1. ' HAIDER ALI PIRZADA, J-The petitioner Mackinnon Mackenzie & Co., of Pakistan Limited seeks to impugn orders dated 23-8-1980 and 10-11-1980 of the respondent No, 3, whereby the respondent No, 3 directed the petitioner to establish the workers' participation Fund and constitute the Board of Truntees as required under sections 3 and 4 of the Companies Profits (Workers' Participation) Act, 1968 hereinafter referred to as "the Act".
2. ' Briefly stated the facts of the case are that the petitioner is engaged in the business of (i) acting as agent for the peninsular and oriental Steam Navigation Company Ltd., U. K., (ii) running a travel agency approved by the Internal Air Transport Association and on the request of customers/ passengers and as agents booking tickets and passage on various airlines and earning an agreed percentage of agency fee from the airlines, (iii) acting as agents for Lloyds of London and other agencies and undertaing surveys and performing services on their behalf and earning as agency fee thereon, (iv) recruiting personnel for foreign employment in the service of various overseas employers, depending upon the requirement of said employees and earning agency fee thereon, and (v) owning dumbbarges which are hired out to third parties on which hire charges are earned on a ton-per-day basis, staff and running expenses being the responsibility of the third party contractor. It is averred in the petition that the petitioner does not carry on itself any business of the carriage of men and goods by seed or air and neither own any oceangoing vessels or aircraft or operates them but merely acts as Agents for the above-mentioned purposes on behalf of foreign principals who carry on such business themselves. The petitioner received letter No, IMP (111)- (290)/73 dated 16-8-1979 from the respondent No, 3 stating that it had been brought to the notice of the Labour Division of the Government of Pakistan that the petitioner had not established a workers' participation Fund as required by the said Act. The said letter stated that the Act applies to the Companies engaged in 'Industrial undertaking' and includes companies engaged in the "carriage of men or goods by sea or air" which satisfy any one of the conditions stipulated in paragraph 1 of the scheme set out in the schedule to the Act. The petitioner sent a reply dated 4-9- 1979 stating that the petitioner was not engaged in the carriage of men or goods by sea or air and explained the nature of the business conducted by it and in the light of these circumstances the petitioner was not liable to constitute a workers' participation Fund. Subsequently the petitioner received from respondent No, 3 a letter dated 4-6-1980 advising the petitioner to appear before the respondent No, 2 on 14-6-1980. Accordingly the petitioner's representative along with the representative of the petitioner's Advocate appeared before the respondent No, 2 on 14-6-1980 when the respondent No, 2 requested certain information regarding the number of workers employed by the petitioner and the details of its paid-up capital and fixed assets. Pursuant to the request of the respondent No, 2 the requisite information was provided to the respondent by its letter, dated 15-6-1980 from respondent No, 3 and stating therein that the Act is applicable to the petitioner and ordering it to establish the Fund as required under section 3 of the Act and submit a compliance report to the Labour Division. A review petition was also filed through its Advocates on 22-9-1980 to respondent No,
1. The petitioner's representative along with the petitioner's Advocate appeared before respondent No, 2 on 6-10-1980 when the review application was heard. The respondent No, 3 by its letter, dated 10-11-1983 directed the petitioner to establish the workers' participation Fund and constitute the Board of Trustees as required under sections 3 and 4 of the Act within one month of the receipt of the letter.
3. ' The petitioner being aggrieved by the above orders has filed the present petition.
4. ' The respondent No, 3 filed counter-affidavit and averred that the Act does not exclude an agent from its purview if the conditions laid down in the Act are satisfied. It was further averred that the word `Engaged' means "to employ or involve on self to take part to `embark on'. The petitioner involved definitely itself in one way or the other in the carriage or the transportation of men or goods. The scheme under the Act applies to all companies engaged in industrial undertaking without any exception as provided under the schedule to the Act.
5. ' In support of the above petition Mr. E. A. Nomani learned counsel for the petitioner has urged that the provisions of the Act are not applicable to the petitioner as it does not engage in the carriage of men or goods but acts as agent of foreign principals. He relies on the PLD 1975 Kar. 811 and dictionaries in support of his submission.
6. ' On the other hand Mr. M. Fasihuddin the learned counsel for the respondent has urged that the provisions of the Act apply to the petitioner and has urged that the expression "engaged in the carriage of men or goods" in clause (iv) of the scheme means "to employ or involve oneself ; to take part into, the embark on".
7. ' Adverting to the above contention of the learned counsel for the parties, it may be advantageous to reproduce herein below Para. 1 of the scheme, that is, schedule to the Act which reads as under :- "The scheme applies to all companies engaged in industrial undertakings which satisfy one of the following conditions and to such other companies as the Federal Government may, by notification in the official Gazette, specify in this behalf, namely :
(i) The number of workers employed by the company at any time during a year is 50 or more.
(ii) The paid-up capital of the company as on the last day of its accounting year is Rs, 20 laRs or more.
(iii) The value of the fixed assets of the company at last as on the last day of the accounting year is Rs, 40 Lacs or more.
8. Explanation-in the scheme-
(iv) The working of a mine, oil well or any other source of mineral deposits including blending, refinery and purification of oils and gases, includes companies engaged in the marketing and distribution of gas or in the carriage of men or goods by sea or air, and any other constitution, organisation, enterprise or establishment which the Federal Government may, by notification in the official Gazette declare to be an industrial undertaking for the purpose of this scheme."
9. Before considering para. 1 of the scheme, it may be relevant to remember that the Act was passed to provide for participation of workers in the profits of companies and matters ancillary thereto. The object of the' Act, broadly stated, is to bring into existence the scheme to be called "the participation of workers in the profits of companies is considered appropriate and necessary for increased productivity and promotion of industrial peace to mutual benefit of employers and the employees. This object is specified by section 3 of the Act. Section 3(1) of the Act provides that every company to which the scheme applies shall establish a workers' participation Fund in '4 accordance with the scheme as soon as the accounts for the year in which the scheme becomes applicable to it are finalised, but not later than nine months after the close of the year. Section 4 provides that there shall be constituted a Board of Trustees consisting of two persons elected by the workers of the company from amongst themselves and two persons nominated by the management of the company of whom at least one shall be a person from the Account Branch of the Company.
10. ' The arguments of the learned counsel, for the petitioner may be thus summarised ; all companies engaged in industrial undertakings and those engage in that behalf and by issuing a notification, bring within the scope Of the Act such companies.
11. In our opinion, this argument is not well-founded. The' expression "engaged" specified in clause (iv) of para. Of the scheme does not lend itself to the construction that it is confined to companies engaged in the carriage of men or goods by sea or air exclusively engaged themselves. What exactly is meant by the clause we will have occasion to deal with later on. For the present, it would be enough to say that when the Legislature has described companies as companies engaged in carriage of men or goods by sea or air, it did not intend that the said companies should engage themselves exclusively in the carriage of men or goods by sea or air but should include agents of foreign companies also. The constructions for which the petitioner contends requires that we would add the word "exclusively themselves and not on behalf of foreign principals" in the clause and that clearly would not be permissible, ' The petitioner has averred in the petition that it is engaged in the business of acting as agent for the Peninsular and Oriental Steam Navigation Company Limited and various other foreign shipping companies. It has also averred that it was appointed agent of foreign shipping companies. The agency agreements were not annexed to the petition as contended by the learned counsel for the respondents.
12. ' The main submission on behalf of the petitioner is that on true construction of the agency agreements thereof the agencies provide to clear all incoming vessels and complete all formalities of the K. P. T., Customs and the Mercantile Marine Department and in case of all outgoing ships similar functions are involved in relation to the K. P. T., Customs and the Mercantile Marine Department booking cargo as agent of said foreign shipping companies.
13. In connection. With this submission and before referring to the activities of the petitioner on which reliance has been placed on behalf of the petitioner; it may at once be stated that the matter of the legal relationship which arises upon a contract of agency made between a principal and an agent has not remained ambiguous and has been crystallized in Pakistan by the provisions in sections 182 to 238 of the Contract Act.
14. ' Section 182 provides that an agent is a person employed to do any act for another, or to represent another, or to represent another in dealings with third persons. The persons for whom such an act is done, or who is so represented is called the 'principal'. Under sections 191 and 192 an agent is authorised to appoint a sub-agent ; but were a sub-agent is properly appointed, the principal is, so far as regards third persons, represented by sub-agent and is bound by and responsible for his acts, as if he were an agent originally appointed by the principal. Sections 211 to 221 deal with the agent's duty to principal and conversely sections 222 to 225 deal with the principal's duty to the agent. Under section 213, an agent I bound to render proper accounts to his principal on demand.
15. Under section 215, if an agent deals on his own account in the business of the agency, without first obtaining the consent of his principal and acquitting him with all circumstances the principal may repudiate the transaction. Now these two sections have the effect of providing that in no case where under an agreement between the two parties one of them is entitled to act on his own, behalf and for himself in respect of the goods entrusted to him in respect of the goods entrusted to him the relationship of principal and agent can arise. In other words, where such relationship exists, the acts of the agent under the agreement, ordinarily, cannot be for himself and he should in the matter of the agreement only act as an agent and carry out his obligations as representing and for and on behalf of his principal. In this connection, the provisions in section 216 are important.
16. Sections 226 to 236 relate to the effect of agency and carry and contract with third persons. It would be out of place to describe the true effect, of all these sections in this judgment. It is sufficient to state that the scheme of these sections clearly indicates that contracts made by an agent are enforceable in the same manner and have the same legal consequences as if the contracts had been made by the principal. Under section 230, an agent cannot personally enforce contracts entered unto by him on behalf of his principal, nor is he personally bound by them. This provision, however, is subject to the exceptions contained in the second part of the section.
17. ' Having regard to the law relating to legal relationship between an agent and principal as contained in the sections 182 to 238 of the Contract Act. Now in this connection reference may be made to para. 351 at 'page 146 of Volume I, Halsbury's Law of England 3rd Edition where the following appears :- "if it be found that such agreement in substance contemplates the alleged agent acting on his own behalf, and not on behalf of a principal, though the alleged agent may be described as an agent in the agreement, the relation of agency will not have arisen."
18. "The essence of such an agent's position is that he shall be but a conduit pipe connecting two other parties. Thus an agent for sale or purchase is debarred from being himself either buyer or seller without full disclosure to the principal."
19. ' Having regard to the above discussion, we have to consider Mr, Nomani's submission that the provisions of the Act are applicable to the petitioner or not applicable to it.
20. ' The learned counsel for the petitioner has contended that the petitioner is engaged as agent for the foreign principals as stated hereinabove. The petitioner performs acts only as an agent for the said shipping companies but those activities, according to the petitioner, are in the case of all incoming vessels clearing the ship and completing the various formalities of Karachi Port Trust, the Customs and Mercantile Marine Department, in the case of all outgoing vessels, similar functions are involved in relation to the Karachi Port Trust, the Customs and Mercantile Marine Departments, booking cargo as agent on behalf of the said shipping companies for which the petitioner is paid a commission by the said shipping companies, Therefore, the petitioner has contended that the Act is not applicable to the petitioner-company.
21. We are not impressed by the argument of the learned counsel for the petitioner and word "engaged" in industrial undertaking does not include the persons carrying on business as the present Legislature is intended to achieve welfare benefits for the 3rkers. The true nature and character of legislation shows that it is for conforming better conditions of service D amongst those who are engaged in the business of carriage of men or goods by sea or air. That is why the company or industrial undertaking becomes the employer. He cannot escape liability imposed on him by the statute by stating that he is agent of the foreign shipping company and therefore he is not responsible for establishing workers' participating scheme.
22. ' That takes us to the question as to the meaning of the expression "engaged" in the carriage of men or goods by sea or air "specified in sub-clause (iv) of the scheme". It is advantageous to reproduce word "engaged" defined in various dictionaries which are as follows :- , 'Words and Phrases' (Permanent Edition) C. P. 1634/80 Vol. 14-A. Transporting merchandise or property.
23. A tug engaged in towage, the tug and two belonging to distinct owners, having with each other only the relation arising under an ordinary contract for safe towage, is not within the Harter Act, 46 U. S. C. A. Ss 190-195, providing certain exemptions for vessels "engaged in transporting merchandise or property". The Murrell, D. C. Mass., 200 F. 826, 829.
24. ' A wholesale agent for sale of products of certain company only on commission basis is not "engaged in business of acting as agent" within statute imposing privilege tax on persons engaged in business of acting as agent selling on commission basis. Comer v. State Tax Commission of New Mexico, 69 P. 2d 936, 938, 41 N. M.
25. 403.
26. ' The statute imposing privilege tax on every person engaging in business of acting as factor, agent, or broker, selling on commission basis, does not tax employees working for ordinary salaries and wages, who include persons working on commissions, but only those engaged in agency business ; term "engaging in business" referring to owner of business. Comer v. State Tax Commission of New Mexico, 69 P. 2d 936, 41 N M 403.
27. "Engaged" connotes action and means occupied, employed, to take part in, or be employed in, however the employment may arise while to "engage" is to embark in a oneself, or to devote attention and effort, Lumber Mut. Cas. Co. Of N. Y. V. Stukes, D. C. S. C., 72 F. Supp 463, 467.
28. ' The word "engage" meaning to embark in any "Business". State v. Bernard 16, So, 2d 454, 455, 204 La.
29. 844.
30. ' To "engage" is to embark in a business Board of Railroad Com'rs v. Gamble-Robinson Co., I 1 1 P. 2d 306, 310, I 1 1 Mont.
31. 441.
32. ' To "engage" is to embark in a business ; to take a part ; to emplo or involve one's self ; to devote attention and effort.
33. ' Small-wood v. Jeter, 244 P. 149, 153, 42 Idaho 169. Actually doing an act.
34. ' The word "engaged" denotes action; it means to take part in. Barnett v. Merchants' Life Insurance Co. Of Des Moines, Lowa; 208 P. 271, 274, 87 Ikl, 42.
35. ' A statute imposing a licence tax on any person engaging in or carrying on the business of keeping a theatre meant an actual use o management of a theatre ; and hence one who had a hall which he intended to use as a theatre, but in which no performance had ever been gaive, was not within the statute. Gillman v. 55 Ala. 248, 250."
36. ' That means that the clause "engaged in carriage of men or goods by sea or air" does not mean "exclusively themselves". This view does not purport to add any word to the clause, it merely interprets the relevant expression "engaged in carriage of men or goods" specified in the sub- clause (iv) of the schedule "when it is said that a person is engaged in any business, it usually means it is engaged in the business and the same would be the position when the relevant clause refers to a company engaged in the carriage of men or goods. That is the commonsense view which is consistent with the current and accepted connotation of the words "engaged in". Having regard to the relevant facts and circumstances in the present case, we are satisfied that the respondents were right in coming to the conclusion that the petitioner is the company within the meaning of the Act. The orders -of the respondents are in consonance with law. The result is that the petition fails and is dismissed without costs.