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Suit No. 314 of 1977, decided on 27th September, 1982.

Dock Workers (Regulation of Employment) Ordinance (XXVII of 1973)----

‑‑‑ S. 3 and Dock Workers (Regulation of Employment) Scheme, 1973, cl. 4 and Karachi Dock Labour Board Resolution No. 132 dated 9th August, 1974‑Payment of cess to Board‑Liability of‑‑ Lies on contractor utilising services of Master Stevedores‑Steve doring Company entitled to reimbursement of amount of cess deducted by contractor from its bill‑Agreement between Rice Export Corporation and Stevedoring Company appointed as their Stevedoring Contractor for Stevedoring rice shipped by Corporation to foreign ports containing terms and conditions of flat rate contract and Steve doring Company taking over responsibility of all expenses including miscellaneous expenses incurred in connection with welfare fund- Stevedoring Company, in circumstances, held, liable to payment of share of cess at the rate of 25 paisa per ton, made specifically their , responsibility under Resolution of Karachi Dock Labour Board‑‑Res ponsibility under cl. 1 (a) of said Resolution in respect of Rs. 1.05 per ton, held, lay upon the Corporation‑‑Such responsibility, held, could not be shifted to Stevedoring Company‑Suit for recovery of amount representing such . share of cess deducted by the Corporation from bills of Stevedoring Company with interest accrued thereon dec reed by High Court.

Gladstone Wylie & Co. Ltd. v. Shahidi Trading Corporation Ltd. P L D. 1959 Dacca 73 ref.

Liaquat Merchant and Ismail Merchant for Plaintiff:

Arif Hussain for Defendant.

Dates of hearing : 20th and 21st September, 1982.

This suit has been filed for the recovery of Rs. 8,29,008 from the defendant, which comprises a sum of Rs. 6,57,952.05 being the amount deducted by the defendant corporation from the bills of the plaintiff towards the Karachi Dock Labour Board cess and balance amount of Rs. 1,71,055.95 being the interest at the rate of 12 per cent. per annum from the date of the deduction till the filing of the suit. The plaintiff has also claimed future interest at 13 per cent per annum from the date of the filing of the suit till realization.

2. The plaintiff is a Stevedore Company and is accordingly engaged in the business of loading and unloading cargo on ships at the Karachi sea port. The defendant corporation appointed the plaintiff as their Stevedoring Contractor for the stevedoring of rice through shore cranes and barges shipped to foreign ports by the defendant from Karachi between the period March, 1974 to December, 1975. The only dispute between the parties which is the subject‑matter of the present suit, is deduction of the aforesaid amount of Rs. 6,57,952.05 from the bills by the defendant towards the Karachi Dock Labour Board cess. The Karachi Dock Labour Board was constituted by the Government of Pakistan under the Karachi Dock Labour Workers (Regulation of Employment) Scheme, 1973, which scheme was made in exercise of the powers conferred on the Government by section 3 of the Dock Labour Workers (Regulation of Employment) Ordinance of 1973. By clause 4 of the said Scheme, the Federal Government was required to constitute the Karachi Dock Labour Board through a notifica tion in the official Gazette, which Board, subject to the provisions contained in the aforesaid Scheme, was to be responsible for the administration of the Scheme. The Karachi Dock Labour Board was constituted and in its meeting held on 9th August, 1974, the. Board passed the following resolution :‑

"(1) The cess of Rs. 2.05 per ton levied by the Board vide its Resolution No. 32 dated 1st April, 1974 shall be paid as indicated below :‑

(a) By ship‑owners/Steamer ‑Agents/Contractors: any other agency utilising the services of the Master Stevedores/dock workers registered under the Karachi Dock Workers (Regulation of Employment) Scheme, 1973 rioted under the Dock Workers (Regulation of Employment) Ordinance, 1973. @ Rs. 1.05

per ton

(b) By Karachi Port Trust. @ Re. 0.75

per ton

(c) By the Master Stevedores. @ Re. 0.25

per ton"

It appears from the documents exhibited in this suit that the Karachi Dock Labour Board made a demand on the defendant corporation to pay the cess at the rate of Rs. 1.05 per ton according to para. 1 (a) of the aforesaid Resolution by letter dated 13th :ay, 1975. The corporation replied back by its letter dated 20th June, 1975 (Exh. 25) informing the Board that the defendant Corporation was exporting rice but the arrangement of ships was the responsibility of the buyers to charter and book shipping space for the cargo and according to the Resolution 122 the ship‑owners or their agents or the charter were liable to pay the cess at the rate of Rs. 1.05 per ton and the Board was requested that the claim for the payment of this cess may be referred to the respective shipping agents. The Board offered to provide the names of the shipping companies, which transported their rice. The Board did not agree with the defendant Corpo ration and by their letter dated 24th June, 1975 (Exh. 26) informed the defendant Corporation that as the defendant had appointed the Master Stevedores in this case, the plaintiff Company, the defendant Corporation was liable to pay the levy at the rate of Rs. 1.05 per ton in accordance with Resolution 122. The defendant Corporation was also informed through Exh. 26 that the plaintiff company as the Master Stevedores had already paid their share of levy at the rate of 25 paisa per ton. As the Board was threatening to stop the Dock Labour Workers shift unless payment was made by the defendant Corporation of the aforesaid demand of the cess, the amount in question was deducted by the defendant Corporation from the bills of the plaintiff company payable by the defendant, and apparently from this amount, the demand of the Board was met. The plaintiff's case in the present suit is that the responsibility and liability for the payment of the aforesaid amount on account of the cess at the rate of Rs. 1.05 per ton was that of the defendant Corporation and this liability could not be shifted to the plaintiff. The plaintiff %‑ claim is that the deduction has been made unlawfully and against the terms of the contract between the parties. The defendants case is that under the terms of the contract between the parties this cess was the liability of the plaintiff and as such the amount has been lawfully deducted. The following issues were settled by the Court by the consent of the parties :‑

(1) Whether the plaintiff is liable to pay the Dock Labour Board levy cess falling to the share of the ship‑owners; stevedores agents/charter of ship

(2) Whether the defendant rightly deducted a sum of Rs. 6,57,952.05 from the bills of the plaintiff under clause 15 of the contract

(3) Whether the plaintiff is entitled to the refund of Rs. 6,57,952.05 with interest or any other amount

(4) Relief

Certain documents including the contract documents, the minutes of the Board and correspondence exchanged between the parties were exhibited as Exhs. 5 to 27 by consent of the learned counsel. On behalf of the plaintiff one Ustad Sohrab Nanji (Exh. 28), Secretary, Karachi Stevedores Con ference Limited had appeared as a witness and he produced a certificate dated 30th April, 1976 as Exh. 28/1. In cross examination this witness stated that if a contract provides that the stevedores are liable to pay labour cess then in that case the stevedores have to pay labour cess, Exh. 28/1 refers to the aforesaid Resolution passed by the Dock, Labour Court according to which the three categories were made liable and the total cess of Rs. 2.05 per ton was divided against the three categories of persons. Ore behalf of the defendant Corporation. two witnesses were examined namely, Muhammad Shafi (Exh. 29), Accounts Assistant of the Dock Labour Board, and Syed Muhammad Tawab (Exh. 30), Manager of the defendant Corpo ration. Evidence of DW‑1 is of no consequence, as in his evidence he has not stated anything definite. Syed Muhammad Tawab, Manager of the defendant Corporation (Exh. 30) was asked only one question by the learned counsel for the defendant Corporation. as to the practice on the basis of which the defendant Corporation asked for tenders and in reply the witness stated that the defendant called the tenders at only flat rate, which included all the charges, increase and decrease on the tender.

3. According to the learned counsel for the parties, the only point involved in this case is whether under clause 15 of the terms and conditions of contract between the parties the liability or responsibility for payment of Rs. 1.05 per ton as cess under clause 1 (a) of aforesaid Resolution No. 122 of the Dock Labour Board, is of the plaintiff or the defendant. The relevant portion of clause 15 of the contract between the parties is as follows : ‑

15. The flat tonnage rate will cover the following services done on normal working days/Sundays holidays ;overtime namely ;‑

(vii) And all other miscellaneous expenses incurred in connection with stevedoring and stowage operations as well as Attendance Allow ance and welfare fund."

If the aforesaid provision in the contract between the parties is to be interpreted so as to place the responsibility of the payment of Rs. 1.05 per ton as cess . under clause (a) of Resolution No. 122 dated 9th August. 1974 of the Dock Labour Board, on the plaintiff, the suit of the plaintiff is liable to be dismissed. I have heard M. Liaqat Merchant, Advocate for the plaintiff and Mr. Arif Hussain Advocate for the defendant. According to Mr. Liaqat Merchant, neither the aforesaid clause 15 (vii) nor any other clause of the contract between the parties places responsibility of such payment on the plaintiff. It was contended that under the aforesaid Resolution No. 122 dated 9th August, 1974, the total cess of Rs. 2.05 per ton was bifurcated into three amounts and responsibility was placed on the three categories of persons according to the said Resolution. The contention was that the Reso lution had been passed competently and under legal authority and the responsibility under clause I (a) of the aforesaid Resolution in respect of Rs. 1.05 per ton was of the defendant Corporation, who had engaged the plaintiff as stevedores and this responsibility could not be shifted, and if at all the defendant wanted the reimbursement of this amount from the plaintiff after having paid the amount to the Dock Labour Board there should have been a specific provision in the contract between the parties. According to the learned counsel, the liability of making payment of 25 paisa per ton under clause I (c) of the Resolution No. 122 dated 9th August, 1974, had been discharged by the plaintiff by making payment as has been admitted by the Dock Labour Board in their letter dated 25th June, 1975 addressed to the defendant (Exh. 26). It was further pointed out by the learned counsel for the plaintiff that in other contracts entered into by the defendant Corpo ration later on with Stevedoring Contractors now a specific clause is inserted, whereby it is specifically provided that ;he stevedores will pay/reimburse the defendant in respect of any liability falling to the share of the defendant on account of Dock Labour Board cess.

4. On the other hand, Mr. Arif Hussain, learned counsel for the defendant, argued that the contract in question as all other contracts of a similar nature entered into by the defendant with stevedores, are flat rate contracts under which the defendant is liable to pay only a flat rate to the stevedores who had taken over responsibility for all expenses under clause 15 of the contract. The learned counsel had laid great emphasis on the word "All" in clause 15 (vii) of the contract between the parties and in that connection he referred to the definition of the word "All" in Black's Law Dictionary and also a decision of the Dacca High Court reported in Gladstone Wylie & Co. Ltd. v. Shahidi Trading Corporation Ltd. (P L D 1959 Dacca 73). In this judgment, the learned Single Judge of the Dacca High Court had observed that the expression "all liability in respect of loss or damage" does not .leave any claim, which is directly or remotely connected with the loss or damage of the goods outside its meaning. According to Mr. Arif Hussain, learned counsel. for the defendant Corporation, in clause 15 (vii) the words "all expenses and the words "welfare fund" have also been used and, therefore, any liability of the defendant as well as the plaintiff in respect of the Dock Labour Welfare Fund was to be borne by the plaintiff and in the circumstances the deduction made on account of the payment to the Dock Labour Board was lawful and in accordance with the terms and conditions of the contract.

5. Resolution No. 122 dated 9th August, 1974 has not been chal lenged by, the defendant Corporation. By the aforesaid Resolution, as observed earlier, three categories have been created and in my view the defendant in so far as the transaction in question is concerned, came under category I (a) of the said Resolution and the plaintiff fell under category 1 (c). By the aforesaid Resolution the liability for the payment of the cess has been divided into the aforesaid three categories, indi vidual liabilities have been mentioned in the said Resolution and according to the same each category is responsible for payment of :its own liability, The Scheme, under which the Dock Labour Board was constituted, was made under the provisions of an Ordinance. In the circumstances, the defendant Corporation cannot take up the plea that they are not liable to pay the amount of Re. 1.05 per ton to Dock Labour Board in respect of the transaction in question. In fact by their letter dated 20th June, 1975 (Exh. 25) they had taken up the position that the responsibility was that of the buyers. They had not taken up the plea that the responsibility was that of the plaintiff. The categories men tioned in clause 1 (u) of the aforesaid Resolution include the agency utilising the service of the master stevedores. It is an admitted position that in the transaction in question the defendant had employed the service of the plaintiff, master stevedores. As they fell under cate gory 1 (a), they were responsible for payment of Rs. 1.05 per ton for the transaction in question and not the plaintiff, who fell under category 1 (c), under which the master stevedores are liable to pay cess at the rate of 25 Paisa per ton, which payment has admittedly been ' made by the plaintiff to the Board.

6. I am, therefore, of the view that the responsibility for payment of Rs. 1.05 per ton for the transaction in question was that of the defendant. under the aforesaid Resolution. The next question is whether the defendant' was entitled to reimbursement under the terms of the contract between the parties to this suit in view of clause 15 (vii) of the terms and; conditions of the contract. I may observe that the words that have been used are "miscellaneous expenses" incurred in connection with Welfare Fund. In, my view, the reference to miscellaneous expenses incurred means' miscellaneous expenses incurred by the, contractor in respect of the Welfare Fund. According to the contract the plaintiff was entitled to a flat rate and he ‑ could not claim any amount extra on account of any; miscellaneous expenses incurred by him in connection with stevedoring and stowage operations, attendance allowance or welfare fund. Therefore the share of cess at 25 paisa per ton paid by the plaintiff to the Board could' not be claimed by the plaintiff from the defendant, as this was a flat rate contract. However, in so far as the legal liability of the defendant under clause 1 (a) of the Resolution 122 dated 9th August; 1974, is concerned, the defendant could not ask for reimbursement from the plaintiff as' this was not and could not be treated as an expense incurred by the plaintiff on account of welfare found. If at all the defendant wanted' that such reimbursement should be made, specific provisions to the effect should have been incorporated in the contract. As observed' earlier, in all other contracts entered into. later on with stevedoring' companies, the defendant Corporation has started inserting specific' provision to that effect.

7. I am, therefore, of the view that clause 15 (vii) of the terms, and conditions of the contract between the parties does not place responsibility of payment/reimbursement by the plaintiff of the amount of Re. 1.05 per ton under the aforesaid Resolution No. 122 dated 9th August, 1974 and the amount in that connection was unlawfully deducted from the bills of the plaintiff, who are entitled to refund of that amount. Issues (1) and (2) are accordingly decided in the negative in favour of the plaintiff and against the defendant. In view of my findings on issues Nos. (1) and (2), the plaintiff is entitled to refund of Rs. 6,57,952.05. The other point, which requires determination is the question of interest. According to the learned counsel for the defendant the defendant Corporation is a statutory corporation governed by the Federal Government and as such no interest can be awarded against the defendant Corporation.0 law or statutory provision has been cited, whereby interest cannot b awarded against a statutory Corporation. The plaintiff has been deprived of the amount, which was unlawfully deducted and in my view the plaintiff is entitled to interest on this amount, which is, however, awarded from the date of the filing of the suit.

8. Suit No. 314/1977 is accordingly decreed in favour of the plaintiff and against the defendant in the sum of Rs. 6,57,952.05 with interest at the rate of 13 jo per annum from the date of the filing of the suit till realization. The plaintiff shall also be , entitled to proportionate costs accordingly.

Suit decreed.

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