1. MUHAMMAD AFZAL ZULLAH, J.-This appeal through special leave of this Court is directed against the judgment dated 15-2-1981 of the Sind High Court whereby a Constitutional ' Petition concerning cost of living allowance filed by the appellant Mills was dismissed.
2. ' By an amendment dated 26th of June, 1980 in the Employees Cost of Living (Relief) Act, 1973, subsection (4) was added to its section 3. The said section with the amendment reads as follows : "3. Cost of living allowance.-(1) .............................
3. (2)
4. (3)
(4) In addition to the cost of living allowance admissible under subsection (1) and (2) or, as the case may be, subsection (3), if any, every employee whose wages do not exceed one thousand and five hundred rupees, shall, in respect of his employment, on or after the first day of July, 1980 whether on time-work or piece-work basis, be paid by his employer a cost of living allowance equal to Rs, 40 (Rupees forty only) per month : ' Provided that the said cost of living allowance shall be set off :
(a) Against the amount payable under an agreement or settlement reached, or an award given, under the Industrial Relations Ordinance, 1969 (XXIII of 1969) which has been announced and become effective on or after the 1st day of January, 1980 or which is announced and becomes effective within a period of one year of the commencement of the Employees' Cost of Living (Relief)
5. (Amendment) Ordinance, 1980 ; and
(b) Against the amount payable under an award given under the Newspaper Employees (Conditions of Service) Act, 1973 (LVII of 1973), which becomes effective from the fifteenth day of April, 1980.
(5) .................................................
6. ' Section 4 of the Act places responsibility for payment of the cost of living allowance on the employer. The workers of the appellant Mills and its Union (respondents) placed a demand in August, 1980 that they should be paid Rs, 40 per month in pursuance of subsection (4) of section 3 added by the Amendment of 1980, The appellant-Mills refused to make the payment on the ground that this amount already stood adjusted in the agreement reached between the concerned parties on 16-6-1980. Therefore by virtue of the proviso (a) to subsection (4) they were not required to pay the amount over again.
7. ' The matter was taken to the Tribunal under section 50 of the Industrial Relations Ordinance, 1969.
8. The plea of the respondents was upheld on the ground that the agreement relied upon by the appellant although signed on 16-6-1980 had become effective from 1-7-1979 therefore the appellant-Mills was not entitled to make the adjustment under proviso (a) to subsection (4).
9. Constitutional petitions having been filed in the High Court, the appellant was refused the relief.
10. Accordingly leave to appeal was granted by this Court to examine the argument that "the petitioner Company claimed to have included the fresh addition in the cost of living allowance (through the amendment of 1980 in the settlement/agreement reached and announced on 16-6- 1980. The precise question for examination arises whether the petitioner could set off the newly- added cost of living allowance against the emoluments settled under the agreement, dated 16-6- 1980."
11. ' It needs to be clarified that at the time of grant of leave to appeal the attention of the Court was not invited to the proviso and a case was sought to be set up on the general law regarding agreements between the employer and the employee regarding emoluments as to whether the cost of living allowance should or should not be deemed to have been included in the agreements reached between the parties. But during the hearing of the appeal the parties although made reference to a decision of this Court on this question R. B. Industries v. Employees' Welfare Union and another (1), mainly argued the question whether the agreement dated 16-6-1980 would be covered by the proviso (a) to subsection (4).
12. ' It was argued before the High Court that the phrase : "announced and become effective on or after first day of January, 1980", with reference to the agreement or settlement should be read as announced or become effective on or after the first day of January, 1980. But after elaborate discussion on the principles regarding interpretation of a proviso, the argument was repelled.
13. ' By making reference to some of the contents of the agreement dated 16-6-1980 it was held by the Tribunal that it had become effective prior to 1-1-1980. This assessment regarding the agreement was assumed to be correct by the High Court also. But it has been ignored that certain {{FOOT NOTE}}
(1) PLD 1983 SC 15 {{FOOT NOTE}} ' demands made by the respondents in 1979 could not be settled till the end of the financial year 1979-80. In the beginning of the financial year 1980-81 it was realised between the parties that the new financial year haying commenced, it was essential to make provisions' in that behalf also and it is in this context that the agreement dated 16-8-1980 as an introduction or preamble thereto contains two stipulations regarding two separate periods regarding which the agreement was effective. One, in the first line of the conditions of agreement it is mentioned "URDU TEXT"die," (the year 1-7-1979 to 30-6-1980) and in the second line after the conjunction "URDU TEXT"| (and) "URDU TEXT" (the year 1-7-1980 to 30-6-1981). This division of the two years has been kept in almost all the relevant and important clauses of the agreement. In the end also the two years have been mentioned separately with sufficient amount of clarity that the Union would not make any financial demand for the two years covered by the agreement. In the facts and circumstances of this case therefore, it cannot be held that the entire agreement between the parties was effective from 1-7- 1979. One part of it was undoubtedly effective from 1-7-1979 but another part thereof was effective from 1-7-1980. This very agreement could as well have drafted in the form of two agreements : one, for the year 1979-80 and the other for the year 1980-81. The contents of the agreement could very well have been divided as referable to either one or the other year. Therefore, the agreement if at all it has to be treated as one agreement, was effective from 1-7-1980 in so far as the year 1980-81 is concerned.
14. ' Section 40 of the Industrial Relations Ordinance, 1969 defined effective date of settlement, award etc. As follows : "(a) if a date is agreed upon by the parties to the dispute to which it relates, on such date ; and
(b) if a date is not so agreed upon, on the date on which the Memorandum of settlement is signed by the parties."
15. ' In the present case the principle underlying clause (a) would be attracted inasmuch as the parties agreed in so many words in the agreement that it would be effective regarding year 1980- 81 from 1st of July, 1980. Settlement as defined in section 2, clause (xxiv) of the Ordinance means "a Settlement arrived at in the course of a conciliation proceeding held by a Conciliator and also includes an agreement between an employer and workmen arrived at in the absence of a Conciliator where such agreement is in writing, signed by the parties and copy sent to the Government and to the Conciliator concerned or other prescribed person." And award as defined in section 8, clause (ii) of the Ordinance means the determination by a Labour Court, Arbitrator or Appellate Tribunal of any industrial dispute or any matter relating thereto and includes an interim award."
16. The proviso (a) to subsection (4) of section 3 of the Employees Cost of Living (Relief) Act, 1973 permits setting off the cost of living allowance against any amount which is payable under an agreement or a settlement or an award. A "settlement" as defined in the Ordinance can be deemed as wider than an "agreement". In-other words there can be more agreements in a settlement. Looked at from this angle, what the parties achieved on 16-6-1980 was in reality a settlement and it included at least two major agreements : one regarding the year 1979-S0 and the other for the year 1980-81. Looked at in this context the agreement relating to the year 1980-81 as distinguished from that of 1979-80 would become effective on 1-7-1980 even though the settlement regarding both the years might have become effective from 1e7-1979. Undoubtedly the proviso to section 3(4), permits the employer to make use of even an agreement when interpreted in the above sense if it become effective, after 1st day of January, 1980. There is yet another aspect of the matter.
17. ' It is in the light of the principle underlying section 40(1) of the Ordinance that in order to discover the date of effectiveness the first and foremost exercise to be made is regarding what the parties agreed to be the date of effectiveness. And there is no doubt that what the parties agreed in this behalf can be either expressed or implied, deducible from the entire consents of agreement or a settlement. It is only failure to discover as to what the parties agreed to be the date of the effectiveness of an agreement that the second method of adopting the date of the signing of the settlement as the date of effectiveness, can be resorted to. It gives an indication of the intention of the legislation that before taking decision on the mere form of the agreement or settlement the intention of the parties regarding the date of the effectiveness, has to be looked into. In case the agreement or settlement does not contain a specific clause on the subject of effectiveness it would not dispel the need for discovering the intention by interpreting the same. If both are missing only then the date of signing will be treated as that of effectiveness. In this case looked at from this angle as earlier discussed, the settlement reached between the parties on 16-6-1980 contained at least two agreements : one was effective from 1-7-1979 and the other was effective from 1-7-1980.
18. The appellant-Company was thus entitled under proviso (a) to section 3(4) to set off the newly- added cost of living allowance against the amounts payable under the latter agreement. As noted and held above it was announced on 26th June, 1980 but was effective from 1-7-1980. The appellant shall not be able to claim this set-off against the amount payable for the year 1979-80 under the agreement which was effective from 1-7-1979-although both the agreements formed part of the same settlement. We order accordingly. This appeal therefore is allowed. The judgment of the High Court is set aside. There shall be no order as to costs.