The Sind Small Industries & Handicrafts Development Corporation has been established under the Sind Small Industries & Handicrafts Development Act, 1972. It is the successor of the West Pakistan Small Industries Corporation and its principal function is to take measures to render assistance in the establishment and development of cottage, small anal other industries in the Province of Sind and for this purpose it develops and runs small industries establishments in different parts of the Province. Among its other projects, it has established and is running carpet centres in different parts of Sind. The appellant was appointed as a Carpet Teacher in the respondent organization's Carpet Centre at Jacobabad, Originally the appellant was appointed in National Pay Scale. Grade 7-but was first promoted to Grade 8 and ultimately to Grade 11. In February, 1982, when the appellant was working as Carpet Teacher/Incharge Carpet Centre (Boys) at Shahdadkot, he was asked through letter, dated 28th February, 1982, to submit his explanation in respect of certain acts, namely, his absence from his duties,. Particularly during the visit of a Federal Minister, secondly, that during the. Check of the Carpets of his Centre by the Assistant Director (Carpets) Khairpur, the carpets were found to be defective in quality and not of the proper size, and thirdly, that the appellant had wrongly affixed on the application of a piece-rated worker the stamp of the Superintendent, Sind Small Industries Corporation Carpets Trade Centre, Which he was not authorized to use. The appellant submitted his explanation in respect of the aforesaid allegations but the same was not found satisfactory. It is claimed that as the appellant was on probation his services were terminated during the period of probation since his work was not found upto the mark. The appellant challenged the orders of termination of his service- through a grievance petition preferred before the learned VIIth Labour Court, Sukkur, which has dismissed the same on the ground that the appellant's grievance petition was not maintainable as he was not a workman for the purposes of the Sind Industrial & Commercial Employment (Standing Orders) Ordinance, on account of the fact that the Sind Small Industries & Handicrafts Development Corporation, whose employee he was, was being run under the authority of the Government of. Sind and it has statutory rules of service, discipline and conduct and hence the Standing Orders are not applicable to it and its employee. Aggrieved by this decision, the appellant has come up in appeal to this Tribunal.
2. It was conceded by Mr. Shabbir Ahmed Awan, the learned counsel for the appellant, that the Sind Small Industries & Handicrafts Develop--ment Corporation has been established by the Government of Sind under the Sind Small Industries & Handicrafts Development Act, - 1972, and that service, conduct and discipline rules for its employees have been framed by the Government under section 34 of the Act. These rules. Have been published in the official Gazette. Mr. Shabbir Ahmad Awan, however, submitted that the corporation' was being run by its own Board of Directors and not under the authority of the Government and that further the rules have been framed not by the Government. The twin requirement for the exclusion of the application of the Sind Industrial & Commercial Employment (Standing Orders) Ordinance, 1968, under the first proviso to subsection
(4) of section 1 of the Ordinance, in respect of any establishment is that such establishment must be carried on by or under the authority of the Federal or a Provincial Government and that further it must have statutory rules of service, conduct and discipline for its employees. In the instant case, the fulfillment of the second requirement is undisputed as Services and Conduct Rules for the employees of the Sind Small Industries & Handicrafts Development Corporation have been framed by the Government under section 34 of the Act. These Rules, which have been notified in the Government Gazette, indisputably relate to the discipline and other service matters of the employees of the Corporation. The fact that they have been framed by the Government and not by the Corporation does not alter the position. The only A requirement of the law is that they must be statutory rules and clearly the rules in question are statutory rules having been framed under the Sind Small Industries & Handicrafts Development Corporation Act, 1972.
3. The second requirement for the exclusion of the Standing .Orders in respect of an establishment is that it must be carried on by or under the authority of the Federal or a Provincial Government. It is not disputed, that the establishment of the Corporation is not being carried on directly by the Government as it has a Board of Members. It is, however, to be seen whether the establishment of the Corporation is carried on under the authority of the Government. Section 4 of the Act provides that the administration and management of the Corporation and its affairs shall vest in the Board of Members which shall exercise all powers which may be exercised and done by the Corporation in accordance with the provisions of the Act: The constitution of the Board is laid down in section 5 of the Act. Besides the Chairman, who is to be Minister of Industries, Government of Sind there are to be 15 other members, consisting of the (1) Secretary, Industries & Mineral Develop--ment Department, Government of Sind, . (2) Secretary, Finance Department, Government of Sind or his nominee not below the rank of a Deputy Secretary, (3) Development Commissioner, Government of Sind, or his nominee not below the rank of Deputy Secretary, (4) Director, Small Industries and Handicrafts Development Corporation, (5) one representative each from the Industrial Development Bank of-- Pakistan, the Export Promotion, Bureau, Government of Pakistan, and the Trading Corporation of Pakistan, (6) 3 non-official Directors to be appointed by Government on the recommendations of the Chairman, and (7) 5 members of the Provincial Assembly of Sind to be elected by the Assembly. It will be seen that except for the 5 Assembly members and the 3 non- official members, who are also to be appointed by the Government, the remaining members of the Board are ex officio members or officials of the Government or officers of Corporations set up, Managed or run by the Government. There is also a provision to the effect that Government shall have powers to alter the membership of the Board as and when necessary. Since there is no Legislative Assembly, it is presumed that no representation of the Assembly is on the Board of Members of the Corporation. The Chief Executive of the Corporation and Secretary of the Board is to be the .Director, Small Industries & Handicrafts Development Corporation, and. His remuneration and salary are fixed by the Government. Section 9 of the Act provides that the Corporation may from time to time appoint such officers, advisors and employees as it considers necessary on such terms and !Conditions us may be prescribed by the Rules but apart from the fact that the rules of appointment of the staff are to be framed by the Government and the rules appear to empower Government to deal with a corporation employee in such manner as appears to it to be Just and equitable, the Government also has over. Riding powers in respect of the functions to be performed by the Corpo--ration and subsection (4) of section 25 provides that the Corporation shall sponsor, establish and manage the industries in the public sector in Sind as directed by the Government from time to time, and take over and run schemes, projects and training institutions as may be transferred to the Corporation by Government. The main source of finance of the Corporation, apart from the sale-proceeds of its raw materials and finished products and the loans obtained by it from scheduled banks, are grants placed by Government at its disposal. The Government exercises control over the accounts and budget of the Corpora--tion as under section 32 of the Act the Corporation is required to furnish to Government accounts of each financial year and audited statement in the prescribed form its assets and liabilities on the close of the year together with a full report of the working of the Corporation during the year. Furthermore, the Corporation is required to submit to Government its proposals for the next ensuing financial year at such time and in such manner as may be prescribed. I have already referred to the fact that under section 34 the rule-making power vests with the Government, including the lower to frame Rules, regulating the recruitment of the employees, the terms and conditions of service of the staff, and the functions of the advisors. An examination of the above and other provisions of the Act, in my view, clearly indicates that the Government exercises executive control over the functions, affairs, budget and the accounts of the Corporation. It appears to me, therefore, that the Corporation is being effectively carried on under the authority of the Government though through its Board of Members.
4. It was next sought to be argued by Mr. Shabbir Ahmed Awan that since the banks, though nationalized, are deemed to be commercial establishments, the Sind Small Industries & Handicrafts Corporation which is also deemed to be a bank for the purposes of the Bankers' Books Evidence Act, 1890, as provided in the Act tinder which the Corporation has been established, should be deemed to be a commercial establishment. Now, in the first place, the Corporation is deemed to be a bank only for the limited purpose of the application of the provisions of the Bankers' Books Evidence Act, 1890. Further more, under the Banks (Nationalization) Act, 1974, not only is the corporate status of the banks duly preserved and maintained notwithstanding the fact that the banks have been nationalized but all contracts, deeds, agreements, assets, powers, authorities, privilege suits, appeals and other legal proceedings are to be continu--ed and to be maintained irrespective of the nationalization of the banks. It is thus clear that so far as the banks are concerned, the Legislature has incorporated special provisions in the Banks (Nationalization)
Act, 1974. To ensure that their commercial character is not disputed. This is not the case with the Sind Small Industries & Handicrafts Development Corporation which is set up for the promotion of small industries which is the function of the Government. The Corporation is thus performing Governmental functions. Furthermore, as already pointed out, it is being controlled and carried on under the authority of the Government of Sind. In the recent case of the Trustees of the Port of Karachi v. Abdul Ghani (1), C A No. K-272 of 1980 it was observed by the Supreme Court that the K. P.
T. Is being carried on under the authority of the Federal Government, though it is being managed by its Trustees. A Division Bench of the Karachi High Court, in the case reported as Muhammad Nawaz v. Sind Labour Appellate Tribunal (1982 PLC 1002) has held that the Karachi Metropolitan Corporation, which is a Statutory Corporation, is being run under the Provincial Government and that the Standing Orders are not applicable to it or its employees.
5. For the reasons discussed by me above, I would concur in the view taken by the learned Labour Court that the Sind Small Industries & Handicrafts Development Corporation is being carried on under .The authority . Of the Government of Sind and has rules of E conduct and discipline for its employees. As such, the Standing Orders are not applicable to it. I would, therefore, dismiss the appeal in limine. "