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 for an additional 50% payment on social security contributions that the petitioner, Shaheen Airport Services, had failed to pay regarding porters at Karachi Airport. The core legal question is whether the statutory increase of 50% under the Provincial Employees Social Security Ordinance, 1965, can be lawfully imposed when the liability to make the underlying contribution was legally ambiguous and unsettled until a prior Supreme Court decision clarified the matter. The petitioner argued that because the liability was unclear until the 1993 Supreme Court ruling, the failure to pay on the due date did not trigger the penalty provisions. The Supreme Court granted leave to appeal to determine whether the facts of this case attract the ratio decidendi of M. Imamuddin v. Mst. Surriya Khanum, which addresses the application of penalties in cases of legal uncertainty. The Court declined to grant a stay, ordering the petitioner to pay the disputed amount subject to recovery if the appeal succeeds.
- Can an additional 50% penalty for late payment of social security contributions be imposed when the underlying liability was legally ambiguous prior to a judicial clarification?
- Does the failure to pay a contribution on the due date automatically trigger penalty provisions under Section 23 of the Provincial Employees Social Security Ordinance 1965 if the obligation to pay was subject to genuine legal dispute?
- 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 1968
ORDER
' AJMAL MIAN, J.---By this common order, we intend 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 Misc. 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 Mirza, 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, 1968 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 place 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 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.