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Petitioner: SHAMAS TEXTILE MILLS LTD. and others VS Respondent: THE PROVINCE OF PUNJAB and 2 JUDGMENT
Court Name: Supreme Court of Pakistan Judge(s): Muhammad Arif, Ajmal Mian, Munawar Ahmed Mirza Title:SHAMAS TEXTILE MILLS LTD. and others vs THE PROVINCE OF PUNJAB and 2
JUDGMENT
Reported As: 1999 SCMR 1477 Result: Appeals dismissed Judgment JUDGMENT ' CH. MUHAMMAD ARIF, J.---Through these appeals by leave of this Court, the appellants have made a challenge to a common judgment of the Lahore High Court, Lahore passed in a number of Constitution Petitions unsuccessfully brought before it to challenge the demand made by respondents Nos.1 to 3 being, respectively, the Province of Punjab; Provincial Employees Social Security Institution and Director, Provincial Employees Social Security Institution, to make payment of amounts specified in notices issued to the appellants under the Provincial Employees Social Security Ordinance (No,X of 1965), hereinafter referred to as 1965- Ordinance, on account of social security contribution at the rate of 7% of 'wages' of the workers employed in their respective establishments, vide judgment dated 28-12-1995. 2. Briefly stated the background is that the appellants are public limited companies incorporated under the laws of Pakistan. On account of amendments made in the West Pakistan Minimum Wages Ordinance (No,XXXIX of 1961), hereinafter referred to as 1961 Ordinance, through the West Pakistan Minimum Wages for Unskilled Workers (Amendment) Act (No,IX of 1993), hereinafter referred to as 1993-Act, which came into force on 10th April, 1993 and was to take effect from 1st July, 1992, by enhancing the minimum wages of an unskilled worker to Rs,1500 per month. This amendment in 1969 Ordinance was assailed in the Lahore High Court by some of the appellants and by some others in the High Court of Sindh. Ultimately, these causes were resolved by this Court
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in "Alnoor Textile Mills Limited and others v. The Federation of Pakistan and others (PLD 1994 SC 568). However, during the interregnum, a number of Labour Laws (Amendment) Ordinances/Acts were issued between 25-9-1993 and June-1994. The Labour Laws (Amendment) Act (No,XI of 1994), hereinafter referred to as 1994-Act, proceeded with introducing lots of amendments in different statutes, including 1965 Ordinance. As a consequence of these amendments, the exclusion of employees drawing wages of more than Rs,1500 from the purview of the said statutes, was to enure to the benefit of employees drawing Rs,3,000. 3. The Province of Punjab also promulgated the Punjab Employees Special Allowance (Payment) Act, 1988 (No,II of 1989), hereinafter referred to as 1989-Act, whereby special allowance to he paid to the employees was increased to Rs,450. In terms of section 8 of 1989 Act, it was mandated that the allowance was not to be considered as part of the 'wages' for the purposes of any other law, including contribution to provident fund, social security, E.O.B.I., gratuity, bonus and calculating wages for the over time workers. On 16-1-1994, a Joint Secretary of Labour issued a clarification to the effect that the amount of minimum wage of Rs,1,500 should be taken to be the basic wage and all benefits, as well as obligations, should be calculated and paid on the basis of the said amount. Accordingly, the respondent-authorities raised a demand for payment of social security on the amount of wages including special allowance which, according to them, had become a part of the 'minimum wages' by then with retrospective effect. This effort on the part of the respondent- authorities was challenged by some of the affected companies in the Lahore High Court on the ground that the liability to pay social security under 1965-Ordinance has to be with reference to 'minimum wages', as determined from time to time in their respective industries under 1961- Ordinance. Additionally, the liability was to be computed by excluding the special allowance, in terms of the non obstante clause in 1989-Act. These petitions were disposed of by the Lahore High Court on 03-05-1995 by a common order passed in W.P. No,4931 of 1994 in terms of the assurance extended by the then counsel for the respondent-authorities to the effect that the minimum wages under 1961-Ordinance having been fixed at Rs,1500, demand was being made accordingly and that the writ petitioners were not being asked to make payment of contribution on the special allowance payable under 1989 Ordinance. 4. The respondent-authorities issued Circular No,SSS/Cont/Genl4/95/6996, dated 28-5-1995 asserting that the demand raised earlier, alongwith the demand/s accruing thereafter, be recovered as the Lahore High Court, Lahore had declined to resolve the issue in question. As a consequence of this circular dated 28-5-1995, proceedings for recovery were again initiated by the respondent authorities, which furnished the cause/reason for the institution of all the Constitution Petitions which have led to the passing of the judgment in appeal by the High Court. 5. The learned Judge in Chambers of the Lahore High Court, Lahore dismissed the writ petitions vide the impugned judgment holding that Presidential Order No,4 of 1975, issued under Article 268 of the Constitution of the Islamic Republic of Pakistan, 1973 had the effect of converting 1965- Ordinance and 1969 Ordinance from the sphere of Provincial legislation to that of Federal legislation. The term 'wages' contained in 1965-Ordinance was comprehensive enough to include special allowance therein and thus the said law has the effect of overriding the non obstante clause in 1989-Act, in line with Article 143 of the Constitution as the earlier legislation is Federal in nature and the later, obviously, falls in the Provincial sphere. It was also held that the reference to 1961-Ordinance or any Notification thereunder was neither relevant nor essential in that the definition of 'wages' in 1965, Ordinance was comprehensive enough to include the special allowance. Paras. 16 and 17 of the judgment in appeal read thus: "(16)Learned counsel for the petitioners pointed out that if the amount of allowance admissible under Punjab Employees Special Allowance (Payment) Act, 1988 is added to the wages/remuneration as determined under the Provincial Employees Social Security Ordinance,
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1965 most of the workers on account of increase of the amount of wages beyond the maximum limit would stand excluded from the purview of the said Ordinance in respect of whom no contribution could be demanded under the said Ordinance. This being also a question of fact, therefore, should be raised under sections 57 and 58 of the Ordinance which as already observed are adequate and efficacious remedy. '(17) The upshot of the aforementioned discussion is that allowance payable under the Punjab Employees Special Allowance (Payment) Act, 1988 can be considered as part of wages of a worker under the Provincial. Employees Social Security Ordinance, 1965 for making payments on account of Social Security Contribution under the said Ordinance, therefore, writ petitions have no force which are hereby dismissed with no order as to costs'. 6. Leave Grant Order, in these cases, reads thus: "Leave to appeal is granted to consider whether the special allowance being paid to a workman in pursuance of the provisions of the Punjab Employees Special Allowance (Payment) Act, 1988 is to be treated as part of his wages for the purpose of computing the contribution which his employer is liable to make under the Social Security Ordinance, 1965, despite the specific exemption granted by section 8 of the aforementioned Act. The interim order already made on 17-1-1996. To continue during the pendency of the appeals on the same terms." 7. Hence these appeals. 8. Messrs Muhammad Akram Khawaja Advocate Supreme Court, Malik M. Rafiq Rajwana, Advocate Supreme Court and Imitiaz Rashid Siddiqui, Advocate High Court (with special permission of the Court) have argued the matter on behalf of the appellants. Between themselves, all the learned counsel have relied upon Zain Packaging Industries Limited, Karachi v. Abdul Rashid and 2 others (1994 SCMR 2222) and Messrs Gadoon Textile Mills and 814 others v. WAPDA and others (1997 SCMR 641) to contend that the definition of 'wages' in the respective enactments has to apply to all causes arising under the said enactments {Zain Packaging Industries Limited, Karachi (supra)} and that Presidential Order No, 4 of 1975 does not effect the Provincial status of the golden era {Messrs Gadoon Textile Mills (supra)}. According to the learned counsel, 1989-Act being later enactment the same is to prevail over 1965- Ordinance. Mr Imtiaz Rashid Siddiqui, appearing with special permission, was also of the view that as item 'labour' was one of the Provincial Subjects in 1962- Constitution but as the said item now stands included in the Concurrent List' and as under Article 268 of the Constitution the term "appropriate legislatures" has been used, the result is that in the process of adaptation, no law whatsoever appears to have been made by the Federal Legislature. Thus, the Provincial legislation afore-referred is holding the field up to date. 9. Contrarily, M/s A.K. Dogar and M. Arshad Malik, learned counsel appearing on behalf of the respondent-authorities have controverted the pleas raised by the learned counsel for the appellants and contended that the purpose of the law being beneficial to the employees of the appellants and as the employers are also making contribution in this process, the Federal Law has to prevail over the Provincial Law. Mr A.K Dogar supported the impugned judgment generally and specifically relied upon para.4 thereof, which is to the following effect: "(4) The argument as presented appears to be ingenious but not tenable on close scrutiny. The Punjab Employees Special Allowance (Payment) Act, 1988 is a Provincial Statute whereas West Pakistan Minimum Wages for Unskilled Workers Ordinance, 1969 and Social Security Ordinance, 1965 when originally promulgated were no doubt also provincial statutes because at the relevant time under the Constitution these matters fell within the exclusive domain of the Provincial Legislature having not been included in the Federal Legislative List." ' Mr. M. Arshad Malik was of the view that Messrs Gadoon Textile Mills (supra), pressed into service by the learned counsel for the appellants in support of the appeals, in fact helps the respondent- authorities. He also sought support from National Embroidery Mills Ltd. And others v. Punjab
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Employees' Social Security Institution (1993 SCMR 1201 for the proposition that the definition of wages' includes remuneration for services and that this cause squarely falls within the category of beneficial legislation and none of the appellants has a case to plead, in these appeals. 10. Before proceeding with the discussion on the respective claims made by and on behalf of the parties, it will be beneficial to say a word or two in respect of legislation by respective Legislatures in a Federal set-up. In a unitary form of Government, all the Legislative Powers, of necessity, vest in the legislature of the given country. In the federal form of Government, however, the legislative powers vest in the respective legislatures in line with the dispensation under the Constitutional- document/concerned. CENTRAL AND PROVINCIAL LAW MAKING POWERS UNDER 1962 CONSTITUTION. 11. The dispensation in operation in line with Article-131 of 1962-Constitution, provided for the Central Legislature to have "exclusive powers to make laws (including laws having extra-territorial operation) for the whole or any part of Pakistan with respect to any matter enumerated in the Third Schedule." It was under Article 132 of 1962 -Constitution, that a Provincial Legislature had the powers to make laws for "..the Province, or any part of the province, with respect to any matter other than a matter enumerated in the Third Schedule." As there was no item relating to 'labour' in the Third Schedule of 1962-Constitution, therefore, only a Provincial Legislature was possessed of the powers to make laws on, among others, 'labour'. SUBJECT MATTER OF FEDERAL AND PROVINCIAL LAWS AND THE POWERS OF CENTRAL AND PROVINCIAL LEGISLATURES TO MAKE LAWS UNDER 1973-CONSTITUTION. 12. The dispensation under the Constitution of the Islamic Republic of Pakistan, 1973 consists of two legislative lists i.e, (i) Federal Legislative List Part-I { consisting of 59 items} and Part-II {consisting of 8-items}, and (iii) Concurrent Legislative List {consisting of 47-items) in the Fourth Schedule. 13. It is in the spheres of distribution of legislative powers in a federal set up that a conflict of sorts between the legislation by the Federal-Central Legislature and Provincial/State Legislature can arise for resolution by the Judiciary. The question which arises for consideration in these appeals, to begin with, relates to the effect of legislation by the Federal and Provincial Legislatures, respectively in the sphere of 'labour'. Put differently, it would be for the Courts to consider the effect of both types of legislations if the respective Legislatures have chosen to make laws on the subject of 'labour' falling within the Concurrent Legislative list, Item No,26 whereof deals with ...Welfare of labour; conditions of labour provident funds: employers' liability and workmen's compensation, health, insurance including invalidate pensions, old age pensions". 14. Articles 141,142 and 143 of 1973 Constitution respectively deal with (1) extent of Federal and Provincial Laws (2) subject matter of Federal and Provincial Laws and (3) inconsistency between Federal and Provincial Laws] These Articles read thus: "(141) Extent of Federal and Provincial laws.- -Subject to the Constitution, Parliament may make laws (including laws having extra-territorial operation) for the whole or any part of Pakistan, and a Provincial Assembly may make laws. For the province or any part thereof. "(142) Subject-mattter of Federal and Provincial laws. --Subject to the Constitution- (a) Parliament shall have exclusive power to make laws with respect to any matter in the Federal Legislative List; (b) Parliament, and a Provincial Assembly also, shall have power to make laws with respect to any matter in the Concurrent Legislative List; (c) a Provincial Assembly shall, and Parliament shall not, have power to make laws with respect to any matter not enumerated in either the Federal Legislative List or the Concurrent Legislative List; and (d) Parliament shall have exclusive power to make laws with respect to matters not enumerated in either of the Lists or such areas in the Federation as are not included in any Province.
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"(143) Inconsistency between Federal and Provincial laws, If any provision of an Act of a Provincial Assembly is repugnant to any provision of an Act of Parliament which Parliament is competent to enact, or to any provision of any existing law with respect to any of the matters enumerated in the Concurrent Legislative List, then the Act of Parliament whether passed before or after the Act of the Provincial Assembly, or, as the case may be the existing law, shall prevail and the Act of the Provincial Assembly shall, to the extent of the repugnancy, be void." It may be reiterated that under Article 141 (ibid) [(Majlis-e-Shoora (Parliament)] may make laws for the whole or any part of Pakistan and a Provincial Assembly may make laws for the Province or any part thereof. Under Article 142 (ibid) Majlis-e-Shoora (Parliament) has exclusive powers to make laws with respect to any matter in the Federal Legislative List and [Majlis-e-Shoora (Parliament)] and a Provincial Assembly also have powers to make laws with respect to any matter in the Concurrent List. Under clause (c) of Article 142 (ibid) a Provincial Assembly shall and [Majlis-e- Shoora (Parliament)], shall not, have power to make laws with respect to any matter"...Not enumerated in either the Federal Legislative List or the Concurrent Legislative List'. Further, in the event of any inconsistency between the Federal law and the Provincial Law, the mandate of the Constitution, as contained in Article 143 (ibid) is that ''...Then the Act of {Majlis-e-Shoora (Parliament}, whether passed before or after the Act of the Provincial Assembly, or, as the case may be, the existing law, shall prevail and the Act of the Provincial Assembly shall, to the extent of the repugnancy, be void" (Underlining is for emphasis). 15. The Presidential Order 4 of 1975 was issued by the President in the exercise of his powers under Article 268 of the Constitution of the Islamic Republic of Pakistan, 1973 which Article reads thus: "268. Continuance in force, and adaptation of, certain law. --(1) Except as provided by this Article, all existing laws shall, subject to the Constitution, continue in force so far as applicable and with the necessary adaptations, until altered, repealed or amended by the appropriate Legislature. (2) The laws specified in the Sixth Schedule shall not be altered, repealed or amended without the previous sanction of the President. (3) For the purpose of bringing the provisions of any existing law into accord with the provisions of the Constitution (other than Part II of the Constitution), the President may by Order, within a period of two years from the commencing day, make such adaptations, whether by way of modification, addition or omission, as he may deem to be necessary or expedient, and any such order may be made so as to have effect from such day. Not being a day earlier than the commencing day, as may be specified in the Order. (4) The President may authorise the Governor of a Province to exercise, in relation to the Province, the powers conferred on the President by clause (3) in respect of laws relating to matters with respect to which the Provincial Assembly has power to make laws. (5) The powers exercisable under clauses (3) and (4) shall be subject to the provisions of an Act of the appropriate Legislature. (6) Any Court, tribunal or authority required or empowered to enforce an existing law shall, notwithstanding that no adaptations have been made in such law by an Order made under clause (3) or clause (4), construe the law with all such adaptations as are necessary to bring it into accord with the provisions of the Constitution. (7) In this Article, 'existing laws' means all laws (including Ordinances, Orders-in-Council, Orders, rules, bye laws, regulations and Letters Patent constituting a High Court, and any notifications and other legal instruments having the force of law) in force in Pakistan or any part thereof, or having extra-territorial validity, immediately before the commencing day." SUBJECT OF ADAPTATION BY WAY OF MODIFICATIONS AND ADDITIONS UNDER (I) 1956-CONSTITUTION AND (II) 1962-CONSTITUTION: 16. (I) Under 1956 Constitution:
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' The process of 'adaptation' has been the subject-matter of couple of precedents in the wake of the partition of the Sub-Continent and thereafter. It was in the case of Zain Noorani v. Secretary of the National Assembly of Pakistan (PLD 1957 (W.P.) Karachi 1) that the extent of the process of adaptation was discussed, as below: "No authority has been cited by the learned Attorney-General to show that adaptation of the Constitution is permissible even where difficulty has arisen solely because of the non-observance of any particular provision of law. Moreover, a distinction has to be drawn between 'adaptation' and 'amendment'. The Constituent Assembly had drawn a distinction between 'amendment' and 'adaptation'. Under Article 216 'the Constitution or any provision thereof may be amended or repealed by an Act of Parliament', while Article 234 speaks only of 'adaptation whether by way of modification, addition or omission'. 'To amend' means 'to free from faults; correct; to make alterations', while "to adapt' means 'to fit; to make suitable; to alter so as to fit for new needs'. It may be conceded that amendment in a Constitution is introduced because of some changed circumstance, but then, as a rule, amendment is not introduced in order to reconcile different provisions of the Constitution or to bring the Constitution in line with any other law, while the object of adaptation is to fit some provision of the Constitution with another provision of the same, or with any other law. In my opinion, the so-called modification introduced in Article 141 of Constitution is not an adaptation, but an amendment of the same by introducing some new proviso to the same." (II) Under 1962 Constitution: ' In the case of Muhammad Abdul Hague (Member, National Assembly of Pakistan) v. Fazlul Quader Chowdhury (Minister Government of Pakistan) and two others (PLD 1963 Dacca 669) the provisions of Article 224 (3) of 1962-Constitution were dealt with by a Full Bench of the erstwhile Dacca High Court, which read thus: "At any time before the commencing day or before the expiration of three months after the commencing day, the President may, for the purpose of removing any difficulties that may arise in bringing this Constitution, or any Provision of this Constitution, into operation (whether in respect of the elections referred to in clause (2) of this Article or in any other respect) direct, by Order, that the provisions of this Constitution shall, during such period as is specified in the Order, have effect subject to such adaptations whether by way of modification, addition or omission as he may deem to be necessary or expedient." ' Paras. 53 to 58 of the judgment in the precedent case read thus: "53.The first question that strikes us is, what is the import of the term 'adaptation' in the context of the present Constitution as distinguished from the term 'amendment'? A Constitution is a solemn and sacred document of seminal and supreme consequence, partaking the nature of almost scriptura sanctity embodying, as it usually does, the final will and testament of the sovereign authority that resides in the people and providing the manner and norms of the Government of a nation. It therefore, assumes something of the immutability of the laws of the Medes and the Persians. It is not subject to easy change which is usually effected by a special and somewhat difficult process. In the present Constitution the provisions with regard to 'amendment' of the Constitution have been enumerated in Articles 208 to 210. We may note that it requires a two-thirds majority of the Legislature to effect an amendment in the Constitution. "54 Article 224(3), on the other hand, deals with 'adaptation'. Although 'adaptation' is in a sense, amendment, the Constitution recognizes a distinction between the expression 'amendment' and the term 'adaptation'. We may discuss a few cases which illustrate the difference. "55 In the case of Punjab Province v. Daulat Singh (AIR 1941 Lah. 182) Dalip Singh, J., delivering the judgment of the Full Bench, has observed at page 184 of the report as follows: It appears to me that all that section 293 enacts is a power given to His Majesty in council to adapt acts already in force to bring them into accord with the provisions of the Government of India Act
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add what is contemplated is formal or consequential amendment arising in the Act due to the passing of the Government of India, Act. I do not think that section 293 means that if His Majesty has made any Act the subject of an Adaptation Order, then that Act ipso facto becomes valid even though its provisions conflict with the provisions of the Government of India Act:' '56.In the case of Sajawal Baksh v. Muhammad Hussain (AIR 1943 Lah. 233) Abdul Rashid, J., (as he then was ) has observed at page 236 of the report as follows: "In my opinion, this contention is without any force. Sections 292 and 293 save the operation of the existing laws of India which were in force when Part III, Government of India Act, came into operation. Section 293 deals with formal adaptations and modifications which had to be made in a large number of Acts in force in India in order to bring the Phraseology used in the Government of India Act. 'Section 293 cannot, therefore, override the provisions of section 238, Government of India Act. (The Italicised have been done by us). "57 In the case of Ziaul Huq v. Government of West Pakistan (PLD 1956 Lah. 358), M.R. Kayani, J. (as he then was) has, with reference to the same provisions of the Government of India Act, observed as follows: 'The meaning is that the Governor-General may for the purpose of adaptation of laws, make repeals of omissions from, addition to and modifications of any Act. It is equally clear that any alteration is to be made only for the purpose of adaptation of laws that is , if the laws existing on the date of integration do not suit one another or fit into one another, they will be made to fit...But where a function was…
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