This first appeal arises out of the judgment, dated 30-9-79, of the learned Judge, Social Security Court, Lahore (Annexure H), regarding penalty imposed on the appellant under section 23 of the West Pakistan Employees' Social Security Ordinance (X of 1965) (hereinafter called the Ordinance).
In relation to contribution not paid in time for the period June. 1976 to November. 1977. It is an admitted fact that the appellant Company, in pursuance of an agreement, dated 25-10-77, entered into with the Punjab Employees' Social Security Institution, under section 46 (5) of the Ordinance, had been providing medical care and other facilities as contemplated by the provisions of the said Ordinance, Rules, Regulations and Notifications issued from time to time. The Institution imposed a penalty amounting to Rs. 58.528.86 under section 23 of the Ordinance on the ground that no advantage can be taken by the appellant for its own fault in not complying with the statutory provisions of the said section and, therefore. It was a fit case for invoking the penal clause for increase of unpaid contribution as contemplated by section 23 of the Ordinance.
2. Learned counsel for the appellant submits that during the disputed period, the appellant made its own arrangement for providing medical facilities to the workers who had refused to get themselves registered with the Social Security Organization and the Institution did not provide any facility whatsoever to the workers of the appellant during this period. This question of fact is not denied by the learned counsel for the respondents. He however. Submits that the appellant has no vested right to claim remis--sion of increase for not making the payment within the stipulated period and the Institution has no option but to levy the increase if the contribution is not paid in time. The controversy involved in this appeal stands settled by the judgment of the Supreme Court in Kohinoor Chemical Co. Ltd. And another v. Sind Employees' Social Security Institution and another (PLD 1977SC 197) where it was held that "the arrears of contribution may not be realised from an employer for the period during which he had made alternative arrangements for affording the necessary benefits to the employees and had made a contribu--tion in that behalf at least equal to the rate prescribed under the Ordinance and the Rules and Regulations framed there under.
Otherwise, the realisation of arrears would mean a double levy on the employer, without any corresponding benefits to his employees. However, the existence of any such adequate alternative arrangements must be established to the satisfac--tion of the Social Security Institution". Learned counsel for the appellant submitted that in view of the dictum of the Supreme Court in the precedent case, the appellant Company was under no legal obligation to pay any contribution at all for the disputed period, inasmuch as the appellant Company was admittedly providing corresponding benefits to his employees as a result of arrangement made with the Institution vide agreement dated 25-9-77 and even earlier. There appears to be a great force in the submission of the learned counsel for the appellant and I am inclined to agree with his submission.
3. Be that as it may, since the appellant at no stage made any grievance before the institution as to the payment of contribution for the disputed period. He is estopped by his conduct to claim any benefit in this regard. 1 see, however, no justification for the imposition of penalty under section 23 of the Ordinance. I am, therefore, of the view that the imposition of penalty in the facts and circumstances of the present case was not justified and tenable in law.
4. For the reasons stated above, the appeal is accepted and the orders dated 18-6-78 of the Institution, as well as, of the Social Security Court dated 30-9-79 are hereby set aside with no orders as to costs.