SHAHEEN AIRPORTS SERVICES vs SINDH EMPLOYEES SOCIAL SECURITY
This matter concerns petitions for leave to appeal against a judgment of the High Court of Sindh, which upheld the demand of the Sindh Employees' Social Security Institution for an additional 50% payment on contributions the petitioner failed to make regarding porters at Karachi Airport. The core legal question is whether the petitioner is liable for the additional 50% surcharge under the Provincial Employees' Social Security Ordinance, 1965, and the Provincial Employees' Social Security (Contribution) Rules, 1978, given that their liability to make the underlying contribution was legally ambiguous until a prior Supreme Court decision in 1993. The petitioner argues that because the liability was unclear, the failure to pay on the due date does not warrant the penalty. The Supreme Court granted leave to appeal to determine if the ratio decidendi of M. Imamuddin v. Mst. Surriya Khanum applies to these facts. The Court declined to grant a stay order, directing the petitioner to pay the disputed amount subject to recovery if the appeal succeeds.
- Can an employer be held liable for a 50% surcharge on social security contributions if the underlying liability was legally ambiguous at the time of the due date?
- Does the ratio decidendi of M. Imamuddin v. Mst. Surriya Khanum apply to the imposition of penalties for delayed social security contributions?
- Is a stay of recovery of disputed social security contributions appropriate pending the final adjudication of an appeal?
- Section 20(1), Provincial Employees' Social Security Ordinance 1965
- Section 23, Provincial Employees' Social Security Ordinance 1965
- Rule 6, Provincial Employees' Social Security (Contribution) Rules 1978
ORDER
' AJMAL MIAN, J.-By this common order, we intent to dispose of the above two petitions which are directed against a common judgment dated 29-4-1997 passed by a learned Single Judge of the High Court of Sindh in Miscellaneous Appeals Nos.46 and 47 of 1995, filed by the petitioner against the orders dated 20-6-1991 and 26-11-1992 passed upon their appeal by the Commissioner, Sindh Employees' Social Security Institutions, maintaining the demand of the respondents for the additional payment of 50% on the contribution which the petitioner failed to make in respect of porters working at the Karachi Airport, dismissing the same. The petitioners have, therefore, filed the present petitions for leave to appeal.
2. In support of the above petitions Mr. Siddique Mina, learned Advocate Supreme Court for the petitioners, has contended that till the decision of this Court on 21-12-1993 in the case of Shaheen Airport Services v. Sindh Employees' Social Security Institution (1994 SCM R 881), it was not clear as to whether the petitioners were liable to make any contribution under the Provincial Employees'
Social Security Ordinance, 1965, and, therefore, the demand for the increase of 50% amount under section 23 of the above Ordinance read with rule 6 of the Provincial Employees' Social Security (Contribution) Rules, 1978 is not warranted by law as it cannot be concluded that the petitioners failed to pay on the due date the contribution payable under subsection (1) of section 20 of the aforesaid Ordinance. Reliance has been placed by him on the judgment of this Court in the case of M. Imamuddin v. Mst. Surriya Khanum through Legal Heirs (PLD 1991 SC 317).
3. We are inclined to grant leave to consider, as to whether the facts of the present case attract the ratio decidendi of the judgment of this Court in the case of M. Imamuddin v. Mst. Surriya Khanum (supra). Leave is accordingly, granted. As regards the stay application, we are not inclined to grant any stay order. The petitioners shall pay the disputed amount to the respondents subject to their right to recover the same back in case they succeed in the appeals arising out of the present petitions.