P L D 1975 Karachi 274 (PLP)

"Industrial and commercial establishments carried on by or under the authority of the Central Government or any Provincial Governments where statutory rules of service conduct or discipline are applicable to the workmen employed therein."

2. The Labour Court found that the petitioner Corporation was govern ed by the Standing Orders Ordinance and that the respondent had been dismissed for an alleged misconduct without any charge‑sheet or without any enquiry in violation of Standing Order 15, and, therefore, directed the petitioner Corporation to re‑instate the respondent with full back benefits.

3. In appeal the Labour Appellate Court repelled the contention that the petitioner Corporation was not governed by the Standing Orders Ordi nance on the ground that though the petitioner Corporation was an establishment carried on by or under the authority of the Central Govern ment, there were no statutory rules of service conduct or discipline applicable to the respondent in the petitioner Corporation. On merits the Appellate Tribunal found that the respondent had been denied the benefits of Stand ing Order No. 15 and, therefore, maintained the order of re‑instatement made by the Labour Court, with this modification, however, that the back benefits awarded to the respondent will depend upon the result of a show cause notice by the petitioner Corporation. A review of this order was sought by the petitioner on the ground that the expression re‑instatement created confusion for the vessel Padma was in the High Seas and not likely to return for sometime. The Appellate Tribunal in its order in review observed as follows :‑ "I have not ordered in my decision that the respondent be re‑instated on board the ship. The difficulty has arisen because of the use of the word re‑instatement in the operative portion of the order. I must admit the word `re‑instatement' is not proper word. I should have said that the name of the respondent should be brought back in the Roster maintained by the National Shipping Corporation. The question of re‑instatement of the respondent on the ship does not arise as I had held that the dismissal of the respondent by the Master of the ship was not in violation of the principle of natural justice. With these remarks I would dismiss the application for review."

4. In support of his main contention that the Standing Orders Ordi nance did not apply to the petitioner Corporation Mr. Mujahid Hussain, the learned counsel, relied on the definition of the expression "commercial establishment" and in the alternatively on the proviso to section 1 of the said Ordinance which excludes from its operation industrial and commercial establishments carried on by or under the authority of the Central Govern ment or any Provincial Government where statutory rules of service, conduct or discipline are applicable to the workmen employed therein. The expression "commercial establishment" has been defined in the Standing Orders Ordinance as including among other things a unit of a Joint Stock Company and the argument was that since the petitioner Corporation is a statutory Corporation established under the National Shipping Corporation Ordinance, 1963, it was not a joint stock company with reference to section 254 of the Companies Act, 1913, it was sought to be argued that only that company is a joint stock company which is registered under the Companies Act. The argument is fallacious. All that this section provides for is that a Joint Stock Company as defined therein was capable of being registered under section 253 of the Act. The definition itself does not depart from the ordinarily understood meaning of a Joint Stock Company as a company limited by shares having a permanent paid up or nominal share capital of fixed amount divided into shares, also of fixed amount, or held and transferable as stock and formed on the principle of having for its members the holders of those shares or that stock and no other person. That the petitioner Corporation is such a company is obvious from the plain reading of section 5 of the National Shipping Corporation Ordinance, 1963, which reads as follows :‑ "

5. Share capital and shareholders.‑(I) The authorised capital of the Corporation shall be twenty‑five crores of rupees divided into twenty‑five lakhs fully paid‑up shares of one hundred each, of which five lakh shares shall be issued in the first instance and the remaining may be issued from time to time with the previous sanction of the Central Government. (2) The authorised capital of the Corporation may at any time be increased by an order of the Central Government published in the official Gazette and the capital so increased shall in like manner be divided in fully paid‑up equal shares of one hundred rupees. (3) Of the initial issue of five lakh shares, one lakh twenty‑five thousand shall be subscribed for by the Central Government and the remaining shall be offered for public subscription ; and at every subsequent issue of capital the same ratio shall be maintained between the shares held by the Central Government and those offered for public subscription Provided that fifty per cent of the shares reserved for the public shall be offered for subscription in East Pakistan and the other fifty per cent., in West Pakistan and a separate share register shall be main tained for each Province, but nothing in this proviso shall affect the transferability of the shares. (4) A scheduled bank, a co‑operative bank, a company including an insurance company, an investment trust or any like institution may subscribe for the shares offered for public subscription. (5) If at any time the shares offered for public subscription remain unsubscribed in a Province such shares shall be subscribed for by the Central Government, and may subsequently be transferred to the public in that Province."

5. That the authorised capital of the Corporation is fixed by the Statute and that the Central Government has reserved for itself certain powers like increase in the capital, nominating majority directors or restrict ing the Corporation's borrowing power will not make the National Shipping Corporation anytheless a Joint Stock Company.

6. I now come to the alternate argument of the learned counsel that the Standing Orders Ordinance was not applicable to the petitioner Corporation as it is an establishment "carried on by or under the authority of the Central Government". That the establishment of the Petitioner Corporation is not carried on by the Central Government is not denied by the learned counsel, for what has been urged is that its establishment is being parried on under the authority of the Central Government. The words employed by the Legislature, it may be noted, are not an establishment established by the Central Government or under its authority but one carried on by or under the authority of the Central Government. The learned counsel relied on the facts that the Corporation was established by the Central Government under section 3 of its Ordinance; that its majority directors including the Chairman, the Managing Director and the Finance Director are to be appointed by the Central Government; that in discharging its functions the Board under section 8 was to be guided by such instructions on question of policy involving national interest as may be given to it from time to time by the Central Government ; that the Corporation's borrowing powers were subject to previous sanction of the Central Government under section 23 and under section 30, the Corporation could be wound up only by an order of the Central Government and in such a manner as the Central Government may direct. It may, at once be noted that under subsection (1) of section 8 the affairs and the business of the Corporation is vested in its Board of Directors which may exercise all powers and do all acts and things which may be exer cised or done by the Corporation and the nominee Managing Director of the Central Government under subsection (2) of section 14, was to exercise only such powers and perform such functions as may be prescribed or delegated to him by the Board. These provisions would show that the management of the petitioner Corporation was vested in its Board, which was to carry on its business as a body and the fact, therefore, that majority of its directors are nominated by the Central Government is no legal consequence for these persons, namely, the nominated directors have no individual authority of power to exercise any functions. It is also significant to note that under subsection (3) of section 8 the Board is only to be guided by instruction, from the Central Government and that too only on question of policy involving national interest. From these provisions it is obvious that the establishment of the petitioner Corporation is not being carried on under the authority of the Central Government but on its own authority not with, standing the restrictions on its borrowing powers or the power. vested in the Central Government under section 30 of the Ordinance for winding up. The least that the learned counsel had to show to us was that the petitioner Corpo ration would have ceased to carry on its business in the absence of exercise of any authority by the Central Government. No doubt the Central Govern ment has reserved for itself certain powers in the functioning of the Corpora tion but nonetheless the petitioner Corporation will continue to function under its own authority without the exercise of any authority by the Central n Government. I am, therefore, unable to agree with the learned Appellate Tribunal that the petitioner Corporation is an establishment carried on under the authority of the Central Government.

7. The Labour Appellate Tribunal held that the petitioner Corpora tion did not come within the proviso to section 1 for, in addition to it being an establishment carried on by the Central Government, the other condition, namely, existence of statutory rules of service applicable to the workmen employed in the petitioner Corporation did not exist. The statutory rules to which our attention was invited by Mr. Mujahid Hussain are one framed under the Merchant Shipping Act but these have no relevancy as will be presently seen when I deal with the merits of the case.

8. On merits Mr. Mujahid Hussain contended that the respondent had committed a misconduct while on board of the vessel Padma which had been enquired into by the Master of the vessel and found to be correct, and the action taken was, therefore, in accordance with the Articles of Agreement entered into between the Master of the Ship and the respondent Seaman under section 27 of the Merchant Shipping Act, 1923. I will for the purpose of this argument accept the allegation that a show‑cause notice and a proper enquiry had been held in respect of the misconduct alleged against the respondent though none of these documents had been produced before the Labour Court.

9. Under the Merchant's Shipping Act, 1923, the rules framed there under no person is eligible for engagement as a Seaman unless he is duly registered at a Shipping Office and his name is entered in the General Roster of Seamen maintained by the said office. Every Master engaging a Seaman has to enter into an agreement in the prescribed form. This agreement is in fact an agreement by the seaman to serve on board of a particular ship, do the present case M. V. Padma, on terms and conditions specified therein. The agreement comes to an end on conclusion of the voyage or discharge of the Seaman by the Master. The agreement in short governs the Seaman while on board of the vessel. It also includes regulations for maintaining discipline on board which provide as punishment for disobedience of lawful commands, in each instance of disobedience, an amount of fine equiva lent to two days' pay and for wilful neglect of duty equivalent of three days' .Pay. Strictly speaking a shipping company or the owner of the ship has no concern with the agreement between the Crew and the Master of the vessel or the conduct of the Crew while on board of a vessel. It is the Master who engages the Crew for the vessel for a particular voyage and the require ment of the law is that such crew must be on the General Roster main tained by the Shipping Office or on the shipping company's Roster if the ‑shipping company is allowed to maintain its own Roster by the Shipping ‑Office. By removing the respondent's name from the Roster the petitioner Corporation was in effect removing him from service for the misconduct alleged. In so far as the petitioner Corporation is concerned this removal was effected without any charge‑sheet by them or an enquiry and, there ‑fore, clearly in violation of Standing Order

15. The reliance placed on the alleged show‑cause notice and the enquiry held by the Master is misplaced, ‑for that was entirely a matter between the Master of the vessel and the respondent and the Shipping Master. In so far as the contract of employ ment between the petitioner and the respondent is concerned it could be ,terminated only in terms prescribed by the Standing Orders Ordinance. I must not, however, be understood to mean that the alleged misconduct on the .4Part of the respondent while on board vessel Padma cannot become ‑subject‑matter of a charge‑sheet or an enquiry by the petitioner against the respondent but only this that if the petitioner Corporation intended to terminate his services for this or any other reason they were bound to follow she procedure laid down in the Standing Orders Ordinance.

10. My conclusion, therefore, is that the Standing Orders Ordinance apply to the petitioner Corporation as it does not come within the proviso to section 1 of the Standing Orders as it is neither an establishment carried .on by or under the authority of the Central Government nor it has statutory rules governing the respondent's employment with them and ‑that the respondent's dismissal from service was in violation of Standing Order No. 15.

11. This petition is, therefore, dismissed with cost. TUFAIL ALI A. RAHMAN, C. J.‑I agree. S. A. H. Petition dismissed.