1. ' ZAFFAR HUSSAIN MIRZA, J.-Leave to appeal was granted in this case in order to examine the question of interpretation of the settlement reached between the parties on 15-5.1974 in its application to section 8 of the Employees' Cost of Living (Relief) Act, 1974, as amended by Mt XLVII of 1974, (hereinafter to be referred to as the Act)
2. ' Respondent No. 1 is the collective bargaining agent of the workers employed in the Factory of R. B.
3. Industries Limited, the appellants herein, at Karachi. On 1-5-1974, the respondent Union submitted a charter of demands, in pursuance whereof a settlement was reached between the parties on 15-5- 1974. It was, inter alia, agreed between them to increase the basic salaries of workers at the rate of Rs, 55 per month in the case of those who had completed more than five years' permanent service and at the rate of Rs, 45 per month in the case of remaining workers in permanent service of the appellants. It is pertinent to point out that the main Act was in force on the date of the. Said settlement, but on 10-9-1974, the Amending Act referred to above was promulgated granting an additional cost off living allowance at the rate of 10 percent of the salary subject to a minimum of Rs, 50 per month to the workers. The respondent Union, therefore, demanded the additional cost of living allowance for the workers. The Management of the appellants, however, did not accede to their demand on the ground that the financial benefits granted by them to the workers under the settlement, dated 15-5-1974, had been allowed with the intention to provide relief to them due to a rise in the cost of living and, therefore, in terms of the proviso to section 8 as substituted by the Amending Act, the appellants were not required to pay to the workers the additional cost of living allowance provided for in the Amending Act. In view of this difference between the parties as to the interpretation of the relevant clause of the settlement, both the appellants and the respondent Union separately approached the Sind Labour Appellate Tribunal under section 50 of the Industrial Relations Ordinance, 1969, for decision. By order, dated 27.11-1974, the Tribunal held that the respondent Union was not entitled to claim any increase in the payment of allowance. In view of the abnormal increase in the salary under the terms of the settlement as compared to the previous settlements, the obvious conclusion was that the raise of salaries granted in terms of the settlement in question was intended to meet the higher cost of living. The respondent Union challenged the decision of the Tribunal before a Division Bench of the Sind & Baluchistan High Court at Karachi in the Constitutional jurisdiction and by judgment, dated 20-12-1974, the High Court, disagreeing with the view taken by the Tribunal, declared the same to be without lawful authority and of no legal effect, and held that the increase allowed through the settlement, dated 5-5-1974 was not due to the increase in the cost of living. The appellants being aggrieved by the aforesaid judgment have now come up before this Court in the present appeal.
4. ' Since the controversy between the parties turns on the interpretation of section 8 as amended, its provisions are reproduced hereunder:- "8. Saving of certain rights and privileges.-Nothing in this Act shall affect any right or privilege to which an employee was entitled,- (a)in the case of the cost of living allowance payable under sub section (1) of section 3, immediately before the commencement of employees' Cost of Living (Relief) Ordinance, 1973 (XXII of 1973), ore (b)in the case of the cost of living allowance payable under subsection (2) of section 3, immediately before the commencement of the Employees' Cost of Living (Relief) (Amendment)
5. Act, 1974, under any law for the time being in force or under any award, decision, agreement, settlement, contract, custom or usage in force immediately before such commencement: ' Provided that, if, at any time commencing on or after the first day of August. 1973, but preceding the commencement of the said Ordinance or, as the case may be, commencing at or after the commencement of the said Ordinance but preceding the commencement of the Employees' Cost of Living (Relief) (Amendment) Act, 1974, any employer has paid, or become liable to pay, whether by virtue of an award, decision, agreement, settlement, contract, custom or usage, to any employee, in respect of any period, any sum of money, which is intended to provide relief due to a rise in the cost of living, such employer shall not be required to pay to such employee in respect of such period any amount in excess of the difference, if any, between the amount so paid by him or the amount which he has so become liable to pay, and the cost of living allowance payable to such employee."
6. ' Explanation.-For the purpose of this proviso, any increase in wages accruing by virtue of the usual annual increment or promotion to a higher grade, or an allowance not specifically given to provide relief due to a rise in the cost of living, shall not be deemed to be an increase intended to provide relief due to a rise in the cost of living."
7. From the plain reading of section 8 as reproduced above, it will appear that the right of the workers of the respondent Union to receive financial benefits under the settlement, dated 15-5-1974, would be saved under clause (b), and they would be entitled to the payment of additional cost of living allowance by virtue of newly-added subsection (2) of section 3, unless their case falls within the admit of the proviso, which in substance lays down that if these benefits were, "intended to provide relief due to a rise in the cost of living", they would not be entitled to any additional benefit by way of cost of living allowance granted under subsection (2) of section 3 of the Act. In other words the intention underlying the provisions of the proviso was that in case any financial benefit was granted to the workers by virtue of, inter alia, a settlement, which was intended to provide relief 4 due to a rise in the cost of living, then such financial benefit will be adjustable as against the additional cost of living allowance granted by the Amending Act. The High Court, in order to resolve this controversy, referred to the demand contained in the charter of demands submitted by the workers preceding the settlement, in which it was urged that those workers who had put in five years or more service should be allowed an increase of Rs, 60 per month in their wages and those having service of less than five years should be given Rs, 50 per month as such increase. The settlement recorded the agreement between the parties on this demand in the following words:- "It is agreed between the Company and the Union that with effect from 1st April, 1974, the salaries of all permanent workmen employed in the Factory as on 1st April, 1974, will be increased at the following rates:-
(i) All entitled workmen as fully detailed in the attached Schedule `A' who have completed more than five years of permanent service in the Company as on 31st March, 1974, will get an increase of Rs, 55 in the basic monthly salary drawn by them on the 31st March, 1974.
(ii) All entitled workmen as fully detailed in the attached Schedule 'B' who have not yet completed five years of permanent service in the Company as on 31st March, 1974, will get an increase of Rs, 45 in the basic monthly salary drawn by them as on 31st March, 1974."
8. ' In the opinion of the High Court, the language of the foregoing clause of the settlement clearly indicates "that the increase contained in the settlement is by way of addition to the basic monthly salary". The learned Judges further strengthened their view by taking the aid of the explanation appended to section 8, as a conclusive test for determining the issue. They observed:- "The Legislature by adding the explanation clearly wanted to set at rest any controversy as to what is, and what is not an increase due to rise in the cost of living and hence its specific and unambiguous language."
9. ' Since the settlement does not specifically declare that the increase was occasioned due to rise in the cost of living, in terms of the explanation referred to in the opinion of the High Court, it was not possible to hold that the increase was intended to provide relief due to a rise in the cost of living and no extraneous evidence that the increase was due to such rise could be taken into consideration.
10. ' It is forcefully contended by Mr. A. A. Fazeel, learned counsel appearing for the appellants that this approach to the controversy between the parties was uncalled for, as the explanation to section 8 was not at all attracted in the present case.
11. ' The plain reading of the language employed in the explanation by the Legislature shows that the same related to increase in wages accruing by virtue of the usual annual increment or promotion to a higher grade or due to an 'allowance' not specifically given to provide relief due to a rise in the cost of living. Increase resulting from such situations was not to be taken into account for the application of the proviso. We agree with the learned counsel that in the present case there was no question of increase in wages on account of usual annual increment or promotion to a higher grade, nor was there any question of an increment on account of an "allowance" and, therefore, the explanation was really irrelevant for the purposes of the present controversy. The instant case was a case in which admittedly the parties negotiated a settlement which provided for an extraordinary increase in the wages of the workers in the manner provided therein, as already mentioned, which does not fall under category dealt with in the explanation. The question has, therefore, to be resolved by applying the test laid down in the proviso to section 8, namely, whether the increase provided in the settlement was intended to provide relief due to a rise in the cost of living. In order to apply this test and determine this question, we see no reason to exclude from consideration the charter of demands, the language of the settlement itself and the surrounding circumstances whether the rise in the wages was given with a view to relieve the mounting cost of living. If after' taking into consideration all these factors the conclusion is reached by the authority concerned that the increase was really given to provide such relief, B then the case would squarely fall within the ambit of the proviso and the financial benefits granted under the settlement would be adjustable against the additional cost of living allowance granted by the Amending Act. The interpretation adopted by the High Court would lead to a situation where such adjustment would be possible if the settlement expressly stated that the increase was for the purpose mentioned and in no other case. Such does not appear to us to be the intention of the Legislature in enacting the proviso to section S. We are particularly impressed by the manner in which the Tribunal dealt with the question, by referring to the increases allowed under the previous settlements of the years 1970 and 1972, and in coming to the conclusion that the settlement in question provided for an increase to the extent of 38.6 % in the case of lower grade workers and in the case of higher grade workers to the extent of 21.6 %. This abnormal increase was held by the Tribunal to be nothing but relief for higher cost of living.
12. ' There is yet another aspect of this case, which seems to have poorly impressed the High Court, but in or opinion is a material consideration which should have been taken into account. Demand No 12(A)(2) contained in the charter provided that any concession/relief allowed by the Provincial or Central Government in future will not affect the terms of the settlement between the parties and the appellants would be bound to give effect to such privileges. This demand was withdrawn by the respondents and it is argued that since the Amending Act was in the offing, this was intentionally done C so that any concession or relief, like the increase in the cost of living could be adjusted with the relief granted in the settlement. At any rate having withdrawn this condition, the respondents cannot now be permitted to argue that the intention of the parties was to provide for a normal increase in the wages unconnected with considerations relating to rise in the cost of living.
13. ' For the reasons set out above, we regret or inability to agree with the view taken by the High Court and uphold the decision of the Tribunal that the financial benefits conferred by the settlement dated 15-5-1974, between the parties were intended to provide relief due to a rise in the cost of living. Before concluding, we would like to deal with the arguments advanced by Malik Muhammad Saeed, learned counsel appearing for the respondent Union, in support of the view taken by the High Court and also raising certain questions of law.
14. ' It was contended by the learned counsel for the respondent Union that the words "intended to provide relief due to rise in the cost of living" were key words occurring in the proviso to section 8, revealing unambiguous intention of the Legislature that the settlement must expressly disclose that the financial benefits were given to the workers by way of relief due to rise in the cost of living.
15. In this behalf counsel submitted that it is well-established rule that for construing an instrument no extraneous evidence can be taken into consideration and the intention of the parties has to be gathered from the language of the instrument itself. The argument was that there being no such express provision in the settlement in question or the demands preceding it, the conclusion reached by the High Court must be upheld. Strong reliance was placed on two Karachi decisions reported as New Jubilee Insurance Company Ltd. v. District Judge, Karachi and Alpha Insurance Co. Ltd. v. Employees' Union . Both these decisions do not support the contentions advanced. In the first case, while construing the proviso and the explanation appended to section 8, it was held that:- "8. . We have already analysed that the words "specifically given" do not govern the cases of increase in wages due to annual increment and promotion. It is significant to note that the Legislature has used the words "specifically given", and not "specifically provided" or "expressly mentioned". The dictionary meaning of the word "given" is "bestowed", "disposed", "granted", "paid'.
16. The words "specifically given" appearing after the word "allowance" do not relate to the form of agreement or the manner in which while granting the allowance it should be expressed. It refers to the intention of the parties which should be clear, express and unambiguous. Such payment or intention can be ascertained from the facts and circumstances of the case. Any employer claiming1 2 the benefits of the proviso has to establish by clear documentary or oral evidence as the case may be that increase in salary or the grant of allowance was made with a view to provide relief due to rise in cost of living. We are, therefore, clear in or view that the words "not specifically given" do not refer to the form of expression in which increase or allowance should have been mentioned in the agreement or in other document. They refer to the intention of the parties and the factum or grant of payment of allowance to the workers."
17. ' The following further significant observations were also made:- "Such determination can be made by looking into the settlement which may mention it impliedly or expressly. If increase in wages can be co-related with the rise in cost of living and it is established that it was intended to provide relief due to rise in cost of having, then the employer will be entitled to invoke the benefits of the proviso to section 8 and subject to rules of evidence to prove it by independent evidence also ' The second case, referred to above, is distinguishable on facts as the question of application of the proviso was considered in respect of increase in conveyance allowance, medical allowance, and house rent and it was held that these were not prima facie, payments specifically made to provide relief due to rise in cost of living. But significantly the question was resolved by looking into and comparing the increases granted by the employer in the' previous settlements, much in the same manner as was done in the present case by the Appellate Tribunal. In support of the interpretation of the provisions in question adopted by the High Court, counsel also referred us to a decision of the Labor Appellate Tribunal in Messrs Celluko Industries, Karachi v. People's Labour Union . We are unable to agree with the construction placed on the proviso and the explanation contained in section 8 by the Tribunal, but in any case the decision turned on the peculiar facts of that case, namely, that the financial benefits under consideration in that case were not generally given to all the workers by way of increase in wages but to a category of them who completed one year of service on the date of the agreement. These were materially different considerations to hold that the increase was not given on account of rise in cost of living.
18. ' Finally, the argument of the counsel that the Appellate Tribunal decided the controversy on pure conjecture is also devoid of force, in that the Tribunal has proceeded on a rational basis as already discussed.
19. ' For all the aforesaid reasons, we allow this appeal and set aside the judgment of the High Court, dated 1-10-1975, with the result that, the order of the Sind Appellate Tribunal, dated 27-11-1974 shall stand restored. In the circumstances of the case, there shall, however, be no order as to costs. 1981 PLC 566 PLD 1979 Kar. 47 1976 PLC 187