Brief facts in the instant appeal are that a complaint dated 12.5.1988 was filed against the demand of Rs, 1,95,000/- as contribution including increase for the period December, 1986 to December, 1987 by the Director Local Office, Multan through notice dated 30.4.1988. Written reply was filed on 11.6.1988 by the respondent. The Commissioner, Punjab Employees Social Security Institution, HQ, Lahore vide order dated 12.12.1988 remanded the case to the Director of Local office to revise the impugned demand and recover the same accordingly. The case of Respondent No, 1 was reviewed and re-assessed and demand of Rs, 1,86,000/- was made for the period 17.3.1987 to 31.12.1987 by the Director Local Office. Respondent No, 1 deposited Rs, 33,675/- for the period January, 1988 to March, 1988 and deposited Rs, 14,400/- for the period January, 1988 to May, 1988. Upon a complaint of Respondent No, 1 dated 26.1.1991 u/S. 57 of the Social Security Ordinance, 1965 the Vice Commissioner vide order dated 31.10.1991 reduced the amount of contribution for the period 17.3.1987 to 31.12.1987 by 10% and further ordered that the recovery be affected after adding corresponding amount of increase thereto. Being aggrieved respondent No, 1 filed an appeal against the impugned order dated 31.10.1991 passed by the Vice Commissioner Pessi before the social security Court Punjab. The learned Judge observed that in his considered view 25% increase amounting to Rs, 27,900/- in this appeal will meet the ends of justice and reduced the amount of increase from Rs, 55,800/- to Rs, 27,900/-and with this modification the appeal was dismissed. The order of learned Judge of Social Security Court, Punjab is impugned in the present appeal by the appellant.
2. The only point, which is agitated by learned counsel for the appellant before this Court is that the learned Judge of Social Security Court has no jurisdiction to reduce the penalty as provided in Rules 5 and 6 of the Provincial Employees Social Security Ordinance 1965 (Contribution Rules, 1966) readwith Section 23(1) of the Ordinance, 1965. As penalty for default in the payment of contribution is automatic and the Respondent No, 1 had to pay increase of 1/2 percentum per day for each day after the expiry of the date prescribed in Rule 5 subject to the maximum of 50 percentum of the amount due.
3. Learned counsel for the respondent submits that Social Security Court is fully competent to decide the matter and can reduce the amount in view of Sections 57 and 58. He further argued that no increase could be recovered from the respondent as dispute was pending before the Court in appeal and the increase will stand from the date of decision of the Social Security Court, as relaxation will be given to the aggrieved party by the Social Security Court.
4. I have heard the learned counsel for the parties and perused the record as well as law. In the definition clause of the West Pakistan Ordinance No, X of 1965 "Social Security Area means an area to which this Ordinance has been applied" and "Social Security Court" means a Court constituted under Section 60 of the Social Security Ordinance 1965". Section 60 provides "Constitution of Social Security Court :-- (i)Government may for purposes of this Ordinance, constitute, by notification, a Social Security Court for any Social Security Area or Areas specified in the notification; (ii)A Social Security Court shall be presided over by a Judge who shall be appointed by Government."
Section 61 provides :-- "Jurisdiction of Social Security Courts :--
(i) Subject to the provisions of sub-section (2), a Social Security Court shall have exclusive jurisdiction to hear and decide appeals from decisions of the institution u/S. 57 or reviews u/S. 58 in respect of all claims, questions and disputes arising in the appropriate Social Security Area."
Section 62 provides :-- (i)"Power of Social Security Court, etc.-- "A Social Security Court shall have all the powers of a Civil Court for the purposes of summoning and enforcing the attendance of witnesses, compelling the discovery and production of documents and material objects, administering oath and recording evidence, and such a Court shall be deemed to be a Civil Court within the meaning of Section 195 Cr.P.C.; (ii)Notwithstanding anything contained in any other law, a Social Security Court, may for the purposes of deciding any appeal examine such witnesses and take such evidence as it considers necessary; (iii)A Social Security Court may make such order with regard to costs incidental to any appeal as it thinks fit; (iv)An order of a Social Security Court shall be enforceable as if it were a decree of a Civil Court."
5. From the perusal of all the circumstances in this case it seems that the complaint against Respondent No, 1 kept pending before the Vice Commissioner and finally was decided by the Social Security Court, who reduced the increase of 25% from 50%. In view of "Messrs R.C.D. Ball Bearing Ltd vs. Sindh Employees Social Security Institution, Karachi" (PLD 1991 S.C. 308) where it was observed that if a employer can point out that there was no failure on his part to make the contribution and in fact nonpayment was on account of act/omission on the part of the staff of the institution he will not be liable to pay the amount of increase. The reasonable interpretation of word "fail" used in Section 23 of the Ordinance will be that in order to attract the penal provision of the levy of increase, contained in the above section, there should be inexcusable neglect or omission on the part of employer to pay contribution on an item of wages/salary.
6. In the present case the matter remained pending before the Court and levy of penalty of increase could not be justifiable as the latest decision was made by the Social Security Court, who was fully empowered to adjudicate upon the matter in view of Sections 60, 61 and 62 of the Ordinance, Section 23 of the Ordinance is re-produced below :-- "Increase of unpaid contribution and recovery of contribution, etc. as arrears of land revenue:--
(i) If any employer fails to pay on the due date the contribution payable by him under sub-section
(i) of Section 20 the amount so payable by him shall be increased by such percentage or the amount as may be prescribed ; Provided that in no case shall such increase exceed fifty per centum of the amount due. Provided further that no part of such increase shall be payable by, or the liability to pay the same be passed on by the employer to, his employees."
In view of the provisions of Section 23 of the Ordinance proviso, there is no bar for the Social Security Court to reduce the amount of penalty if it deems fit in the circumstances of each case.
Even the impugned orders disclose that payment of the contribution for the period from 17.3.1987 to 31.12.1987 was reduced by 10%. The proviso of Section 23 only provides that such increase shall not exceed 50% of the amount due, therefore, the arguments advanced by learned counsel for the petitioner that Social Security Court could not reduce the amount in the circumstances of the case is not convincing. The Social Security Court being a Civil Court in nature is fully empowered to adjudicate upon the matter in view of Sections 60, 61 and 62 of the Ordinance, therefore, finding no substance in the instant appeal, the same is dismissed. No order as to costs.