' QAZI MUHAMMAD FAROOQ, J.---By this common judgment we intend to dispose of the abovementioned 15 appeals, by leave of the Court, directed against two divergent judgments on one and the same subject rendered by two learned Judges in Chambers of the High Court of Sindh, Karachi. One set of appeals consists of three Civil Appeals bearing Nos.879, 880 and 882 of 2000 which have 'arisen from the judgment, dated 28-9-1999 and the second is comprised of 12 Civil Appeals bearing Nos.346 to 357 of 2001 which are directed against the judgment dated 11-12-2001.
2. The dispute between the parties relates to payment of the prescribed contribution under the Employees Social Security Institution Ordinance, 1965, hereinafter referred to as the Ordinance, for a specified period in respect of a certain category of employees by the respondents in the first set of appeals and appellants in the second set who are notified establishments. There are some variations on facts and same is the position in relation to the periods of default but the question of law, highlighted in the leave granting orders, involved in all the cases is common. The genesis of the dispute lies in the demand raised by the petitioners pursuant to a clarification circulated on 18- 11-1991 on the strength of the judgment of this Court reported as PLD 1988 SC 1 that an employee whose wages exceed Rs,1,500 per month shall continue to be a secured person and contribution in his respect shall be payable upto his daily wages of Rs,60 per day in accordance with section 20(4)
(a) of the Ordinance. The Demand Notice for payment of contribution amounting to Rs,1,12,980 for the period from December, 1991 to January, 1992 in respect of the employees whose wages had exceeded Rs,1,500 per month was resisted by the respondents in Civil Appeals Nos.879, 880 and 882 of 2000 on factual grounds as well as on the legal ground that the employees whose wages exceeded Rs:1,500 per month were not covered by the definition of "employee" contained in section 2(8)(f) of the Ordinance. They filed a complaint before the Commissioner, Sindh Employees Social Security Institution on 23-7-1992 but their view-point that a secured employee whose wages exceed Rs,1,500 per month ceases to be a secured employee and the employer is not liable to pay contribution on his behalf did not prevail and the complaint was rejected on 3-7-1994. The decision was challenged before the Social Security Court No,1 Karachi through an appeal but the same was dismissed on 10-1-1996. While the matters were pending before the said forum the Labour Laws (Amendment) Ordinance, 1993 was promulgated whereby section 2(8) of the Ordinance was amended in the manner that the ceiling of R.1,500 was enhanced to Rs,3,000 and a provisio was inserted to the effect that an 'employee' shall not cease to be an 'employee' for the reason that his monthly wages exceed Rs,3,000. The judgments rendered by the Social Security Court No,1, Karachi were challenged through miscellaneous appeals which were allowed by a learned Judge in Chambers, vide judgment dated 28-9-1999, with the findings, inter alia, that clause (f) subsection
(8) of section 2 of the Ordinance as it stood at the relevant time excluded persons employed on wages exceeding Rs,1,500 from the ambit of the expression 'employees', contribution became payable in respect of an employee drawing wages not exceeding Rs,3,000 from the date of enforcement of the Labour Laws (Amendment) Ordinance, 1993 and the very insertion of the provision to section 2(8)(f) indicated that under the unamended clause an employee drawing wages exceeding the specified amount would not be treated as an employee for the purpose of the Ordinance, the law laid down in PLD 1988 SC 1 was in fact against the appellants and the crucial amendment made in the Ordinance in 1993 can be treated as a piece of remedial legislation but it cannot be applied retrospectively becauase the legislature itself had given it prospective effect and if its application is made retrospective it would nullify the very basis', on which proviso to the aforementioned clause was added.
3. The judgment giving rise to the second set of appeals was passed on 11-12-2000 whereby the miscellaneous appeals preferred by the establishments were dismissed with the observations, inter alia, that the learned First Sindh Labour Court/First Sindh Social Security Court had rightly held that the provisions contained in Provincial Employees Social Security Ordinance, 1965 are applicable to the employees whose wages have exceeded the ceiling and the Institution is entitled to recover the contribution in respect of the said workers inasmuch as the proviso to section 2(8)(f) of the Ordinance being a part of definition section is declaratory and at the same time is beneficial, curative, remedial and welfare legislation and as such has to be given retroactive effect.
4. Leave to appeal was granted in the first set of appeals on 26-7-2000 in the following terms:- "(i) To examine the scope of clause (f) of subsection (8) of section 2 of Provincial Employees Social Security Ordinance, 1965, with reference to the object of the Ordinance.
(ii) Whether the dictum laid down by this Court in the case reported as Sindh Employees Social Security Institution v. Dawood Cotton Mills Ltd. (PLD 1988 SC 1) is attracted td the circumstances of this case."
' Leave in the second set of appeals was granted on 27-3-2001 in the same terms.
5. Mr. Khalid Habibullah, Advocate Supreme Court, learned counsel for the petitioners in the first set of appeals and respondents Nos.1 and 2 in the second set of appeals addressed lengthy arguments. The main thrust of his argument was that the impugned judgment was contrary to the law laid down by this Court in Sindh Employees' Social Security Institution v. Dawood Cotton Mills Ltd. (PLD 1988 SC 1) that on exceeding the prescribed wage limit the contribution would be payable upto the prescribed limit and excess to it would be exempted, the employees whose wages exceed the prescribed limit will remain secured and contribution would be payable on wages upto Rs,60 per day, the word 'employee' has been used in respect of initial requirement and if once an employee is secured he shall continue to be a secured person, the amendments have been held to be prospective without determining their precise nature and the amendments are remedial, declaratory or clarificatory in nature and it is well-settled that a remedial, clarificatory and declaratory amendment operates retrospectively. Reliance was placed on Shaheen Airport Services v. Sindh Employees Social Security Institution (PLD 1994 SC 881) wherein it was held that the Ordinance is a specie of a statute which was enacted by the State with the object of promoting social and economic well-being of the people and, therefore, it is a beneficial enactment intended to provide social security to the workmen covered by the provisions of the same and hence it is to be construed liberally and if two constructions are possible, one which extends the benefits of the Ordinance to more workmen and the other which limits such benefits, the former is to be preferred.
Reference was also made to The Punjab Cooperative Bank Ltd. v. The Republic of Pakistan and 128 others (PLD 1964 SC 616) wherein it was held that a definition clause or section is, as a rule, of a declaratory character.
6. Mr. Abdus Samand Khan, Advocate Supreme Court, learned counsel for the respondents in the first set of appeals and Mr. Abdul Karim Khan Kundi, Advocate Supreme Court, learned counsel for the appellants in the second set of appeals, on the other hand, contended with vehemence that before promulgation of the Ordinance no contribution was payable in respect of those employees whose wages exceeded Rs,1,500 per month, the word 'employee' used in clause (f) of subsection
(8) of section 2 of the Ordinance referred to both initial employment as well as to an employee whose wages exceed the ceiling during the course of employment, a plain reading of the proviso added to clause (f) of subsection (8) of section 2 of the Ordinance leads to the conclusion that it is intended to apply prospectively and not retrospectively, the construction placed on the amendment in the judgment dated 11-12-2000 is flawed because in the event of practical application it shall lead to an anomalous, inequitable and discriminatory result and the judgment of this Court in the case of Dawood Cotton Mills (supra) supported the stance taken by their clients.
7. Before adverting to the points taken note of in the leave granting order and the rival contentions it will be pertinent to mention that the dispute relates to a specified period preceding the enforcement of Labour Laws (Amendment) Ordinance, 1993 and Labour Laws (Amendment) Act, 1994. It is also necessary to mention that the Ordinance was promulgated on 4-6-1965 as the West Pakistan Employees Social Security Ordinance, 1965. The word 'Provincial' was substituted for West Pakistan by P.O. 4 of 1975. In the unamended Ordinance the expression 'employee' was defined in subsection (8) of section 2 and clause (f) thereof was couched in the words "any person employed on wages exceeding one thousand rupees per mensem". The words "one thousand five hundred" were substituted for the words "one thousand" by. Labour Law (Amendment) Act, 1985. The words "three thousand" were substituted for the words "one thousand five hundred" by Labour Laws (Amendment) Ordinance, 1993 and Labour Laws (Amendment) Act, 1994 and a proviso was also added that an employee shall not cease to be an employee for the reasons that his monthly wages exceed three thousand rupees. The amended section 2(8)(f) is worded thus: "2. Definition.---In this Ordinance, unless the context otherwise requires, the following expression shall have the meanings hereby respectively assigned to them, that is to say---
(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--
(f) any person employed on wages exceeding three thousand rupees per mensem.
' [Provided that an employee shall not cease to be an employee for the reason that his monthly wages exceed three thousand rupees1"
' There is yet another relevant provision of the Ordinance i.e, clause (a) of subsection (4) of section 20 which having been referred to in PLD 1988 SC 1 requires mention at this stage. In the original Ordinance it was expressed in the terms that "no contribution shall be payable on wages which are in excess of rupees twenty per day". Through subsequent amendments the level of wages was raised to rupees sixty and rupees one hundred and twenty per day and a proviso was also added that no contribution shall be payable on so much of an employee's wages as is in excess of one hundred and twenty rupees per day or three thousand rupees per month. Section 20 as amended by the Labour Laws (Amendment) Act of 1994 reads as under:-- "20. Amount and payment of contributions.---(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 at such times, at such rate and subject to such conditions as may be described: ' [Provided that no contribution shall be payable on so much of an employee's wages as is in excess of one hundred and twenty rupees per day or three thousand rupees per months]."
8. The fate of all the appeals essentially hinges on the interpretation and application of the judgment of this Court reported as Sindh Employees' Social Security Institution v. Dawood Cotton Mills Ltd. (PLD 1988 SC 1). Brief facts of that case are that demands made by the Institution on the Mills in respect of certain payments made to its employees were challenged by the Mills through an appeal wherein it was pleaded, inter alia, that some of the employees drawing more than Rs,20 per day were not covered by. The Ordinance. The appeal was dismissed by the concerned Appellate Court as a result of which an appeal was filed before the High Court of Sindh, Karachi which was partly allowed and the case was referred back to the Institution with the observations that the Mill was not liable to pay the contribution in regard to the employees whose wages are more than Rs,20 per day because the employees whose wages exceed Rs,20 per day are to be excluded in computing the amount of contribution in view of subsection (4) of section 20 of the Ordinance. Aggrieved by the judgment of the High Court the Institution filed a petition for leave to appeal which was granted to examine whether the Mill was not liable to make contribution in respect of the employees who are covered by the definition of employee but the wages being drawn by them exceed Rs,20 per day. The appeal was allowed and the direction by the High Court to the Institution for further investigation into the formulated question was withdrawn with the following observations:-- ' "It does not require or permit the exclusion of 'an employee' vis-a-vis the contribution simply because he is receiving more than Rs,20 as wages per day. On the other hand, a more natural construction of this provision would mean that the amount "in excess of Rs,20 per day paid as 'wages' to an 'employee' would not qualify for contribution to the Institution, i.e,, the amount corresponding to the excess. Therefore, if an employee was getting Re.1 in excess of Rs,20 per day as wages, contribution would be payable on the wages up to Rs,20 per day; but no contribution would be payable on the excess wages, i.e, Re.1 per day. Thus, interpreted there would be no clash between the definition of 'employee' as contained in section 2 and section 20(4)(a) of the Ordinance. In doing the proper exercise for discovering whether any amount payable as wages is liable to be subjected to the contribution, it would first have to be seen whether the employee falls within the definition as contained in section 2(8). After this, if it is found that a certain employee is covered by the definition the liability to the contribution would have to be determined under section 20(4)(a) read with the other provisions of the relevant law which deal with the amount of wages payable to an employee."
9. The appellants in the first set of appeals i.e, the Institution and the appellants in the second set of appeals, namely the establishments both have claimed that the dictum supports their view point. It was urged by Mr. Khalid Habibullah with great vehemence that notwithstanding the quantum of wages mentioned in the unamended clause (f) of subsection (8) of section 2 of the Ordinance an employee shall remain secured and contribution would be payable upto the amount mentioned in section 20 thereof. The learned counsel representing the establishments took the stance that the law laid down in the said authority leaves no room for doubt that unless a person falls within the definition of the term 'employee' the establishment is not liable to make contribution envisaged by section 20 of the Ordinance. The plea of the Institution was considered and referred in the impugned judgment giving rise to the first set of appeals but in the impugned judgment dated 11- 12-2000 reference to the law laid down in the said authority was made in passing and relief was granted to the Institution mainly for the reason that proviso to section 2(8)(f) of the Ordinance being declaratory, beneficial, curative, remedial and welfare legislation would apply retrospectively. Be that as it may, in view of the observations "In doing the proper exercise for discovering whether any amount payable as wages is liable to be subjected to the contribution, it would first have to be seen whether the employee falls within the definition as contained in section 2(8). After this, if it is found that a certain employee is covered by the definition the liability to the contribution would have to be determined under section 20(4)(a) read with the other provisions of the relevant law which deal with the amount of wages payable to an employee" (underlining is ours) highlighted above there is no difficulty in holding that the view point of the establishments has an edge over that of the Institution and law laid down in the authority is fully attracted. Ap employee whose wages exceeded Rs,1,500 per month did not qualify to be an employee for the purpose of the Ordinance and as such no contribution was payable in respect of such employee during the period preceding the promulgation of Labour Laws (Amendment) Ordinance, 1993 and Labour Laws (Amendment) Act, 1994.
10. Adverting to the second aspect of the matter we find that according to its preamble the object of promulgation of the Ordinance was to introduce a scheme of social security for providing benefit to certain employees or their dependents in the event of sickness, maternity, employment, injury or death and for matters ancillary theieto. Initially the provisions of the Ordinance were applicable to a class of employee earning wages upto Rs,1,500 per month but subsequently the limit was raised by the Labour Laws (Amendment) Ordinance, 1993 and Labour Laws (Amendment)
Act, 1994 to Rs,3,000 in view of the statutory increase in the wages. The definition of "employee" as contained in the unamended section 2(8)(t) of the Ordinance is worded thus:- "2. Definition.---In this Ordinance, unless the context otherwise requires, the following expression shall have the meanings hereby respectively assigned to them, that is to say---
(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--
(f) any person employed on wages exceeding one thousand five hundred rupees per mensem."
We cannot persuade ourselves to agree with the contention raised by the learned counsel for the Institution that the above definition of 'employee' covers only initial appointment. The definition refers to initial appointment at wages exceeding the ceiling mentioned therein as well as the employees whose wages exceed the ceiling during the course of employment and the ceiling is to be kept in view while applying the formula for payment of the contribution envisaged by section 20(4)(a) and elucidated by the aforementioned judgment of this Court. Needless to mention that section 2(8)(t) and section 20(4)(a) of the Ordinance are to be interpreted harmoniously.
11. The scope of the unamended sections 2(8)(f) and 20(4)(a) of the Ordinance is comparatively limited and cannot be enlarged by giving retrospective effect to the amendments made therein on the grounds that the same are remedial, the proviso added to section 2(8)(f) being a part of definition section is declaratory and the Ordinance being a beneficial statute its provisions must be construed liberally. As a general rule every statute is deemed to be prospective unless by express is provisions or necessary implication it is given retrospective effect. The acid test for ascertaining whether a staute or an amendment operates prospectively or retrospectively is the legislative intent. The language of the amending Ordinance- and the Act and their terms neither make it manifest that the Legislature intended the amendments to operate retrospectively nor the intention can be gathered by necessary implication. The rationale is obvious inasmuch as the amendments have affected vested rights and created new obligations.
12. According to Halsbury's Laws of England: Volume 44 (4th Edition) a declaratory statute is a statute which either resolves doubts on a particular point or restates the law on a particular subject. This definition of a declaratory statute leads to the irresistible conclusion that a declaratory provision does not purport to change the law. Notwithstanding their placement the amendments in question cannot be termed as declaratory for the simple reason that they have created new obligations and changed the existing law considerably. It is true that the statutory increase in the wages was not incorporated in the Ordinance but the existing law did not suffer from any legal defect in view of the law 1-id down in the case of Dawood Cotton Mills (Supra), therefore, the amendments are not purely remedial. Be that as it may, the amendments cannot be held to be retroactive in operation even if the same are presumed to be remedical because they tend to affect vested rights. In any event giving retrospective effect to the amendments would tantamount to nullifying the binding effect of the dictum laid down in PLD 1988 SC 1, which squarely applies to the facts and circumstances of the present cases. For the foregoing reasons, Civil Appeals Nos.879, 880 and 882 of 2000 are, dismissed and Civil Appeals Nos.346 to 357 of 2001 are allowed, the impugned judgment dated 11-12-2000 is set aside and the appeals filed in the High Court are dismissed. Parties to bear their own costs.