1. ' MUHAMMAD HALEEM, J.-The petitioner seeks special leave to appeal against the order of the Lahore High Court, Lahore, dated 27th of November 1971, by which F. A. O. No, 225 of 1975 was accepted and the order of the Social Security Court, Punjab, Lahore, dated 3rd of November 1975, was set aside.
2. ' The facts are these: BECO Industries Ltd., Lahore, had two industrial units; one at Badami Bagh and the other at Kot Lakhpat. Both the units were taken over by the Federal Government under the provisions of the Economic Reforms Order, 1972, and, thereafter, it was described as Pakistan Engineering Company Ltd., The Mall, Lahore. However, before it was taken over, BECO Industries Ltd., Lahore, was brought under the Social Security Scheme with effect from 1st of March 1971, and on 22nd of April, 1971, it represented to the Commissioner that the application of the Social Security Scheme should be deferred as the workers had strongly opposed the measures, because the workers of other units, who were brought under the Scheme, were not at all satisfied with its performance and efficacy. But this representation was rejected by the Commissioner by letter dated 3rd of July 1971, and Messrs BECO Industries Ltd., was directed to submit its statutory returns and pay the contribution at the prescribed rates. However, since there was a failure on the part of Messrs BECO Industries Ltd., to do the needful it was served with notices dated 6th of July 1971, and 19th of October 1971, to pay its contribution for the months of March to August 1971, inclusive of the 50% increase for the non-payment of the dues within the prescribed period. The demand for BECO, Kot Lakhpat was Rs, 1,70,000 and for BECO Badami Bagh, Rs, 2,90,000.
3. ' Messrs BECO Industries Ltd., Lahore, thereupon, filed an application under section 57 of the West Pakistan Employees' Social Security Ordinance, 1965, praying therein for the withdrawal of the demand notices and in the alternative for the withdrawal of the penalty and for the recovery of the actual contribution due from these units. Accordingly, the Commissioner appointed an officer to inspect the record who worked out the correct figures according to which the amount due from BECO, Badami Bagh came to Rs, 1,06,280.81 and the amount recoverable from BECO, Kot Lakhpat to Rs, 58,065.71. He also added to it the increase, by way of penalty, which in the case of the first unit was Rs, 53,190.44 and in the case of the second, Rs, 28,132.60. After the aforementioned calculations the Management of the BECO Industries Ltd., cleared the arrears of the contribution amounting to Rs, 1,62,646.02 but it protested against the recovery of the penalty amounting to Rs, 82,173. This prayer was refused by the Commissioner by order dated 23rd of November 1972.
4. ' Against this order Messrs BECO Industries Ltd., filed an appeal before the Social Security Court which, by order dated 18th of July 1973, held that the Commissioner had no jurisdiction to decide the application and directed the Punjab Employees' Social Security Institution to decide the application; but, thereafter, the Commissioner was empowered, by a Notification, to hear the application. The Commissioner, thereupon, heard the application in which the question of inclusion of 50% by way of penalty was agitated which did not find favour with the Commissioner who rejected it by order dated 11th of February 1974. By this time the Pakistan Industries Ltd., had been taken over by the Federal Government and an appeal was preferred by the petitioner before the Social Security Court, Punjab, Lahore, and succeeded as by order dated 23rd of November, 1975, the recovery of the penalty was waived.
5. ' Against this order the Punjab Employees' Social Security Institution, Lahore, preferred an appeal- before the High Court which was decided against the petitioner principally on the ground that the Social Security Court had erroneously waived the penalty contrary to the dictum of the Supreme Court in Kohinoor Chemical Co. Ltd. And another v. Sind Employees' Social Security Institution and another.
6. In seeking leave to appeal it was urged: firstly, that the petitioner could not be penalized for the failure of the BECO Industries Ltd., t pay the contribution; secondly, that as no alternative arrangements we made for the medical care of the workers and for the payment of injury benefits, the respondent could not levy the demand and hence the payment of the increases by 50% as penalty did not arise; and thirdly, that the demand, being excessive, the failure to pay it would be inconsequential. These contentions are against the spirit of sections 20 and 21 of the West Pakistan Social Security Ordinance, 1965. In this connection it would suffice to refer to the following dictum in the above-cited case in so far as it relates to the facts of the present case :- "Reading the two sections together, it appears to me that once a notification has been issued under subsection (3) of section 1 of the Ordinance notifying the areas, classes of persons and industries or establishments to which the Ordinance is to apply, then the obligations of the employers spelt out in sections 20 and 21 come into play, and it is incumbent upon them to make the necessary contributions and keep the necessary records and furnish the necessary returns as may be prescribed by the Social Security Institution under rules or regulations made under the Ordinance. These obligations are not dependent upon any action to be taken or initiated on the part of the Institution; on the contrary, they are statutory obligations incurred under the relevant provisions of the Social Security Ordinance.
7. ' The stringent provisions contained in section 23 of the Ordinance are supplemented by further penal provisions contained in section 66 thereof, which makes the failure to pay any contribution an offence punishable with imprisonment which may extend to three months or with fine not exceeding Rs, 1,000 or with both. Here again, the penalty is incurred on account of the failure to pay any contribution which the person concerned is liable to pay under the Ordinance. The penal1 sections do not speak of failure to comply with any notice of demand served by the Institution. It follows, therefore, that the liability to pay or make the contribution arises under the statute and the rules and regulations made thereunder irrespective of any demand being made by Social Security Institution, although the Institution has the powers to carry out a check under section 22 of the Ordinance."
8. As there was failure on the part of BECO Industries Ltd., to comply with sections 20 and 21 of the West Pakistan Social Security Ordinance, the penalty was incurred for this failure by reason of section 23 which levy is unexceptionable. The contentions raised to resist it lose their efficacy in view of the imperative nature of the obligations contained in sections 20 and 21 of the Ordinance.
9. ' The petition fails and is ,hereby dismissed. PLD 1977 SC 197