CHEMPAK (PVT.) LIMITED and another vs SINDH EMPLOYEES' SOCIAL SECURITY

' This order shall dispose of the appeals cited above which though arise out of separate orders, but involve common points. The appellants. Messrs Chempak (Pvt:) Limited in Misc. Appeal No, 13 of 1998, Messrs Khas Shoes (Pvt.) Limited in Miscellaneous Appeal No,14 of 1998 and Messrs Khan Traders in M.A. No,23 of 1997 have impugned the orders passed by the 1st Social Security Court at Karachi whereby the decisions of Commissioner, Sindh Employees Social Security Institution, Karachi (SESSI) dismissing the Complaints of all these applicants, respectively, were upheld.

2. As regards the background of these appeals, it may be stated that the appellant Messrs Chempak (Pvt.) Limited, Messrs Khas Shoes (Pvt.) Limited and Messrs Khan's Traders were issued separate demand notice by the Director Social Security Korangi Karachi calling upon them to pay a sum of Rs,49,595, Rs,2,35,874 and Rs,3,29,544.50 respectively being the difference of Social Security contribution at the rate of 7% including 50% increase on the wages of their workers who were drawing wages up to Rs, 3000 per month for the period from 1-2-1994 io 30-6-1994. The appellants did not accept the said claim and challenged the demand before the Commissioner SESSI who dismissed their complaints, and their appeals also failed.

3. I have heard learned counsel for parties.

4. The contest between the parties in these appeals, is mainly on the validity of the Ordinance XXIII of 1993 promulgated on 25-9-1993 enhancing the limits of wages in section 2(8)(f) and section 20 of the Sindh Employees Social Security Institution Ordinance, 1965 from Rs,15,00 to Rs,3,000 which according to learned counsel for appellants lapsed on 24-1-1994. Learned counsel for appellants contended that the President was not competent to re-promulgate the same Ordinance under Article 89 of the Constitution, particularly, when the National Assembly was in session during the period from February, 1994 till June, 1994. According to him, demand of contribution founded on such Ordinance was not legal. He relied on the authorities Collector of Customs v. New Electronics (Pvt.) Limited (PLD 1994 SC 363) and Government of Punjab v. Zia Ullah Khan (1992 SCMR 602).

Learned counsel for respondents controverting the above point, submitted that the forums who passed the impugned orders as also this Court, while deciding the appeals within the scope of sections 63 and 64 of the SESSI Ordinance, 1965 were not competent to question the validity and constitutionality of the amendments enforced through Ordinance VII of 1994. Ordinance XXVIII of 1994 and Act XI of 1994. In this context he relies on Standard Printing Press v. Sindh E.S.S.I. (1988 SCMR 91). According to him, in view of the law laid down in Riaz Ahmed v. State (1998 SCMR 1729), Noor Muhammad v. Ghulam Mustafa (1999 SCMR 264) and Mahmood Hassan Harvi v. Federation of Pakistan (PLD 1999 Lahore 320) the re-enactment of the Ordinance was valid. He, therefore, urged that valid demand was made. With regard to the quantum of the contribution he submitted that the same has not been questioned in lower forums and even otherwise the burden is on the appellants to prove that the demand was incorrect. He referred, in this context, to Volkervam (Pak.)

Ltd. v. Sindh Employees' S.S.I. [1991 SCMR 2361 (2366)].

5. The foremost contention raised on behalf of respondents that the constitutionality of a law promulgated in pursuance of the authority conferred by Constitution could not be questioned in the forums including the High Court which decides the matters, cases and appeals under the S.E.S.S.I. Ordinance, is based cm the principles laid down in Standard Printing Press v. S.E.S.S.I. (1988 SCMR 91). In the said matter initially this Court, while dismissing the appeal under section 64 of the S.E.S.S.I. Ordinance had held in the case reported as Standard Printing Press v. Sindh Employees Social Security Institution (PLD 1978 Karachi 945) that clause (f) of section 57 of the Ordinance must be given a restricted meaning as held in the S.E.S.S.I. v. Mumtaz Ali Taj (PLD 1975 SC 450) and cannot be extended to include the fundamental question whether the Ordinance itself was legally applicable to a particular establishment. Although in the said matter vires of notification issued under subsection (3) of section 1 of the Ordinance was mainly assailed, but the constitutionality of the S.E.S.S.I. Ordinance was also questioned, The Hon'ble Supreme Court approved the view taken by this Court and, while dismissing the appeal held as under:-- "The upshot of the above discussion is that the right of appeal conferred on the Social Security by section 59 of the Ordinance is by statute limited to matters enunciated in section 57 of the Ordinance. A further appeal on a "substantial question of law" to High Court under section 64 of the Ordinance does not enlarge, rather it limits, the scope of appeals arising on adjudication under section 57 of the Ordinance. Constitutional question of the vires of enacted law and notifications thereunder could not be agitated under section 57 before the Social Security Institution or in appeal under section 59 before the Social Security Court in further appeal under section 64 before the High Court. In case, the enacted law (section 1 subsection (3) is not ultra vires for its repugnance with Article 25 of the Constitution. As the challenge to the Government's notification under section 1, subsection (3) of the Ordinance necessarily involves the examination of certain controverted facts and determination thereof it cannot take place in the absence of the Government and the [parties in whose favour discrimination was alleged for they could possibly demonstrate that their cases were not similar but distinguishable."

6. The rule laid down as above is fully applicable to the instant case. It is significant to note that the exercise of appellate jurisdiction by the High Court under section 64 of the Ordinance, while questioning an order of a Social Security Court is restricted to substantial questions of law, but the compass of scrutiny of such question is not unlimited, and as held by the Hon'ble Supreme Court in the aforecited case, is restricted to the matters described in section 57 of the Ordinance which pertain to following questions: -

(a) whether any person is a secured person within the meaning of this Ordinance; or

(b) the rate of wages or average daily wages of a secured person for the purposes of this Ordinance; or

(c) the rate of contribution payable by an employer in respect of an employee; or

(d) the person who is or was the employer in respect of a secured person; or

(e) any benefit and the amount and duration thereof, or

(f) any other matter in respect of any contribution or other dues payable or recoverable under this Ordinance.

7. In this manner a controversy only on a point of law arising out of the above matters shall fall within the domain of appellate jurisdiction of the High Court under section 64 of the Ordinance.

Instantly, the contentions raised by learned counsel for the appellants are wholly beyond the above subject-matter and are directed towards examining the vires of the Amending Ordinance and their constitutionality. These contentions for various reasons are wholly misdirected for, the authorities cited on this point by both the learned counsel refer to decisions when the Courts had undertaken the validity of the Ordinance and their re-enactment in view of the Article 89 of the Constitution, but the exercise of appellate jurisdiction of this question, as discussed above, was indisputably restricted to limits mentioned above and this Court is not supposed to transgress such limits.

8. It is, however, noted that at the time when the impugned orders were passed the Ordinance were on the statute book and were in force as the same had been promulgated by the President in exercise of Constitutional power under clause (1) of Article 89 of the Constitution of Islamic Republic of Pakistan. The first Amending Ordinance namely; the Labour Laws (Amendments) Ordinance, 1993 (Ordinance XXIII of 1993) came into force on 25-9-1993 and within the Constitutional life of this Ordinance the second Ordinance, Labour Laws (Amendment) Ordinance, 1994 (Ordinance VII of 1994) was promulgated with effect from 13-1-1994 which, too was alive when similar Ordinance (Ordinance XXII of 1994) carrying the same amendments on the subject in question came into force on 12-5-1994. In the next month the amendments were solidified in the form of an At enacted by the Parliament on 29-6-1994 through Labour Laws (Amendment) Act, 1994 (Act II of 1994), thus, the law was in force on the, relevant day and, as observed by the Full Bench of Hon'ble Supreme Court, comprising 12 Judges, in Federation of Pakistan v. Aitizaz Ahsan (PLD 1989 SC 61) it is a well- settled principle of Constitutional interpretation that until a law finally held to be ultra vires for any reason it should have its normal operation. The law enforced through the said Amending Ordinance enhancing the limit of social security contribution by bringing within its net the employees drawing wages upto Rs,3,000 had its normal operation on the relevant day, the Social Security Court had therefore, rightly refrained from examining its vires and validity. This Court would also not enter into examination of validity and constitutionality of the Ordinance in view of the dictum of Hon'ble Supreme Court in Standard Printing Press case (supra) which approves the earlier decision of this Court in the same case as discussed above.

9. From academic point of view it may however, be mentioned that Mr. Khalid Habibullah submitted that the view taken by Lahore High Court in Rahmat Khan v. Federation of Pakistan (PLD 1993 Lahore 70) was affirmed by the Hon'ble Supreme Court in Noor Muhammad v. Ghulam Mustafa (1999 SCMR 264) on the point that the President was fully competent to re-enact an Ordinance which was the subject-matter in the cited case. He also referred to another Division Bench decision of Lahore High court in Mahmood Hassan. Harvi v. Federation of Pakistan (PLD 1999 Lahore 320) wherein the case-law on Article 89 of the Constitution was dilated upon and after an elaborate discussion it was held that the President was fully competent to re-enact an Ordinance even if subsequent Ordinance was word by word the same as the preceding Ordinance. The earlier decisions of the Hon'ble Supreme Court Noor Muhammad v. Ghulam Mustafa (1999 SCMR 264), Riaz Ahmed v. State (1998 SCMR 1729), Collector of Customs v. New Electronics (PLD 1994 SC 363) (also cited by the learned counsel for appellants), Government of Punjab v. Zia Ullah Khan (1992 SCMR 602) (also cited by the learned counsel for appellants) and many other authorities were considered in the judgment. The argument founded on the above authorities made by Mr. Khalid Habibullah, learned counsel for respondents is thus, fully supported. Nevertheless, it may be pointed out that the Lahore High Court had examined this point in a Constitutional petition wherein the Attorney-General for Pakistan as also the Assistant Advocate-General .Punjab were duly heard.

Instantly, the vires of the Social Security Ordinance cannot be questioned in absence of making the relevant Government as party who were responsible to defend the piece of legislation enacted and promulgated by them. It is a question apart that this Court, as already noted, sitting in exercise of appellate jurisdiction under section 64 of the Ordinance, is not competent to undertake such an exercise. To this extent the legal aspect was discussed from the point of view that the impugned order passed by the Security Court was not patently illegal on any point of law.

10. As far the quantum of contribution is concerned the same was never challenged in Appeals No,13 and 14 of 1998 in the lower forum the same, therefore, cannot be dilated upon at the appellate stage. Indeed, it would be for the Court of the first instance, to examine such point of fact and if any error of misappreciation of the controversy is committed the legal aspect thereof would be considered in appeal and not otherwise. A ground was, inter alia, taken in M.A. No,23 of 1997 that the order was passed without notice to the appellants, but this question has been thrashed out fully in the impugned order and further no specific arguments was made in this behalf. The contentions raised on behalf of the appellants were converted solely on the point of validity of the Amending Ordinances which point has already been dilated upon and discussed above. No efforts were also made to point out if the remission of contribution was excessive and beyond the limits provided under the law. Learned counsel for respondents in this context, relied on Volkervam (Pak) Ltd. v.

Sindh Employees' S.S.I. (1991 SCMR 2361). It was observed therein that the assessment was made on inspection of ledger and books of accounts it was for the appellant to object to any amount and prove that the same was incorrectly mentioned and claimed. This legal position could not be controverted by the appellants. Nothing was argued to suggest that the quantum of demand was unwarranted. No other contention was raised.

11. In view of the foregoing discussion all these appeals are without merits and the same are dismissed with no order as to costs.