2005 PLP 390 (PLC)

A demand for payment of Rs.5,49,411 was raised against the petitioner, being contribution towards the old age benefit for the period January 1991 to December 1992. The petitioner objected to calculation and a local commissioner was appointed who prepared his report on 22-11-1997. The matter was not resolved on the basis of report of local commissioner, resultantly the petitioner filed a petition under section 33 of Employees Old-age Benefits Act 1976. Second report by another commission was submitted and respondent No.2, passed order dated 15-4-1999, wherein the petitioner was found liable to pay an amount of Rs.2,43,313 along with statutory increase making total of Rs.3,64,

970. A review application was filed by the petitioner, which was dismissed on 2-6-1999. The petitioner then filed appeal before respondent No.1 wherein the order dated 15-4-1999 of respondent No.2 was maintained to the extent of actual amount unpaid, while the amount of statutory increase was waived. The petitioner has through the instant petition, called in question, the orders dated 15-4-1999 and 11-9-1999, passed by the respondents Nos.1 and 2 respectively.

2. Learned counsel for the petitioner has contended that respondents have withdrawn all the demands except the charges/dues for outside processing. Respondents have placed reliance with regard to the definition of worker as contemplated in section 2(bb) of the Act 1976. Learned counsel referred to various provisions of Act 1976 and argued that the contributions are to be collected from institutions for disbursement to insured employees. He placed reliance on section 2(b) of the Act, 1976 and stated that contribution is sum payable in respect of insured person. Insurable employment as per section 2(1) relates to person in employment in respect of whom contribution are payable. Section 3 provides that all employees be insured. Learned counsel claimed that combined reading of provisions of Act, 1976 provide that worker or employee is only that employee who is insured. It was then) contended that outside workers, comprise of small groups of persons A who in houses, use their own equipments and tools and also certain raw material, do not fall within the definition of workman. Learned counsel 1A has referred to the cases of "Abdul Aziz Noor Muhammad and others v. Employees Old-age Benefits Institutions" (1983 PLC 198), "Muhammad Umer and 25 others v. M.M. Isphani Ltd., (1980 PLC 888) and "State of Kerela v. V.M. Patel" (1961 PLC 432) to contend that persons employed to work under independent contractor are not under supervision and disciplinary control of establishment, they receive pay directly from the contractor and as such do not maintain the relationship of workers and employer with establishment.

3. Learned counsel for the respondent on the other hand has raised serious objection as to the maintainability of the petition. He has referred to the case of "Employees Old-age Benefits Institution v. National Industrial Relation Commission" (1988 SCMR 765) to contend that EOBI has been established under section 4(1) of Act of 1976, which provides old age benefits to industrial, commercial and similar organization. Such functions do not relate to any sovereign functions of State. Learned counsel supported the impugned orders and submitted that employees are defined in clause 2(bb) of Act of 1976 and for the purpose of EOBI Act 1976, the definition of employees as contained in section 2(bb) is only relevant. He in support of this contention has referred to the cases of "Lahore Race Club v. Deputy Director EOBI" (1998 SCMR 1571) and "Messrs Cawasjee and Sons v. Board of Trustees EOBI" (2001 SCMR 949)

4. Heard learned counsel for the parties and perused record.

5. Appellate Authority while passing the impugned order has observed that employees under contract, convert the raw material supplied by establishment into finished goods, at agreed rate therefore these employees are actually working in connection with the affairs of industry and come within the ambit of section 2(bb) of the Act. The impugned orders do not suffer from any legal infirmity and resultantly do not call for any interference in writ jurisdiction.

6. The arguments of the learned counsel for the petitioner that the definition of employee as contemplated in section 2(bb) of the Act of 1976 is not relevant, has no force. The apex Court has held the employer liable for contribution with regard to persons who have been found to be employees in terms of section 2(bb) of the Act of 1976, in the case of (2001 SCMR 949) (supra). Any person in service 'of industry or establishment, whether employed directly or indirectly, falls within the definition of employee. August Supreme Court in the case of "Lahore Race Club v. Deputy Director, Employees Old-age Benefits Institution" (1998 SCMR 1571) has defined the employees:-- The definition of the term "employee" does not exclude from its operation the part-time employees engaged in one's service for wages or otherwise. Only such persons are excluded from the provisions of the Act, who fall within the purview of clause (1) to section 47 of the Act which reads thus:-- "persons in the service of statutory bodies other than those employed in or in connection with the affairs of a factory (as defined in) section 20) of the Factories Act, 1934 (XXV of 1934), (or a mine as defined in the) Mines Act, 1923 (IV of 1923). "Provided that workshops maintained exclusively for the purposes of repair or maintenance of equipment or vehicles used in such statutory bodies shall not be treated as factories for the purposes of this clause."

7. The demand raised by respondent pertains to employees who do not fall within the category of person, who have been excluded under section 47(1) of Employees Old-Age Benefits Act. 1976, therefore outside employees of the petitioner are employees, as envisaged by section 2(bb) of the Act of 1976. Definition of the employee as interpreted by the learned counsel for the petitioner is not well-founded. Thus the petitioner is not absolved from liability to pay contribution under Employees Old-Age Benefits Institution Act 1976.

8. This petition has no merits and is dismissed as such. H.B.T./G-138/L Petition dismissed.