2008 P L C 293

[Karachi High Court]

Before Mrs. Yasmeen Abbasey and Dr. Rana Muhammad Shamim, JJ

AL-RAI MEMORIAL EDUCATIONAL SOCIETY through General Secretary

Versus

COMMISSIONER, SINDH EMPLOYEES, SOCIAL SECURITY INSTITUTE,

KARACHI and 3 others

Constitutional Petitions Nos.D-2004 of 1998, D-165 of 2006, D-1478 of 2003 and D-3108 of
1996, decided on 25th April, 2008.

(a) Provincial Employees' Social Security Ordinance (X of 1965)---

----Ss. 1(3), 2(ii) & 20---Constitution of Pakistan (1973), Art.199---Constitutional petition---

Application of Employees' Social Security Ordinance, 1965 to educational institutions---Term
"establishment" in S.2(ii) of the Ordinance---Scope---Government by Notification extended the
area of application of Employees' Social Security Ordinance, 1965 to the educational institutions
and had called upon educational institutions to .get their employees registered under the Social
Security Scheme and to submit a statement to the office of social security every month regarding
the contribution scheme---Plea of counsel for petitioners was that activities as carried out in the
educational institutions did not come within the purview of business, trade or manufacturing and
producing any material product, but were of spiritual character just to promote the status of a
society to up-bring the educational level, and as such same could not be parallel to the
establishment functioning exclusively in business sector---Validity---Educational institutions
though were running the institution on charitable basis, but the fact remained that' the employees
of such institution and their dependants, should also be benefited and their service be secured in
case of sickness, maternity, employment injury or death and for matters ancillary thereto---If an
institution claimed itself running on charitable basis, it was also supposed to give security to all
its employees as those also would come within the ambit of objects for which the institution was
established---Term "establishment" in S.2(ii) of Provincial Employees' Social Security
Ordinance, 1965, covered educational institutions within the meaning of said Ordinance.

Employees' Union, Jamia, Karachi v. Registrar of Trade Unions, Sindh and 2 others 1981 PLC
403; Board of Governors Aitcheson College, Lahore v. Punjab Labour. Appellate Tribunal and
others 2001 PLC 589; Holy Family Hospital and another v. Government of Sindh and another
1985 SCMR 593; Multiline Associates v. Ardeshir Cowasjee and 2 others PLD 1995 SC 423;
Don Basco High School Empress Road Lahore v. Director, Social Security and 2 others 2005
PLC 110; St. Bonaventure's Boys High Schools Tilak Incline and Qasimabad, Hyderabad
through Authorized Representative and another v. Province of Sindh through Secretary Labour
and Transport, Government of Sindh and 2 others 2004 PLC 381; Province of East Pakistan v.
Sirajul Huq Patwari PLD 1966 SC 854 and AIR Assam 22 ref.

(b) Maxim---

----"Ejusdem generis" was not a rule of law, but was a rule of construction, which enabled a
court to ascertain the intention of the legislature---Maxim ejesdem generis did not warrant the
court to subvert or deflect from the legislative will by confining the operation of statute within
narrower limits than intended by the law-maker.

(c) Provincial Employees' Social Security Ordinance (X of 1965)----

----S. 2(ii)---"Establishment"---Definition and scope---Term "establishment" as used in S.2(ii) of

Provincial Employees' Social Security Ordinance, 1965, was not restricted to the three fields as
referred therein; it included employees at all levels, they could be household servants, staff of
public institution or of a private business---In the common parlance any organized set up with
certain number of its employees, would be covered within the meaning of "establishment"--Word
"establishment" as defined in Industrial Relations Ordinance, 1969, covered a large area of small
or big business set up including an office, firm, industrial unit, shop or undertaking or premises
in which workmen were employed for the purpose of carrying on any business, trade,
manufacture, calling, services employment or occupation.
1989 PLC 969; PLD 1994 SC 738; Don Basco High School v. The Assistant Director, E.O.B.I.
and others PLD 1989 SC. 128; Lila Vati Bai v. State of Bombay AIR 1957 SC 521; K.G. Old
Principal, Christian Technical Training Centre, Gujranwala v. Presiding Officer, Punjab Labour
Court, Northern Zone and 6 others PLD 1976 Lah. 1097; The Managing Committee, Attock
Industrial School v. Presiding Officer, Punjab Labour Court No.2, Lahore and another 1985 PLC
936; The University of Delhi and another v. Ram Nath and others AIR 1963 SC 1873;
Management of Safdar Jung Hospital, New Delhi v. Kuldip Singh Sethi AIR 1970 SC 1407; St.
Bonaventure's Boys High Schools Tilak Incline and Qasimabad, Hyderabad and another v.
Province of Sindh and 2 others 2004 PLC 381 and Sacred Heart High School v. Director, Social
Security and others 1997 PLC 729 ref.

Shahid Anwar Bajwa for Petitioners.

Jawwad Sarwana for Respondents.

Date of hearing: 22nd April, 2008.

JUDGMENT

MRS. YASMIN ABBASEY, J.--- By notification, dated 15-12-2005 the Government of Sindh
had extended the area of application of Sindh Employees Social Security Ordinance, 1965 to the
educational institutions and had called upon these petitioners' institutions to get their employees
registered under the Social Security Scheme and to submit a statement to the office of Social
Security every month regarding the contribution schedule showing details of social security
contribution in respect of each employee along with the amount of social security contribution
payable at 7% of the salaries/wages paid or payable to them of each succeeding month.

Being aggrieved with this notification and notice dated 20-1-2006 received in that context, these
three constitutional petitions bearing Nos.D-165 of 2006, D-1478 of 2003 and D-2108 of 1996
have been preferred. Irrespective of other grounds taken by each of the petitioners separately in
the petitions, the main ground urged by all of them in that Social Security Ordinance of 1965 is
not applicable to educational institutions as the educational institutions does not fall within the
ambit of industrial, commercial or agricultural organization as defined in section 2(ii) of the
Ordinance, 1965 and the word "otherwise" as used in the section is to be read ejusdem generis
with the words "industrial, commercial and agricultural".

It is argued by learned counsel for the petitioners that the activities as carried out in the
educational institutions does not come within the purview of any business, trade manufacturing
and producing any material product but are of spiritual character just to promote the status of a
society to upbring the educational level, therefore, it cannot be in parallel to the establishment
functioning exclusively in business sector. To them term "establishment" as used in the
Ordinance of 1965 is limited to an organization functioning in industrial, commercial or
agricultural capacity or otherwise of the same nature of business.

Learned counsel for the petitioners has referred the case of Employees' Union, Jamia, Karachi v.
Registrar of Trade Unions, Sindh and 2 others 1981 PLC 403 stating that services rendered by
industrial, commercial and agricultural organization have been differentiated with those of
educational institutions.

In view of the observation made in the cited judgment service of industrial, commercial and
agricultural units have been termed as material service, whereas in respect of service rendered by
university it is observed that:

"The service rendered by the University entirely depends upon the contribution of the
learning, research, study, knowledge of the men of letters. It is this distinctive character
of the University, which absolutely distinguish it from institutions, providing material
service. This absence of material nature of service keeps the University and the Board out
of the pale of the word Industry Education, is not a service it is a duty. Its acquirement is
no longer voluntary but undisputedly it is being made compulsory. The Universality and
cosmopolitan nature of education keeps it completely distinct and distinguished from
material service."

The question involved in the referred case was that whether the employees of University, who
got their union registered under Trade Union Act, on their termination from service will be
termed as an employee of an industry as defined in Industrial Relations Ordinance, 1969 and
their grievance petition before Labour Court under Industrial Relations Ordinance, 1969 would
be maintainable. It was observed that University and Board cannot be termed as industry within
the meaning of Industrial Relations Ordinance, 1969 for the purpose of filing petition before
Labour Court, and thus, is not relevant to the present case as the observation made in the case of
Employees' Union, Jamia, Karachi v. Registrar of Trade Unions, Sindh and 2 others (supra) was
with reference to the jurisdiction of Court only. In another judgment reported as Board of
Governors Aitchison College, Lahore v. Punjab Labour Appellate Tribunal and others 2001 PLC
589, wherein an employee of a educational institution on his termination from service
approached to Labour Court under section 25-A of Industrial Relations Ordinance, 1969, as it
went up to the Honourable Supreme Court and in that context it was observed that the
educational institution does not fall within the definition of industry. The question of application
of Social Security Ordinance for the facility provided under the Ordinance, as pleaded by
respondent, was not subject-matter of these petitions.

To examine the question that what does the "establishment" means the very preamble of Social
Security Ordinance would be relevant. It says that the scheme of social security is introduced
through this Ordinance for providing benefit to certain employees or the dependents of an
institution in the event of sickness, maternity employment injury or death and for matters
ancillary thereto. By using the word "institution" it has enlarged the area of its application. Thus,
to avail the benefits of scheme an employee who may not necessarily be to the organization
relating to the industrial, commercial or agricultural but any worker of any organization, who is
employed for carrying out a service must be given equivalent status for protection of his service
benefits. It is observed in the case of Holy Family Hospital and another v. Government of Sindh
and another 1985 SCMR 593 that the word "service" as contained in the definition of workers'
Children (Education) Ordinance, 1972, wherein almost the same issue was raised, it was held
that: ---

"The word "service" as contained in the definition of "establishment" is not restricted to

"service", which results in profit or gain, but would embrace service of various kinds."

In the same report it is further observed that:--

"The education cess is charged for the benefit of education of workers' children. Such
object indeed is beneficial and has nothing to do whether the service rendered by the
workers results in yielding the profit for the establishment or not. In accordance with the
accepted principle of interpretation while dealing with a welfare and beneficial
legislation, which indeed the Ordinance in question is, the term "establishment" is to be
given wide and liberal interpretation in keeping with the object of the legislation so as to
advance the remedy and suppress the mischief or else it would defeat the very legislative
 intent."

With this observation the petitions filed by Holly Family Hospital against the levy of income tax
were rejected.

Advancing his argument elaborating the definition of "establishment", it is contended that the
word "otherwise" must be construed as ejusdem generis with the words immediately proceeding
to it.

Conversely learned counsel for the respondent referring to a judgment reported in 2004 PLC 381
also referred by the learned counsel for the petitioner has argued that a Bench of this Court had
already observed that schools are establishments within the meaning of Social Security
Ordinance and fall within the purview of Ordinance and with this observation the petition filed
by St. Conventure High School, Hyderabad was dismissed. It is contended that the observation
made by the Bench of this Court in view of law laid down in the case of Multiline Associates v.
Ardeshir Cowasjee and 2 others PLD 1995 SC 423 are of binding nature and in case of a
contrary view the proper course would have been a request to be made to the learned Chief
Justice for constitution of a larger bench instead of giving conflict findings, which is bound to
create confusion. Although no reply has been given by the learned counsel for the petitioner to
the arguments advanced as to the binding effect of an observation of a Division Bench on
another Bench of the same Court but has referred the case of Don Basco High School Empress
Road Lahore v. Director, Social Security and 2 others 2005 PLC 110, wherein a contrary view
has been taken but at the same time it is admitted by him that this judgment was challenged
before the Honourable Supreme Court of Pakistan in C.P. No.885 of 2000 and by order, dated
29-9-2005 the impugned judgment of High Court was set aside and the appeals were disposed of
by remanding the petitions to the Social Security Institution, Punjab, Lahore for decision afresh
in terms as indicated in the order, hence after setting aside this judgment of Honourable Lahore
High Court, the only judgment in field is of this Court reported in St. Bonaventure's Boys High
Schools Tilak Incline and Qasimabad, Hyderabad through Authorized Representative and
another v. Province of Sindh through Secretary Labour and Transport, Government of Sindh and
2 others 2004 PLC 381. The perusal of Multiline Associates v. Ardeshir Cowasjee and 2 others
(supra) further reveals that the rule of interpretation of law and the applicability of a law in a
particular and general field has also been discussed therein, which reads as under:---

"Cardinal principle of interpretation of statutes is that a law should be interpreted in such

a manner that it should be saved rather than destroyed. The Courts should lean in favour
of upholding constitutionality of legislation and it is, therefore, incumbent upon the
Courts to be extremely reluctant to strike down laws as unconstitutional. This power
 should be exercised only when absolutely necessary, for injudicious exercise of this
power might result in grave and serious consequences. In support of the proposition
reference can be made to the case of Province of East Pakistan v. Sirajul Huq Patwari
PLD 1966 SC 854. The same principle of interpretation shall apply to subordinate
legislation including Regulations as in this case."

From the above proposition what can be gathered is that the intention of law-makers in all
respects should be saved as while construing any law, it is presumed that it is legislated for the
benefit of the society as a whole to which it applies and in this scenario we have to examine that
whether extension of area of protection to employee of different institution under Social Security
Scheme is permissible or not. Observations made in AIR Assam 22 are very much beneficial
which says that:--

"Where in a social legislation the Legislature intends to give protection or confer a

privilege on a class or persons which it otherwise did not possess, the legislation should
be taken to apply ordinarily to the entire class unless there was some saving or exception
meant by the terms of the legislation itself. The mere fact that there is a suit or proceeding
pending against any member of the class should not in the usual course deprive him of
the protection or privilege so afforded, unless the Legislature intended to make an
exception in his case."

With this frame of reference, argument advanced by learned counsel for petitioners that the term
"otherwise" as used in section 2(ii) is to be read as ejusdem generis does not appeal to reason
because the term ejusdem generis is not a rule of law but is a rule of construction, which enables
a Court to ascertain the intention of the Legislature. It does not warrant the Court to subverting or
defeating the legislative will by confining the operation of statute within narrow limit than
intended by the law-maker. Thus, the term "establishment" in context of the word "otherwise" as
used in section 2(ii) of the Ordinance of 1965 is not restricted to the three fields as referred
therein. "Establishment" includes employees at all levels either they may be household servant,
staff of public institution or a private business. Thus, in the common parlance any organized set
up with certain number of its employees will be covered within the meaning of "establishment".
The word "establishment" as defined in Industrial Relations Ordinance, 1969 covers a large area
of small or big business set ups including an office, firm, industrial unit, shop or undertaking or
premises in which workmen are employed for the purpose of carrying on any business, trade,
manufacture, calling, services, employment or occupation. Reference can be made to 1989 PLC
969 and PLD 1994 SC 738.

With this large area of term "establishment" used in Industrial Relations Ordinance, 1969
covering almost all small business institutions of private and public sectors observations made by
the Honourable Supreme Court of Pakistan in the case of Don Basco High School v. The
Assistant Director, E.O.B.I. and others PLD 1989 SC 128 is material, wherein it is observed
that:---

"Doctrine of ejudsem generis will apply where there is nothing to show in the provision of Act
that a wider sense was intended or the intention to give to the general term a broader meaning
than the doctrine was not manifested."

Term "establishment" as used in Industrial Relations Ordinance, 1969 if read with section 2(ii) of
Social Security Ordinance, we found both of them are in parallel to each other and thus term
"otherwise" as used cannot be said to be a ejudsm generis but will extend to the educational
institutions also for the purpose of applicability of Social Security Ordinance.

So in Lila Vati Bai v. State of Bombay AIR 1957 SC 521 referred by learned counsel for
respondent, the argument advanced by petitioner's counsel in that case that the term "otherwise"
used in section 6 of Bombay Land Acquisition Act, 1948 must be construed as ejusdem generis
with the words immediately proceedings and also in view of affidavit filed on behalf of the
Government there was in law no vacancy. It is observed that:--

"the Legislature has been cautious and through going enough to bar all avenues of escape
by using the words "or otherwise". Those words are not words of limitation but of
extension so as to cover all possible ways in which a vacancy may occur."

Thus we are not in agreement to the argument advanced by learned counsel for the petitioners
that the term "establishment" as used in the Ordinance of 1965 be read in limited scope to the
extent of three forums as specifically defined therein and no vacancy has been left by the
Legislature to add educational institutions in terms of "establishment" with the cover of word
"otherwise" used in the section.

The authorities referred by learned counsel for the petitioner as K.G. Old Principal, Christian
Technical Training Centre, Gujranwala v. Presiding Officer, Punjab Labour Court, Northern
Zone and 6 others PLD 1976 Lah. 1097; The Managing Committee, Attock Industrial School v.
Presiding Officer, Punjab Labour Court No.2, Lahore and another 1985 PLC 936; The University
of Delhi and another v. Ram Nath and others AIR 1963 SC 1873; Management of Safdar Jung
Hospital, New Delhi v. Kuldip Singh Sethi AIR 1970 SC 1407 are absolutely on different
footings and in none of the cases applicability of Social Security Ordinance on the educational
institutions has been discussed. Almost all the cases referred are with reference to the jurisdiction
availed by the parties for their respective claims.

To meet such a situation we will again go to the doctrine of ejusdem generis, which cannot be
applied in a case where the very construction of statute as a whole indicates that the Legislature
intended the general words to go beyond the class specifically designed as it applies only when--
-

(1) the statute enumerates the specific words;

(2) the subject of enumeration constitute a class or category;

(3) the class and category is not exhausted by the enumeration;

(4) the general term following the enumeration; and

(5) there is no indication of different legislative intent.

In parallel to this term and word "otherwise" as used and discussed clearly indicates that the
purpose of Legislature by using this word is not to restrict the term "establishment" only to the
area specified in the definition but it intends to extend the same wherever is found it reasonable.
The' word "otherwise" in subsection (ii) of section 2 of the Ordinance of 1965 is used
distinctively in a sense to include any other organization that attract the operation of this
Ordinance.

The term "organization" has further been elaborated in the case of St. Bonaventure's Boys High
Schools Tilak Incline and Qasimabad, Hyderabad through Authorized Representative and
another v. Province of Sindh and 2 others 2004 PLC 381 that:

".... the term "organization" as employed in the Ordinance has therefore, a very wide and
literal -importance to deliver benefit to its employees irrespective of the nature of
organization. The intention thus, seems to apply the Ordinance even to such organizations
which are engaged on non-profit basis and are rendering welfare services, it therefore,
follows that the mere fact that the petitioner's schools are being run on non-profit basis,
do not justify their exclusion from the purview of the Ordinance."

Learned counsel for the respondent has also relied his arguments on Sacred Heart High School v.
Director, Social Security and others 1997 PLC 729, wherein almost same issue of applicability of
Social Security Ordinance on the educational institutions was dealt with and it was observed that
"the notification issued by the respondent do not suffer from any legal infirmity" and with this
observation petition filed by the petitioner was dismissed.

Although the petitioners in Constitutional Petition No.D-165 of 2006 stated that they are running
the institution on chartiable basis and to support his contention photocopy of declaration of trust
has been filed. Indeed it may be so, but the fact remains that the employees of such institution
and their dependents should also be beneficent and their service be secured in case of sickness,
maternity employment injury or death and for mattes ancillary thereto. So if an institution claims
itself, running on charitable basis, is also supposed to give security to all its employees as they
also come within the ambit for the purpose of which the institution was established.

The upshot of the above discussion is that we are of the view that the term "establishment"
covers educational institutions within the meaning of Ordinance of 1965. Consequently, all the
three constitutional petitions stands dismissed.

H.B.T./A-38/K Petitions dismissed.