The appeals captioned above emerge from the decision dated 26-9-1988 recorded by the learned Presiding Officer, Punjab Labour Court No, 2, Lahore whereby the grievance petitions of the respondents for their reinstatement in service were accepted and they were directed to be reinstated in service allowing the appellant to take action under Standing Orders Ordinance, 1968.
2. As common questions of fact and law are involved in both the appeals, they are being disposed of together through this single judgment.
3. It has been argued by the learned counsel for the appellant that the Lahore Development Authority is not an industry, therefore, Standing Orders Ordinance, 1968 is not applicable to it. The line of argument of the learned counsel is that the Lahore Development Authority is functioning under the authority of the Government and has its own statutory rules of service. The definition of 'Industrial establishment' is given in section 2(1) of the Standing Orders Ordinance, in which the definition of the term given in the Payment of Wages Act has been adopted. According to the definition given in the Payment of Wages Act, a workshop or an establishment in which articles are produced adopted or manufactured with a view to their use, transport or sale is covered by the definition. The functions of the Lahore Development Authority are to acquire sites and after making construction to transfer the constructions to the public against payment. For construction of buildings and roads certain articles are to be produced and manufactured for being used in the construction but the difficulty is that the respondents did not produce any evidence to this effect.
In view of want of evidence it cannot be said that the Lahore Development Authority is covered by the definition of industrial establishment, but obviously it is covered by the definition of 'Construction industry' as defined in section 2(bb) of the Standing A Orders Ordinance, 1968. The definition reads as under:- "Construction industry means an industry engaged in the construction, reconstruction, maintenance, repair, alteration or demolition of any building, railway, tramway, harbour, dock, pier, canal, inland waterway, road, tunnel, bridge, clam, viaduct, sewer, drain, water-work, well, telegraphic or telephonic installation, electrical undertaking, gas work or other work of construction as well as the preparation for, or laying the foundation of any such work or structure."
Water and Sanitation Agency (WASA) is a part of Lahore Development Authority and its functions are to supply water by construction of water works, to construct and maintain drains and sewerage etc. An elaborate discussion of the point has been made by me in the case 'Lahore Development Authority (WASA) v. Salahuddin' reported in 1983 PLC 281.
4. The other point argued is that the Lahore Development Authority is working under the authority of the Government. This point has also been discussed at length in the case mentioned above. The Lahore Development Authority has been found under the Lahore Development Authority Act and is working under its own authority. Where a body has come into existence under the authority of an enactment, it does not require any further authority from any sovereign body. The mere fact that the Government has retained the powers of appointment and removal of Director-General from service is not sufficient to show that the appellant Authority is working under the authority of the Government. Section 10 provides that the Authority can delegate its powers to the Director-General.
It is clear that all powers are with the Authority and not with the Government, otherwise the provision would have been that the Government can delegate its powers to the Director-General or to the Authority. The answer is quite clear that the Authority was authorised by the Lahore Development Authority Act. With regard to loans also the Government has retained certain powers but this on the contrary shows that the Government did not authorise the Lahore Development Authority. If the Lahore Development Authority had been working under the authority of the Government, then there would have been no need for the Government to retain certain powers with regard to loans. Section 17 provides that the Authority would be guided by the directions of the Government in the discharge of its functions. But for this provision, the Lahore Development Authority would have taken guidance from its own authority and not from the Government. Since the Government wanted to have some control over the Lahore Development Authority, that is why the provision was made that the Lahore Development Authority would be guided by the instructions of the Government. Learned counsel for the appellant has cited PLD 1975 SC 244 in which the question involved was whether the High Court had writ jurisdiction in the matter. Holding that Frontier Sugar Mills & Distillery was not a body performing functions in connection with the affairs of the Federation, it was held that the High Court had jurisdiction to entertain and decide the writ petition. The ruling is not germane to the facts of the case in hand. Lahore Development Authority is not performing such functions which are regal in their nature. Any person can purchase land and after making development upon it and raising construction can sell the construction on profit. Even if the Government starts doing such acts, they do not become functions connected with the affairs of the Federation. The functions, which no private body is entitled to perform, can be called functions connected with the affairs of the Federation. Preparation and maintenance of currency, maintenance of law and order through the police and Courts etc. are such functions which no private body is entitled to perform. In the ruling the Supreme Court has mentioned for example statutory corporations such as National Bank of Pakistan, WAPDA, National Shipping Corporation, Agricultural Development Bank of Pakistan and the Universities, but Lahore Development Authority is not mentioned. No doubt, it has been observed that the National Bank of Pakistan etc. mentioned above, are bodies performing functions in connection with the affairs of the Federation or a province but it does not mean that the said bodies are working under the authority of the Government. It has not been observed in the ruling that the said bodies got any authority from the Government. Rather it has been observed that the Government has retained effective control over their functions by appointing the heads and other senior officers of the corporations. It has been further observed, "However, private organisations or persons as distinguished from Government or Semi- Government agencies and functionaries cannot be regarded as persons performing functions in connection with the affairs of the Federation or province simply for the reason that their activities happen to be regulated by laws made by the State."
The ruling goes on to say:-- "The primary test must always be whether the functions entrusted to the organisation or person concerned are indeed functions of the State having some exercise of sovereign or public power; whether the control of the organisation vests in the substantial manner in the hands of the Government and whether the bulk of the funds is provided by the State."
There is no material on the record to show that the Lahore Development Authority is performing functions of the State and that the Government has a substantial control over it or that the bulk of the assets has been provided by the Government. Even if it be said, as mentioned above, that a body is performing affairs of the State, it cannot be regarded as working under the direct authority of the Government.
5. Since admittedly no inquiry was held, the respondents did not get any opportunity to show that the charges were baseless. The allegations made against the respondents were that unauthorised encroachments were made and they did not report the matter. So far as Muhammad Aslam, respondent, is concerned, he brought on the record of the learned lower Court the reports made by him, which are Exhs. P-4 and P-6. Muhammad Razzak, respondent, had also submitted reports Exhs.P-1 and P-2 about the unauthorised construction. The plots upon which the construction was made are LDA/9, LDA/287 and LDA/227. Since Standing Orders Ordinance, 1968 applies, without holding an inquiry, major penalty could not be imposed upon the respondents. The learned lower Court has thus rightly accepted their grievance petitions.
6. As a result, both the appeals fail and are dismissed.