Yahya Afridi, J.--M/S Abasyn University, through its Vice Chancellor, the petitioner, seeks the Constitutional jurisdiction of this Court praying for: "It is, therefore, respectfully prayed that by accepting this writ petition, the impugned notices dated 21.10.2011 and 1.11.2011 firstly may be declared illegal, without lawful authority and secondly a writ of mandamus may also be issued to the respondents to return Rs, 1,92,000/- illegally received from the petitioner with interest prevailing in market."
2. In essence, the present case revolves around the petitioner, stated to be a statutory body, established through Abasyn University Act, 2009 ("Act of 2009") having challenged the demand for contribution vide notices dated 21.10.2011 and 01.11.2011 for the period commencing from January 2008 till September 2011 made by Employees Old Age Benefit Institution ("Institution") under Employees Old Age Benefit Act, 1976 ("EOAB Act").
3. The respondents were put to notice. They submitted their comments, wherein they have raised preliminary objections that the petitioner has an alternative remedy of challenging the impugned notices before the Institution under Sections 33, 34 and 35 of the EOAB Act.
4. On merits, the respondents-Institution contended that the petitioner-University comes within the purview of an 'establishment', as defined in the EOAB Act, and was thus, served with the demand notices for the contributions due from January 2008 to September, 2011; that the petitioner- University did not fall within the purview of statutory body, as provided under Section 47(f) of the EOAB Act, as Mr. Muhammad Imranullah Khan, the Chancellor of the petitioner-University was also the Chief Executive of M/S Abasyn System of Education (Pvt) Ltd ("Company"), that owns and control all the assets of the petitioner-University and was being run on profit basis, hence a case for payment of contribution was made out. In fact, the respondent-Institution was seeking from this Court to pierce the veil of incorporation of the petitioner- University and the Company, and to see that, the will and mind behind the legal facade created by establishing the Company and Petitioner University, was only to circumvent the spirit of the regime provided for paying contribution under the EOAB Act. The worthy counsel sought reliance upon Ghee Corporation's case (NLR 1994 Lahore [labour] 112), Sadiq Public School's case (2012 CLC 880), and PTCL's case (2012 PLC 460).
5. On the other hand, the stance of the worthy counsel for the petitioner-University was that the petitioner-University is a statutory body, being the creation of Act of 2009, and hence, no contribution therefrom can be sought under section-47 of the EOAB Act; it was further contended that the impugned notices issued to the petitioner- University and the recoveries of Rs, 192,060/- made from the University were dues of M/S Abasyn Institute of Management of Sciences ("Abasyn Institute"), a distinct person with no concern, whatsoever, with the petitioner- University and that the said payment was illegally extracted through coercive measures, and hence warrants its immediate return.
6. Valuable arguments of the learned counsel for the parties were heard and with their assistance the available record perused.
7. Let us first address the preliminary objection raised by the worthy counsel for the respondent- Institution, regarding the maintainability of the present petition, on the ground that the petitioner has an alternative remedy provided under Section 33 of EOAB Act. The said provision provides that: "33. Decision on Complaints. Questions and Disputes.
If any complaint is received or any question or dispute arises as to;
(a) Whether a person is an insured person within the meaning of this Act;
(b) The amount of wages of an insured person for the purposes of this Act;
(c) The amount of contribution payable by an employer in respect of an insured person;
(d) The person who is the employer in respect of an insured person; i(e) Entitlement to any benefit under this Act or as to the amount and duration thereof; and 2(ee) registration of industry or establishment; or any other matter in respect of any contribution or any I benefit] referred to in clause (e), or dues payable or recoverable under this Act relating to contributions or the aforesaid [benefits], the matter shall be decided by the Institution, in such manner, and within such time, as the regulations may provide and the Institution shall notify its decision to the person concerned in writing, stating therein the reason for its decision."
(emphasis provided)
8. On careful reading of the aforementioned provision, it is noted that a complaint can be filed. By the petitioner-University protesting its registration as an "Establishment", and thus, contesting the impugned demand notices of payment of contribution made by the Institution under the EOAB Act.
9. In case this Court is to determine the status of the petitioner as an "establishment" envisaged under the EOAB Act, then it would have to adjudge certain jurisdictional facts; as to the number, nature and scope of work of its employees, and nature and scope of business of the petitioner- University itself. These determinations can not be undertaken by this Court on the available record of the case. And for that resolution thereof, it would be appropriate for the petitioner-University to first avail the remedy provided under the EOAB Act.
10. When the worthy counsel for the petitioner- University was confronted with the alternative remedy provided under Section 33 of the EOAB Act, he vehemently responded in rejecting the same being neither efficacious nor appropriate remedy for the petitioner-University. In this regard, the worthy counsel after initially vigorously denying the petitioner-University to come within the purview of an "establishment" under the EOAB Act, finally did not press the same. The worthy counsel finally responded that under Section 47(f) the provision of the EOAB Act, did not apply to the petitioner-University. He asserted that the issue in hand was purely jurisdictional, and thus legal, which could be appropriately resolved by this constitutional Court, without determination of any disputed facts. The worthy counsel for the respondent-Institution rebutted the above contention and maintained his preliminary objection of the non-maintainability of the petition, on the touch stone of the alternate remedy provided to the petitioner under Section 33 of the EOAB Act.
11. This Court is a Constitutional Court exercising its jurisdiction under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973, ("Constitution"), which expressly provides for it to entertain grievances of an aggrieved person, who does not have an alternative remedy provided under the law. However, the judicial consensus that has evolved with time and rendered jurisdictional space for the Constitutional Court to assume jurisdiction, when the remedy provided under the law to the aggrieved person would not be, interalia, efficaciously meaningful or whether the challenge made is purely jurisdictional, as is in the present case. The present petitioner is in essence seeking from this Constitutional Court the interpretation of sub-section (f) of Section 47 ibid. To be more precise, the meaning and purport of the term statutory body as contained therein. Thus, in case this Court, without indulging in determining factual disputes, can resolve the matter of jurisdiction, then assuming jurisdiction in such like cases, should be the rule, and restraining there from should be an exception thereto.
12. In view of the above, this Court would assume jurisdiction only to the extent of jurisdictional issue, so as to determine whether the petitioner-University comes within the purview of a statutory body, as envisaged under Section 47 of the EOAB Act or otherwise. However, in case this Court comes to the conclusion that, factual determination are also to be rendered to resolve this or any other contesting claim of the parties, then this constitutional Court shall surely refrain from assuming jurisdiction.
13. Let us now review the general theme envisaged by the legislature in enacting the EOAB Act. As provided in its preamble, EOAB Act is enacted to facilitate and ensure the old age benefits for the persons employed in 'Industrial', 'Commercial' and other organizations and matters related therewith. Section-9 ibid mandates contributions from the Employer of an Establishment or an Industry in respect of every person in its ensureable employment. The contribution so collected by the Institution, are maintained in the Employees Old Age Benefits Fund, established under Section 17 ibid. The contribution received by the Institution in respect of ensured persons is, thereafter, utilized for their various prescribed pensions. The Employer, in case of any erroneous payment made to the Institution, can seek the refund thereof under Section 15 of the EOAB Act, which reads: "15. Refund of Contributions paid Erroneously: An employer shall be entitled to the refund of any contribution paid to the Institution under erroneous belief that it was payable under the provisions of the Act, and shall be entitled to the refund of excess amount of the contribution where such contribution had been paid at a higher rate than the rate prescribed.
Provided that no contribution or excess amount of any contribution shall be refunded unless an application for such refund is made within six months of the date on which the contribution was paid."
In cases of complaints received or any question or dispute regarding crucial matters relating to the contribution, the same are determinable by the Institution itself, in terms of Section 33 ibid. The decision made under Section 33 is reviewable under Section 34 ibid, in case new facts are brought to notice of the Institution, which provides: "34. Review of Decisions.
The Institution may, subject to regulations, on new facts being brought to its notice, review a decision given by it under Section 33."
While a remedy of an appeal has also been provided under Section 35 to aggrieved person against the decision of the Institution under Section 33 or its review under Section 34 ibid. The said provision provides; "35. Appeal to Board. Subject to rules, a person aggrieved by a decision of the Institution under Section 33 or on a review under Section 34, may appeal to the Board"
' Now to Section 47, ibid, this provision clearly stipulates the persons who do not come within the purview of the EOAB Act. It reads that; "47. Act not to apply to certain persons. Nothing in this Act shall apply to;
(a) persons in the service of the State, including members of the armed forces, police force and railway servants;
(b) persons in the service of a local council, a municipal committee, a . Cantonment board or any other local authority;
(c) persons who are employed in services or installations connected with or incidental to the Armed Forces of Pakistan including an ordinance factory maintained by the Federal Government or Railway administration;
(d) persons in the service of Water and Power Development Authority;
(e) persons in the service of a bank or a banking company;
(f) persons in the service of statutory bodies other than those employed in or in connection with the affairs of a factory as defined in Section 2(i) of the Factories Act, 1934 ()ON of 1934), or a mine as defined in the Mines Act. 1923 (IV of 1923); Provided that workshops maintained exclusively for the purpose of repair or maintenance of equipment or vehicles used in such statutory bodies shall not be treated as factories for the purposes of this clause;
(g) members of the employer's family that is to say, the husband or wife and dependent children of the employer, living in the house in respect of their work for him; and (h)
(i) (emphasis provided)
Section 37 of the EOAB Act, provides a penal provision for imprisonment, extendable also to two years or with fine or both for, inter-alia, violating the specific orders passed under EOAB Act or rules made there under; while the recovery mechanism of unpaid contribution is recoverable as arrears of land revenue under section-13 read with section-9 of the EOAB Act.
14. Now, moving to the relevant facts, leading to the present petition; it all started with Abasyn Institute of Management of Sciences, a sole proprietorship, owned and controlled by Muhammad Imranullah Khan that was carrying on business of imparting various academic courses, while being affiliated with Gomal University Dera Ismail Khan. This business, it is asserted, ended on 19.07.2008, when the said affiliation was terminated. In the meanwhile, Muhammad Imranullah Khan, the sole proprietor of the Abasyn Institute, aspiring to apply for establishing a university under the Khyber Pakhtunkhwa Registration and Functioning of Private Educational Institutions Ordinance, 2001, incorporated a private limited company in the name and style of MIS Abasyn System of Education
(Pvt) Ltd ("Company"). The Company had four shareholders; Muhammad Imranullah Khan and his son Irfanullah held 50% of the share capital of the Company (25,020 shares of the Company), while the remaining share capital was equally held by Zimran Ihsan and Adnan Ihsan. Muhammad Imranullah Khan was the Chief Executive, while the remaining three shareholders were the directors of the Company, as per attested copy of the Form- A of the Company for the year 2013.
15. Muhammad Imranullah Khan succeed in establishing a university, when the Provincial Assembly of Khyber Pakhtunkhwa enacted the Act of 2009 duly gazetted on 24.10.2009 and given effect from 1.3.2008. It was under Section 3 of the Act of 2009, that the University was established and rendered a legal personality in terms that; "3. Incorporation.
(1). There shall be established at Peshawar a University to be called as Abasyn University (3). The University shall be a body corporate by the name of Abasyn University having perpetual succession and common seal, and may sue and be sued by the said name.
(4). The University shall be competent to acquire and hold property, both moveable and immovable, and to lease, sell or otherwise transfer any moveable and immoveable property which may have become vested in or been acquired by it.
(5). Notwithstanding anything contained in any other law for the time being enforced, the University shall have academic, financial and administrative autonomy, including the powers to employ officers, teachers and other employees on such terms as may be prescribed, subject to the terms of this Act and Higher Education Commission Ordinance, 2002. In particular, and without prejudice to the authority granted to the Commission by the law, the Government or any authority or auditor appointed by the Government shall have no power to question the policy underlying the allocation of resources approved by the Senate in the annual budget of the University."
(emphasis provided)
16. Interestingly, Muhammad Imranullah Khan, the Chief Executive of the Company, was also declared the first Chancellor of the Petitioner University under section-9 ibid, whose terms and conditions were to be determined by the Board of Directors of the Company. Moreover, the ultimate ownership of the property, funds and resources of the University were vested in the Board of Directors of the Company under Section 25 of the Act of 2009, which expressly provides; "25. Powers of the Board of Directors.
The Board of Directors shall;
(a) own, hold, control, and administer the property, funds and resources of the University and raise funds for the purpose of the University upon such Security as may be required under Regulations;
(b) undertake responsibility for the financial viability of the University, including responsibility for ensuring effectiveness of its operations and their continuity; and
(c) consider and pass the resolution of the annual report, plan of work, statement of accounts and the annual budget estimates as recommended by the Senate."
(emphasis provided)
17. Now to the main thrust of the petitioner-University against the impugned demand notices served by the respondent-Institution. It was asserted that the petitioner-University was a statutory body and thus, no contribution could be sought from the petitioner under the said enactment. In order to appreciate this legal stance taken by the petitioner-University, this Court would have to revisit the provisions contained in Section 47(f) of the EOAB Act, which provides:
(f) "persons in the service of statutory bodies other than those employed in or in connection with the affairs of a factory as defined in Section 2(i) of the Factories Act, 1934 (XXV of 1934), or a mine as defined in the Mines Act, 1923 (IV of 1923)"
18. The careful reading of the above provision reveals that the legislature in its wisdom has neither defined the term statutory body nor qualified the same by its ownership, control or nature and scope of business. The plain and simple interpretation of the said provision provides for any legal entity created by an enactment passed by the Parliament or a Provincial Assembly, irrespective of its ownership, control or purpose. The only two reservations provided therein are that the persons employed in the statutory body, do not perform services of or in connection with the affairs of a factory, as defined in Factory Act, 1934, or a mine, as defined in Mines Act, 1923. The contesting parties are in consonance that the persons employed in the petitioner-University do not come within the said two exceptions. In fact, the stance taken by the respondent-Institution is that the petitioner- University is owned and controlled by the Company, registered under the Companies Ordinance, 1984 ("Ordinance") and is a profit earning commercial establishment. Hence, it would come within the purview of the scheme provided under the EOAB Act.
19. About two Centuries ago, the Privy Council in Crawford v. Spooner's case (1846) 6 Moore PC 1 laid down the basic principle of interpretation of statutes, which has been generally followed thereafter in all Commonwealth jurisdiction:-- "we cannot aid the Legislature's defective phrasing of an Act, we cannot add or mend and, by construction make up deficiencies which are left there."
A statute is to be read as enacted; each word expressed therein has to be given its ordinary meaning. It would not be appropriate on the part of the Courts to substitute or add a word, for what has been clearly provided in an enactment. In case of any conflict in the provisions or contest in interpreting the same, all efforts are to be made to first resolve and reconcile the provisions provided in the statute and only in exceptional cases, where the interpretation of the provision is leading to an absurdity and it is absolutely necessary, that Courts may intervene, providing refuge to save the provision contained in the enactment. For legislation is a domain of the Parliament, and surely beyond the power vested in Courts, and as enshrined in the principle of Trichotomy of Power, running through our Constitution.
20. Now, moving on to the next contention of the respondent-Institution regarding the insistence for this Court to pierce the veil of the three distinct persons, in order to adjudge the legality of the impugned demand for the contribution by the Institution. The said three persons are: Firstly, Abasyn Institute of Management of Sciences, the sole proprietorship, owned and controlled by Mr. Muhammad Imranullah Khan; Secondly, M/S Abasyn System 9f Education (Pvt.) Ltd., a company registered under the Ordlitmce, where Muhammad Imranullah Khan has fifty percent share capital and is also as its Chief Executive, and Finally, the Abasyn University, a University established under the Act of 2009 having its independent legal personality to sue and be sued in its own name and with Imranullah Khan, as its Chancellor; and its property owned by the Board of Director of the Company.
Each of the three persons are independent and separate legal personalities. The mere fact that Muhammad Imranullah Khan has crucial role in each of the three entities, would not disturb their independent legal personalities.
21. In all economically alive countries, such as Pakistan, the principle of limited liability of shareholders is ordinarily protected under the law to boast economic growth. Under this principle, the liability of a shareholder is restricted to the value of his shares in the company, and in case of fully paid up shares, the shareholder would not be liable for the actions of the company. This separate and independent legal personality is preserved throughout the corporate world to encourage, attract, protect, and ensure investment in an economy. It is only in exceptional cases, when shareholders/Directors are also challenged to face the penal or financial consequences, for the actions of the company.
22. The general judicial consensus is not to pierce the veil of incorporation of the company and to preserve the doctrine of separate legal personality of the company and the limited liability of its shareholders. The Courts sparingly exercise their authority byiewin the veil of incorporation of the company and that too in exceptional circumstances; when sham or facade corporate entities are created to legally blanket the illegal actions of the controlling shareholders or the governing directors Antonio Gramsei Shipping v. Stepanovs (2011) 1 Lloyds Rep. 647, Kensington International v.
Republic of Congo (2006) 2 BCLC 296; when companies are setup to avoid execution of Court decision. Gilford Motor Co. Ltd vs. Horn (1933) Ch 935, CA Jones vs. Lipman (1962) 1 WLR 832.
' A Court in United Kingdom in Adams v. Cape Plc [2000] 1 W.L.R.
1545., while considering whether a subsidiary company carrying on business in the United States of America, despite its incorporation there, could render the principal company, registered in the United Kingdom, liable for its actions, finally decided not to lift the veil of incorporation, despite serious challenge made on the impugned action being against the interest of justice. The worthy Court maintained that, as the companies had the right to use the corporate structure to avoid financial exposure and liability, in terms that:- "as a matter of law the Court is entitled to lift the corporate veil as against a defendant company which is the member of a corporate group, merely because the corporate structure has been used so as to ensure that the legal liability (if any) in respect of particular future activities of the group (and correspondingly the risk of enforcement of that liability) will fall on another member of the group rather than the defendant company. Whether or not this is desirable, the right to use a corporate structure in this manner is inherent in our corporate law."
(emphasis provided)
23. In the present case, Sections 9 and 25 of the Act of 2009 are clear in its content; there appears no sham or facade in incorporating the Company, the entire arrangement is open and has the blessing of the legislature. When the wires of the Act of 2009 have not been challenged before this Court, the independent legal personality of the University and the control of the Board of Directors of the Company, as provided therein, cannot be questioned or commented upon by this Court in the present proceedings. Thus, Muhammad Imranullah Khan has, along with his three other shareholders and Directors of the Company, intelligently availed the corporate structure, and also obtained the legislative advantage and sanction, by establishing an independent statutory University.
24. Now, that this Court has accepted the independent legal personality of the petitioner- University and its incorporation being based upon the Provincial Legislative enactment, Act of 2009 and not by any subsequent registration or incorporation under the Ordinance, the petitioner- University clearly fulfills the attributes of a statutory body having its independent legal personality, as explained by the apex Court in Pakistan Telecommunication's case (2016 SCM R 1220), wherein it was explained; "5. The appellant company was incorporated as a limited company under the provisions of the Companies Ordinance, 1984. It did not come into existence under the Pakistan Telecommunication (Re-organization) Act, 1996. This Act only provided that a company limited by shares shall be incorporated under the provisions of the Companies Organization) Act, 1996
6. In our view only such entities can be described as statutory bodies which come into existence by virtue of a Statute. Where the legislature has not brought into existence an entity through a special law but the same has been incorporated under some existing statute then such entity cannot to be assigned the status of a statutory body. If every entity that a formed under some existing statute is to be described as 'statutory body' then we are afraid every limited company incorporated under the Companies Ordinance, 1984, every partnership concern formed under the Partnership Act, every association formed under the Societies Act and every co-operative society formed under the Cooperative Societies Act is also to be described as 'statutory body'. For an entity to be described as a 'statutory body', its birth itself should have been caused by a special statute. In other words, such entity should come into existence by virtue of a statute itself and not established under the provisions of an already existin statute The deciding, factor would be when the appellant company, as a separate and distinct entity limited by shares, was incorporated under the provisions of the Companies Ordinance, 1984. It matters not that at the time of its incorporation its shares were solely held by the Federal Government."
(emphasis provided)
Keeping in view the meaning of statutory body, as explained in the above case, as our guiding principle, and applying the same to the facts of the present case, it can, therefore, safely be stated that, the petitioner-University falls within the purview of a Statutory Body, as provided under Section 47(f) ibid. And thus, the petitioner-University is legally exempt from paying any contribution to the Institution under Section 9 of EOAB Act.
25. This being the position, the decision of Ghee Corporation of Pakistan's case (supra) and PTCL's case (supra) relied upon by the worthy counsel for the respondent-Institution do not apply to the facts and circumstances of the present case. In the Ghee Corporation's case prior to the enactment, Ghee Corporation was already registered with the Institution and hence declared not to come within the exceptions provided under section-47 of the EOAB Act. While, in PTCL's case, it was noted that PTCL after the enactment was duly registered, as the company under the Ordinance, and thus, correctly declared not to fall within the exceptions provided in Section 47 of the EOAB Act.
26. As far as the demand made by the petitioner-University warranting the return of Rs, 192,063/- having been coercively extracted by the respondent-Institution, it is noted that there is no evidence in support thereof available on the record of the present case. This being the position, the petitioner-University would require to prove its claim by producing cogent and reliable evidence.
This, we are afraid, is beyond the domain of this Constitutional Court, more so when the petitioner has an alternative remedy to seek this relief before the Institution under the enabling provisions of EOAB Act. The petitioner-University, if so advised, may seek its remedy before the appropriate forum provided under the EOAB Act.
27. Accordingly, for the reasons stated above, this. Court holds that: Firstly, the notice of dated 21.10.2011, which is a demand notice served upon the petitioner University by the Institution under Section 12(3) of the EOAB Act for an amount of Rs, 1.30 Million for the period commencing from January 2008 to September, 2011 is without lawful authority, as the provisions of the EOAB Act do not apply to the Petitioner University under Section 47(i) ibid; Secondly, the demand notice of 1.11.2011 served by the Institution upon the petitioner-University for an amount of Rs, 2.206 Million for failing to pay the due contribution and for initiating the recovery proceeding as envisaged under Section 79 of the Land Revenue Act, 1967, is without lawful authority, as the provisions of the EOAB Act do not apply to the Petitioner University under Section 47(f) ibid; and Thirdly, the return of Rs, 1.902 million made from the petitioner-University by the Institution, claimed to be dues of Abasyn Institution, a distinct person, cannot be ordered by this Court, as the Petitioner-University has to prove its claim for which it has an alternative remedy provided under the provisions of the EOAB Act and thus may, if so advised, seek this relief there from.