IN THE HIGH COURT OF SINDH, AT KARACHI

Constitutional Petition No.D-758 of 2006

Present:

Mr. Justice Gulzar Ahmed &

Mr. Justice Irfan Saadat Khan.

Date of hearing : 20.10.2009.

Petitioner through : M/S Fazal-e-Ghani Khan

and Kashif Naseer, Advocates.

Respondent No.1 through : Mr. Adnan Karim, A.A.G.Sindh.

Respondents 2&3 through : Mr. Jawad Sarwana, Advocate.

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GULZAR AHMED, J.:- By this petition, the petitioner has impugned the notification dated 17.3.2005 issued under sub-section (3) of Section 1 of the Provincial Employees’ Social Security Ordinance, 1965 (the Ordinance), by which the Government of Sindh applied the said Ordinance with immediate effect to the establishment of the petitioner. As a consequential relief, the petitioner has sought quashment of demand of contribution made under the Ordinance.

Learned counsel for the petitioner has contended that M/S Baqai Foundation is a Waqf and Muslim Trust and does not come within the ambit of term defined under Section 2(2) “Employer” and Section 2(11) “Establishment” of the Ordinance. He has further contended that the word “establishment” has to be construed ejusdem generis and in doing so the petitioner will be excluded from its ambit. He further contended that petitioner is a charitable institution and all its earnings are spent to meet its objects and that in the earlier judgment dated 09.6.2009 of a Division Bench of this Court in Constitutional Petition No. D-977 of 2007 this aspect of the matter was not considered. In support of his submissions, learned counsel has relied upon the cases of MERCANTILE TRADERS (PVT)LTD. & ANOTHER V/S STATE BANK OF PAKISTAN (2002 SCMR 250), GRAND FOLKS ENGLISH SCHOOL V/S EXCISE AND TAXATION OFFICER (1991 PLC 757), EMPLOYEES’ UNION, JAMIA, KARACHI V/S REGISTRAR OF TRADE UNIONS, SINDH & 2 OTHERS (1981 PLC 403), COMMISSIONER OF INCOME TAX, COMPANIES-I, KARACHI V/S M/S ORIX LEASING PAKISTAN LTD, KARACHI (2007 PTD 1151) and 2005 PLC 110.

As against this, learned counsel for the respondents 2 & 3 has contended that the very question of covering of the schools and hospitals under the Ordinance has already been considered by three different Division Bench judgments of this Court, wherein it has unanimously been held that these institutions are covered by term establishment defined under the Ordinance and that the said judgments are to be followed unless a different view is expressed necessitating constitution of a full bench. In support of his submissions he has relied upon the cases of ST.BONAVENTURE’S BOYS HIGH SCHOOLS TILAK INCLINE AND QASIMABAD HYDERABAD V/S PROVINCE OF SINDH & 2 OTHERS (2004 PLC 381), LAIQUAT NATIONAL HOSPITAL ASSOCIATION V/S GOVERNMENT OF SINDH & ANOTHER (2006 PLC 364), Order dated 20.2.2008 in Constitutional Petition No. D-619 of 2005 (KARACHI ADVENTIST HOSPITAL V/S GOVERNMENT OF SINDH AND ANOTHER), M/S HOLY FAMILY HOSPITAL V/S GOVERNMENT OF SINDH & ANOTHER (2009 PLC (CS) 824), MUSLIM EDUCATIONAL SOCIETY V/S GOVERNMENT OF SINDH & 2 OTHERS (2006 PLC 263), ADAMJEE FOUNDATION & ANOTHER V/S FIRST SINDH LABOUR COURT KARACHI & ANOTHER (PLD 1979 Karachi 510), MULTILINE ASSOCIATES V/S ARDESHIR COWASJEE & OTHERS (1995 SCMR 362), AGRICULTURE WORKERS’ UNION, BALOCHISTAN V/S THE REGISTRAR OF TRADE UNIONS, BALOCHISTAN, QUETTA & OTHERS (1997 SCMR 66) and M/S MACDONALD LAYTON CONSTAIN LIMITED WEST WHARF, KARACHI V/S PUNJAB EMPLOYEES’ SOCIAL SECURITY INSTITUTION, LAHORE AND 2 OTHERS (PLD 1991 SC 1055).

Learned A.A.G.Sindh has adopted the submission made by learned counsel for the respondents 2 & 3.

We have considered the submissions made by learned counsel for the parties and have gone through the record.

It appears that petitioner M/S Baqai Foundation is a Waqf and is registered under Societies Act, 1860 as a society. To achieve its objects, the said foundation has established and running three institutions namely Baqai Hospital Nazimabad, Baqai Medical University, Super Highway and Baqai Cadet College, Super Highway, wherein the work of providing medical treatment and imparting education and training are being carried out and that the funds generated by it are paid to meet expanses of the said three institutions and remaining amount is kept for meeting the objects of said foundation. Through notification dated 17.3.2005, the said foundation along with its three institutions were brought under the net of the Ordinance pursuant to which the petitioner was asked to register its employees with the Social Security Institution. As the petitioner did not register its employees with the Social Security Institution, the Social Security Institution made assessment of contribution and increase and sent a demand of Rs.12,09,821/- which having not been paid by the petitioner, coercive action was initiated under Section 81 of Land Revenue Act, 1967 for recovery of the demanded sum, pursuant to which the petitioner has filed Complaint No. 28 of 2005 with the respondent No.2 and at the same time also filed this petition challenging the applicability of the Ordinance to the petitioner.

As regards the contention of learned counsel for the petitioner that M/S Baqai Foundation is a Waqf and a Muslim Trust and does not come within the ambit of term “employer” and “establishment” as defined in the Ordinance, it will be useful to reproduce the definition of said terms as under:-

(9) “employer” means in the case of works executed or undertakings carried on by any contractor or licensee on behalf of the State, the contractor or licensee working for the State, and in every other case the owner of the industry, business, undertaking or establishment in which an employee works and includes any agent, manager or representative of the owner;

(11) “establishment” means an organization, whether industrial, commercial, agricultural or otherwise.

The reading of above two definitions shows that undertakings carried on by the contactor or licensee on behalf of the State, the contractor or licensee working for the State, and in every other case the owner of the industry, business, undertaking or establishment in which an employee works and includes any agent, manager or representative of the owner have been defined as employer and organization, whether industrial, commercial, agricultural or otherwise are defined as establishment in the Ordinance. The plain reading of above two definitions do not, in specific words, exclude Waqf or a Muslim Trust from being an employer or an establishment rather in our view the two definitions are so elaborate and wide that a Waqf or Muslim Trust, having undertaking or establishment in which employee works, will be covered by the definitions as it is not the case of the petitioner before us that M/s Baqai Foundation the petitioner is not undertaking or establishment in which employees are not working. Further, it may be noted that trust deed of the petitioner which has been filed as annexure P/1 in its clause (4) provides that trustees shall collect, recover and get dividends, rents, income, interest, bonuses and profits of the foundation and after defraying all costs incurred by the foundation the trustees shall pay, apply, divide and distribute the balance of the receipts for the object and purposes of the foundation. The element of making income and profits is very much apparent from the trust deed itself except that no amount of its income and profit is to be distributed to the trustee or any individual person but has to be applied for the objects of the trust only. The argument that was made before us that the petitioner is a charitable or non-profit making foundation is not supported by the trust deed itself rather it shows that the trust is a profit making undertaking except that such profits are to be applied for the aims and objects of the trust. Such a foundation in the case of Adamjee Foundation (supra) was found to be covered by the definition of the term “establishment” of the Ordinance.

As regards the arguments that the petitioner is providing medical treatment and education and on construction of the definition of the term “establishment” ejusdem generis, the Ordinance will not apply to the petitioner, these very arguments have already been considered by Division Bench of this Court in the cases of St.Bonaventure’s Boys High Schools Tilak Incline and Qasimabad Hyderabad, Laiquat National Hospital Association and Karachi Adventist Hospital in which it was consistently held that the school imparting education, hospital providing medical treatment are covered by the term establishment as defined in the Ordinance and that even construing such definition ejusdem generis will not exclude the institution of school or hospital from the definition of term “establishment” as given in the Ordinance. We respectfully agree with the above referred three decisions of Division Bench of this Court and find nothing on the basis of which any different view can be taken.

The case being squarely covered by the earlier judgments of this Court, there is no reason to discuss the judgment cited by learned counsel for the petitioner.

We, therefore, find no merit in this petition. The same is, therefore, dismissed. Listed application is also disposed off.

J U D G E