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Constitutional Petition No. D‑268 of 1987, decided on 1st October, 1987.

‑‑‑ S.57‑‑Sind Employees' Social Security (Procedure for Deciding Complaints and Review of Decision of Regulations, 1983, RegIn. 5‑ Regulation 5 is ultra vires of the powers of Authority which framed the Regulations‑‑‑ Complaint in term of S.57, therefore, can be entertained without asking the deposit of 25% of the alleged claim.

In the absence of any provisions in section 57 of the Sind Employees' Social Security Ordinance, 1965 or i6 any other section of the Ordinance the framers of the regulations had no power to provide depositing of 25% of the amount in dispute as a condition precedent to the entertainment of a complaint. A complainant cannot be deprived of his remedy in the form of complaint by burdening him with the condition to deposit. 25% of the amount in dispute. In some of the fiscal statutes express provisions have been provided by the relevant statute, which has not been done in the present case under the Ordinance and, therefore, it is evident that in the instant case, the law‑makers did not consider it proper and necessary to provide any provision in section 57 of the Ordinance for deposit of any, percentage of the disputed amount. Such deliberate omission on the part of the law‑makers cannot be nullified by the authority vested with the power to make subordinate legislation in the form of regulations. The Regulation is ultra vires the power of the authority, which framed the regulations.

Complaint in terms of section 57 of the Ordinance is to be 'entertained without asking the deposit 25% of the alleged claim.

‑‑‑S.57‑‑West Pakistan Land Revenue Act (XVII of 1967), S. 81‑‑Land Revenue Rules, 1921, R. 118‑‑ Contribution amount when becomes due‑ When the question of liability to pay contribution is determined through the machinery/ forums provided under the statute, same will become due and resort can be made to the provisions of Land Revenue Act for recovery as the arrears of land revenue‑‑Not necessary that such dues should be adjudicated upon by a Civil Court‑‑Till the time Machinery/Forum decides the question of liability in terms of S.57 of the Ordinance, resort to the provisions of Land Revenue A& is not warranted by law.

Karachi Flour Mills Union and others v. Province of West Pakistan and others P L D 1968 Kar. 910; Abdul Latif v. The Government of West Pakistan. and others P L D 1962 S C 384; Government of West Pakistan and others v. Abdul Majid and another P L D 1963 Kar. 653; Province of West Pakistan v. Muhammad Ayub Khan P L D 1957 Kar. 673 and ZakAria A. Bawany v. City Deputy Collector, Karachi and 2 others P L D 1975 Kar. 1008 ref.

S.A. Samad Khan for Petitioner.

S.A. Sarwana for Respondent.

Date of hearing: 22nd September, 1987.

‑The petitioners through this petition have prayed for the following relief:

"Respectfully praying that the impugned orders dated 25‑2‑1987 and 2‑3‑1987 of the respondents and the actions threatened therein may please be declared illegal and without jurisdiction and set aside."

2. The brief facts leading to the filing of the above petitions are that the petitioners are a private limited company and own an art‑silk factory situated in SITE Karachi. The petitioners were assessed for the purpose of payment of contribution under the Social Security Ordinance, 1965, hereinafter referred to as the Ordinance, the respondent No.1 on 1980. The petitioners continued to make contribution upto 13th January, 1982 when they wrote a letter to the respondent No.1 informing him that their factory was closed for want of finance and market demand. Upon the receipt of the above letter, the respondent No.1 did not make any demand for the contribution from the petitioners. However, respondent No.1 through his letter dated 25‑5‑1986 addressed to the petitioners informed them that during a surprise visit to the petitioners' 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 29‑5‑1986 at 10.00 a.m. alongwith the documentary evidence regarding re‑opening of the establishment and strength of employees engaged at their premises. It appears that in response to the above letter, the petitioners saw respondent No.1 on 3‑6‑1986 and thereafter sent their letter to respondent No.1 on 4th June, 1986 stating therein, that their establishment had been divided up into 5 units and all of them were run separately by independent contractors and that the labour employed by the said contractors each of them getting wages more over Rs.1,500 per month. After that the petitioners were directed to submit a copy of their income‑tax assessment order and also account books. It appears that petitioners submitted a copy of the income‑tax assessment order for the assessment year 1985‑86 but had not submitted the other account books etc. Respondent No. 1 assessed the contribution on the basis of the above assessment order for the period commencing from 1‑1‑1982 to il‑12‑1986 and conveyed the same to the petitioners by his letter dated 8‑2‑1987, whereby the petitioners were called upon to pay a sum Rs.1,32,143.03. The above demand was contested by the petitioners. After that the matter was referred to by respondent No. 1 to respondent No.2 for the recovery of the above amount as the arrears of land revenue under Section 81 of the Land Revenue Act, 1967. Respondent No.1 in pursuance thereof issued a notice dated 2‑3‑1987 to the petitioners under Section 81 of the Land Revenue Act, 1967 and Rule 118 of the Lard Revenue Rules, 1921, The Petitioners have, therefore, filed the present petition and have prayed for the above‑quoted relief.

3. It was pointed out to Mr.S.A. Samad Khan, learned counsel for the petitioners that the Ordinance provides the machinery for resolving the dispute as to the quantum of petitioners' contribution and, therefore, they should have resorted the above machinery. His reply was that since under Regulation No.5 the petitioners have to deposit 25% of the amount claimed by respondent No.1, the above remedy is not adequate. He has urged the following points:

(i) That Regulation No.5 providing that a complaint under Section 57 of the Ordinance cannot be entertained without first depositing 25% of the amount in dispute, is ultra vires the rules making power.

(ii) That the impugned notice for the recovery of the alleged amount due as arrears of land revenue is illegal as no competent Court has determined the same.

4. On the other hand Mr. S.A. Sarwana, learned counsel for the respondent No.1 has submitted as follows:-------------

(i) That Regulation No.5 is intra vires of the rule‑making power.

(ii) That under subsection (3) of section 22 of the Ordinance respondent No.1 has the power to assess the amount of contribution in case of failure on the part of an employer to produce the account books and other record and, therefore, the amount is determined and is due and hence is recoverable as arrears of land revenue.

(5) Adverting to the first submission of the learned counsel for the parties it may be advantageous to reproduce hereinbelow section 57 of the Ordinance, which reads as follows:

"Section 57. Decisions or, complaints, questions and disputes;‑‑If any complaint is received or any question or dispute arises as to:-------

(a) whether any person is a secured person within the meaning of this Ordinance or (b) the rate of wages of ‑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 the matter shall be decided by the Institution, in such manner, and within such time as the regulations may provide, and the Institution shall notify its decision to the person or persons concerned, in writing, stating therein the reason or reasons for its decision."

6. A perusal of the above‑quoted section 57 of the Ordinance indicates that a complaint in respect of the matters referred to in clauses (a) to (f) is to be decided in such manner and within such time as the regulations may provide.

7. In pursuance of the above section 57, the Sind Employees Social Security (Procedure for Deciding Complaints and Review of Decisions) Regulations, 1983 were framed providing the procedure of filing of complaints. However, Regulation T provides that a complainant is to deposit 25% amount of the demand. The above Regulation reads a follows:

"In case, the question or dispute relates to demand or assessment of the Social Security Contribution, the complaint shall deposit 25% of the demand/ assessment with the Institution."

8. The question, therefore, for consideration is, as to whether while framing the above regulation in pursuance of above‑quoted section 57 of the Ordinance, the rules‑making authority had the power to provide for deposit of 25% of the amount in dispute as a condition precedent to the entertainment of complaint. It may be observed that in the Income Tax Act and in some other enactments the relevant statute itself has provided a proviso providing that the amount in dispute is to be deposited before an appeal is filed, * this has not been done in the present cage under the Ordinance. Mr. S. A. Samad Khan in furtherance of his submission has referred to the following cases:

(i) O.N.R.M.M. Chettyar Firm v. Central Bank of India, Ltd. and another, AIR 1937 Rangoon 419, in which a Full Bench of the Rangoon High Court held that proviso (b) to Rule 90 of Order 21 as it stood before 27th January,. 1937 providing the deposit of the amount mentioned in the sale warrant as a condition for entertaining the objection to the sale was ultra vires the rules‑making committee.

(ii) Sales tax Officer, Ponkunnam and another vs. K.I. Abraham, A I R 1964 Kerala 131. In the above case a Full Bench of Kerala High Court held that Section 8 (4) of the Central Sales Tax Act, 1956 in which the phrase "in the prescribed manner" was used, does not confer power on the rules‑making authority to prescribe a time limit within which the declaration is to be filed by a registered dealer.

9. We are inclined to hold that in the absence of any provision is the above‑quoted section 57 of the Ordinance or in any other section of the Ordinance, the framers of the regulations ‑had no power to provide depositing of 25% of the amount in dispute as a condition precedent to the entertainment of a complaint. A complainant cannot be deprived of his remedy in the form of complaint by burdening him with the condition to deposit 25 % of the amount in dispute. We have already pointed out hereinahove that in some of the fiscal statutes express provisions have been provided by the relevant statute which has not been done in the present case under the Ordinance and, therefore, it is evident that in the instant case, the law‑makers did not consider it proper and necessary to provide any provision in section 57 of the Ordinance for deposit "of any percentage of the disputed amount.. The above deliberate omission on the part of the law‑Makers cannot be nullified by the authority vested with the power to make subordinate legislation in the form of regulations. We are, therefore, of the view that the above Regulation is ultra vires' the power of the authority, which framed the regulations.

10. As regards the second submission of the learned counsel for the parties, it may be observed that the contention of Mr. S.A. Samad Khan was that unless a Court of law decides the question of liability of the petitioners, resort cannot be made to the provisions of the Land Revenue Act. in furtherance of his above submission, he has referred to the following cases--------

(i) 'Karachi Flour Mills Union and others v. Province of West Pakistan and others PLD 1968 Kar. 910, in which a Division Bench of the erstwhile High Court of West Pakistan at Karachi after referring to three judgments namely, (i) Abdul Latif v. The Government of West Pakistan and others PLD 1962 S C 384,

(ii) Government of West Pakistan and others v. Abdul Majid and another, PLD 1963 Kar. 653, and (iii) Province of West Pakistan v. Muhammad Ayub Khan, PLD 1957 Kar. 673 observed that "A claim ripens, according to the judgment, into "dues" if it is established in accordance with law and justice."

(iii) Zakaria A. Bawany v. 'City Deputy Collector, Karachi and 2 others, PLD 1975 Kar. 1008. In ‑the above case, a learned Single Judge of this Court while construing the provision of section 31 of the Investment 'Corporation of Pakistan Ordinance, 1966, held that dues are those which are determined and established and unless that is done resort cannot be made for the recovery of the same as arrears of land revenue.

11. We are unable to subscribe to the contention of Mr.S.A. Samad Khan that a contribution amount will become due I only if a Court of law decides the question of liability. In our view, if the question of liability to pay contribution is determined through the machinery/ forums provided under the Ordinance, the same will become due and resort can be made to the provisions of the Land Revenue Act for recovery as the arrears of land revenue. It is not necessary that the same should be adjudicated upon by Civil Court.

12. We, therefore, allow the above petition and declare that the above Regulation 5 is ultra vires the power of the authority which framed the regulations and, therefore, the petitioners' complaint inc terms of Section 57 of the Ordinance is to be entertained without asking the petitioners' to deposit 25% of the alleged claim. We further declare that till the time the Institution decides the question of liability in terms of Section 57 of the Ordinance the resort to the provisions of the Land Revenue Act was not warranted by law. The petitioners, therefore, shall file the complaint in terms of Section 57 of the Ordinance within 30 days from the date of this judgment, failing which the respondent No.1 may proceed in accordance with law on the assumption that the petitioners do not wish to dispute respondent No.1's demand.

13. The petition stands disposed of in the above terms with no order as to costs.

M.B.A./251/M‑K Order accordingly

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