Law: Companies Profit (Workers Participation) Act, 1968

Section: 3,3(2),Sched.

Companies Profits (Workers' Participation) Act (XII of 1968)--S.3 & Sched.---Workers' Participation Fund---5% profits of company for financial year 1-10-1991 to 30-9-1992 paid into such fund on 16-1-1993---Interest on such profit from 1-10-1991 till its payment on 16-1-1993 claimed by such Fund---Company's plea that no interest was payable on such profit paid during grace period of nine months after end of a financial year---Validity---According to provisions of S.3(2) of Companies Profits (Workers' Participation) Act, 1968, such profit payable by company stood allocated to and vested in such Fund on first day of the following financial year i.e. 1-10-1992---No legal nexus existed between such grace period and liability of a company to pay interest on delayed payment of such profit---According to scheme given in Schedule of the Act, interest to such Fund would accrue on and from first day of year next succeeding the year in which scheme became applicable to the company---Such scheme became applicable to company on 1-10-1992, thus, company was liable to pay claimed interest. Dilshad Hussain and another v. Islamic Republic of Pakistan through Secretary, Ministry of Labour, Manpower and Overseas Pakistanis, Islamabad and another 2005 SCMR 530 distinguished. JUDGMENT JAWWAD S. KHAWAJA, J.---The appellant which is a limited liability Company operating in the textile sector, impugns the judgment of the learned Division Bench of the Sindh High Court dated 14-12-2004. The facts of the case and the issues arising in it are straightforward and can be briefly stated to provide context to the discussion which follows. 2. The appellant acknowledges that it was required by law to establish a Workers' Participation Fund (the 'Fund') in terms of section 3 of the Companies Profits (Workers Participation) Act, 1968 (the 'Act'). Such Fund was, in fact, established by the appellant. The Act provides inter alia, that 5% of the profits of a Company during any financial year shall be paid into the Fund. The liability to create the Fund and to make payment of profit into it is set out in section 3 of the Act. The said provision, to the extent relevant, is reproduced as under:--…

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