2025 PLP 38 (PLC)

SHAMS MEHMOOD MIRZA, J.

This order shall decide the present writ petition as well as connected Writ Petition No.41703 of 2024 on account of similarity of facts and the cause of action agitated therein.

2. For the purposes of this order the facts of the present case shall suffice. The petitioner claims to be an insured person with Employees' Old-Age Benefits Institution (EOBI) and has served 14.75 years of service as mentioned in paragraph No.2 of the petition. The petitioner submits that he is entitled to old age pension in terms of section 22 of the Employees' Old-Age Benefits Institution Act, 1976 (the Act). On account of non-payment of the pension, the petitioner approached Adjudicating Authority/respondent No.5 under section 33 of the Act but his complaint was dismissed through order dated 19.09.2022 as amended by order dated 20.10.2022. The petitioner filed a review which was also dismissed on 17.01.2023.

3. Learned counsel submits that the petitioner fulfills the criteria mentioned in section 22 of the Act read with the Schedule and thus the respondents erred in dismissing his complaint.

4. Learned counsel for the respondent, on the other hand, submits that section 22(1)(b) of the Act stipulates that the contribution in respect of an employee must have been paid for a period not less than fifteen years and thus the essential condition laid down by the Act was not fulfilled in the case of the petitioners and that they were not entitled to the old age pension.

5. There is no dispute between the parties that the petitioner has rendered service of 14.75 years. The impugned orders also accept this fact. The only question left for determination is whether the length of service of the petitioner can be rounded of from 14.75 years to 15 years.

6. Section 22 (1) of the Act stipulates that an insured person shall be entitled to a monthly old-age pension to be calculated at the rate specified in the Schedule. This provision, therefore, must be read with the Schedule. While providing the formula for calculating the old age pension, the Schedule prescribes that "A period of six months or more on insurable employment shall be treated as one full year...". It is thus explicit that rounding of is in-built in the calculation of old age pension as provided for in the Schedule. In other words, where the service of any employee is more than 14.5 years he/she shall automatically become entitled to old age pension. The Schedule and the above stipulation contained therein was not at all considered in the impugned orders.

7. Proviso (b) to section 22(1) provides the qualification of 15 years of contribution for establishing the entitlement of an employee to seek old age pension. The necessary question is whether the proviso in question limits the scope of the main provision. The answer to this question must be answered in negative for the following reasons. It is often stated that the function of a proviso is to except something out of the enactment or to qualify something enacted therein. Proviso (a) and (b) to section 22(1) do not except anything from section 22(1) rather they provide the qualifications of an employee for seeking the monthly old age pension and thus cannot be construed as proviso in the strict sense. In the case of Pakistan Match Industries (Pvt.) Limited and others v. Assistant Collector, Sales Tax and Central Excise Mardan and others 2019 SCMR 906, the Supreme Court stated that " .it is no doubt correct that sometimes a proviso is construed to be a substantive clause that operates in its own right. However, such instances are rare, and for a provision to be so construed the language of the provision must be clear." On the plain language of proviso (a) and (b) of section 21, it is manifestly clear that these provisions do not qualify as provisos and by providing the qualifications on the entitlement for old age pension they ought to be construed as substantive provisions.

8. Even otherwise, the stipulation for rounding of in the Schedule is explanatory in character and must be read as expressing a clear intention that the length of service provided in proviso (b) to section 22 (1) of the Act is to be construed in conjunction with and subject to the Schedule. Read in this context, the length of service contained in the proviso in question is controlled by the explanation contained in the Schedule. A strict adherence to the text of proviso (b) to section 22(1) Act requiring 15 years of service as a compulsory condition would destroy and make redundant the explanation contained in the Schedule. Such a narrow construction is not permissible as the Act is required to be construed as a whole.

9. It is otherwise settled law that a proviso cannot nullify the primary objective of the main, provision. In other words, a proviso cannot be allowed to operate in conflict with what is expressed in the main provision (see Muhammad Anwar Kurd v. State 2011 SCMR 1560). As a general rule, where there is inconsistency between the main provision and its proviso, it is desirable to harmoniously construe them in order to avoid making either of them redundant. There is in one sense no conflict between section 22(1) and proviso (a) in as much as section 22(1) read with the Schedule provides for the entitlement of an insured person to receive old age pension and stipulate's the rate at which such pension is to be received whereas proviso (a) provides the essential qualification of the insured person to receive such pension.

10. The Act has as its main object to confer various benefits to the employees working in the Industry or Establishment as defined therein and, amongst others, to provide the rates at which the employers are required to make contributions to the Employees Old-Age Benefits Institution. It also provides the Mechanisms for assessment of the contributions and recovery of the same to the employees. Being a beneficial statute, it is required to be construed in the perspective and the purpose for which it was enacted. The interpretation of various provisions ought to be carried out in a manner that advances the objectives of the Act and in favour of the employees although as noted above the Schedule itself is quite explicit in granting benefit to such employees who have completed more than six months of service for it to be treated as one full year.

11. In the circumstances, the service of 14.75 years of the petitioner shall be treated as fifteen years on the basis of the stipulation contained in the Schedule. The case of the other petitioner in the connected writ petition is also at par with the case of the present petitioner.

12. Lastly, reliance has been placed on Circular No.1 of 2022 dated 17.02.2020 to contend that the said Circular has clarified that rounding of is not permissible for holding an employee entitled for old age pension under section 22 of the Act. In the first place, this Circular was not relied upon in the impugned orders and was not pressed in service by the respondents before the forums below. Secondly, this Circular cannot be given retrospective effect for determination of rights of the petitioners for being eligible for old age pension which rights have already accrued to them before the issuance of the said Circular. Thirdly, the Circular which is in the form of an administrative direction cannot offend or clarify the provisions of the Schedule which form part of the Act and which from the reading of the text are unambiguous.

13. For what has been stated above, this writ petition and the connected writ petition are allowed and the orders impugned in this writ petition are set aside and respondent No.4 is directed to pay old age pension to both the petitioners. SA/M-88/L Petition allowed.