MUKHTAR AHMAD JUNEJO, J.--Pakistan Industrial Development Corporation (Private) Limited (hereinafter referred to as the petitioner) has invoked Constitutional jurisdiction of this Court against an order dated 24-4-1988 passed by respondent No. 1, setting aside an order dated 24-5- 1986 passed by the respondent No. 2 and ordering reinstatement of respondent No. 3 in service of the petitioner with all the back benefits.
2. Admittedly respondent No. 3, S.M. Nasiruddin joined service of the petitioner on 30-8-1976 and on 3-1-1983 his services were transferred to Al-Libas International which was a garment factory being run by the petitioner. On 7-11-1984 the Federal Government of Pakistan promulgated Pakistan Industrial Development Corporation (Dissolution) Ordinance (hereinafter to be referred to as the Ordinance), which inter alia provided for dissolution of the petitioner Corporation from a date to be fixed by the Federal Government under section 7 of the Ordinance. Section 4 of the Ordinance reads as under:-- "4. Transfer of projects, etc. of the Corporation.--The Federal Government may, by order, direct that--
(a) the business, projects and properties of the Corporation shall stand transferred to the Company or to such subsidiary on such date in such manner and to such extent as may be specified in the order and the business, projects and properties so transferred shall, as from that date, be carried on by, and vest, in the Company or subsidiary, as the case may be: and
(b) all the shares held by the Corporation and its nominees in the capital of a Managed Company and subsidiary shall stand transferred to and vest in the company on such date as may be specified in the order, and thereupon the Company shall become the registered holder of such shares and have the same rights under the Companies Act, 1913 (VII of 1913), or any other law or the Articles of Association of the Managed Company and the subsidiary as the Corporation and its nominees had immediately before the said date."
In respect of the employees of the petitioner Corporation the Ordinance provided following provisions under section 6 of the Ordinance.
"6. Continuance in service of employees etc.--
(1) All officers, advisers, workmen and other employees of the Corporation shall stand transferred to the Company or, as the case may be, subsidiary as from the date of vesting of the projects and properties in the Company or the subsidiary.
(2) Every officer, adviser, workman and other employee employed in a business or project or in connection with the properties vested in the Company or a subsidiary, by whomsoever appointed, shall, on the day of the vesting of the business, properties or project in the Company or the subsidiary, become an officer, adviser, workman or other employee, as the case may be, of the Company or the subsidiary.
(3) An officer, adviser, workman or other employee who becomes an officer, adviser, workman or other employee of the Company or a subsidiary shall in the Company or the subsidiary be entitled to such terms and conditions as are not less favourable than those to which he was or may be entitled immediately before the day on which he becomes an officer, adviser, workman or other employee of the Company or the subsidiary and his transfer to the Company or the subsidiary shall not entitle any such officer, adviser, workman or other employee to any compensation or to the designation he was holding at the time of such transfer and no claim for such compensation or designation shall be entertained by any Court, Tribunal or other authority."
' In pursuance of section 4 of the Ordinance, the Federal Government issued an order dated 10-3- 1985 transferring inter alia its project Al-Libas International to M/s Al-Libas International Limited on and from the date of registration of the Pakistan Industrial Development Corporation Limited as a private limited Company.
3. It is also an admitted position that M/s. Al-Libas International Limited moved Second Labour Court, Karachi for permission under Standing Order 11-A to close down the whole of their establishment. Said application was allowed by the Labour Court under its order dated 18-11-1986.
In pursuance of such decision M/s. Al-Libas International Limited terminated services of 50% of its employees including the respondent No. 3. Aggrieved by such order respondent No. 3 moved First Labour Court, Karachi under section 25-A of I.R.O. for his reinstatement but his application was dismissed on 24-5-1986. Respondent No. 3 took the matter to Sindh Labour Appellate Tribunal which under the impugned order dated 24-4-1988 allowed the appeal and ordered reinstatement of respondent No.3 in service of the petitioner. Hence this Constitution petition.
4. Mr. Aftab Ahmed Alvi, learned counsel for the petitioner argued that the respondent No. 3 had ceased to be employee of the petitioner in view of section 6 of the Ordinance which says that all officers, advisers, workmen and other employees of P.I.D. Corporation shall stand transferred to the Company or as the case may be to the subsidiary as from the date of vesting of the projects and properties in the Company or the subsidiary. It was added that Al-Libas International was a subsidiary project of P.I.D.C. and services of the respondent No. 3 were transferred to Al-Libas International on 3-1-1983. It was next argued that all the employees of Al-Libas had given in writing their consent to be governed by the Ordinance. Learned counsel for the petitioner further argued that Al-Libas made losses and this made it necessary to seek permission of the Labour Court under Standing Order 11-A for closure of the establishment. It was further argued that whole of the factory of Al-Libas International Limited was sold to M/s. Zeenat Shirt Factory and that Al-Libas no more existed. It was further argued that order of the Labour Court under Standing Order 11-A was not challenged and it attained finality and that M/s. Al-Libas had been liquidated.
5. Mr. Talmiz Burney, learned counsel for the respondent No. 3 drew our attention to an agreement dated 25-8-1986 which shows that on said date the petitioner sold to M/s. Zeenat Shirt Factory the assets of wholly owned subsidiary namely M/s. Al-Libas International (Pvt.) Limited alongwith with its three sheds having numbers S.F. Units 103, 104 and 105 at SITE Karachi, for an amount of Rs.67,50,000. Mr. Burney argued that when services of the respondent No. 3 were terminated on 30- 6-1985 M/s. Al-Libas International Limited was part of the petitioner because sale of Al-Libas International by P.I.D.C. to M/s. Zeenat Shirt Factory took place after 30-6-1985.
6. It is an admitted position that basically the respondent No. 3 was employed by the petitioner on 30-8-1976. Even if the petitioner chose to transfer respondent No. 3 to M/s. Al-Libas International Limited on 3-1-1983, that did not amount to severing of connection of employer and employee between the petitioner and the respondent No. 3. The Ordinance was promulgated on 7-11-1984 but the employees of the petitioner were to be transferred to the newly formed Company of the petitioner or to a subsidiary of the petitioner only from the date of vesting of the projects in the petitioner after its formation as a Company or in the subsidiary. We cannot agree with the contention of learned counsel for the petitioner that the respondent No. 3 ceased to be employee of the petitioner after issue of the order dated 10-3-1985 in pursuance of section 4 of the Ordinance because under said order the project Al-Libas International was transferred to M/s. Al-Libas International Limited which was registered as a private Company only on 10-7-1983. If, Al-Lihas International ceased to be a subsidiary of the petitioner on 10-3-1985 then the question arises as to how the petitioner on 25-8-1986 sold to M/s. Zeenat Shirt Factory the assets of Al-Libas International (Pvt.) Limited. This could not be satisfactorily explained by the learned counsel for the petitioner.
7. In our view, the respondent No. 3 was an employee of the petitioner but posted in its subsidiary Al-Libas International on 30-6-1985 when his services were terminated. Consequently, his services were terminated by Al-Libas International Limited which appears to have misconceived the legal position that by mere issue of an order dated 10-3-1985 the services of the respondent No. 3 were transferred from the petitioner to Al-Libas International (Pvt.) Limited. In this view of the matter the termination of services of the respondent No. 3 was illegal and of no legal consequence. We would, therefore, maintain order of the Labour Appellate Tribunal and dismiss this petition with no order as to costs.