MUMTAZ AHMED SILK MILLS LTD. Versus DIRECTOR, SIND EMPLOYEES' SOCIAL SECURITY INSTITUTION
This petition for leave to appeal challenges a High Court judgment regarding the recovery of social security contributions. The petitioners, a private limited company, were assessed for contributions under the Sind Employees' Social Security Ordinance 1965. Following a surprise inspection, the respondent assessed contributions for the period 1982 to 1986 and initiated recovery proceedings as arrears of land revenue under the Land Revenue Act 1967. The petitioners challenged the recovery process, arguing that the authorities could not initiate coercive recovery measures for a disputed claim without first allowing the statutory period for complaints or appeals under the Ordinance to expire or obtaining a final order under the Ordinance. The Supreme Court granted leave to appeal to consider whether the respondents were legally obligated to await the exhaustion of statutory remedies under sections 57 and 67 of the Sind Employees' Social Security Ordinance 1965 before invoking coercive land revenue recovery procedures for disputed contribution claims.
- Can coercive recovery proceedings for social security contributions be initiated as arrears of land revenue while a claim is still disputed?
- Are authorities under the Sind Employees' Social Security Ordinance 1965 required to wait for the exhaustion of statutory appeal periods before initiating coercive recovery?
- Section 57, Sind Employees' Social Security Ordinance 1965
- Section 67, Sind Employees' Social Security Ordinance 1965
- Section 81, Land Revenue Act 1967
- Rule 118, Land Revenue Rules 1967
ORDER
1. JAVID IQBAL, J. ‑‑This petition for leave to appeal is directed against judgment of the High Court of Sind at Karachi, dated 1st October, 1987. The petitioners are a private limited company owning an art‑silk factory. They were assessed for the purpose of payment of contribution under the Sind Employees' Social Security Ordinance 1965 by respondent No.1 in 1980 and continued to make contribution upto January 1982 when they addressed a letter to respondent No.1 informing him that their factory was closed due to numerous reasons. Upon the receipt of this communication respondent No.1 did not make any demand for the contribution from them. However, through his letter, dated 25th May, 1986 addressed to the petitioners, respondent No.1 informed them that during a surprise visit to their establishment it was discovered that the factory was functioning without any intimation to respondent No.1. The petitioners were directed to appear before respondent No.1 on 29th May, 1986 alongwith the documentary evidence regarding reopening of the factory and the strength of the employees engaged. The petitioners appeared before him. Eventually respondent No.1 after examining the record as well as income‑tax assessment order for the year 1985‑86 assessed the contribution for ‑the period commencing from 1st January, 1982 to 31st December, 1986 and conveyed the same to the petitioners vide letter, dated 8th February, 1987 whereupon they were called upon to pay a sum of Rs.1,32,143.03. This demand was contested by the petitioners. Thereafter, the matter was referred by respondent No.1 to respondent No.2 for the recovery of the said amount as arrears of land revenue. A letter dated 25th February, 1987 followed by a notice dated 2nd March, 1987 were accordingly issued to the petitioners under section 81 of the Land Revenue Act 1967 read with rule 118 of the Land Revenue Rules. These were challenged before the High Court by way of Constitutional Petition. But their plea to the effect that the coercive land revenue arrears recovery procedure could not be set in motion was rejected. Hence the present petition for leave to appeal.
2. It is inter alia argued by the learned counsel that if a disputed claim had been raised as in the instant case, the respondents as functionaries under the Sind Employees' Social Security Ordinance were bound in the first instance to wait out the 90 days period of complaint /appeal under section 57 of the Ordinance before issuing the coercive land revenue arrears recovery process because either the said claim should be admitted by the other side namely the petitioners or converted into dues by a final order of the High Court made under section 67 of the said Ordinance. In order to consider the points raised by the learned counsel we grant leave in this case. Security to be deposited Rs.5,000. The appeal shall be prepared on the present record with permission to file additional documents if necessary.
3. M.I./M‑345/S ????????????????????????????????????????????????????????????????????????????????????? Leave granted.