IN THE SUPREME COURT OF PAKISTAN 
(APPELLATE JURISDICTION) 
 
 
PRESENT: 
MR. JUSTICE GULZAR AHMED 
MR. JUSTICE DOST MUHAMMAD KHAN 
MR. JUSTICE FAISAL ARAB 
 
CIVIL APPEAL NO. 908 OF 2012  
(On appeal against the judgment dated 17.5.2012 
passed by the Islamabad High Court, Islamabad in Writ 
Petition No. 622/2007) 
 
Pakistan Telecommunication Company Limited 
… Appellant 
VERSUS 
 
Employees Old Age Benefit Institution and another 
… Respondents 
 
For the Appellant: 
Mr. Hamid Khan, Sr. ASC 
 
Mr. M.S. Khattak, AOR 
 
For the Respondents: 
Mr. Tariq Bilal, ASC 
 
Date of Hearing:  
01.03.2016 
 
 
JUDGMENT 
 
FAISAL ARAB, J.- Telegraph & Telephone Department was 
originally a department of the Federal Government. Under Pakistan 
Telecommunication Corporation Act, 1991 (Act XVIII of 1991) the 
Telegraph & Telephone Department was transformed into a 
Corporation and its affairs were entrusted to a board comprising of 
a chairman and 11 other directors appointed by the Federal 
Government. In the year 1996, for the purposes of reorganizing the 
telecommunication 
system 
in 
the 
country, 
the 
Pakistan 
Telecommunication (Re-organization) Act, 1996 (Act XVII of 1996) 
was passed. It was intended to dissolve the Corporation and in its 
place create five different entities in which the rights, properties 
and liabilities of the Corporation were to vest. These five entities 
Civil Appeal No. 908/2012 
2 
that were to form under the said Act are (i) Pakistan 
Telecommunication Authority, (ii) Frequency Allocation Board,    
(iii) 
National 
Telecommunication 
Corporation, 
(iv) 
Pakistan 
Telecommunication 
Employees 
Trust 
and 
(v) 
Pakistan 
Telecommunication Company Limited.  Out of these five entities, 
the entity mentioned last was to be incorporated as a company 
limited by shares under the Companies Ordinance, 1984. The 
remaining entities were to come into existence as four distinct 
statutory bodies that were to perform various functions under the 
administrative control of the Federal Government. Relevant for the 
purposes of these proceedings is the status of ‘Pakistan 
Telecommunication Company Limited’ a company limited by 
shares which was incorporated with effect from 1.1.1996. This 
limited company that was formed is the appellant in the present 
proceedings. 
Under 
the 
Pakistan 
Telecommunication 
(Re-
organization) Act, 1996, all employees of the defunct Corporation 
were to be transferred to the five distinct entities out of which a 
very large number was transferred to the appellant company. The 
employees of the defunct Corporation, who were transferred to the 
appellant company, their terms and conditions of service were 
secured under Section 36 of the Pakistan Telecommunication (Re-
organization) Act, 1996.  
 
2. 
 
In the year 1998, respondent No. 1 called upon the 
appellant company to pay contributions in terms of Sections 9 & 9-
B of the Employees Old-Age Benefits Act, 1976 from the date of its 
incorporation. Such demand was resisted by the appellant 
Civil Appeal No. 908/2012 
3 
company by taking the plea that Section 47(f) of the said Act 
exempts all statutory bodies from the application of the said Act 
and as the appellant company was created under the Pakistan 
Telecommunication (Re-organization) Act, 1996, it enjoys the 
status of statutory body and thus not liable to pay contributions. 
This led to the issuance of show cause notice, which was then 
followed by registration of the appellant company under the 
Employees Old-Age Benefits Act, 1976. To challenge it registration 
on the ground that the appellant Company being a statutory body 
was not liable to make contributions, it first lodged a complaint 
with the Institution under Sections 33 of the Employees’ Old-Age 
Benefits Act, 1976 and when its complaint was rejected it appealed 
to the Board of the Institution as envisaged under Section 35 of the 
said Act. Having availed both the statutory remedies provided 
under Sections 33 and 35 the Employees’ Old-Age Benefits Act, 
1976 and failed, the appellant company was served with a demand 
notice in March, 2007. Faced with coercive action in the wake of 
the demand notice, the appellant company challenged the demand 
notice in a Constitution Petition filed under Article 199 of the 
Constitution of Pakistan. This petition was initially filed in the 
Rawalpindi Bench of the Lahore High Court. However, after the 
establishment of the Islamabad High Court, the same was 
transferred to it for disposal. The Constitution Petition was 
eventually dismissed vide impugned judgment dated 17.5.2012. 
Aggrieved by such decision, leave to appeal was filed in this Court, 
that was granted and Civil Petition No.1299 of 2012 was converted 
into present appeal.   
Civil Appeal No. 908/2012 
4 
 
3. 
 
Learned counsel for the appellant Mr. Hamid Khan 
argued that the appellant Company was the creation of a statute 
as it was created under Pakistan Telecommunication (Re-
organization) Act, 1996 and thus being a statutory body, by virtue 
of Section 47(f) nothing in the Employees Old-Age Benefits Act, 
1976 applies to the persons who are in service of statutory bodies. 
He, therefore, submitted that the demand raised by the respondent 
No. 1 for realizing contributions under Employees’ Old-Age 
Benefits Act, 1976 was without jurisdiction. In the alternative, it 
was also argued that as many employees of the Pakistan 
Telecommunication Corporation were originally the employees of 
Telegraph & Telephone Department, who at that time enjoyed the 
status of civil servants and thereafter as employees of the statutory 
body, their terms and conditions of service were protected under 
Section 36 of the Pakistan Telecommunication (Re-organization) 
Act, 1996, therefore, the appellant company was not liable to make 
contributions under the provisions of Employees’ Old-Age Benefits 
Act, 1976 in so far as such employees are concerned.  
 
4. 
 
The only question that needs to be decided is whether 
the appellant company can be described as a statutory body as 
stated in Section 47(f) of Employees’ Old-Age Benefits Act, 1976 
and therefore not amenable to the provisions of the said Act.  
 
5. 
 
The appellant company was incorporated as a limited 
company under the provisions of the Companies Ordinance, 1984. 
Civil Appeal No. 908/2012 
5 
It 
did 
not 
come 
into 
existence 
under 
the 
Pakistan 
Telecommunication (Re-organization) Act, 1996. This Act only 
provided that a company limited by shares shall be incorporated 
under the provisions of the Companies Ordinance, 1984, as is 
evident from Section 34 of the Pakistan Telecommunication (Re-
organization) Act, 1996. This legal position is realized by the 
appellant Company itself as in the memo of appeal, it is stated that 
the appellant company remained a statutory body at-least till such 
a time it was transformed from a state owned statutory body to a 
public limited company and such transition took place upon 
transfer of the management of the appellant company to a foreign 
company i.e. Etisalat International Pakistan LLC in May, 2006 and 
therefore uptill May, 2006 it is to be regarded as a statutory body.  
 
6. 
 
In our view only such entities can be described as 
statutory bodies which come into existence by virtue of a Statute. 
Where the legislature has not brought into existence an entity 
through a special law but the same has been incorporated under 
some existing statute then such entity cannot to be assigned the 
status of a statutory body. If every entity that is formed under 
some existing statute is to be described as ‘statutory body’ then we 
are afraid every limited company incorporated under the 
Companies Ordinance, 1984, every partnership concern formed 
under the Partnership Act, every association formed under the 
Societies Act and every co-operative society formed under the 
Cooperative Societies Act is also to be described as ‘statutory body’. 
For an entity to be described as a ‘statutory body’, its birth itself 
Civil Appeal No. 908/2012 
6 
should have been caused by a special statute. In other words, such 
entity should come into existence by virtue of a statute itself and 
not established under the provisions of an already existing statute. 
Examples of some entities that are creatures of the Statues itself 
are Karachi Port Trust, Pakistan International Airlines, and 
WAPDA. Such entities only are to be regarded as statutory bodies. 
How the appellant company, which came into existence under the 
provisions of the Companies Ordinance, 1984, could be regarded 
as an entity incorporated under Pakistan Telecommunication (Re-
organization) Act, 1996 when it was incorporated under the 
Companies Ordinance, 1984. As the appellant company was 
incorporated under an existing law, it cannot be regarded as a 
‘statutory body’. None of the employees of the appellant company 
also, from the date of its incorporation, can be regarded as 
employees of a statutory body so as to enjoy the benefit of the 
provisions of Section 47(f) of Employees’ Old-Age Benefits Act, 
1976. The management of the appellant company may have been 
transferred to a foreign company i.e. Etisalat International 
Pakistan LLC in May, 2006 but that cannot be made the starting 
point to reckon its transition from a statutory body to a non- 
statutory body. The deciding factor would be when the appellant 
company, as a separate and distinct entity limited by shares, was 
incorporated under the provisions of the Companies Ordinance, 
1984. It matters not that at the time of its incorporation its shares 
were solely held by the Federal Government. 
 
Civil Appeal No. 908/2012 
7 
7. 
 
In view of the above discussion, the appellant company 
cannot be regarded as a statutory body and thus has become liable 
to pay contributions under the provisions of Employees’ Old-Age 
Benefits Act, 1976 from the date of its in-corporation. This appeal 
is therefore dismissed.  
 
JUDGE 
 
JUDGE 
 
 
 
JUDGE 
 
 
Islamabad, the 
 
Announced on _______________ by Hon’ble Mr. Justice Faisal Arab 
 
Approved For Reporting 
Khurram