HASHOO STEEL INDUSTRIES LIMITED vs BOARD OF TRUSTEES, EOBI and others

' SABIHUDDIN AHMED, J.---All these petitions calling in question the decision of the Board of Trustees Employees Old-Age Benefits Institution (respondent) passed on different dates were heard together as identical questions of law appear to be involved. It is not necessary to refer to the facts of each case and it 'might be suffice to mention that the petitioners were called upon to make payment of contributions under the Employees Old-Age Benefits Act, 1976 (E.O.B. Act) in respect of certain persons employed by Independent contractors for the purpose of business of the petitioners to work at the petitioners' premises. The petitioners filed objections to the demand notices under section 33 of the E.O.B. Act. Their subsequent appeals to the respondent No,1 also failed whereupon they have invoked the jurisdiction' of this Court under Article 199 of the Constitution.

2. In a nutshell the petitioners' case is that the employees in respect of whom contributions were demanded were not in the insurable employment of the petitioners, but had been employed by independent contractors. Therefore at best the respective contractors and not the petitioners were liable to pay contribution in terms of section 9 of the E.O.B. Act. Before proceeding further it may be pertinent to mention that a similar question was raised in C.P. No,D-363 of 1996, which was dismissed in limine by a Division Bench of this Court comprising of the Honourable Chief Justice and our learned brother Ghulam Rabbani, J., vide order dated 30-12-2002.

3. Mr. Muhammad Humayun learned counsel for the petitioners however, attempted to persuade us to take a different view by arguing that the judgment of the Honourable Supreme Court in Sindh Employees Social Security Institution v. Consolidated Sugar Mills Limited (1989 S.C.M.R. 888) relied upon in the above-mentioned order was premised upon the interpretation of the provisions of the Employees Social Security Ordinance, 1965 which was substantially different from those of the E.O.B.

Act and could not be relied upon as to two statutes were not in pari-materia.

4. In the above case the question before the Honourable Supreme Court was whether the owner of an industry was liable to make Social Security contributions in respect of employees purported to be employed by independent contractors for carrying out work at the owner's premises. The High Court held that since there was evidence to show that employees engaged in removal of mud/ash and unloading of sugarcane were paid their wages by the contractors and not the owner/respondent, the latter was not liable to pay contributions under section 20(1) of the Ordinance. The. Honourable Supreme Court nevertheless reversed the findings holding that except where the statute expressly provided otherwise every owner of an establishment was to be treated as an employer in terms of section 2(9) and was liable to pay contributions in respect of every employee whether employed directly or through-another person under section 20(1).

5. Section 9(1) of the E.O.B. Act requires every employer to pay contributions in respect of every person in his insurable employment and sections 2(bb) and 2(c) define the expressions "employee" and "employer" respectively in the following terms:-- "2(bb) "employee" means any person employed, whether directly or through any other person, for wages or otherwise, to do any skilled or unskilled, supervisory, clerical, manual or other work in or in connection with the affairs of an industry or establishment, under a contract of service or apprenticeship, whether written or oral, express or implied.

2(c) "employer". In relation to an industry or establishment, means any person who employs, either directly or through any other person, any employee, and includes.

(i) in the case of an individual, an heir, successor, administrator or assign;

(ii) a person who has ultimate control over the affairs of an industry or establishment, or where the affairs of an industry or establishment are entrusted to any other person (whether called a managing agent, managing director, manager, superintendent, secretary or by any other name) such other person; and

6. Mr. Humayun may be correct to the extent that the language of the relevant provisions in the two statutes is not identical. Nevertheless, in our humble view difference is inconsequential for the purpose of the present controversy. Indeed the definition of the expression "employee" in section 2(8) of the Social Security Ordinance only speaks of a person working in connection with the work of an industry business undertaking or establishment and does not expressly refer to a person employed through a contractor. The charging section 20(1) however, requires that contributions are payable in respect of every employee whether employed directly or through any other person.

On the other hand a person employed through a contractor is covered by the defining provisions of the expressions "employee" and "employer" under section 2(bb) and 2(c) of the E.O.B. Act and obviously the charging section 9 would apply to such persons. Indeed we are conscious of the well-settled principle that definition of an expression contained in one statute cannot be imported into another unless two statutes are in pari-materia. This principle however, does not appear to be attracted in the present case as no question of borrowing definitions from another statute is involved and both the statutes define certain expressions independently which appear to have the same effect. At the same time it is difficult to subscribe to the view that they are not in pari-materia inasmuch as both of them are intended to provide certain benefits to low paid employees and cast certain obligations upon employers to make contributions for the purposes of such benefits.

7. Learned counsel finally invited us to examine the work contract agreement dated 1-1-1993 between the petitioners and the work contractor in C.P. No,D-203 of 2000. He pointed out that under clause (5) the Contractor was liable to comply with the provisions of Labour Laws and under clause

(6) he was expressly required to comply with the provisions of the Social Security Ordinance and E.O.B. Act and was responsible to indemnify the petitioner against any loss occasioned by his failure to do so.

8. Mr. Namazie on the other hand argued that such contracts were intended to evade liabilities under the law and amounted to frauds upon the law. We do not think it is necessary to persue this controversy inasmuch as there is nothing to show that contributions had in fact been collected from the so-called contractor or he registered himself as an employer under the Act. Indeed once the statutory liability of the petitioners is established, no contract to the contrary can be pleaded in defence. The petitioners could have always ensured that contributions were duly paid by the contractor or deducted the amount from his bills. For the foregoing reasons we find no reason to doubt the correctness of the view taken in Attock Cement case (C.P. No,363 of 1996) and respectfully following the same would dismiss all these petitions with costs as being without substance.