are performing their duties along with other employees under same management and therefore, the source of their employment would immaterial.
8. The law laid down in case of Sindh Employees' S.S.I. (supra) is applicable and the question of any deprivation of such employees does not arise. Even otherwise the provisions as enumerated in section 9(1) of the EOAB Act, 1976 provides that every employer shall pay contribution in respect of every person in his insurable employment read with the provisions as contained in section 2(bb) and 2(c) of the EOAB Act, 1976 whereby the "employee" and "employer" have been defined and all the doubts if any have been removed by giving such an exhaustive definition of "employee" and "employer". The learned Advocate Supreme Court at this juncture was asked that how section 9 of the EOAB Act, 1976 being charging section cannot be made applicable to such employees but no answer could be given. In our view a futile attempt has been made to frustrate the beneficial provisions of Labour Laws with an attempt to evade statutory liability by exploiting certain legal provisions of law and such like techniques and mechanism are usually evolved to avoid financial responsibilities having complete legal sanctity behind it which cannot be appreciated."
Hence, this principle has already been decided by the Hon'ble Supreme Court of Pakistan and the petitioner is bound to pay the contribution of the workers performing their functions under a contractor, agent, etc.
12. For what has been discussed above, writ petition No.6617/2007 "KOH-E-NOOR INDUSTRIES (PVT)
LIMITED versus EMPLOYEES OLD-AGE BENEFITS INSTITUTION, ETC" is found to be without any merit and is dismissed accordingly.
13. So for as Writ Petition No.9976/2011 "NOON SUGATR MILS LIMITED B HALWAL versus EMPLOYEES OLD- AGE BENEFITS INSTITUTION, ETC", is concerned, the law points as discussed above are decided against the petitioner herein. However, with regard to additional ground relating to this petition, it has been observed that contribution for certain period has not been fixed by the officials of the Institution after examining the record and the Adjudicating Authority directed that after examining the record contribution could be fixed, but the appellant authority also added the amount of contribution with regard to the period for which relevant record was not checked by the concerned officials. Hence, this writ petition (W.P.No.9976 of 2011) is decided on this issue in the terms that judgment of the appellate authority is set-aside, however, the authority under EOB Act will be at liberty to check the record of the petitioner firm in accordance with law and fix the responsibility.