MUNAWAR AHMAD MIRZA, J.---Brief facts as set out in the Petition are that petitioner is a public limited Company established at Hub for manufacturing Agri auto parts. On or about 18th October, 1982 said Company applied for registration under Rule 3(1) of the Employees Old Age Benefits(Registration of Employees and Insured Persons) Rules 1976, where upon certificate of registration was granted by the Employees Old Age Benefits Institution (Respondent No,1) on 22-12- 1982. It is the case of petitioner Company that from the date of its registration with Employees Old Age Benefits Institution, contribution regarding its insured employees was regularly deposited with concerned authorities and record thereof was throughout inspected by the officials of respondent No,l. According to petitioner the Assistant Director Regional Office EOBI Hub, on 11-3-1989 gave them a demand notice No,HBR/45/89/495 calling upon them to pay within 15 days a sum of Rs,3,45,048 with 50% increase amounting to Rs,1,72,524 in all totalling Rs,5,17,572 towards arrears of contribution due till 27-3-1989. It however transpired later that aforesaid demand pertained to period commencing from September 1982 till February 1989 calculated short average of contribution at the rate of Rs,4313 per month. Petitioner in response to aforesaid demand vide letter dated 21-3- 1989 asked for necessary details from respondent No,1 to give adequate reply. It may be seen that respondent No,1 by means of letter No,HPR/EOBI/DNC0016/89/612 dated 6-4-1989 directed the petitioner to produce within 2 days certain documents namely (i) general ledgers (ii) pay scrolls of the employees (iii) balance sheets and (iv) Income Tax returns; all for the period during September, 1982 till February 1989. Petitioners through letter No, ALL/GMF/89/166 dated 9-4-1989 again demanded details already sought for. It may be seen that on the same date viz. 9-4-1989 certain information and details were supplied to the petitioner. Subsequently on 12-4-1989 respondent No,2 in the purported exercise of authority as Assistant Collector Grade-I issued notice under Section 81 of the West Pakistan Land Revenue Act. 1967, thus requiring petitioner to clear the arrears to the tune of Rs,5,17,572 for which demand was already raised. Petitioner again vide letter dated 20-4-1989 explained that actual payment was made by him to respondents but without consulting the record unjustifiably demand was being raised. Respondent No, 1 again vide letter No,HUB/EOBI/DNC-00016/89/678 dated 22nd April, 1989 repeated the demand for clearing arrears within 5 days otherwise threatened for issuance of distress warrants under section 83 of West Pakistan Land Revenue Act 1967. Thus feeling aggrieved from demand dated 11-3-88 and subsequent issuance of notice under sections 81 and 83 of the Land Revenue Act petition was filed on 26-4-1989.
2. Mr. Akhtar Ali Mahmood, learned counsel for petitioner raised following contentions:
(i) No contribution can be deemed to be due or payable unless same is properly determined by the competent authority in accordance with procedure prescribed by "Employees Old Age Benefits (Determination of Complaints, Questions and Disputes) Regulation 1980.
(ii) Impugned notice suggests arrears from year 1982 whereas contribution was regularly deposited, besides demand is apparently defective and without jurisdiction, because even otherwise there is no determination as contemplated by law. Reliance in this behalf was placed on the reported judgments (a) PLD 1962 SC 384, (b) PLD 1967 Karachi 673, (c) PLD 1976 Karachi 610.
(iii) The respondents have no jurisdiction to summon record of company other than that specified under Section 12 of the Employees' Old Age Benefits Act, 1976. Therefore insistence of respondents for producing the general ledgers (b) balance sheets pay scrolls and (c) Income Tax returns is patently illegal.
3. On the other hand Mr. Muhammad Riaz Ahmad, learned standing counsel appearing for the respondents strenuously contended that notice of the arrears issued by respondent is quite legal, valid and with jurisdiction. Respondents are competent to direct petitioner or other organizations to produce original record. Learned counsel further argued that alternative remedies were available to the petitioners under Sections 33, 34 and 35 of the Employees' Old Age Benefits Act 1976 and relevant rules concerning the same, therefore present Constitutional Petition is not maintainable.
4. We have carefully considered the arguments addressed by learned counsel for parties.
Primary question which arises for determination would be whether amount of arrears claimed by respondents from petitioner in respect of average short-fall from September, 1982 till February, 1989 was properly determined by the competent authority under prescribed procedure; and whether or not proceedings initiated by respondent No, 2, for effecting recovery as arrears of land revenue were proper and justified under the law. It may be seen that record and documents of every Industry or establishment registered with Employees Old Age Benefit Institution in accordance with Section 11 of "Employees Old Age Benefit Act XIV of 1976 "(hereinafter referred to as THE ACT") can be checked by the officials of Department duly authorised in this behalf within the limits prescribed by section 12. Accordingly authorised official would be entitled to examine only such record and documents of the Establishment or Industry, which clearly relate to employment of the persons, payment of wages to employees or matters connected therewith. Evidently according to section, the contribution is payable by employees from month to month basis, and on failure to deposit the same by due date, increase upto 50% of the amount due could be lawfully claimed. Section 13(2) of "The Act" indicates powers for recovering arrears as land revenue. Documents on record which have not been controverted, suggest that petitioner has been regularly depositing certain amounts towards contribution from the date of its registration with the institution, (Respondent No, 1). It is not understandable how respondent without any complaint or ostensible basis, suddenly vociferously started claiming huge arrears allegedly accumulated in the last seven years. Suspicious manner in which demand appears to have been raised obviously provided a legitimate right to ask for details forming basis of said arrears. It is surprising that instead of supplying necessary information the respondents started threatening petitioner by forcing production of certain documents some of which i,e, Income Tax returns of General ledgers could hot be legitimately examined under 'The Act'.
Such conduct of the official was apparently contrary to normal discipline and principle of fairplay.
No doubt, law vests authority in respondents for compelling petitioner to produce certain record and books but the limits thereof have been obviously specified under section 12 of 'The Act', which thereafter could not be transgressed. It may also be noted, that though period for which dispute could be raised for determination before the institution is not mentioned in the law nevertheless section 5 of Employees Old Age Benefits (General) Regulations, 1980 regulates maintenance of record and submission of return by the employees whereby under subsection (2) record pertaining to persons in the insurable employment of employer was to be maintainable for two years or till persons under insurable employment are issued P1-03 Card, whichever is later. It is not disputed that P1-03 Cards have not been issued to the employees of petitioner so far. But at the same time non-issuance of same when admittedly petitioner's establishment was registered with the institution (i,e, Respondent No,1) towards September, 1982 would cast reflection on the conduct of respondent rather than penalizing the petitioner. Thus considering relevant provisions of 'The Act' and Regulations, 1980 we are prone to observe that Assistant Director Hub Region could seek inspection and examination of only those documents which are prescribed under section 12, or any other express provision of law. Accordingly directions contained in letters dated 6-4-1989 and 9-4- 1989 are defective. It may further be seen that details supplied by respondent vide letter dated 94-1989 are vague and scanty. It is not indicative whether demand thus raised relates to average short payment; total amount payable by the petitioners from September, 1982 till date; or balance payable after adjusting various amounts deposited by petitioner during said period. Factual position that demand for payment of arrears was raised for the first time through notice dated 11-3-1989 is not disputed on record. Therefore it was incumbent upon the respondent to have taken into consideration petitioner's objections and stand concerning deposits continuously made in this behalf, as well as claim for adjustment of that amount. Besides some basis ought to have been mentioned for straightaway demanding maximum increase of the contribution, which in spite of the protest of petitioner, unfortunately has not been explained.
Additionally, before directing recovery as arrears of land revenue, it was obligatory, that amount to be realised from petitioner should have been determined. Since objections are expressly raised by petitioner and payment of the amount or at least a part thereof was specifically asserted, therefore, factum of real amount payable by petitioner needed consideration and categoric determination by the Institution (Respondent No, 1), or its lawful delegates. It may be seen that hasty and hostile manner in which proceedings for recovery by way of land revenue are being pressed without properly determining amount due, is not only unjust but also smells of mala fides.
We are also fortified by the broad principle of law enunciated in the following reported judgments:- -
(1) Abdul Latif v. Government of West of Pakistan and others (PLD 1%2 SC 384).
(2) The Province of West Pakistan v. Muhammad Ayub Khoro PLD 1967 Karachi 673).
(3) Ark Ocean Lines Ltd. (A Private Company) Karachi v, The Director of Industries and Mineral Development (Coal Control Wing) and another (PLD 1976 Karachi 610).
(4) Zakria A. Bawani v. City Deputy Collector Karachi and two others (PLD 1974 Karachi 1008).
From the above discussion we are inclined to hold that notice of demand and proceedings initiated by the respondents without determining the amount validly due from petitioner, are unlawful and in excess of jurisdiction vested in them. Besides Assistant Director Hub has flagrantly disregarded law by raising demand of arrears without providing details to petitioner and compelling production of documents not sanctioned by the statute in addition to misusing powers prescribed by law. The proceedings thus drawn up by respondents being patently illegal are declared to be without lawful authority and of no legal effect.
However, we may observe that respondents, on providing fair opportunity to petitioner will be at liberty to raise proper demand, and may also examine relevant record to the extent permissible, and thus draw proceedings for recovery as contemplated by law.
The petition is accordingly accepted in the above terms. Parties are however, left to bear their own costs.