KASHMIR CORNER Versus SIND EMPLOYEES SOCIAL SECURITY INSTITUTION

This appeal is directed against an order of the 1st Sind Social Security Court which dismissed an appeal of the appellant under section 59 of the West Pakistan Employees' Social Security Ordinance which itself was instituted for the purpose of challenging the liability of the appellants to pay a contribution under the terms of the West Pakistan Employees' Social Security Ordinance in respect of their employees at Zebunnissa Street, Saddar, Karachi.

2. The material facts, which are not in dispute, are that at this shop situated at Zebunnissa Street the appellants sell both imported goods and locally purchased goods which may generally be described as Kashmir Handicrafts while the owners of this shop also run a cottage industry at 101/27, Korangi Industrial Area, Karachi which is known as the Kashmir Corner Industry. There is a demand from the appellants in respect of both these establishments and the demand in respect of the Kashmir Corner Industry is not disputed and is not the subject‑matter of the present appeal; the appellants dispute only their liability to pay in respect of the Zebunnissa Street Establishment. The liability arises if at all, from the West Pakistan Employees' Social Security Ordinance, West Pakistan Ordinance of 1965, section 1 (3) of which reads as follows :-

" (3) It shall come into force at once, but shall apply only to such areas, classes of persons, industries or establishments, from such date or dates, and with regard to provisions of such benefits as Government may, by notification, specify in this behalf."

It may be noticed at once that the Ordinance is not in force in any area until a notification under this subsection is made by Government and then only in regard to "such class of persons, industries, or establishments" as may be specified. By a notification dated the 15th October, 1968 the Ordinance was made applicable with effect from the 1st November 1968 to various establishments in the Karachi District and one of these, at Serial No. 195, is "Kashmir Corner Industries, Plot 101, Sector 27, K.I. Area, Karachi." The language in which the notification is made so applicable is also worth noticing. It is :‑

"No. Lab‑III‑SSS‑1/67.‑In exercise of the powers conferred by subsec tion (3) of section 1 of the West Pakistan Employees' Social Security Ordinance, 1965 (West Pakistan Ordinance No. X of 1965), the Governor of West Pakistan is pleased to apply, with effect from the first day of November, 1968, the said Ordinance to the areas mentioned in column 2 of the Schedule annexed hereto and to the employer and the employees of establishments mentioned against each of such areas in column 3 thereof, and to direct that the employees of such estab lishments shall be entitled to the benefits as provided in sections 35, 36, 37, 38, 39, 40, 41, 42, 43, 44 and 45 of the said Ordinance."

The notification does not refer and the Ordinance does not, therefore, apply to a single natural person or a legal entity all the employees of which are to be given the benefits of the Ordinance. On the contrary in its own terms it talks of the "employers of establishments mentioned against each of such areas" and the word "establishment" is itself defined in the Ordinance thus "establishment means organisation, whether industrial, commercial, agricul tural or otherwise". By reason of this definition and section 1 (3) of the Ordinance which I have already quoted it seems plain that the Ordinance was not to apply to all concerns owned by a particular person or a legal entity as such but to industries or establishments specifically stated (I ignore as being irrelevant for my present purposes, the words "classes of persons"). It seems to me, therefore, that the intention of the legislation was to provide specifically for the employees of such industries or establishments. The demand in respect of the Zebunnissa Street Establishment is made on the basis that in that establishment are sold some of the goods manufactured in the Korangi Establishment and that the two establishments have a common ownership. In my opinion that mere fact does not connect the two suffi ciently for the purpose of making the Ordinance applicable to the Zebunnissa Street Establishment. It is in fact the case of the appellants, which is not denied, that a great deal of the products manufactured at the Korangi Establishment are exported while the Zebunnissa Street Establishment sells goods which are not manufactured at the Korangi Establishment only.

3. In this connection two items at serial Nos. 53 and 61 of the same notification are worth noticing. The former of these reads "Sind Steel Corporation Ltd., S/20, SITE Karachi" while the latter is "Sind Steel Corporation Ltd., Steel House, West Wharf, Karachi‑2. As the very language of these two items shows and as is indeed admitted the two have a common ownership, the Sind Steel Corporation Ltd., being the owners. Nevertheless it was thought necessary to mention these two separately in the course of the same notification in order to make the Ordinance applicable to both establishments. I am conscious of course that the mere fact that the Government has so interpreted the Ordinance would not suffice for the purpose of hold ing that I ought to interpret the Ordinance in the same fashion although there is high authority for the proposition that departmental construction may be used as an aid in interpretation : See P L D 1960 S C 195 and P L D B 1965 S C 412. The present, however, is not a case of mere departmental construction; the very applicability of the Ordinance depends upon the terms of this notification and I am, therefore, really called upon not only to inter pret the Ordinance but also to interpret the notification.

4. Learned counsel for the respondents relied upon various parts of the Ordinance itself including the meaning on the word "establishment" which I have already quoted. He laid particular emphasis upon the word "organisation" occurring in that definition and attempted to persuade me that the two establishments must be regarded as being one organisation. On the facts of the case I am entirely unable to agree; all that can be said in favour of this argument is that they are owned by the same persons and that in some measure the two businesses are allied. That is hardly sufficient to make them part of the same organisation.

5. I was then referred to the meaning of the word "employee" in sub section (3) of section 2 of the Ordinance which reads thus :‑

"(3) "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‑

(a) persons in the service of the State including members of the Armed Forces, Police Force and Railway servants ;

(b) persons employed in any undertaking under the control of any Defence Organisation or Railway administration ;

(c) persons in the service of Local Council, a municipal committee, a cantonment board or any other local authority ;

(d) any person in the service of his father, mother, wife, son or daughter or of her husband;

(e) domestic servants ;

(f ) any person employed on wages exceeding five hundred rupees per mensem;".

This however, is begging the question for the definition uses the words "any industry, business, undertaking or establishment". Unless, therefore, the two establishments can be regarded as one this definition is of no real help.

6. Reliance was finally placed upon the definition of the expression "Social Security Area" and which is defined to mean "an area to which this Ordinance has been applied." This would indeed have carried the case of the respondent to a successful conclusion had the Ordinance been made applicable or was capable of being made applicable, to all kinds of establish ments within a particular area. Whether a notification could have issued in respect of all establishments within a particular area is not a question which I am called upon to decide because the notification itself although it does define "the area is nevertheless in terms restricted to certain named establishments."

7. Learned counsel placed before me an unreported judgment of this Court in Miscellaneous Appeal 105 of 1973 for the purpose of showing that even though one establishment is specifically named, nevertheless the Head Office of the company which owned the establishment would be covered. Now in this case the establishment named was "Kohinoor Chemical Company Ltd., D‑91, Shershah Road, SITE, Karachi". The learned Judge, who decided this case, came to the conclusion that the Head Office of the Kohinoor Chemi cal Company Ltd. which was situated at Tibet Centre, Karachi was also included. Now q cite apart from the fact that in this case the named item refers to a legal entity, it was, as the learned Judge himself states in his judgment an admitted position that the Head Office was situated at Tibet Centre. It would seem for the more that all the goods produced at the SITE were handled by the Head Office for distribution and export purposes and that none of the goods were sold to any other persons. The facts of the case were, therefore, materially different and the same is entirely distinguishable.

8. In the course of that judgment, however, the learned Judge observed :‑

"It appears that the Notification mentions the actual site or the industry or establishment, because if details were to be given, the omission of any area where establishment's office or sub‑office might be located, would have created difficulty." That will also be the position if an establishment was to be shifted sometime later. This interpretation would be in consonance with the spirit of the preamble of the Ordi nance. There is nothing to show that the benefits under the Ordinance were meant to be enjoyed only by the employees of the industry at SITE."

9. I think these observations must be read in the context of the case with which the learned Judge was dealing. If, however, the learned Judge is to be understood as meaning that if a particular establishment is named then, ipso facto, and without anything more, the Head Office of the person or the company which owns that establishment is necessarily included, then I must respectfully differ for reasons which I have already stated.

10. I have, therefore, come to the conclusion that the appellants are not liable to pay any contribution in respect of the Zebunnissa Street Estab lishment and, therefore, allow this appeal with costs and set aside the order of the 1st Sind Social Security Court, Karachi.

K. B. A. Appeal accepted.