' SHAFIUR RAHMAN, J.-- Leave to appeal was granted to the Sind Employees' Social Security Institution (hereinafter referred to as the Institution) to examine whether the Sind High Court by its judgment, dated 5-12-1987 correctly held that the respondent was not under legal obligation under section 20 of the Provincial Employees' Social Security Ordinance, 1965 (hereinafter referred to as the Ordinance), to make contributions to the Institution in respect of the employees engaged by independent contractor for the purposes of executing its work on its premises.
2. The respondent is a Sugar Mill located in Ranipur, District Khairpur.
' For the sugar-cane crushing Season 1980-81, starting on 16-11-1980, it entered into different contracts with independent contractors for carrying out at its premises or in respect of its functioning, certain works like removal of (i) mud/ash; (ii) Baggase; (iii) loading/unloading of sugar-cane; (iv) sugar bag stacking; and (v) carriage of its employees by buses.
' By a notification, dated 16-6-1977, the provisions of the Ordinance were applied to the respondent.
A revised demand of Rs.1,33,254.91 was raised by the Institution by its letter, dated 14-3-1982 in respect of the period from October, 1980 to September, 1981. The respondent contested the demand. The matter was taken to the Institution under section 57 of the Ordinance and the Commissioner adjudicated on it by his order, dated 11th of May, 1983. The demand made by the Institution was substantially upheld subject to further inquiry into certain factual aspects of the controversy. An appeal was thereafter taken under section 59 of the Ordinance by the Respondent to the Social Security Court, where the appeal of the respondent was allowed and the demand was struck down holding as follows:-- "I have gone through the aforecited cases and from perusal thereof there is not the least doubt that an owner of a Mill or Factory has a right to engage an independent contractor to carry out a particular job in his Mill/Factory or to run a section or sections in his Mill or Factory and where an independent contractor is so engaged then the workers employed by him to carry out the work assigned to him are not to be treated as workers/employees of the owner of the Mill or Factory but would be the employees of the independent contractor Accordingly, I allow the appeal, modify the order of the Commissioner and rest that the payments made in respect of works relating to: (i) removal of baggase (ii) removal of mud/ash, (iii) carriage of workers by buses; and (iv) unloading of sugarcane are not to be included in the amount on which assessment of Social Security Contribution is to be made."
3. The institution filed an appeal in the Sind High Court under section 64 of the Ordinance against the decision of the Social Security Court. The learned Judge of the High Court after examining the definition of the "employee" and the "employer" contained in the Ordinance held as hereunder:- "As is evident from the definition of 'employee' given in the Ordinance reproduced above, in addition to the above fact, it is also necessary to show that these persons were working for wages under a contract of service or apprenticeship which was written or oral, express or implied. The evidence led in the case only shows that respondents had entered into written contracts with contractor for performance of the works on specific payments Neither the amount of wages nor the terms and conditions on which these workers will be employed by the contractors is spelt out from these agreements It is, therefore, quite clear that there is neither any evidence in the case in proof of the wages paid to the workers in connection with removal of baggase, mud and unloading Sugarcane nor the contract of service in respect of these workers could be established. In these circumstances the learned Social Security Court was fully justified in modifying the order of the Commissioner and excluding from the demand the amount of contribution levied by the appellant in respect of removal of mud/ash and unloading of Sugarcane."
' On these findings the appeal was dismissed by the High Court with costs.
4. Mr. S.A. Sarwana, Advocate, the learned counsel for the Institution/Appellant has contended before us that the Ordinance is one of the several legislative dispensations concerning the Welfare and Social Security of the labour and other employees falling in the low-paid category. The substance of the legislation, its objectives and purposes clearly require a very liberal interpretation of its provisions and an extension of the protection and the cover provided to the category governed by it. Such a liberal interpretation, according to the learned counsel, is amply justified on the words of the Statute itself where while defining `employee' the word 'any' has been used at least at three places as 'any person', `any industry' and any contract'. The word 'any' should be given its ordinary meaning and the extensive connotation that it has, should be taken into consideration for interpreting the various provisions of the law. The learned counsel has also referred to Halsbury's 4th Edition, Volume 16, para. 501 in order to demonstrate that the 'employer' and the 'employee' are the modern expressions for signifying the 'master' and servant' relationship as traditionally understood. He has also referred to the Rules of Interpretation on the subject extracted from decisions from India, United States and the United Kingdom. Further, according to the learned counsel for the appellant, whatever doubt could possibly remain stands fully removed by the charging section 20, where the responsibility of an independent contractor had been passed on to the 'employer' or to the 'owner' even where under the definition it did not belong. He has referred to section 20(8) of the Ordinance where in case of construction work the owner of the building is required to guarantee the payment of contributions by the contractor and in the case of State employing a contractor or licensee, the competent public authority has been placed under a duty to require from the contractor the production of a certificate from the Institution, showing that the necessary contributions have been paid. The law has reached even those cases which the definitions did not possibly cover and this responsibility has been made that of the owner of the building or of the functionary of the State. This, according to the learned counsel clearly showed the Scheme of the Ordinance and the harmony that existed in the definition and the charging sections. He has also pointed out to the decisions from various High Courts in order to bring out that the legal question raised in this Appeal has not received a consistent and a uniform answer and requires to be resolved by an authoritative pronouncement.
5. Mr. Khurshid Anwar Shaikh, Advocate, the learned counsel for the respondent, on the other hand contended that apart from the definition of the `employer' and the 'employee' contained in the Ordinance, the definition of `wages' should also be taken into consideration and if all the three definitions are examined in juxta position and a harmonious meaning is given to all of them, the workers, employed by the independent contractor would fall outside the definition of the 'employee'. Even if such 'employees' were covered by the Ordinance, their 'employer' in law would be the contractor and the liability under the contract as well as under the law to make contributions would be of the contractor and not that of the respondent. The contract itself mentions that the contractor would be liable to make the contributions if at all one has to be made under the Ordinance. The Appellant, according to the learned counsel for the respondent, should pursue the contractor for the recovery because it is the contractor who keeps the record of the labours employed and can meaningfully resolve the factual controversies arising out of such employment. The learned counsel has also brought to our attention to the Indian law on the subject to show that seasonal factories like that of the respondent stand excluded from the Social Security Scheme. There is no express provision in the Ordinance governing the seasonal factories or excluding them from the Ordinance but while interpreting the various provisions of the Ordinance such seasonal employment should not be held covered by it. In this context the learned counsel has drawn our attention to sections 24 and 35 of the Ordinance contending that in the case of seasonal factories none of the benefits guaranteed to the employees under the Ordinance can be availed of by the employees of seasonal establishment, as the benefits under the law cannot appropriately be extended to them. It is only proper that they should not be charged for the same. Finally, it has been contended that the respondent is already looking after the welfare, treatment etc. And nothing better could be done by the appellant by depriving them of those benefits and undertaking responsibility which they cannot on account of provisions of sections 24 and 35 discharge.
6. It is necessary to reproduce hereunder the definitions requiring examination in greater detail, namely, that of the 'employee', the 'employer', the `wages' and the charging section, section 20 itself:- "2. Definitions.--In this Ordinance, unless the context otherwise requires, following expressions shall have the meanings hereby respectively assigned to them, that is to say--
(1) ......
(2) ......
(3) ......
(4) ......
(5) ......
(6) ......
(7) ......
(8) "employee" means any person working, normally for at least twenty-four hours per week, for wages, in or in connection with the work of any industry, business, undertaking or establishment, under any contract of service or apprenticeship, whether written or oral, express or implied but does not include--
(a) person in the service of the State, including members of the Armed Forces, Police and Railway servants;
(b) persons employed in any undertaking under the control of any Defence organisation or Railway administration;
(c) persons in the service of a local council, a municipal committee, a cantonment board or any other local authority;
(d) any person in the service of his father, mother, wife, son or daughter, or of her husband;
(e) omitted.
(f) any person employed on wages exceeding one thousand rupees per mensem;
(9) "employer" means in the case of works executed or undertakings carried on by any contractor or licensee on behalf of the State, the contractor or licensee working for the State, and in every other case the owner of the industry, business, undertaking or establishment in which an employee works and includes any agent, manager or representative of the owner;
(10) .....
(11) .....
(12) .....
(13) .....
(14) .....
(15) .........
(16) .........
(17) .........
(18) .........
(19) .........
(20) .........
(21) .........
(22)...........
(23) ..
(24) ..
(25) ..
(26) ..
(27) ..
(28) ..
(29) ..
(30) "Wages" means remuneration for service paid or payable in cash or in kind to a secured person, not being less than remuneration based on the minimum rates of wages declared under the Minimum Wages Ordinance, 1961 (XXXIX of 1961), without taking account of deductions for any purpose, under a contract of service or apprenticeship, expressed or implied, and shall be deemed to include any dearness allowance or other addition in respect of the cost of living and any payment by the employer to a secured person in respect of any period of authorised leave, illegal lockout or legal strike; but does not include--
(a) any payment for overtime; or
(b) any sum paid to the person employed to defray special expenses entailed by the nature of his employment; or
(c) any gratuity payable on discharge; or
(d) any sum paid as bonus by the employer;" "20. Amount and payment of contribution.--
(1) Subject to the other provisions of this Chapter, the employer, shall in respect of every employee, whether employed by him directly or through any other person pay to the Institution a contribution at such times, at such rate and subject to such conditions as may be prescribed.
(2) Omitted.
(3) The employer shall not be entitled to deduct from the employee's wages or otherwise to recover from him any portion of the contribution, notwithstanding any agreement to the contrary.
(4) Subject to the provisions of subsection (2) of section 71--
(a) no contribution shall be payable on wages which are in excess of rupees twenty per day;
(5) For the purpose of determining the amount of the contribution payable, daily wages shall be calculated in such manner as may be provided by regulations.
(6) Where the mode of payment of remuneration whether in cash or in kind, makes it difficult to determine the amount of wages for computing the contribution, the Commissioner may, subject to regulations and in consultation with the representatives of employees, determine such wages.
(7) Omitted.
(8) In the case of construction work the owner of the building shall guarantee the payment of contributions by the contractor.
(9) In the case of works executed or undertaking carried on on behalf of the State by a contractor or licensee, the competent public authority shall before final settlement of the claims of the contractor or licensee arising out of the contract, require the production of a certificate from the institution showing that the necessary contributions have been paid, and in default of such certificate it shall deduct from the amount otherwise payable in settlement of such claim, the appropriate amount of the contributions payable, and pay such amount direct to the Institution."
The definition of 'employer' has two extremely relevant features for understanding its meaning and scope. Firstly, in the case of Works and undertakings on behalf of the State, the contractor or the licensee carrying on the work has been made the employer. Secondly, 'in every other case' that is in which State's interest is not in that manner directly involved "the owner of the industry, business, undertaking or establishment in which an employee works" has been made the employer. On these two features, without for the present examining the concept of employee, the respondent being the owner would be the employer.
' Coming to the definition of employee, the requirements are that (i) he must normally be working for at least twenty four hours per week; (ii) he must be working for wages; (iii) he must be working in connection with the work of the industry, business, undertaking or establishment; (iv) he must be working under a contract of service or apprenticeship. The exclusions are for the present not relevant. What the High Court considered as deficient was that "neither the B amount of wages nor the terms and conditions on which these workers will be employed by the contractors is spelt out from these agreements". These deficiencies were not the requirements of the definition. It was not the finding that no wages were at all paid by the contractor or that they were not employed on contract of service. All the terms of the contract have not to be established once the contractual relationship is established. There appears to be a mistaken impression that the contract of employment has to be between the owner and the employee. The definition of employer and employee do not contain or exhibit any such constraint or limitation.
' In this context of these definitions the charging provision (section 20) leaves no manner of doubt or ambiguity. Employer has been defined to mean the owner and the owner has been charged under section 20 for contribution. Even where the owner does not fall strictly within the definition of an employer as in the case of State undertaking or an owner of a plot over which he wants to get a building constructed through the Contractor, the liability under the Ordinance has been cast on the State under subsection (9) and on the owner of the building under subsection (8) of section 20.
Such extensions cannot be interpreted as to imply the exclusion of other owners defined as employers but as including them within the charging provisions. Reading these provisions together the conclusion is inescapable that the owner of the industry is liable for employees engaged for his industry even through the contractor. The contention that the Contractor should be taken to be employer and not the owner, as expressed in the agreements with the contractors and made liable for the contribution, cuts across the scheme of the statute where it was intended by law to make the Contractor, the employer, the statute made provision for it directly [State undertakings-- Section 2(9)] or indirectly [section 20(8) and section 20(9)]. By construction or interpretation if the Courts were to introduce such contractors also as employers on the basis of contracts or otherwise, then the Court would be rewriting the law itself. Such an interpretation being in derogation of the express provision that "in every other case" it is the owner who is to he the employer.
' In the circumstances, the owner respondent is obliged to contribute to the Social Security Fund for employees engaged through the contractor. As to the satisfaction of the other requirements of law, viz., the minimum hours of work etc. We are leaving it to be sorted out in the first instance by the Institution itself if and when proper representation is made to it as required by law. This appeal is allowed with costs and the impugned judgments are set aside.