' The brief facts giving rise to this appeal are as follows:- ' Appellant issued demand notice to the respondent on account of less paid social security contribution for the period from August, 1977 to March, 1979 amounting to Rs,37,800 on the payments/allowances made to the workers under the following heads:
(1) Canteen allowance;
(2) House rent allowance; and
(3) Conveyance allowance.
2. Respondent aggrieved by the abovementioned demand notice, filed a complaint under section 57 of the West Pakistan Employees' Social Security Ordinance, 1965 before the Commissioner, Punjab Employees' Social Security. The learned Commissioner found all the above mentioned allowances as wages for the purpose of calculation of Social Security under the Ordinance and dismissed the complaint vide his order dated 3-8-1983. The respondent aggrieved by the order of the learned Commissioner filed an appeal under section 59 of the Social Security Ordinance, 1965 before the Judge, Social Security Court who upheld the finding of the learned Commissioner regarding the contribution on conveyance allowance as part of wages while he held that canteen allowance and house rent allowance did not form the part of wages; vide his judgment dated 16- 2-1984; hence the present appeal.
3. The learned counsel for the appellant contended that respondent did not file any appeal against judgment of the Security Judge regarding conveyance allowance, therefore, the finding of the Security Judge is final qua the respondent regarding conveyance allowance.
4. The learned counsel for the respondent contended that F.A.O. No,58/84 has been filed by the respondent against the conveyance allowance' but he did not know the fate of the appeal. Office was directed to put up F.A.O. 58/84 but the office has failed to find out that appeal. The controversy has been raised before the Karachi High Court in "Bawani Violin Textile Mills Ltd. v. Social Security Institution" (PLD 1978 Karachi 890) A before a Division Bench which held that conveyance allowance paid by the employer to his employees is included in the word "wages" under the Ordinance. I am also fortified from another judgment of the Karachi High Court reported as 1983 PLC 182 and relevant observation is as follows:-- "I am not impressed with the argument of the learned counsel for the respondent that conveyance allowance paid or payable by an employer to an employee is not a payment on account of remuneration for service. First I respectfully agree with the views expressed in PLD 1978 Karachi 890 and PLD 1978 Karachi 744. Further, there can be no two opinions that conveyance allowance is paid to an employee by the employer in connection with his service. It is, therefore, remuneration in connection with his service or employment. If he were not employed with the employer, the employee will not get the conveyance allowance. It is to be treated as a part of remuneration payable by the employer to the employee for his service as this payment enables the employee to be available at the factory, establishment or office of the employer for work. The contention of the learned counsel for the appellant that to hold otherwise would lead to absurd results and would give a lever to the employer to avoid his liability under the Ordinance for payment of contribution relating to social security, is not without substance. For instance an employer may be inclined to give a package of emoluments totalling rupees one thousand per month to an employee and he may at his own discretion give this amount of rupees one thousand in the form of monthly basic wage plus allowances of different sorts. If conveyance allowance is not to be treated as a part of wages, he may even give for instance thirty per cent. Of the total wage or remuneration in the garb of conveyance allowance. It is the total amount, including allowances, which is paid or payable by the employer to the employee as remuneration for his service with the employer which would fall under the term "wages" in section 2(30) of the 1965 Ordinance. No doubt if any payment falls within any of the four exceptions mentioned in section 2(30) such payment will not be treated as wages for purposes of the Social Security Ordinance as also ex gratia payment made by the employer to the employer and also any payment made not on account of remuneration. Judgment in 1982 PLC 325 is firstly distinguishable as it relates to house rent allowance. In any case according to the view that I have taken, even house rent allowance will fall within the meaning of "wages" as the same is paid to the employee as a part of the remuneration for the employee's service. With respect I may observe that I do not find myself able to agree with the view taken by the learned Single Judge in 1982 PLC 325."
5. The learned counsel for the appellant argued that remaining two allowances i,e, canteen allowance and house rent allowance are also covered under the definition of the Social Security Ordinance, section 2(30).
6. The learned counsel for the respondent contended that the titled appeal may be accepted in term of F.A.O. No, 203/82 "Lyallpur Chemical Fertilizer Ltd. And others v. Director, Punjab Employees'
Social Security Institution" decided on 16-6-1993; and remand to the Director, Social Security to decide the same afresh after recording evidence. He also relied upon 1993 PLC 1021 titled as "General Manager, Lyallpur Cotton Mills Ltd. v. Director, Punjab Employees' Social Security, decided on 166-1993. The learned counsel for the respondent only challenged canteen allowance.
7. The learned counsel for the appellant in rebuttal contended that F.A.O. No, 70/84 (1993 PLC 1021) was decided finally and case was not remanded. Further, canteen allowance was not under dispute in this F.A.O. Therefore, F.A.O. No, 70/84 (1993 PLC 1021) is distinguished from the present case, on facts and law.
8. F.A.O. No, 203/82 is also distinguished on facts. The case was remanded to the Director regarding conveyance allowance on the ground that he required evidence as to whether the same was to be paid as a matter of right under contract of service or ex gratia but in the present case it was decided after recording evidence and relied on para. (2) of the order of the learned Director dated 3-8-1983 which is reproduced hereunder: "During course of hearing the witnesses produced by the complainants' learned counsel stated that these allowances were paid to the employees by way of settlement with the bargaining agents and were distributed alongwith payment of wages and relied upon the statement of Fazal Din Annexure 'C' which is reproduced hereunder: {{URDU TEXT}} ' The learned counsel for the appellant finally concluded that the abovementioned cases are distinguished on facts and law.
9. I have given my active consideration to the contentions of the learned counsel for the parties. It is pertinent to mention here that so far as the controversy regarding house rent allowance is concerned, the same has been declared as part of wages, by the Supreme Court in judgment reported in case of "National Embroidery Mills Ltd. And others v. Punjab Employees' Social Security Institution" (1993 SCMR 1201) and relevant observations from the judgment, are reproduced hereunder for ready reference: "From the meanings contained in uses dictionaries it is clear that the word "remuneration" has a wide significance than salary and wages. It may be in the nature of allowance, reward for services rendered and also money value for the house or apartment and other similar nature of payments which may also include assistance or reimbursement allowance spent in performance of the duty."
7. Before deducing the principles from the foretasted judgments it will be proper to first analyses the definition of ' wages' under section 2(30) of the Ordinance. The manner in which term 'wages' has been defined indicates that the intention of the Legislature is to make it comprehensive and exhaustive. It is a remuneration, which by itself is wider than 'wages' for services rendered under a contract of service express or implied. Therefore, the employee who is in employment or is available for service can claim wages. The remuneration paid are payable under the law or contract without giving credit to any deduction made for any purpose will be treated as wages.
Such remuneration may be in cash or kind. As the amount of wages is related to playability remuneration in kind will have to be evaluated in terms of money. By including remuneration kind in the definition of "wages", its scope has been further widened. The definition further proceeds to include in it any dearness allowance or any amount paid towards costs of living allowance. It further adds to it any amount paid by the employer to a secured person towards authorize leave or any period of illegal lock-out or legal strike. Payments made against these three items indicate situations where the employee does not render any service but his absence is not illegal and he be deemed to be available for service. In the end the definition excludes from the term ' wages' payments made for overtime, sum paid to defray special expense entailed by the nature of employment, gratuity payable on discharge and bonus. The definition extends the frontier of term "wages" by describing it as "remuneration". By (IP ..Ming such items which may perhaps not have been considered as wages, have been brought under its net. The exclusion provid Al is neither general, nor wide. It categorises four items with clarity and precision in specific terms.
8. On the basis of the judgments referred above it crystallises that rendering of service or availability for service is a precondition for payment of remuneration. The amount paid by the employer is in discharge of his legal and contractual obligation for the services rendered by the employee. Such payment, the employee gets as a matter of right and entitlement under the contract or law and not as ex gratia, charity, dole grace, reward gift or compensation on compassionate grounds at the mercy and will of the employer. The other characteristic is that the payment should not be irregular in character and must have direct nexus with the actual performance of work. There is unanimity of view that any payment ex gratia to an employee does not fall within the definition of "wages". The ex gratia payment is not made under any contract or law but at the sweetwill of the employer. However, any payment made under an agreement for the services rendered describing it as ex gratia will not have the effect of excluding it from the definition of wages. As observed by Ajmal Mian, J. (1991 SCMR 862) by settlement any amount paid by the employer towards his statutory and contractual obligation cannot be excluded from being ' wages' ."
10. The basic point in this case is, whether canteen allowance and house rent allowance are part of wages or not? F.A.O. No, 203/82 is distinguished on facts and law. The present controversy has already been decided by the Commissioner after recording evidence, as is evident both from the statement of Fazal Din (Annexure 'C') and para. 2 of the order of Director, dated 3-8-1983. The case in F.A.O. No, 203/82 was remanded as the same was decided by the Commissioner/Director without recording evidence.
11. On the basis of law declared by the Supreme Court as well as in section 2(30) of the Act, if the allowance is covered under the exclusion clauses from 'A to D' then it is not part of wages. The heavy burden is on the respondents to bring the case within the parameter of clauses 'A to D' of section 2(30) of the Act, but the respondents failed to bring the case within these clauses. The learned counsel for the respondent contended that it is not part of wages but an ex gratia. This contention of the learned counsel has no force as the said allowances were granted to the employees on the basis of settlement between the employer and C.B.A., therefore, it is not an ex gratia but it is a right of the employees to demand the same from the employer on the basis of settlement arrived between the employer and the C.B.A. Even otherwise, ex gratia means, grant without support of any law or settlement, and the employer has a right to withdraw the same at any time and the employees have no right to demand the same as of right before any Court of law.
But this is not the position in the present case. As mentioned abo employees have a right to demand the same as of the judgment of the Appellate Court is not s
12. In view of what has been discussed above, this appeal is accepted with no order as to costs.