Messrs VOLKERVAM (PAKISTAN) LTD. Versus SIND EMPLOYEES' SOCIAL SECURITY INSTITUTION
This appeal which is directed against the order passed by the learned first Social Security Court, Karachi, dated 29‑10‑1986, has arisen under the following circumstances.
2. Messrs Volkervam (Pakistan) Limited, the appellants in this case were registered with the Sind Employees Social Security Institution, the respondents, for the purpose of making contributions under section 20 of the Sind Employee's, Social Security Ordinance, 1965 (hereinafter referred to as "the Ordinance") since 1979. In May, 1983 the officers of the respondents checked the relevant records of the appellants relating to the payment of Social Security Contributions by them and by a letter, dated 14‑6‑1983, the respondents demanded arrears of 85.2,77,276.05 from the appellants in respect of the years 1982 and 1978 to 1981 on the alleged ground that as a, result of checking of their records an under payment of Rs.55,455.21 for the year 1982 had been found. The appellants through their letter, dated 22‑6‑1983 then filed objections before the respondents who after considering the same informed the appellants that they had agreed to review their demand after rechecking of the appellants' record. The demand was thus, reduced to Rs.2,21,820.84. Thereafter, it appears that, the appellants took their record for rechecking to the respondents; but the record produced by the appellants was found short of providing the relevant information. Consequently, the appellants were asked to pay the revised amount failing which they were threatened with coercive action under the Land Revenue Act for recovery of the same. Consequently, a warrant under section 83 of the Land Revenue Act, dated 26‑7‑1983, was served upon the appellants and the aforesaid amount was recovered from them together with Rs.4,436.42 as recovery charges. The appellants thereafter protested through their letter, dated 26‑7‑1983, in respect of the aforesaid action, but to no avail. Consequently the appellants filed an appeal before the learned Social Security Court, but the same was dismissed on the question of jurisdiction, as according to the learned Social Security Court, no dispute had been raised by the appellants as contemplated by section 57 of the Social Security Ordinance. The appellants then filed appeal before this Court which was allowed by the learned Single Judge of this Court and the matter was remanded to the learned Social Security Court for a fresh decision on the merits of the case. Thereafter, the appeal filed by the appellants was reheard by the learned Social Security Court and the same has been finally dismissed by the impugned order and hence this appeal.
3. I have heard Mr. J.H. Rahimtoola learned counsel for the appellants and Mr.S.A. Sarwana, learned counsel for the respondents.
4. Although various grounds have been urged by the appellants in this appeal but the only ground urged by Mr. J.H. Rahimtoola before this Court is that although the appellants had maintained a complete record pertaining to their liability for the year 1982 but the respondents' officials had failed to make their assessment in accordance with the method provided in section 20 of the Ordinance as only their ledgers and cash books had been checked without going into other details. So far as the assessment of the liability in respect of the period from 1978 to 1981 is concerned, the contention of Mr. J.H. Rahimtoola is that since admittedly the liability has been assessed on the basis of the record of 1982 the same is equally unjustified as liability of each year is to be assessed individually and the liability of one year cannot be made a basis for assessment of the liability for another year. The counsel has further argued that there was no justification for the respondents' officials to proceed on the basis of improper record when the appellants had supplied the required information and the relevant documents to them. Consequently, the contention of Mr. J.H. Rahimtoola is that since the question, whether the appellants had produced the relevant documents before the respondents, was a disputed question of fact, it was incumbent upon the learned Social Security Court also to record oral evidence in the matter before giving its findings in the case. The argument of Mr. SA. Sarwana, on the other hand, is that since admittedly no request was made by the appellants for recording of oral evidence in the case, the learned Social Security Court has rightly proceeded on the basis of the documentary evidence already available on the record. The learned counsel has further argued that since the dispute had been raised by the appellants, the onus was clearly on them to establish their case.
5. Before dealing with the issues respectively raised by the learned counsel it would‑be worthwhile to reproduce section 22 of the Social Security Ordinance which provides as under:‑‑
"22. Officials of Institution to check employer's books.‑‑(1) Any official of the Institution, duly authorised by a certificate in a form specified in the regulations, may, for the purpose of inquiring into the correctness of any of the particulars stated in the records or returns referred to in section 21 or for the purpose of ascertaining whether any of the provisions of this Ordinance have been complied with‑‑
(a) require an employer to furnish to him such information as he may consider necessary; or
(b) at any reasonable time enter any establishment or other premises occupied by such employer and require any person found in charge thereof to produce and allow him to examine such accounts books and other documents relating to the employment of persons and payment of wages, or to furnish to him such information, as he may consider necessary; or
(c) examine, with respect to any matter relevant to the purposes aforesaid, the employer, his agent or any person found in such establishment or other premises, or any other person whom the said official has reasonable cause to believe to be or to have been a secured person.
(2) The official referred to in subsection (1), shall be bound to secrecy as regards all matters with which he becomes acquainted in the performance of his duties and which do not relate to matters provided for in this Ordinance.
(3) If an employer fails to maintain records or to submit returns as required by regulations, or otherwise fails to comply with the provisions of subsection (1) and thereby makes it difficult to ascertain the identity of persons required to be secured or the amount of contribution payable, the contribution shall be assessed on the basis of such evidence as the Institution may find satisfactory for this purpose,"
Section 22 of the Ordinance is preceded by section 21 which provides that "every employer shall keep such records and shall submit to the Institution such returns, at such times, in such form and containing such particulars relating to persons employed by him, as may be provided in the regulations."
6. The above provisions of the Ordinance thus, make it incumbent on the employer who is liable to make contributions under section 20 of the Ordnance to maintain records and provide all necessary information and assistance to the, officials of the social security institution and in case the employer fails to maintain the records or provide information or assistance as referred to in section 22(1), the contributions can be assessed on the basis of the evidence which may be found satisfactory for this purpose.
7. The original record of the case submitted with this appeal shows that by a letter, dated 24‑5‑1983, the respondents sent a notice purporting to be under section 22 of the Ordinance to the appellants requiring them to make the relevant record available for inspection of their officials. Thereafter, as would appear from the note made by the concerned officials of the respondents in this respect, on 13‑6‑1983, the latter after checking the record of the appellants found an under payment of Rs.55,455.21 by them. The note further shows that the officials could not ascertain the exact liability of the appellants in respect of the period from 1978 to 1981 from the record produced before them by the latter. Consequently, the liability for those years was also assessed by the respondents on the basis of the record of 1982. However, through their letter, dated 22‑6‑1983, the respondents sent their objections as under:‑‑
"Therefore, we would like to bring the following objections to your notice:
(a) No relevant record of the year 1982 was checked.
(b) The hourly rated workers were paid on the fortnightly basis as such their monthly salary is based on two fortnights for the purpose of contribution, but the inspecting team only checked one fortnight was based on assumption. This is completely wrong and is not acceptable as per settled principles. The final payment to workers consists of gratuity, fund, leave encashment, notice pay etc. and is recorded in our account as wages and salaries but the inspecting team have ignored this fact and such amounts have not been exempted for the purpose of contribution to SESSI as the same crosses the level of Rs.1,000 per worker.
(d) The payment of bonus was made alongwith the monthly/fortnightly wages, as such the wages of individual worker crosses the level of Rs.1,000. The inspecting team have also failed to exempt the wages of the concerned month.
(e) The Canteen wages of Rs.11,760 have wrongly been mentioned for payment of contribution as we have already paid the contribution for this amount and further demand of payment amounts to double payment.
(f) On the basis of improper inspection of the record of the year 1982, provisional assessment for the years 1978 to 1981 is not understandable to us as previously inspections were made by your teams and nothing was advised nor any discrepancy was pointed to us. Moreover, we were registered with SESSI City Directorate in July, 1979 and our Registration was transferred to Korangi Directorate in October, 1979 as such your demand for payment of contribution w.e.f. 1978 is baseless. Accordingly as per settled principles of law and equity the demand of Rs.2,77,276.05 is without any valid reason, base and proper justification:'
Thereafter, the respondents informed the appellants through their letter, dated 30‑6‑1983 that in case the relevant records were produced by them within three days, the same would be checked/rechecked and the matter would be reviewed by the respondents. Thereafter, it appears that the appellants failed to produce the record for inspection within three days as required but they asked for further time which was allowed to them. It is the case of the respondents that thereafter the appellants did not produce the relevant record although they did produce some documents before the respondents' officials as is evident from the letter written by the respondents' Director to the appellants, dated 25‑7‑1983. This is, however, disputed by the appellants according to whom all the relevant records had been produced by them before the respondents although the same is not supported by the correspondence found on the record.
8. Referring once again to the contentions of Mr. J.H. Rahimtoola, the first contention of the counsel which is in respect of the assessment for the year 1982 requires examination from two different angles. Firstly, the argument is that the assessment has been made on the basis of the record which faded to provide the necessary details to the respondents' officials. I have not been impressed by Mr. Rahimtoola's argument in this respect. As has been already pointed out above, section 22(1) of the Ordinance gives very wide powers to the officials of the respondents to check the records, books and other relevant documents for the purpose of ascertaining the employer's liability in respect of the contributions. Section 22 clearly places the onus on the employer to produce the relevant record. before the officials of the Social Security Institution. If in the opinion of the' officials such record fails to provide proper assistance to the officials to ascertain the exact liability of the employer, then section 22(3) empowers the institution to assess the contributions on the basis of any evidence which may be found satisfactory in this respect by the officials of the institution. The correspondence exchanged between the parties clearly indicates, that in spite of the opportunity' afforded to the appellants they failed to produce the relevant record before the officials of the respondents which according to the farmer s claim could only provide proper assistance in the matter. In that case, the latter, in my opinion, were empowered to make the assessment on the basis of the record produced before and checked by their officials. However, as already pointed out, the contention of the appellants is that the record later produced by them was sufficient to enable the respondents to make a correct assessment. Although Mr.; Rahimtoola concedes that the same cannot be conclusively established from the documentary evidence found on the record of the case, but his contention is that the learned Social Security Court should have afforded opportunity to the appellants to lead oral evidence on the point. The argument, in my opinion, is not tenable since the dispute had been raised by the appellants and the onus clearly: was on them to establish their case before the learned Social Security Court (see Articles 117 to 119 and Article 122 of the Qanoon‑e‑Shahadat Order, 1984). As it has already been pointed out above, no request in writing was made by the appellants before the learned Social Security Court for recording of oral evidence in the case, and consequently, the learned Social Security Court rightly decided; the matter on the basis of the documentary evidence available on the record of the case. If such request had been made on behalf of the appellants and the same had been declined by the learned Social Security Court, the question would have' been different. Mr. Rahimtoola has referred to section 62 of the Ordinance which empowers the Social Security Court to record evidence or examine any witness but this is only an enabling provision and a request in this respect must have proceeded from the appellants themselves. Since no such request was made, they first contention of Mr. J.H. Rahimtoola cannot be accepted.
9. So far as the second contention of Mr. J.H. Rahimtoola is concerned, no; doubt, the contention that the liability assessed by the respondents for the year l 1982 cannot be made the basis for assessment of liability for the period from 1978 to 1981, is forceful, but as already pointed out above, the respondents under l section 22(3) of the Ordinance possess wide powers to proceed on the basis of' any evidence which may be found satisfactory by them, if the employer fails toy produce before them the relevant record or provide sufficient assistance as, required by section 22(1) of the Ordinance to ascertain the actual liability. Since the letter addressed by the respondents' director to the appellants to which I have already referred above, clearly shows that the relevant record in respect of the' years to question had not been produced by the appellants in spite of the opportunity afforded to them by the officials of the respondents and nothing has: been shown by Ml.. Rahimtoola in rebuttal of the same, apparently, the; respondents were justified in assessing their liability for the period in question on: the basis of the assessment of 1982. If the stand now taken by the appellants was, correct, then the onus was again on them to establish the same for the same reasons as stated above. Since as already pointed out above, the appellants failed to produce any oral or documentary evidence in support of their case before the learned Social Security Court, the case, in my opinion was rightly decided against, the appellants. Consequently, I find both the arguments to be devoid of force.
10. For the aforesaid reasons, I find no force in this appeal and 'the same is dismissed, but with no order as to costs.
M.Y.H./V‑11/K
Appeal dismissed.