' Briefly stated the facts are that the petitioner is a private limited company duly registered as an 'establishment' under section 11 of the Employees' Old-age Benefits Act, 1976. The petitioner has been paying contributions legally due under the Act to respondent No,2 for the purpose and has been submitting statement of the wages paid to its employees from time to time. Respondent No,2 made a demand on the petitioner through a demand and show-cause notice, dated 18-10-1984 alleging a short payment amounting to Rs,107,092 with late fee of Rs,53,540, the toal amount being Rs,160,638, the petitioner replied the said notice denying alleged short payments and submitted an application under section 33 of the Act to respondent No,2 asserting that Cost of Living Allowance cannot be legally included in the definition of wages for the purpose of the Act. His application was dismissed by respondent No,2 vide order, dated 24-11-1985 and directed the petitioner to pay the arrears w.e.f 1-5-1977 and not from July, 1976 as required in the Demand Notice. The petitioner assailed this order through an appeal with respondent No,1 who dismissed the same on 1-6-1988.
The petitioner has challenged these orders, dated 24-11-1985 and 1-6-1988 coupled with the demand and show-cause notice, dated 18-10-1984 being illegal, void and without lawful authority.
2. Arguments have been heard and record perused.
3. Contention of the learned counsel for the petitioner is that Cost of Living Allowance is not included in the definition of 'Wages' which has been borrowed for the Payment of Wages Act, 1936, that the definition of . Wages was amended in 1983 and cost of living allowance was included there, that although cost of living allowance has been included in the definition of "wages" yet section 7 of the Employees Cost of Living (Relief) Act, 1973 (as amended in 1977) shows that Cost of Living Allowance shall form part of. Wages of a worker for the purpose of any other law including the purpose of contribution to provident fund, gratuity, bonus, social security scheme and calculating wages for overtime work. However, its proviso shows that it will not be applicable to the Payment of Wages Act, 1936. He thus submitted that as the Payment of Wages Act, 1936 has been excluded from the ambit of cost of living allowance, so the demand and show-cause notice, dated 18-10- 1984 and subsequent orders, dated 24-11-1985 and 1-6-1988 are illegal and void.
4. Conversely, the stand of the representative of the respondents/department is that this very point has already been adjudicated upon in Mehran Sugar Mills Ltd., Karachi v. Employees' Old-age Benefit Institution, Karachi (1993 PLC 630 [Karachi]), where it has been held that cost of living allowance has not been excluded either expressly or by implication from definition of 'wages' as defined in the Payment of Wages Act, 1936 which has been adopted by Employees' Old-Age Benefits Act and same could be included in wages of employees for purpose of contribution under the Employees Old-Age Benefits Act even before amendment of definition of "wages".
' The term "wages" was originally defined by 'section 2(p)' of the. Act, 1936 as follows:-- "(2)(p). Wages' means wages defined in clause (vi) of section 2 of Payment of Wages Act, 1936 (Act IV of 1936).
' The definition of "wages" in section 2(vi) of Payment of Wages Act is as follows:- "Section 2(vi). Wages' means all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment express or implied, were fulfilled, be payable, whether conditionally upon the regular attendance, good work or conduct or other behavior of the person employed or otherwise, to a person employed in respect of his employment or of work done in such employment, and includes his bonus or other additional remuneration of the nature aforesaid which would be so payable and any sum payable to such person by reason of the termination of his employment, but does not include---
(a) the value of any house accommodation, supply of light, water, medical attendance or other amenity, or of any service excluded by general or special order of the (Provincial Government);
(b) any contribution paid by the employer to any pension fund or provident fund;
(c) any travelling allowance of the value of travelling concession;
(d) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or
(e) any gratuity payable on discharge."
' However, by an amendment introduced on 26-6-1983, the above definition of wages in section 2(p) of Employees' Old-Age Benefits Act, 1936 was amended as follows:-- "(p) 'wages' means remuneration for services paid or payable in cash or in kind to an insured person, not being less than the remuneration based on the minimum fates 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, express or implied, and shall be deemed to include any dearness allowance or other addition in respect of cost of living, and any payment by the employer to an insured person in respect of any period of authorized leave, illegal lock-out or legal strike; but does not include---
(i) any payment for overtime; or
(ii) any sum paid to the employee to defray special expenses entitled by the nature of his employment; or
(iii) any gratuity payable on discharge; or
(iv) any sum paid as bonus."
' It is evident from the above amendment that the effect was to expressly include cost of living allowance into the definition of wages by virtue of the deeming clause incorporated in the above definition.
6. The stand of the learned counsel for the petitioner is that although amendment was introduced on 26-6-1983 wherein cost of living allowance was included into definition of 'wages' yet the same is not applicable as section 7 of the Employees' Cost of Living (Relief) Act, 1973 excludes the application of Payment of Wages Act, as is evident from section 7 which reads as follows:-- "7. Cost of living allowance to form part of wages.---Notwithstanding anything contained in this Act or any other law for the time being in force, the cost of living allowance shall form part of wages of a worker for the purposes of any other law, including the purposes of contribution to provident, gratuity, bonus, social security scheme and calculating wages for overtime work: ' Provided that, for the purposes of the Workmen's Compensation Act, 1923 (VIII of 1923), except section 4 thereof, the Payment of Wages Act, 1936 (IV of 1936), the Companies Profit (Workers'
Participation) Act, 1968 (XII of 1968), or the Industrial Relations Ordinance, 1969 (XXIII of 1969), the cost of living allowance. Shall not form part of the wages of a worker."
7. It is evident from the definition of 'wages' given in the Payment of Wages Act, that wages means all remuneration, capable of being expressed in terms of money, and it also includes any bonus or other additional remuneration of similar nature or any other sum which would be payable to a person by reason of the termination of his employment. However, the above definition further indicates that certain remuneration, payments or other benefits received by an employee as enumerated in clauses (a) and (e) of the said definition, have been expressly excluded from the definition of 'wages'. If the above definition of 'wages' is made the criterion for collecting contribution for the purpose of the Act, then cost of living allowance would be deemed to be included therein for the purpose of the Act. There is no doubt that in the proviso to section 7 referred above, certain laws have been excluded from the purview including Payment of Wages Act, but there is no express exclusion of cost of living allowance from the purview of the provisions of the Act. Since the same was not excluded either expressly by implication from the definition of 'wages' in the Payment of Wages Act, which was adopted by the Act, the same would be included in the wages of employees for the purpose of contribution under the Employees' Old-Age Benefits Act (XIV of 1976), even before amendment of the definition of 'wages' in the Act. It is thus clear that contribution demanded by the department vide demand and show-cause notice, dated 18-10- 1984 does not suffer from any illegality and so also the orders, dated 24-11-1985 and 1-6-1988.
Consequently, writ petition fails and is hereby dismissed.