MUNIB AKHTAR, J.---This order applies to the petitions referred to in para 35 below. they raise various issues in relation to or arising out of the Companies Profits (Workers' Participation) Act, 1968 ("1968 Act" on "Federal Law") and the Sindh Companies Profits (Workers' Participation) Act, 2015 ("Sindh Act" or "Provincial Law"). The issues pertain mainly to the interaction and applicability of these two statutes. The issues also overlap in the sense that while some petitions raise only or the other issue, in some multiple issues arise. On 19.09.2017, with the assistance of learned counsel, an attempt was made to particularize and specify the various issues so that matters could be streamlined for case management purposes. The order made on that date in C.P. D-1313/2013 (treated as the lead petition for case management) provided in material part as follows: "This is a large bunch of connected petitions, which arise out of and as a consequence of, the 18th Amendment to the Constitution, whereby the Concurrent Legislative List was omitted. For present purposes, it may be noted that there was a federal law in the field being the Companies Profits (Workers' Participation) Act, 1968 ("Federal Law") and it is common ground that this law was, in its pith and substance, related to an entry on the Concurrent Legislative List. As a result of the omission of the said List, that legislative competence, previously concurrent, passed exclusively to the Provinces, but of course in relation to the Islamabad Capital Territory and such areas of Pakistan which do not form part of a Province, it continues to remain vested in the Federation. It appears that in exercise of the legislative competence, the Sindh Assembly has enacted the Sindh Companies Profits (Workers' Participation) Act, 2015 ("Provincial Law"). This Act provides that it is to be deemed to have effect from 01.07.2011 and that date appears to have been selected with reference to, or on account of, Article 270AA(8) of the Constitution.
For purposes of the order being made today, and by way of a recapitulation, it suffices to note that it appears that in all material respects the Federal Law and Provincial Law are in the same terms.
Those terms, in brief, were and continue to be that if a company makes profits during the relevant year, 5% has to be distributed for the benefit of workers. This distribution comprises of two parts.
One part is to be distributed directly to the workers of the company according to a certain formula as set out in both Acts (which formula also appear to be in the same terms), and (the second part) in case there is any amount left over from the 5% profits after application of the formula, then such balance is to be paid over for the benefit of workers at large. In terms of the Federal Law as well as the Provincial Law, the balance is to be paid into certain worker welfare funds established under certain other legislation that, prior to the 18th Amendment, used to be exclusively federal, but is now both federal and provincial under respective statutes. Thus, on an overall basis, the schemes under the federal and provincial legislation for present purposes can be regarded are the same, i.e, the workers of the company are entitled to a certain amount and any balance is to be paid over into a common pool for the common welfare of labor. At this stage, the learned Additional Attorney General interjected to express certain reservations. So noted.
After the 18th Amendment these petitions [came to] be filed since it appears that there was some confusion or at least ambiguity as to how the balance amount was to be dealt with.
Various orders were made from time to time in these petitions. The overall effect of those orders, and subsequent developments, is such that for present purposes the petitions can now be regarded as falling into various categories.
In the first category comes petitions where it appears that the concerned company has made and has been making payments to its own workers as per their entitlement, whether under the Federal Law or the Provincial Law, and in such cases it is the balance amount that has been deposited with the Nazir of the Court under interim orders. Therefore insofar as this category of petitions is concerned, neither the company nor its own workers have any claim to the amount that is lying with the Nazir and it appears that the only dispute, if any, is between the Federation and the Province. At this stage, learned counsel appearing in some of the petitions interjected to express certain reservations. So noted.
There is a second category of petitions in which it appears that the concerned company and/or the relevant Board (constituted under the Federal Law or the Provincial Law) has been depositing the entire amount of 5% profits with the Nazir of the Court with the result that the workers of such company have not received anything at all.
There is a third category of cases (which may overlap with the other categories stated above) in which the company concerned has trans-provincial operations and there is therefore a dispute as to whether such company is liable to make payment of 5% profits only under the Federal Law or under the Provincial Law or. both.
There is a fourth category, which comprises of only one petition being C.P. No,D-1162 of 2012, in which learned counsel for the company states that although on account of interim orders, certain amounts have been deposited with the Nazir of the Court, the company in fact made a loss for the relevant year(s) and that therefore nothing whatsoever was payable by the company either in terms of the Federal Law or the Provincial Law and that entire amount is to be returned to the company. The order being made today shall not apply in respect of this company.
There is possibly also a fifth category, again comprising of only one petition, but at this stage, it is not necessary to delve further into this aspect.
As is clear from the foregoing resume, the issues involved in these petitions, even if overlapping, are of a somewhat divergent nature, and although these petitions are being listed together, for purposes of hearing some further division or category will be necessary.
Having considered the matter, we make the following order....
Insofar as the companies that fall in the third category are concerned ... [on] the next date, hearing shall commence in respect of these companies and category of cases/petitions, i.e., in order to determine whether these companies fall under the Federal Law or the Provincial Law or both.
Learned Counsel for the petitioners and respondents in such cases, as well as learned Additional Attorney General and learned AAG may prepare themselves. ...."
2. Thus, as directed in the aforesaid order, hearing commenced in respect of the third category described above, and this order deals with the issue raised in respect thereof. That category concerns companies involved in "trans-provincial" operations. For present purposes, a "trans- provincial company" can be regarded as being a company that, regardless of where its registered office is located, has business operations, undertakings, offices and/or workers in this Province as well as other Provinces and/or the Islamabad Capital Territory. The question that requires determination therefore is this: which of the two statutes applies in relation to a trans-provincial company?
3. Learned counsel appearing for the various private parties in the petitions took different and, as will be seen, divergent views as regards the question in issue. The learned Additional Attorney General and learned counsel for the FBR/Department argued in favour of the 1968 Act applying as a federal law to trans-provincial companies. The learned Additional Advocate General Sindh and learned counsel appearing for the Government of Sindh (in its Labor Department) argued for a result that would make the Sindh Act applicable. Given this somewhat diffuse position, we regard it simplest to note the submissions of learned counsel in the order that they appeared before us.
4. Learned counsel who appeared for the petitioner in C.P. D-1313/2013 referred to the 1968 Act and in particular to sections 2(f) and 3(b) thereof. Learned counsel referred to certain amendments that were made in the definition of "worker" in section 2(f), which amendments had been made by various Finance Acts and were challenged as being ultra vires for that reason. Learned counsel submitted that after the 18th Amendment the Sindh Assembly enacted the Sindh Act. Reference was made to the definitions section and to clauses (b) and (h) thereof. With reference to the former, learned counsel drew attention to sub-clause (ii) and submitted that the Sindh Act applied to trans-provincial companies also as long as the registered office was located in Sindh. Referring to the scheme of both Acts learned counsel submitted that there could be some dispute with regard to the sharing, between the Federation on the one hand and the Province on the other, of the excess distributable profits as per the scheme set out in the schedules to both the Acts.
However, that was a question separate from the one being heard by the Court. With reference to the Sindh Act, learned counsel submitted that the words "in Pakistan" in section 2(d) thereof were omitted by an amending Act passed by the Sindh Assembly in 2017, which also made certain other amendments. Reference was also made to the judgment of a learned Full Bench of this Court reported as KESC and others v. NIRC and others PLD 2014 Sindh 553, 2015 PLC 1 (herein after referred to as the "KESC case") with regard to the position of trans-provincial companies. Learned counsel submitted that there were two categories of such companies that were relevant for present purposes. Firstly, there were those that were registered in Sindh but also did business and had workers outside the Province. In respect of such companies learned counsel submitted that the Sindh Act applied. The second category covered the converse situation i.e., companies that were registered outside of Sindh but also did business and had workers in this Province. Learned counsel submitted that insofar as this category was concerned, the 1968 Act continued to apply. Thus, according to learned counsel, section 2(b)(ii) of the Sindh Act would apply only to those companies that constituted the first category as described by him.
5. Learned counsel appearing in C.P. D-7940/2015 submitted that the company involved in this petition was registered in Sindh, but in respect of its workers outside of the Province the Sindh Act did not apply and it was the 1968 Act that would apply. Insofar as the workers in Sindh were concerned, learned counsel submitted that there were two possibilities. One was that the entirety of the distributable profits (being in the case of both Acts 5% of the profits made by the company) be distributed amongst the workers in Sindh (since the company was registered in this Province).
The second possibility was that it was only that percentage of the distributable profits that represented proportionately the workers in Sindh that was to be distributed to the said workers in terms of the Sindh Act. Learned counsel also drew attention to paragraph 15 of the scheme (which has an equivalent in the 1968 Act) and the possibility of the division or splitting up of the Fund in terms of the said paragraph.
6. Learned counsel appearing in C.P. D-3227/2017 submitted that the majority of the workers of the company involved in this petition were located in Sindh. Learned counsel submitted that the Sindh Act would apply. Learned counsel. appearing in C.P. D-2336/2015 submitted that the real question was what was the nature of the law? Learned counsel submitted that it was concerned with giving a share of the profits made to the workers of the company. Learned counsel drew attention to Standing Order 10-C (of the Industrial and Commercial Employment (Standing Orders) Ordinance, 1968) in terms of which bonuses are paid to workers.
7. The learned Additional Attorney General submitted that the Sindh Act applied to companies registered in Sindh and obliged them to distribute a certain amount of their profits (i.e., the aforementioned 5%) to the workers. However, it was submitted that in respect of a trans-provincial company it was only the 1968 Act that applied, and it was submitted that that was the situation in respect of such companies regardless of the place where the registered office was located.
Referring to section 7(2) of the Sindh Act the learned Additional Attorney General submitted that it provided for a mechanism for settling disputes between the company and any worker as regards matters arising under the statute, and provided that the dispute was to be settled in the same manner as provided for in the Payment of Wages Act, 1936. Referring to the position of workers located outside Sindh, of a company registered in this Province, the learned Additional Attorney General submitted that in such a situation the workers would be entitled to the dispute resolution mechanism as applicable in the Province where they were located. To hold that the Sindh Act applied also to such workers would require them to submit to the fora only in Sindh. This was not only untenable but would also work in a discriminatory manner, in violation of Article 25 of the Constitution. The learned Additional Attorney General emphasized that the Sindh Act would not apply to trans-provincial companies since uniformity was required and thus the Sindh Act applied only to a company registered in Sindh and having workers only in this Province. In relation to trans- provincial companies the 1968 Act continued to apply. Referring to the KESC case, the learned Additional Attorney General made reference to paras 14 and 15 thereof and submitted that the judgment did not rest on the fact that the federal statute there considered had been enacted after the 18th Amendment.
8. Learned counsel who appeared in C.P. D-1275/2013 adopted the submissions made by the learned Additional Attorney General and in addition drew attention to the territorial nature of provincial legislation Insofar as trans-provincial companies and operations were concerned, learned counsel submitted that that would require inter-provincial coordination and hence the matter would come within the exclusive domain of Parliament. In this regard reliance was placed on entry No,27 of Part I of the Federal List, insofar as it provides for "inter-provincial trade and commerce" and also on entry No,13 of Part-II, newly added by the 18th Amendment and which provides for "inter-provincial matters and coordination". Learned counsel also referred to entry No,31 of Part-I which relates to corporations as well as the entry No,58. Learned counsel also placed reliance on Articles 37(e) and 38(a), which form part of the Principles of Policy and submitted on a combined reading of all of these constitutional provisions that in respect of trans-provincial companies, it was the 1968 Act that would apply. Referring to the American Constitution learned counsel submitted that the jurisprudence of the US Supreme Court with regard to the Commerce Clause should be applied to the aforementioned portion of entry No,27 and in this regard placed, reliance on a recent decision of the Supreme Court reported as Sindh Revenue Board and another v. Civil Aviation Authority of Pakistan 2017 SCMR 1344. Learned counsel referred to various paragraphs from the judgment relying in particular on subpara (c) of para 43 thereof. Learned counsel also referred to the Australian Constitution where the legislative powers of the federal Parliament are listed in section 51. Reference was made to clause (xx) of this section, which relates to "corporations". Learned counsel referred to certain decisions of the High Court of Australia and relying on the same submitted that on this basis too, the 1968 Act insofar as it applied in respect of trans-provincial companies was, in its pith and substance, relatable to entry No,31 of Part-I of the Federal Legislative List. On such basis learned counsel submitted that as regards trans-provincial companies it was only the 1968 Act that applied and not the Sindh Act.
9. Learned counsel who appeared in C.P. D-1313/2013 for the company submitted that it had employees all over the country. Learned counsel submitted that the concept of a trans-provincial company was not to be found in the 1968 Act but originated in the post-18th Amendment scenario and found legislative expression in the (federal) Industrial Relations Act, 2012. Referring to the KESC case, where this statute was under consideration, learned counsel placed reliance on paras 18 and 19 thereof. Learned counsel submitted that if the Sindh Act were to apply, the result would be that the entire profits would have to be disbursed among the workers of the company in this Province, to the manifest detriment of the workers in other Provinces. It was for this reason that, according to learned counsel, in respect of trans-provincial companies the matter was relatable to entry No,58 of Part-I of the Federal List as held in the KESC case. Hence it was the 1968 Act that applied.
10.Learned counsel who appeared in C.P. D-2336/2015 and certain other petitions (appearing in all the petitions for the company concerned) submitted that the true question was whether the legislation in question (i.e. both the 1968 Act and the Sindh Act) was in its pith and substance a law that related to labor, or a law relating to corporations and providing for distribution of a certain percentage of the profits to the workers. If the former then, learned counsel submitted, the pith and substance would relate to entry Nos, 26 and/or 27 of the erstwhile Concurrent List (which had been omitted by the 18th Amendment) and the matter would now fall exclusively within the provincial domain. However, if, as learned counsel contended was the case, the pith and substance of the legislation related to the latter category then the relevant legislative entry would be entry No,31 of Part-I of the Federal List and hence fall exclusively in the federal domain. It was contended that the 1968 Act, being an existing law within the meaning of Article 268, fell in the exclusive federal domain by reason of entry No, 31 and since that position had not been altered by the 18th Amendment, the legislative competence continued to be exclusively federal in nature. In this regard learned counsel also referred to the preamble of the 1968 Act. On a specific query from the Court, learned counsel accepted that on his submissions the result would be that the Sindh Act would fail and be ultra vires the Constitution in its entirety, since it would relate in its pith and substance to a legislative competence that always had been, and continued to remain, exclusively federal in nature. Learned counsel also referred to certain case law in support of his submissions.
11.Learned counsel who appeared in C.P. D-3111/2013 and in another petition submitted that the resolution of the issue before the Court lay not in determining whether the registered office of the company was in this Province or elsewhere but rather, where was the industrial undertaking located? Learned counsel, referring to the position in C.P. D-3111/2013 submitted that the registered office of the company there was located in the Islamabad Capital Territory but its industrial undertaking was located in this Province. Thus, according to learned counsel the Sindh Act applied in respect of this company. In the other petition in which he appeared, learned counsel submitted that both, the registered office of the company as well as the industrial undertaking were in Sindh and all of its workers were also in this Province. However, learned counsel submitted, in all of these factors the only one that was of relevance and which had to be applied was the location of the industrial undertaking. That, according to learned Counsel, was the determining factor. On that basis in this petition also it was the Sindh Act that applied.
12.Learned counsel who appeared for the Labor Department of the Government of Sindh submitted that both the 1968 Act and the Sindh Act in their pith and substance related to nothing other than the welfare of labor, and thus were relatable to entry No, 26 of the erstwhile Concurrent List. On such basis learned counsel submitted that prior to the 18th Amendment the legislative competence had been concurrent but was now exclusively provincial in nature. Insofar as trans- provincial companies were concerned, learned counsel submitted that there was an appearance of a discriminatory effect but that the problem would be resolved if both statutes were interpreted in a manner that had nexus with the the purposes of the legislation, that being the welfare of workers. Learned counsel submitted that since the legislative competence was now purely provincial (and insofar as the Federation was concerned, vested in it in respect of any part of Pakistan not forming part of a province) the statutes had also to be so interpreted as had nexus with the territory in which they respectively operated. Thus, learned counsel submitted that the Sindh Act applied in respect of only the workers in Sindh but, and this was of importance, that this was true regardless of where the office of the company was registered and/or whether its operations were trans-provincial in nature or not. Similarly, the 1968 Act, which had ceased to apply in this Province with the enactment of the Sindh Act but continued to apply (although now as purely provincial legislation) in the other three Provinces would so apply in respect of the workers of a company as were located in each respective Province. Again, this would be regardless of whether the registered office or industrial undertaking of the company was in that Province. Finally, according to learned counsel, the 1968 Act would likewise apply as federal legislation in the Islamabad Capital Territory, but now only as a legislative competence vesting in the Federation by reason of Article 142(d) of the Constitution. Referring to the Sindh Act, learned counsel submitted that the deletion of the words in Pakistan" that were earlier to be found in section 2(d) by the amending Act of 2017 made no substantive difference.
13. Summing up her submissions, learned counsel submitted that the proper resolution of the question now before the Court lay in reading down the Sindh Act such that it only applied to a company's workers in Sindh, in the manner as noted above. Thus, for example, if a company had 10% of its workers in this Province, then it was 10% of the distributable profits (i.e., of the aforementioned 5%) that would be distributed in Sindh, and the Sindh Act would apply accordingly.
The balance would be distributable to the workers in the other Provinces as per the proportion of the workers in each respectively, and likewise in respect of the Federal Capital Territory. Here the distribution would be in terms of the 1968 Act but it would now only operate as provincial legislation. However, learned counsel submitted with reference to the Sindh Act, that this submission was subject to one point namely that related to paragraph 1 of its Schedule, where the scope of the scheme was set out. Learned counsel submitted that that paragraph served only as a basis for determining whether a particular company came within the scope of the Act or not, and hence the requirement given in clause (1) thereof, namely that the number of workers employed by the company at any time during the year had to be hundred or more, was not to be applied as meaning only the workers actually in this Province but the workforce in its entirety, wherever located. Learned counsel submitted that such reading of this particular provision did not run contrary to the principle of territoriality of provincial legislation. Likewise, in respect of the "industrial undertaking" referred to in paragraph 1, learned counsel submitted that that could, for similar reasons, be located anywhere in Pakistan. Learned counsel further submitted that even if, as contended by some of the other learned counsel, Parliament had legislative competence over trans-provincial companies (a submission that learned counsel did not accept), the 1968 Act itself could not be regarded as applying to such companies. This was so because it was a law that existed on the date the 18th Amendment came into force and, therefore, became purely provincial legislation in nature and how, insofar as the Federation was concerned, applied only in the Islamabad Capital Territory (herein after referred to as the "Capital"). As regards the KESC case, learned counsel submitted that that did not apply in the facts and circumstances before the Court since the legislation there under consideration was post the 18th Amendment and there, unlike the situation at hand, a fundamental right was also involved. Finally, learned counsel submitted that on her proposed solution, the issue of dispute resolution as raised by the learned Additional Attorney General would disappear and cease to have any relevance.
14. The learned Additional Advocate General Sindh adopted the foregoing and amplified the Province's case with further submissions. It was submitted that since the legislation, i.e., the 1968 Act and the Sindh Act, were in the provincial domain, the "nexus" doctrine would apply on account of the territorial limitation imposed on such legislation. Reference was made to the leading Indian decision, State of Bombay v. R.M.D. Chamarbaugwala and another AIR 1957 SC 699. The learned AAG submitted that there was a difference between "trans"-provincial and "inter"-provincial. It was submitted that the latter was not a source of legislative competence, and reference was made to Article 141. The learned AAG submitted that as a result of the 18th Amendment, clear legislative boundaries were established, clarifying what law lay in which domain. It was submitted that after the 18th Amendment, the Sindh Assembly had passed no less than 16 Acts relating to labor. It was emphasized that the Sindh Act was beneficial legislation, the purpose of which was to further labor welfare. The learned AAG submitted that the Act only regulated activities and had effect in this Province and not elsewhere. It had sufficient nexus with the welfare of labor to be applicable to trans-provincial companies as well. It was submitted that the pith and substance of the legislation was not at all relatable to entry No,
31. Trans-provincial companies were, as such entities, relatable to the said entity, but the welfare of labor was not. It was submitted that entry No, 27 was equally not applicable and the learned AAG submitted that this entry ought not to be regarded in the same terms as the Commerce Clause of the US Constitution. Here, the distinction sought to be drawn between "trans"- and "inter"- provincial was highlighted. "Inter"-provincial trade and commerce was concerned with the actual movement and mechanics of trade, which was not necessarily the case with "trans"-provincial. The learned AAG further submitted that since the legislative Competence was now provincial, each Province was entitled to draw up its law as it deemed fit in Order to pursue its own policy goals and objectives. The learned AAG submitted that the distinction sought to be pursued in relation to "trans"-provincial entities was artificial and without substance.
15.The right of reply was exercised. Learned counsel who appeared in C.P..D-1275/2013 referred to the Companies Ordinance, 1984 and, relying on section 4 thereof submitted that trans-provincial entities came fully within the scope of No,
31. Reliance was placed on a Full Bench decision of the Balochistan High Court, Balochistan Workers Federation and others v. Government of Pakistan and others 2014 PLC 351. As regards the portion of entry No, 27 relating to "inter-provincial trade and commerce" it was submitted that this was a standalone competence and had to be read along with entry No, 13 of Part II of the Federal List. Learned counsel submitted that the distinction sought to be drawn by the learned AAG Sindh between "trans"- and "inter"-provincial was without substance and reliance was placed on certain case law to contend that "trans"-provincial was included in "inter"-provincial (though not vice versa). As regards the "territorial nexus" principle developed by the Indian Supreme Court, learned counsel submitted that that would apply only if the Federation could not legislate in relation to the subject matter at all, which was not the case at hand. As regards the submission that the Sindh Act could be appropriately read down, learned counsel submitted that that would effectively result in the statute being re-written, which was beyond the judicial domain.
16.Learned counsel who appeared in C.P. D-1313/2013 for the petitioner also exercised the right of reply. It was submitted that the Sindh Act was perfectly workable. Reference was made to paragraph 15 of the scheme set out in the Schedule, and the equivalent provision contained in the 1968 Act. It was also submitted that there was no issue or problem as regards dispute resolution, since sufficient and proper mechanisms existed in all the statutes. It was submitted that the location of the industrial undertaking did not, and could not, control the applicability of the statute.
It was emphasized that the Sindh Act applied to a trans-provincial company only when its registered office was located in Sindh and not otherwise.
17.At the conclusion of the hearing, we allowed written synopses to be filed, and some of the learned counsel did so, along with supporting case law.
18.We have heard learned counsel as above, considered the record and material, and the case law. The question that requires determination has been set out in para 2 above. We begin by considering the issue of legislative competence. It will be recalled that one of the learned counsel contended that the pith and substance of both the 1968 Act and the Sindh Act is relatable to entry No, 31 of Part I of the Federal Legislative List. If so, that of course places the entire matter exclusively in the Federal domain and indeed renders the Sindh Act unconstitutional in its entirety. Some of the other learned counsel took a more nuanced approach, arguing that the matter of trans-provincial companies at least was relatable to various entries on the Federal Legislative List, including entry No,
31. This approach saves the Sindh Act but puts trans-- provincial companies outside its purview on the constitutional plane. On either basis it is argued that the 1968 Act alone applies to trans- provincial companies. This therefore needs to be sorted out first.
19.The division of legislative powers in a federal system as envisaged by our Constitution, and the allocation of legislative competences and of laws existing on the date on which the Constitution comes into force, are matters of great importance. They have been treated many times in the case law and have been considered recently by Full Bench and Division Bench decisions of this Court, being, respectively, Dr. Nadeem Rizvi and others v. Federation of Pakistan and others PLD 2017 Sindh 347 and Pakistan International Freight Forwarders Association v. Province of Sindh and others 2017 PTD I. It will only unnecessarily burden and lengthen this judgment if the relevant passages from those judgments were to be extracted here at any length. It suffices to note that this judgment is informed by, and is based on and relies upon, what has been held and observed there. The 1968 Act was of course an existing law within the meaning of Article 268 when the Constitution came into force on its commencing day (14.08.1973). To which legislative domain i.e., federal or provincial was it to be allocated? If in its pith and substance it related to an entry on the Federal Legislative List, then it fell in the exclusive federal domain. If it related to an entry on the Concurrent Legislative List (which was then very much a part of the Constitution), then it fell to the Federation and became a federal law, although the legislative competence itself was concurrent. If it related to none of the entries in either of the Lists then it fell in the exclusive provincial domain and became a provincial law (coming also within the Federal domain but only in relation to those areas of Pakistan that did not form part of a Province, being effectively and principally the Capital).
20. In determining the pith and substance of an existing law, one has only to look at the law itself regardless of its provenance under whatever constitutional dispensation it had originally been enacted. However, the 1968 Act on the face of it, in its second preamble, makes reference to the provision of the 1962 Constitution under which it was enacted. So, in this case it will be permissible to look at that and certain other provisions of the 1962 Constitution as an aid in determining the pith and substance of the 1968 Act. The second preamble is as follows: "AND WHEREAS the national interest of Pakistan in relation to the achievement of uniformity within the meaning of clause (2) of Article 131 of the Constitution requires Central legislation in the matter".
Now, the 1962 Constitution, which also had a federal structure, had certain features unique to it in respect of the distribution of legislative power. These have been considered in Pakistan International Freight Forwarders Association v. Province of Sindh and others 2017 PTD 1, where it was, inter alia, observed as follows (emphasis supplied): "38. ... It will be recalled that this Constitution had only one list, set out in the Third Schedule and exclusive to the Centre, and provided in Article 132 that the Provinces could legislate in respect of the powers not there listed. Now, Article 131(2) provided that the Centre could also legislate in respect of any matter not enumerated in the Third Schedule where the national interest of Pakistan so required, in relation to either the security of the country (including its economic and financial stability) or planning or co-ordination or the achievement of uniformity of any matter in different parts of the country. Article 133 provided that the responsibility of deciding whether a legislature had the competence to make a law was that of the legislature itself, and that the validity of a law could not be challenged on the ground that the legislature in question had not the competence to make it. Thus, the Central legislature could, of its own volition and subject to its own determination that the conditions laid down in Article 131(2) were fulfilled or applicable, legislate in respect of a matter not enumerated in the Third Schedule. However, in Province of East Pakistan v. Siraj ul Haque Patwari PLD 1966 SC 854, the Supreme Court had indicated that the Court could determine whether the pre-conditions that made permissible Central legislation in respect of a matter not enumerated existed or not .... [O]ne point is clear: the 1962 Constitution had special features peculiar to it, which are conspicuous by their absence in the present Constitution...."
Thus, it is clear that the Central (i.e., federal) legislature, in invoking Article 131(2) for purposes of enacting the 1968 Act was of the view that the law, in its pith and substance, could not be related to any entry in the Third Schedule to the 1962 Constitution. For, if that had been the case, then of course there would be no need to invoke Article 131(2) at all. The matter would in the normal constitutional course have come within the competence of the Central legislature and the 1968 Act could have been enacted accordingly. The importance of this lies in that when the Third Schedule is examined, it had entries relating to "corporations" and "inter-provincial trade and commerce", being entry Nos, 13 and 5 respectively. When these entries are compared with entry Nos, 31 and 27 of the present Constitution, they are essentially the same. On the foregoing basis it can fairly be concluded, and we so hold, that the 1968 Act in its pith and substance was not related to either of these entries.
21. In relation to entry No, 31, one of the learned counsel placed reliance on the position under the Australian Constitution. No doubt decisions of the High Court of Australia are of assistance when considering questions arising under our Constitution. Indeed, this is also the view taken in India.
Thus, to take but one example, the leading decision of Cole v. Whitfield [1988] HCA 18, (1988) 165 CLR 360 in respect of section 92 of the Australian Constitutive (which relates to freedom of inter-State trade and commerce and is Equivalent in our Article 151) has recently been considered and applied by the Supreme Court of India in Jindal Stainless Ltd. and another v. State of Haryana and others AIR 2016 SC 5617, (2017) 12 SCC 1 (being a decision of a 9 member Constitution Bench). However, when considering issues of the division or distribution of legislative power (as opposed to, e.g., its exercise or scope) the Australian position has to be regarded with caution. The reason lies in certain features peculiar to Australian constitutional law, which in this regard is significantly different from ours. It is true that the Australian Constitution appears to have only one "list" of legislative powers, given in section 51, which delineates the powers of the Federal Parliament. This is seemingly similar to the, position under our Constitution after the 18th Amendment. But, in reality, the Australian position is markedly different. It is stated thus in a standard treatise, Lumb, Moens and Trone's The Constitution of the Commonwealth of Australia Annotated (9th ed., 2016, pg. 118; emphasis supplied): "201 The main grant of legislative power to the federal Parliament is to be found in section 51.
Section 51 does not distinguish between exclusive and concurrent powers, although section 52 and certain other sections of the Constitution make particular Commonwealth powers exclusive to the federal Parliament. However, there are some matters covered by section 51 which by their nature are exclusive to the federal Parliament, for example section 51(iv), (xxiv), (xxv), (xxx), (xxxi), (xxxiii), (xxxvi) and (xxxviii). But apart from these matters the powers conferred upon the federal Parliament are not exclusive of State powers: they are concurrent with continuing powers of the States over the same matters. However, if there is any inconsistency between a valid exercise of power by the Commonwealth and a valid exercise of power by a State, the Commonwealth exercise of power prevails under section 109 of the Constitution."
Thus, unlike our Federal List, which contains legislative competences exclusive to the Federation, the position in Australia, and the powers enumerated in section 51, is different. The specific provision relied upon by learned counsel, clause (xx) relating to "corporations", is a concurrent power in terms of the Australian Constitution, and not an exclusive competence as is entry No, 31.
The second difference is this. For some time after the Australian Constitution came into force (in 1901) the High Court interpreted the various clauses of section 51 on the assumption that there were certain (non-enumerated) powers "reserved" to the States, and that the powers conferred on the Federal Parliament had therefore to be understood and applied so as not to trench upon those "reserved" powers. However in Amalgamated Society of Engineers v. Adelaide Steamship Co. Ltd.
(1920) 28 CLR 129, [19201 HCA 54, commonly known as the Engineers case and widely regarded as one of the most important decisions ever rendered by the High Court, the reserved powers doctrine was decisively rejected. It was held that there were no legislative powers "reserved" to the States and the competences listed in section 51 had to be construed and applied without any concern with regard thereto. Again, this is significantly different from our Constitution, where right from inception huge swa thes of legislative power have vested exclusively in the Provinces. The 18th Amendment has only added to that category. In our view therefore, the position in Australia provides little, if any, assistance in resolving the specific point now under consideration which, in its essence, is as regards the distribution of the relevant legislative power and as to whether it is, especially in the post-18th Amendment scenario, exclusive to the Federation or to the Provinces. It is therefore, with respect, not necessary to consider in any detail the Australian cases relied upon by learned counsel.
22. Insofar as the Full Bench of this Court, the KESC case, is concerned, with respect, in our view it has no application to the issue at hand. The learned Full Bench was there considering the (federal)
Industrial Relations Act, 2012, in which "trans-provincial" is a specifically defined term (see section 2(xxxii)). The learned Full Bench upheld the challenged provisions on the ground that they related to the enforcement of a fundamental right (the right of association under Article 17), and it was thus within the Federal domain in terms of entry No, 58 of Part I of the Federal List. Here, there is no issue of any fundamental right. None was referred to or relied upon although we specifically invited assistance from learned counsel in this regard. Therefore, the decision is, with respect, distinguishable.
23. Entry No, 26 of the erstwhile Concurrent List had provided as follows: "Welfare of labor; conditions of labor, provident funds; employer's liability and workmen's compensation, health insurance including invalidity pensions, old age pensions". In our view when the 1968 Act is considered as a whole as it stood on the commencing day of the Constitution it was, in its pith and substance, relatable to "welfare of labor" and hence to entry No,
26. Thus, being an existing law relatable to an entry on the Concurrent List, it stood allocated to the Federation and operated as a federal law. When the 18th Amendment omitted the Concurrent List, some of its entries were shifted to the Federal List, but entry No, 26 was not one of them. Thus, it stood omitted, with the result that it came exclusively in the provincial domain. What happened to the 1968 Act? The legislative competence to which it related had moved in the manner just indicated. The 1968 Act necessarily followed suit. It therefore "fractured" into provincial legislation. Instead of being one unified federal law applying as such over the whole of Pakistan, it now applied as provincial legislation in each of the four Provinces, and as a law in the federal domain in the Capital by reason of Article 142(d). Of course, no doubt that when the 18th Amendment came into force it applied identically all over Pakistan. But it must be clearly understood that this was not because it so applied in any unified sense as being one law relatable to the legislative competence of one legislature, i.e., Parliament. It so applied simply because on "fracturing" it passed (obviously in exactly the same form and shape) to each of the Provinces as provincial legislation, and continued to apply in the Capital on the same terms. Put differently, it was as though each Province had enacted exactly the same law for itself exercising its exclusive legislative competence, and the Federation had done the same for the Capital in terms of Article 142(d). Instead of there being one law, there were now five laws. Now, as is well known the territorial extent of legislation by a Provincial Assembly is limited to that province (see Article 141) and that of federal legislation under Article 142(d) to the Capital (and such other territory as does not form part of a province). Therefore, in that sense the 1968 Act had not merely "fractured"; it also "receded" from being one unified all-Pakistan law into five separate and distinct laws that, albeit identical, applied in their own respective territories. To the extent that the 1968 Act continued as federal legislation, it was only by virtue of Article 142(d) and there also only confined to the Capital. The fact that when the 18th Amendment came into force the 1968 Act continued to apply all over the country should not obscure the crucial constitutional change that had taken place, both as regards the territorial operation of the "fractured" statute as well as the legislatures to which it now stood allocated.
24.Since the 1968 Act passed on to the Sindh Assembly in terms as just noted, that legislature was well within its competence to repeal it and replace it with fresh legislation, being the Sindh Act. This was done by section 12(1) thereof, where in repealing the 1968 Act the traditional formula "in its application to the Province of Sindh" has been used. At the risk of some repetition it must again be emphasized and clearly understood that what the Sindh Assembly was repealing was not some federal legislation over which it had acquired competence. What was being repealed was what had become provincial legislation by reason of the 18th Amendment. Of course, the Sindh Act, like the statute which it replaced, applied only in Sindh though over the whole of it (see section 1(2)).
25.Before proceeding further it will be convenient to pause and deal with a submission made by one of the learned counsel that the 1968 Act continues to apply on an all-Pakistan basis by reason of entry No, 27 of Part I of the Federal List (i.e., "inter-provincial trade and commerce"). It will be recalled that in this context reliance was placed on Sindh Revenue Board and another v. Civil Aviation Authority of Pakistan 2017 SCMR 1344 and the Commerce Clause of the US Constitution. In our view, with respect, entry No, 27 has nothing to do with the 1968 Act. Once the pith and substance of the 1968 Act as an existing law on the commencing day had been identified, it then remained, as it were, "fixed" is the legislature envy in which it related, being entry No, 26 of the Concurrent List. As correctly submitted by learned counsel for the Government of Sindh (Labor Department), the 1968 Act had to be dealt with on such basis throughout, with the post 18th Amendment consequences being as described above. It did not (because it could not) happen that somehow on account of the omission of the Concurrent List, the pith and substance of the 1968 Act altered such that it became relatable to entry No,
27. If at all there is fresh federal legislation in which the subject matter of the statute is the same as the 1968 Act and the Sindh Act, and it is sought to support and justify such legislation in terms of entry No, 27, then that legislation will be dealt with on its own terms at that time. For present purposes, the legislative competence sought to be relied upon has no relevance.
26.We are now in a position to consider the 1968 Act and the Sindh Act in order to address the issue identified in para 2 above. Since the 1968 Act has "receded" in the territorial sense as explained above, and has in this Province been replaced by the Sindh Act, it certainly does not apply here. But, that may not necessarily lead automatically to the conclusion that it is the Sindh Act that applies to trans-provincial companies. And even if it does, the question of the extent to which it applies would still need to be addressed. As will be seen from the submissions made by learned counsel. a wide range of differing and divergent solutions have been proposed, which we have carefully considered. In our view, a proper resolution of the issue requires keeping in mind two principles, one operating on the constitutional plane and the other as a rule of statutory interpretation. Firstly, provincial legislation, as well as federal legislation in terms of Article 142(d), is territorially bound. The principal rule, which is applicable here, is that a provincial law cannot extend beyond the confines of the Province concerned. Secondly, it is well settled that legislation in relation to labor that is beneficial legislation is to be construed broadly and liberally. It is that interpretation which achieves and advances the purpose of the statute that should be adopted, which should not be thwarted or subverted by "specious sophistry" (Pakistan Engineering Co. Ltd. v.
Fazal Beg and others 1902 SCMR 2166). There can be no doubt that the 1968 Act and the Sindh Act are beneficial legislation. It is by a judicious interaction of these two principles that the issue before us is to be resolved.
27. Applying the first principle, we again recall the conclusion reached as regards the pith and substance of the two Acts: it is relatable to the legislative competence of "welfare of labor". That is the purpose of both the statutes: to enhance labor welfare by allowing workers to participate in the profits of a company with whom they are associated in the manner stipulated by law. But, and this is where the first principle comes into operation, the welfare of which workers? Is it all the workers of a company that has its registered office in this Province regardless of where the workers themselves may be (i.e., all over the country)? Or, it is only the workers in Sindh of a company that has its registered office in Sindh (i.e., both conditions must apply)? Can it apply to the workers here of a company that has its registered office elsewhere? What about a situation where the company's registered office is located here but the industrial undertaking is elsewhere, and vice versa, or even both are outside the Province? It will be seen that these questions in fact relate to the various submissions made, and solutions offered, by learned counsel. In our view, with respect, focusing on the company and/or where its registered office is located and/or where its industrial undertaking is situated and any other similar consideration tends only to obscure what lies, and must necessarily lie, at the heart of the statutes: the welfare of labor by allowing them to share in the profits of the company. At the same time, it must also be kept in mind that in enacting the Sindh Act as beneficial legislation, the legislative intent is clearly to benefit all workers. Once these aspects are kept in mind, and the constitutional principle of territorial limitation is applied, the solution is clear. In relation to any company, the Sindh Act applies to all the workers, but only to those workers, who are in this Province. In other words, it is irrelevant where the registered office or the industrial undertaking of the company is located. It is equally irrelevant whether the company is trans-provincial or not. The focus of the Act must be on the workers alone and nowhere else. And, since the statute is territorially limited, it must only be on those workers who are in this Province and nowhere else. In our view therefore, it is the solution suggested by learned counsel for the Government of Sindh (Labor Department) that is correct. It is this solution that properly relates the Sindh Act to the legislative competence with reference to which it was enacted, the principle that the statute is territorially limited, and the rules of interpretation that apply to beneficial legislation.
But, in specific terms, what does this mean? More, precisely, what percentage of the distributable profits is allocable to the workers in Sindh? Is the whole of the distributable profits or only some share therein? Or is it only the profits, if any, that are earned in Sindh? The answer to this is also now clear. Only that percentage of the distributable profits fall within the scope of the Sindh Act as are proportionate to the workers in this Province. And, since this is beneficial legislation it is the whole of the company's profits that are to be used in the computation, regardless of where earned. Thus, if the distributable profits are 5% of the total profits made, and the company's workers in this Province are 25%, the profits to which the Sindh Act applies would be 25% of 5%, i.e., 1.25% of the profits made.
28. So much for the solution. How does it relate to the actual interpretation and application of the Act? In our view if the principal obligation under Sindh Act, in terms of section 3(b), that a company "pay every year to the Fund not later than nine months after the close of that year five percent of its profits during such year", can be read and applied such that the obligation is regarded as requiring that payment be made only of such percentage of the distributable profits as is proportionate to the workers in Sindh, then the Sindh Act will be in accord with the solution that we have held to be correct in the circumstances at hand. Relevant provisions elsewhere in the statute would also have to be interpreted in a manner that gives effect the foregoing. The question is of course whether it is permissible for the Court to so interpret and apply the Sindh Act. Does the solution that, in our view, accords best with achieving the purposes of the statute while keeping it faithful to constitutional constraints come within the scope of permissible judicial interpretation or does it intrude into the legislative field? In Excise and Taxation Officer and another v. Burmah Shell Storage and Distribution Company of Pakistan Ltd. and others 1993 SCMR 338, the Supreme Court observed as follows (pg. 345; Para 9): "There cannot be any cavil to the proposition that the Court can supply an obvious omission in a particular provision of a statute or omit some word which is apparently redundant in the context of the provision, but the Court cannot legislate in place of the legislature".
More recently, in Collector o Sales Tax Gujranwala and others v. Suter Asia Muhammad Din and Sons and others 2017 SCMR 1427, 2017 PTD 1756, the Supreme Court has observed as follows (pp. 1438-9; italics in original): "8. ... It is settled law that the principle of reading in or casus omissus is not to be invoked lightly, rather it is to be used sparingly and only when the situation demands it. In fact the Courts should refrain from supplying an omission in the statute because to do so steers the Courts from the realms of interpretation or construction into those of legislation. This principle has been aptly dealt with by this Court in judgment reported as Abdul Haq Khan and others v. Haji Ameerzada and others (PLD 2017 SC 105) in which it was observed that:- 'The reading in of words or meaning into a statute when its meaning is otherwise clear is not permissible. As a matter of statutory interpretation, Courts generally abstain from providing casus omissus or omissions in a statute, through construction or interpretation. An exception to this rule is, when there is a self-evident omission in a provision and the purpose of the law as intended by the legislature cannot otherwise be achieved, or if the literal construction of a particular provision leads to manifestly absurd or anomalous results, which could not have been intended by the legislature. However, this power is to be exercised cautiously, rarely and only in exceptional circumstances."
29. The leading authority in English law in this regard is the decision of the House of Lords in Inco Europe Ltd. v. First Choice Distribution (a firm) [2000] UKHL 15, [2000] 2 All ER 109 ("Inco Europe"). The House was concerned with the proper interpretation of section 18(1)(g) of the Arbitration Act, 1996.
Lord Nicholls, with whom the other Law Lords agreed, had this to say (pg. 115; emphasis supplied): "I freely acknowledge that this interpretation of section 18(1)(g) involves reading words into the paragraph. It has long been established that the role of the courts in construing legislation is not confined to resolving ambiguities in statutory language. The court must be able to correct obvious drafting errors. In suitable cases, in discharging its interpretative function the court will add words, or omit words or substitute words. Some notable instances are given in Professor Sir Rupert Cross' admirable opuscule, Statutory Interpretation, 3rd ed., pp. 93-105. He comments, at page 103: 'In omitting or inserting words the judge is not really engaged in a hypothetical reconstruction of the intentions of the drafter or the legislature, but is simply making as much sense as he can of the text of the statutory provision read in its appropriate context and within the limits of the judicial role.'
This power is confined to plain cases of drafting mistakes. The courts are ever mindful that their constitutional role in this field is interpretative. They must abstain from any course which might have the appearance of judicial legislation. A statute is expressed in language approved and enacted by the legislature. So the courts exercise considerable caution before adding or omitting or substituting words. Before interpreting a statute in this way the court must be abundantly sure of three matters: (1) the intended purpose of the statute or provision in question; (2) that by inadvertence the draftsman and Parliament failed to give effect to that purpose in the provision in question; and (3) the substance of the provision Parliament would have made, although not necessarily the precise words Parliament would have used, had the error in the Bill been noticed.
The third of these conditions is of crucial importance. Otherwise any attempt to determine the meaning of the enactment would cross the boundary between construction and legislation: see Lord Diplock in Jones v. Wrotham Park Settled Estates [1980] A.C. 74,
105. In the present case these three conditions are fulfilled.
Sometimes, even when these conditions are met, the court may find itself inhibited from interpreting the statutory provision in accordance with what it is satisfied was the underlying intention of Parliament. The alteration in language may be too far-reaching. In Western Bank Ltd. v.
Schindler [1977] Ch 1, 18, Scarman L.J. observed that the insertion must not be too big, or too much at variance with the language used by the legislature. Or the subject matter may call for a strict interpretation of the statutory language, as in penal legislation. None of these considerations apply in the present case. Here, the court is able to give effect to a construction of the statute which accords with the intention of the legislature."
Inco Europe has been cited with approval in India: see, e.g., the decisions of the Indian Supreme Court reported as Manga @ Man Singh v. State of Uttarkhand (2013) 7 SCC 629 and Dilip S. Dahanukar v. Kotak Mahindra Co. Ltd. and another (2007) 6 SCC 528.
30. We have carefully examined the point now under consideration. When the Sindh Act is compared with its predecessor, the 1968 Act, one aspect that leaps out immediately is that the former is virtually an identical copy of the latter. Now, the 1968 Act started out as a unified, all- Pakistan statute enacted by the then Central legislature. Its purpose was clearly the welfare of labor, and since it operated in the manner just stated, there were no problems applying it to all the workers of a company throughout Pakistan. As explained above, it retained this character on the commencement of the present Constitution and up to the 18th Amendment, i.e., from 1973 to 2010.
The Act thereafter "fractured" into provincial legislation and was then replaced by the Sindh Act.
And, with great respect, herein the problems begin and the difficulty lies. Unfortunately, and we say this with respect, it is clear that as the Bill that culminated in the Act passed through the Provincial Assembly the changed constitutional circumstances were not properly appreciated and kept in mind. This has led to manifest errors. A striking example is provided by paras 9 and 10 of the scheme embodied in the Schedule, which are an identical reproduction of paras 9 and 10 of the scheme contained in the Schedule to the 1968 Act. These provide, respectively, that the income of the Fund and any sums paid to workers shall be exempt from income tax. Now; when the 1968 Act was federal legislation, this was of course unexceptionable: the income tax, being in the Federal domain, could be exempted by federal legislation. But of course, when the matter was transferred to the Provincial domain and resulted in legislation enacted by the Provincial Assembly, the purported "exemption" became ultra vires the Constitution. Provincial legislation cannot give exemption from federal taxation. Yet, this is precisely what the Sindh Act purports to do. Obviously, if due regard had been given to this point, the error in the Bill as it passed through the Provincial Assembly, would have been corrected immediately. Other examples can be given, but perhaps one suffices to bring home the point we are making. In our view, and again with great respect, when such a manifest error escaped attention, it is perhaps not surprising that the more subtle and latent issue, namely whether the Bill proposed to be enacted accorded with the principle of territorial limitation, also escaped attention. It was not properly appreciated that when the 1968 Act operated as federal legislation on an all-Pakistan basis, then the legislature could take into account the welfare of all labor throughout the country. However; when the same subject matter was being dealt with by the Provincial Assembly as provincial legislation, then it could take into account only the labor within its legislative reach, i.e. in the Province. Of course, the principle of beneficial legislation allowed the Provincial Assembly to legislate for the welfare of all of the labor within the Province, regardless of where the company itself or its industrial undertaking was located. We may note that during the course of her submissions, learned counsel for the Labour Department stated that proposals were under consideration to amend the Sindh Act on account of these, and other, errors, which had to be rectified. (However, it is not at all clear what stage those proposals have reached or when amending legislation will be introduced in the Assembly.) This serves only to strengthen our view that when the Bill was passing through the Assembly, had these points been highlighted the errors would have been corrected.
31.Keeping the foregoing in mind, it is our conclusion that by reason of (if we may say so with respect) the somewhat peculiar manner in which the Sindh Act has been enacted, the issue now under consideration (i.e., as raised in para 2 above) has resulted from, and itself creates, a situation where, as held by the Supreme Court, "the purpose of the law as intended by the legislature cannot otherwise be achieved", and if there is a "literal construction" of the relevant provisions, that would "lead to manifestly absurd or anomalous results, which could not have been intended by the legislature". In addition, the three conditions identified in Inco Europe also apply to the situation with which we are confronted. Therefore we conclude that a resolution of the issue at hand is within the judicial purview. By applying the interpretive tools available to it, the Court will not be entering the impermissible legislative arena. It will only be performing its judicial role and function. Therefore, in our view the relevant provisions of the Sindh Act can, and ought, to be so understood and applied as brings them in accord with the principles noted above. We hold accordingly. To recapitulate: in our view, the principal obligation under the Sindh Act, in terms of section 3(b), that a company "pay every year to the Fund not later than nine months after the close of that year five percent of its profits during such year", can and ought to be read and applied such that the obligation is regarded as requiring that payment be made only of such percentage of the distributable profits as is proportionate to the workers in Sindh. Relevant provisions elsewhere in the statute can, and ought, to be interpreted in a manner as gives effect to the foregoing. We hold accordingly.
32.This does not however, quite end the matter. Certain other points must also be made and addressed. One relates to the scheme set out in the Schedule to the Sindh Act. Again, this is in terms virtually identical to those to be found in the 1968 Act. Paragraph 1 sets out the scope of the scheme. The scheme applies to any company that satisfies any one of the three conditions listed in the paragraph. The first condition is as follows: "The number of workers employed by the company at any time during a year is hundred or more. (The number given in the "1968 Act was, and remains, fifty but otherwise the condition is no different.) In view of what has been stated above, one question that arises is whether the number of workers to be taken into account is that found only in this Province or all over the country? This has obvious implications for a trans- provincial company. Suppose such a company (having its registered office and industrial undertaking outside the Province) has 150 workers, of whom only 60 are in this Province. Will the Sindh Act apply to such a company? As has already been held, the fact the registered office and industrial undertaking are outside the Province is irrelevant. The Sindh Act will apply, but only in respect of the 60 workers, and their entitlement to the distributable profits will be as explained above. But could the company not argue that since the number of workers in this Province is less than 100, the first condition of paragraph 1 of the scheme is not met and hence the company has no liability? (We assume additionally that the other two conditions do not apply.) In our view, the company could not so argue. Applying the principle of beneficial legislation, the reference to the number of workers in the first condition must be regarded as referring to the total workers all over the country and not merely in Sindh. The principle of territorial limitation is not violated since; as correctly submitted by learned counsel for the Labor Department, the purpose of paragraph 1 is only to establish the parameters that would make the scheme applicable. Those parameters can be based on or take into account factors that lie outside the Province. Likewise, the third condition, which relates to the value of the fixed assets of the company. It is irrelevant where those assets are located, whether within or outside the Province.
33. Secondly, on the view that has been taken the specific problem identified by the learned Additional Attorney General, relating to dispute resolution also disappears. It is obvious that in our view, the 1968 Act as applicable in the other Provinces and the Capital respectively will apply there in the same manner as the Sindh Act in this Province, i.e.; in respect of all the workers within the relevant territorial domain. Thus, if a worker, say in Punjab, has a dispute with a company that has its registered office here, he does not have to come to this Province for redressal; he can simply invoke the procedure available under the 1968 Act, as applying in Punjab as provincial legislation.
The reverse would, obviously, also be true. Thirdly, a potential issue of a variation in the amount of distributable profits would also cease to be a problem. Currently, in each Province and in the Capital, the same percentage of the total profits is to be distributed, being five percent. But of course, that need not always be the case. Since the competence is now exclusively provincial, each Province (or the Federation in respect of the Capital) can vary the amount. Suppose the Sindh Act were to be amended so as to increase the amount to, say, seven percent. What would be the position of a trans-provincial company that had its registered office in, say, Punjab where the amount continued to remain at five percent? Could such a company argue that it was only liable to distribute to the workers in Sindh a proportionate amount calculated on the basis of five percent? In our view, the answer would have to be in the negative. The law in this Province would have to be applied, and workers here would get an amount proportionate to their number calculated at seven percent. Of course, the workers in Punjab would get an amount proportionate to their number calculated at five percent. But would this not be discriminatory? Again, the answer is that it would not. The reason is that the legislative competence is exclusively provincial, and the territorial extent is limited. Each Province is entitled to legislate in its own manner in respect of a matter that is exclusively within its domain.
34.In view of the foregoing discussion, we therefore answer the issue specified in para 2 above, which relates to the third category identified in the order of 19.09.2017, as follows. In the case of trans-provincial companies, it is the Sindh Act that applies, but interpreted, read and applied such that the obligation under the Act is only to make distribution to the workers in this Province, and only of an amount that is proportionate to their number here. It is irrelevant where the registered office and/or the industrial undertaking of the trans-provincial company are located, i.e., they could be located in this Province or elsewhere. Furthermore, in making the computation, the whole of the profits made by the company are to be used, regardless of where they were earned in the country.
35.This order applies to all petitions that were listed along with C.P. D-1313/2013 on 22.12.2017. While the order may well dispose off some of the petitions, we have considered it more convenient to keep all petitions pending for the time being. This is so as to enable the other categories to be dealt with in a more convenient manner. Therefore, at the present time none of the petitions are being disposed off. Office may take note and act accordingly.
36.The Office is directed to now fix these petitions according to roster and for a date in office.