1986 PLP 989 (PLC)

(2) That all the Directors of the petitioners company are appointed by the Government. The Chairman of the Board of Directors is an officer of the Armed Forces of the rank of Major General. The Managing Director of the petitioner company is also a military officer in active service. (3) That the exact volume and nature of defence items being manufactured by the petitioners cannot be disclosed being classified information. (4) That all the machinery and staff of the petitioners are engaged in the manufacture of defence items as well as commercial items and it is not possible to bifurcate the machinery and the staff working exclusively in the manufacture of defence items or on commercial items. (5) That Trade Unions of employees under the I.R.O. are functioning in the petitioners establishments. The contention of Heavy Mechanical Complex that the I. R. O. is not applicable to the complex is pending decision in the Supreme Court and Heavy Foundry a Forge have no case pending in court of law regarding the applicability of I.R.O. but are waiting for the decision in the case of Heavy Mechanical Complex which will also apply to him, the facts and law in case of both being the same: The witnesses also produced copies of certificates from the Senior Officials of Defence Production Division, Ministry of Industries, P.O.F. Boards, Director General Munition Production, Directorate of Procurement (Army), certifying that the petitioners were actively engaged in manufacturing defence stores for the Armed Forces of Pakistan and for Pakistan Ordnance Factory. The point for determination before me is whether the persons employed with the petitioner are employed in services or installations connected with or incidental to the Armed Forces of Pakistan and are thus excluded from the applicability of E.O. B. Act, 1976 under section 47 (c) of the said Act. I have heard the representatives of the parties at length. Arguing the case of the petitioners, Mr. Zaman stated that the evidence led by the petitioner has very clearly brought out the degree of involvement of the Armed Forces of Pakistan in the Petitioner's establishments. It has also been established that the petitioner establishments are engaged in the manufacture of defence stores on the order of the Armed Forces which are a continuous process and it is not possible to bifurcate the machinery and staff of the petitioners engaged in production of the defence items and the commercial items but all the staff and the machinery is continuously and simultaneously engaged in manufacturing both the defence items as well as commercial items. He stressed that the respondent had not produced any evidence in rebuttal of the evidence of the petitioners and, therefore, the petitioners' evidence fully establishes the fact of production of defence items continuously and their connection with the Armed Forces of Pakistan thus excluding them from application of the E.O. B. Act by virtue of section 47 (c) of the said Act. The learned counsel argued that the provisions in section 1 (3) of the I.R.O. was similarly worded as in section 47 (c) of the E.O.B. Act, therefore, the provisions in the two legislations were identical. Thus the factors determining an organization as being connected with or incidental to the Armed Forces in one legislation will be the same as in the other legislation. He then produced case law, where private organizations were held to be connected with or incidental to the Armed Forces of Pakistan within the meaning of section 1 (3) of the Industrial Relations Ordinance. Mr. Zaman referred to the case reported in 1976 P L C 855 (United Builders v/s Punjab Labour Court) the responsibility of the Armed Forces. 1980 P L D 828(k) (Wah Bofors Workers Trade Union v. Registrar Trade Unions) where the Punjab Labour Tribunal declared that the provisions of the I. R.O., 1969 were not applicable to Wah Bofors although it was a private limited company and a commercial undertaking but it manufactured dynamite to meet the entire requirement of the Armed Forces of Pakistan. P L J 1975 Tr.C. 251 (Muhammad Sharifa Co. Workers Union v. Registrar Trade Union) where the Punjab Labour Court decided that as long as the workers of the contractor were engaged in the construction of the navel complex they were not covered by the provisions of the I. R. O., 1969. 1974 P L C 10 (Gammon Pakistan Ltd. v. Muzaffar Khan) where‑the Punjab Labour Appellate Tribunal held that the employees of the Company were not covered by I. R. O. 1969 "As long as they were employed in the construction of an Ordinance Factory, which is an installation connected with or incidental to the Armed Forces of Pakistan." The learned counsel argued that the law laid down in these cases clearly applies by analogy to the present cases as there is no distinction whatsoever in the language used in the two provisions of law. He contended that the demand notice issued under the E.O.B. Act were liable to be held to be illegal, without jurisdiction and contrary to law and the amount already paid inadvertently in the case of Heavy Foundry a Forge is liable to be refunded. The representative of respondent Mr. Mujtaba Rasul argued that in the petition only one legal issue was involved is whether the petitioners were connected with and incidental to the Armed Forces of Pakistan within the meaning of section 47 (c) of the E.O.B. Act. He conceded the fact that in addition to production of the commercial items, the petitioners were also engaged in manufacture of defence items and, therefore, no evidence in rebuttal was required. The petitioners witnesses or the authorities issuing the certificates Exhs. P‑2 to P‑6 were however not qualified to state that the petitioners are connected with or incidental to the Armed Forces but this issue is to be decided by the tribunal on examination of the evidence on record in the light of established principles of interpretation. He contended that as admitted by the petitioners companies were established as commercial undertakings as is clear from their Memorandum of Association and they are manufacturing commercial items for the purpose of which they were established, like any other order of the Armed Forces of Pakistan. Thus admitting the petitioners are not working exclusively for the Armed Forces but the Armed Forces are also one of their many customers. He asserted that an establishment catering for the Armed Forces of Pakistan but it could only be if the service or installation was established primarily and basically for requirement of the Armed Forces or is exclusively catering for the Armed Forces. He maintained that the workers "connected with or incidental to" will have to be construed narrowly otherwise every establishment which supplies food items, clothing and shoes and other articles of use for the Armed Forces will be considered to be connected with or incidental to the Armed Forces which cannot be intention of the legislature. Discussing the citations of case Law produced by the petitioners, he stated that the case of Wah Bofors 1980 P L C 828(k) was not relevant in the facts of the present case as in that was Wah Bofors was a subsidiary of the Pakistan Ordnance Factory and not merely a private company supplying stores to the order of the Armed Forces. The case reported in 1974 P L C 10, 1976 P L C 322 and 1976 P L C 855 were all of the contractors whose services obtained by the Armed Forces for completion of some project of the Armed Forces and it was held by the Court that the employees of the contractors engaged in completing the project of the Armed Forces and it was held by the Court that the employees of the contractors engaged in completing the project of the Armed Forces were not covered by I. R.O. so long as they were working on the project. Mr. Mujtaba Rasul also drew my attention to the admission on behalf of the petitioners that Trade Union under the provisions of I.R.O. were functioning in the petitioners establishments which prove that the I. R.O. was applicable to the petitioners and the provisions of section 13 of the I.R.O. which are identical to the provisions of section 47 (c) of E.O.B. Act are not attracted in their case. He argued that in the reported cases it was not declared by the Courts that all the Labour Force employed by respective contractors working on non‑military projects would also not be covered by I. R. O. but only those workers who were for the time being working exclusively on the project of the Armed Forces were considered to fall in the category of employed in services or installation connected with or incidental to the Armed Forces of Pakistan. Thus from the case law cited by the petitioner it is clear that only those persons who are exclusively working for the Armed Forces at a given time are considered to be employed in services or installation connected with or incidental to the Armed Forces and not those who work simultaneously for the Armed Forces as well as others. The case of petitioners admittedly is that the persons employed by them continuously work for the production of commercial item and, therefore, is distinguished from the cases cited. Concluding his arguments he submitted that the persons employed by the petitioners do not fall within the meaning of the category specified in section 47 (c) of the E.O.B. Act and not excluded from the application of the Act and, therefore, the petitioners were liable to pay contributions to the respondent Institution as provided by section 9 of the Act and the demand notices issued to the petitioners were lawful and valid. I have carefully examined the contentions of the parties in the light of the evidence on record and the arguments of the learned representations of the parties and the case law produced before me. The fact that the petitioners are engaged in production of defence stores side by side with the commercial items, is not disputed as the representative of the respondent has carried to this fact. I find that the petitioner companies were not basically and primarily meant for production of defence items only otherwise they could had been established as Ordnance Factories and would have casually manufactured commercial items to make it a viable concern as Pakistan Ordnance Factory is doing. P.W.3, Major Muhammad Yodnus in his cross‑examination stated that the officers of Defence Production Division keep on visiting private industries and collect information which can be of use all manufacture of overflow and excess requirement beyond the capacity of these two factories, which goes to show that orders for defence stores may also be placed to the private industries. He has also stated in cross‑examination that these factories are bound to give priority .to the orders placed by Defence Production Division under instructions of the Government and not stipulation in the agreement with the Armed Forces. From this, I conclude that the Armed Forces are just like any other customers of the petitioners factories. Major Younus in his examination in chief has stated that all the operation of the factories are involved in defence production although in cross‑examination he has stated that he has not visited the H. M. C. and H. F. F. to observe the manufacture of items ordered by the Defence Production Division. Therefore, his earlier statement is not of his own knowledge. The actual dispute between the parties is over the meaning and interpretation of the words "services or installations connected with or incidental to the Armed Forces of Pakistan". The learned representative of the petitioners has argued that connection means any relation or association and incidental means occasional or casual, anything that occurs casually or occasionally whereas the representative of the respondents gave the meaning of connection as held together by a bond or a coherence and incidental to mean naturally attached and consequential. In the context of the case, I would agree with the' meaning given by the respondent's representative to be more suited. With these meanings in view I would hold that any service or installation connected with or incidental to the Armed Forces of Pakistan would mean such services or installation ,which would have an established relation and will be falling upon an naturally attached to the Armed Forces so that its existence as such without the Armed Forces would not be possible. In the instant case, I find that the petitioner could very well exist even if they do not engage in production of defence stores as they are manufacturing a large quantity of commercial items. Moreover, analysing the case law produced before me, I find that in all these cases only those persons who at a given time have been exclusively working for the Armed Forces under private concerns have been excluded from the application of I.R.O. under section 1 (3) of the said Ordinance,' for only so long as they continue to work exclusively for the Armed Forces. Admittedly, the persons employed by the petitioners are not working exclusively in production of defence stores for the Armed Forces at any time but are continuously and simultaneously for the production of commercial items also at all the time, therefore, I hold that the persons employed in the petitioner establishments are not employed in services or installations connected with or incidental to the Armed Forces of Pakistan. In the result, I hold that the petitioners are liable to pay contribution to the respondent Institution under the provisions of the E. O. B. Act, 1976 and Demand Notices issued by the respondent Institution are valid and lawful and dismiss the petitions. ??????????? Given under my hands and Seal of the Adjudicating Authority this 9th day of March, 1986. A. A.??????????????????????????????????????????????????????????????????????????????????????????????????? Petition dismissed.