' This appeal is directed against the judgment dated 23rd June, 1978 passed by the Sind Social Security Court No, 1, Karachi.
' The facts leading to the filing of the above petition are that the Director, Sind Employees' Social Security Institution through the orders dated 5th July, 1977 and dated 4th August, 1977 called upon the respondent to pay a sum of Rs, 1703.27 being the arrears of Social Security contribution on "canteen allowance" and "Eidi", inclusive of increase of 50% thereon. The respondent being aggrieved by the above orders filed an appeal under section 59 of the West Pakistan Employees'
Social Security Ordinance, 1965 (hereinafter referred to is the said Ordinance) before the Sind Social Security Court No, 1, at Karachi. The learned lower Court had partly allowed the said appeal to the extent that it held the respondent was not liable to pay the Social Security Contribution in respect of the amount paid as -Eidi". The learned Court had also held that the respondent could not be called upon to pay the increase on the amount of canteen allowance inasmuch as they could not be said to have made any default in making the payment of the Social Security contribution on the canteen allowance, which the respondents were not paying in view of the letter of the Director of the Institution dated 30th March, 1973 which had been acted upon by the Institution for about four years until the respondents for the first time were asked to pay the contribution on this account somewhere in May, 1977. On this view of the matter the learned lower Court further paid that the increase which was in the measure of a penalty could not be demanded from the respondents on the amount paid as the canteen allowance. The appellant being aggrieved by the above judgment, disallowing the recovery of the increase to the extent of Rs, 470.11 has filed this appeal.
2. In support of the above appeal Mr. S.A. Sarwana learned counsel for the appellant has contended that in case of any delay or failure to pay contribution on the due date the increase is automatic and there is no discretion either with the institution or with the Court to condone it, and therefore, the learned lower Court erred in disallowing the above amount of increase of Rs, 470.11 on the canteen allowance. On the other hand, Mr. Nasir Aslam Zahid the learned counsel for the respondents has contended that as contribution in respect of the payment towards the canteen allowance could not be made within time because of the Director of Institution's aforesaid letter dated 13th March, 1978, whereby he had clarified that no contribution was payable on the canteen allowance in response to M/s. Sabina Ltd. Letter dated 18th January 1973 (which is a sister concern of the respondents) there was no failure on the part of the respondents to make the contribution in terms of section 23 of the Ordinance. In order to appreciate the respective contentions of the learned counsel for the parties, it will be advantageous to reproduce here in below section 23 of the Ordinance, which reads as follows :- Increase of unpaid contribution and recovery of contribution, etc., as arrears of land revenue-(1). If any employer fails to pay, on the due date the contribution payable by him under subsection (I) of section 20, the amount so payable by him shall be increased by such percentage or amount as may be prescribed : ' Provided that in no case shall such increase exceed fifty percentum 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.
(2) Without prejudice to any other remedy, the amount of the contribution due together, with the increase provided for under subsection (1) may be recovered as arrears of land revenue.
3. (a) It may be noticed that the important words used in the above-quoted section are "if any employer fails to pay on the due date the contribution payable by him under subsection (1) of section 20". The question which requires consideration is, as to 'whether an employer will become liable to pay the amount of increase if he fails to pay contribution in respect of any payment, for any reason whatsoever, or there should be some neglect or default on his part in order to attract the above penal provision. The learned counsel for the appellant Mr. S.A. Sarwana has urged that an employer became liable to pay the amount of increase on the amount of the contribution irrespective of the fact that there was no default or neglect on his part. According to him the increase is automatic except that the institution can condone the delay of 45 days by virtue of rule 5 of the West Pakistan Employees' Security Contribution Rules, 1966.
(b) In support of the above contention the learned counsel for the appellant has relied upon the case of M/s. Koh-i-Noor Chemical Co. Ltd. v. Sind Employees' Social Security institution (I) particularly on the observation contained at pages 208 and 209 of the report which reads as follows :- "A perusal of the rules and regulations issued by the Provincial Government under the Ordinance thus shows beyond doubt that the liabilities to pay contributions on all the secured workers of the notified establishment rests on the employer, and his failure to pay can be visited with a penalty by way of an increase in the amount payable, or even by prosecution before a criminal Court, such being the scheme of the law, it is clear that an employer would ordinarily be under a statutory duty to pay the arrears of the contributions, whether the same have arisen owing to failure to pay any amount due on the employees shown as secured workers in the requisite returns, or on account of the omission of the employer to show certain number of employees at all in such returns on the assumption that they were not covered by the notification or for any other reason. The liability having been incurred under the law, the arrears would keep on falling due in accordance with the prescribed rate of contributions on account of all the employees who would, on a proper construction of the law, be entitled to be treated as secured workers. The employer cannot benefit from his own default."
4. (a) The learned counsel for the parties have referred to Blacks' Law Dictionary, 4th Edition, p. 771, Shorter Oxford Dictionary, Third Edition, p. 668, Stroud's Judicial Dictionary, 4th Edition, p. 10001 and the Law Lexicon by Justice T.P. Mukerji (Second Edition) at page 596-98, in support of their respective contentions relating to the interpretation of the word "fail" used in section 23. It may be advantageous to reproduce here in below the relevant portion of the definition of the word "fail" given in the aforesaid dictionaries.
(b) (i) Black's Law Dictionary.....................
(1) Fail, fault, negligence, or refusal.........
(2) It also means : Involuntarily to fall short of success or the attainment of one's purpose.
(3) The words "fail to comply," however, have in general the same operation in law as the words "refuse to comply." "Ginnochic v. Hydraulic Press Brick Co. (2). And an allegation in an indictment that defendant "failed and refused" to comply with a statute should not be expanded to carry the implication that there was a deliberate, intentional and excusable refusal, especially where the indictment is not (good without such expansion,. Mackey v. U. S. (3).
(1) PLD 1977 SC 197 (2) D. C. Ohic. 266 F. 564, 569
(3) C. C. A. Tenn. 290 F. 18, 21
(ii) Shorter Oxford Dictionary ; 663 "to be absent or wanting ; to be inefficient, to become exhausted, come to an end, run short, die out......To fail short in performance or attainment ; to make default, to miss the mark, to make default in ; to disappoint, to miss.
(id) Stroud's Dictionary, 1002 "fails to land and take delivery (Merchant Shipping Act, 1862) (C. 63), S. 67) need not imply a wilful default in the cargo owner.
(iv) Law Lexicon by Mukerji, 596. "fails to resume duty. The words "fails to resume duty to apply only to a railway servant who by a voluntary and deliberate act or omission stays away from duty and fails to report and not to one who was prevented by a cause beyond his control to resume duty. It cannot apply to a servant who fell ill and was treated by the railway in its own hospital under its own supervision and was discharged as fit for duty by its own officers after the expiry of the maximum period of leave due to him." "fails to submit return". Whether under section 15(a) the words "fails to submit a return" must be read as "fails without reasonable cause." Whether although giving the words the natural meaning, the section does not admit of such an interpretation, but considering the scheme and the purpose of the Act, this view should be taken of the section."
5. (a) According to Mr. Sarwana learned counsel for the appellant the above meanings of the word "fail" given in the above dictionaries indicate that even when a person has not committed default deliberately he can be said to have failed to discharge his obligation ; but according to the learned counsel for the respondents Mr. Nasir Aslam Zahid the meanings of the word "fail" given in the above dictionaries clearly indicate that a party cannot be said to have failed if there has not been any default or neglect on his part. It has further been urged by the learned counsel for the respondents that the appellant's Director in his aforesaid letter dated 30th March, 1973 clearly stated that no contribution was payable on the canteen allowance and that in fact the appellant adhered to the above statement for about four years inasmuch as no contribution was claimed on the canteen allowance, and, therefore, the respondents cannot be said to have failed to pay contribution.
(b) In order to appreciate the above contention, it may be advantageous to refer to the contents of M/s. Sabina's letter dated 18th January, 1973 addressed to the appellant's Director and his reply thereto dated 30th March, 1973 referred to hereiaabove. The above letter and the reply thereto reads as follows :- ' Registered A. D.
' SABINA LIMITED (PARIS MILLS)
' PM/ 5/2967 ' January 18, 1973 ' The Director, ' Sind Employees' Social Security Institution, 78-A, Mahr, Karachi, ' Dear Sir, ' We have recently entered into an agreement with Bargaining Agent Union of our workers to pay Rs, 0.30 "Thirty Paisas" per day, to each worker w. e. f. 1st January, 1973 as canteen allowance. This allowance of thirty paisas per day in lieu of subsidised or concession rates of canteen which were being demanded by workers. Instead of subsidizing any amount to canteen with a view to supply foodstuffs to our workers at cheap or concession rates, agreement has mutually been entered into to pay to each worker Rs, 0.30 per day as subsidy for canteen in the name of canteen allowance.
Thus this payment of canteen allowance is an ex gratia payment to workers and we believe Social Security is not applicable on the above payment.
' Please confirm. Looking forward for an early reply.
' Yours faithfully, for Sabina Ltd. (Paris Mills) Sd/- (BASHIR AHMAD KHAN), Administrative Officer."
' SIND EMPLOYEES' SOCIAL SECURITY INSTITUTION LANDHI DIRECTORATE ' 78-A Malir Colony, ' Malir, Karachi-37 ' Dated 30' 73.
' No, SSS-2/Cont/2-23-16/892.
' M/s. Sabina Ltd.
' Landhi Industrial. Area, ' Karachi.
' Subject : Payment of Social Security Contribution on Canteen Allowances paid to secured workers in lieu of Concessional Rate.
' Please refer to your letter No, PM/5/2967 dated 18th January, 1973 on the subject cited above, ' It is to inform you that Social Security Contribution is not payable on the canteen allowances paid to the secured workers in lieu of subsidized rates of canteen.
' Sd/- (IRFAN AHMAD KHAN), ' Director ' Copy to : ' S.S.O. I/c for information and necessary action."
(c) It was also contended by the learned counsel for the respondents that the appellant has not controverted the assertion of facts contained in paras. 3 to 9 of the affidavit filed by the respondents before the learned lower Court in support of their appeal either by challenging the same in the cross-examination or by producing evidence in rebuttal. It may be advantageous to reproduce the same which reads as. Follows :- "(3) That I say that I am also the Manager of M/s. Sabina Ltd. (Paris Mills) Landhi, which is owned, run and controlled by the same management as that of the appellant-Company.
(4) That there is one common Trade Union (Collective Bargaining Agent) of workmen in both the establishments, viz., the appellant-Company and M/s. Sabina Ltd. (Paris Mills), Landhi.
(5) That both the establishments are adjacently situated having a common boundary wall.
(6) That the Management of the appellant-Company is the same as that of M/s. Sabina Ltd. (Paris Mills), Landhi.
(7) That the terms and conditions of service of workmen employed in both the establishments are almost identical.
(8) That I say that the payment of "Canteen Allowance" to the employees of the appellant- Company, is regulated by the same terms and conditions as are applicable to the employees of M/s. Sabina Ltd. (Paris Mills) who are similarly paid a Canteen Allowance.
(9) That re-affirm and say that the contents of letter No, PM/5/2967 dated 18th January, 1973 which was addressed by me on behalf of M/s. Sabina Ltd. (Paris Mills) to the Social Security Institution, applies with equal force to the case of appellant-Company and the payment of "Canteen Allowance' is made to the employees of the appellants on exactly the same basis as is done in the case of M/s. Sabina Ltd. (Paris Mills)."
6. (a) It was urged by Mr. Sarwana that as the letter was addressed by the Director of the Institution to M/s. Sabina Ltd. And not to the respondents in the present appeal, the above letter cannot be treated as a representation to the respondents in the present appeal and, therefore, the same cannot furnish a ground for non-payment of the contribution on the canteen allowance. On the other hand Mr. Nasir Asians Zahid learned counsel for the respondents has submitted in view of the assertions contained in the above-quoted paras. 3 to 9 of the affidavit, which remained unchallenged, it cannot be urged by the appellant that the above appellant's letter dated 20th March, 1973 cannot be relied upon by the respondents, It may be pertinent to mention that the aforesaid assertions have not been controverted by the learned counsel for the appellant at the Bar and as a matter of fact after checking the record Mr. Sarwana Advocate has candidly conceded that no cross-examination was directed to challenge the veracity of the above assertions contained in the aforesaid paras. 3 to 9 of the affidavit.
(b) In view of the factual position that the respondents and M/s. Sabina Ltd. .Are sister concerns, there is one bargaining agent for the two factories, there is a common manager and the offices of the two concerns are situated in one compound, it can be urged that there was sufficient justification for the respondents not to pay any contribution on the canteen allowance because of the appellant's Director's aforesaid letter dated 30th March, 1973 referred to hereinabove..
(c) In order to point out the learned counsel for the appellant that the contention that increase on the amount of contribution not paid is automatic irrespective of the reason for non-payment appears not to be correct, the learned counsel for the appellant was asked to say as to whether an employer will be liable to pay its amount of increase even in a case when he goes to deposit the amount of contribution with the institution but the staff of the Institution refuses to accept without any justification. His reply to the above query was that in such a case the Institution would not be justified in claiming the amount of increase. In my view from the above reply as a logical corollary it must follow that if an employer can point out that there was no failure on his part to make the contribution and in fact one payment was on account of act/omission of the part of the staff of the Institution he will not be liable to pay the amount of increase. In my view the reasonable interpretation of word "fail" used in the aforesaid 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 on which contribution is payable and there should not be any contributory act/ omission on the part of the Institution resulting in the non-payment of the contribution.
(d) Mr. Nasir Aslam Zahid learned counsel for the respondent has referred to the case of Balwant Raj v. Union of India (I) where a Single Judge of the Allahabad High Court while construing the term "fails to resume duty", used in the Railway Establishment Rules, held that the words "fail to resume duty" apply only to a railway servant who by a voluntary and deliberate act or omission stays away from duty and fails to report and not to one who was prevented by a cause beyond his control to resume the duty and that it cannot apply to a servant who fell ill and was treated by the railway in its own hospital under its own supervision and was discharged a fit for duty by its own officers after the expiry of the maximum period of leave due to him. The above ruling supports the contention of the learned counsel for the respondent on all fours.
(e) Kohinoor's case of the Supreme Court, referred to hereinabove, relied upon by the learned counsel for the appellant, is distinguishable inasmuch as in the above case it was not argued by the appellant that the contribution in respect of the employees working in the Head Office of the appellant company could not be made for any reason attributable to the respondent institution. As a matter of fact a perusal of the above-quoted para. Particularly the last line indicates that their Lordships were pleased to hold that the appellant-Company had committed default as their Lordships were pleased to observe that "the employer cannot benefit from his own default."
6. (a) Mr. Nasir Aslam Zahid learned counsel for the respondents has also contended that the words "fail" and "default" are synonymous and, therefore, the rulings relating to the interpretation of the word "default" will be applicable in all fours to the instant case. He has relied upon the case of Mst. Shahjahan v. Mst. Mukti (2), the case of Abdul Majid v. Saadullah and others (3) and the case of dyed Toghan Shah v. Shah Muhammad Madni Abbas (4). In all the above cases the Courts while interpreting the word "default" used in section 13(6) of the West Pakistan Urban Rent Restriction Ordinance, 1959, were pleased to hold that in order {{FOOT NOTE}}
(I) AIR (?) All. 14 (2) PLD 1968 Kar. 777
(3) PLD 1963 Quetta 16 (4) P L Q 1964 Pesh. 101 {{FOOT NOTE}} ' to establish a case of default within the meaning of section 13(6) of the Ordinance, the default must be made wilfully and negligently and not for any reason beyond the control of the tenant.
(b) In my view strictly speaking the words "fail and default" are not synonymous. The word "fail" has wider connotation as compared to the word, "default". And, therefore, the above-cited rulings cannot be pressed into service for the purpose of interpreting the word "fail" used in section 23 of the Ordinance.
(c) In the instant case the respondents did not pay the contribution on the amount of the Canteen Allowance because the express statement made by the Director of the appellant that no contribution in respect thereof was payable. It will be unjust and improper to levy a penalty in the form of an increase in the instant case as in my view there has not been any failure on the part of the respondents within the meaning of section 13 of the Ordinance. The learned lower Court was justified in disallowing the amount of the increase viz. Rs, 470.11 on the basis of the finding of fact that the appellant's Director's aforesaid letter dated 30th March, 1973 could be relied upon by the respondents in view of the aforesaid assertions contained in paras. 3 to 9 of the affidavit referred to (herein above in para. 5(c).
' In view of the above discussion, the above appeal does not merit and, therefore, the same is dismissed, but there will be no order as to costs.