1. ' SARMAD JALAL OSMANY, J.---In this petition the demand by respondent No,2 under section 23 of the Sindh Employees Social Security Ordinance in the sum of Rs,68,732.80 being penalty on late payment of contribution by the petitioner under section 20 of the Ordinance, has been challenged.
2. ' The brief facts of the matter are that the petitioner is registered under the Sindh Employees Social Security Ordinance, 1965 and has been paying regular contributions in respect of those of its employees who are earning wages upto Rs,1,500 per month as per the requirement of the said Ordinance. In 1993 the limit of the wages of said employees was raised to Rs,3,000 per month which thereby also obliged the petitioner to pay contributions to the Institution of those of its employees who were earning upto Rs,3,000 per month. Consequently a petition being C.P.No, 601 of 1994 challenging the said increase was filed by same companies regarding the same. The said petition was admitted and is pending before this Court. However, in the meanwhile the petitioner upon advice from the Karachi Stavedores Conference (which is its parent body) that the said petition is sub judice did not pay any contribution with regard to those employees who were wearing any amount over and above Rs,1,500 per month. Finally, on 21-9-1994 the petitioner at its own behest decided to pay the additional contribution beginning from September 1993 to July 1994 on the basis of enhanced wages of upto Rs3,000 per month totalling Rs,159,585.86. A copy of the receipt issued by the Institution in this regard has been filed as Annexure 'B' to the petition.
3. ' Based upon the above factual position the petitioner has prayed that the impugned demand be declared as without any, legal validity and be quashed. A further prayer is that section 23 of the Sindh Employees Social Security Ordinance be declared as being violative of the fundamental rights of the petitioner and as such a nullity in the eyes of law. The grounds taken for seeking such prayers is that imposition of the penalty is against the principles of natural justice; the demand has been sent after 16 months without giving any opportunity to the petitioner for making any representation before the respondents that no speaking order has been served by the respondents upon the petitioner, and consequently the impugned notice is a violation of the fundamental rights of the petitioner.
4. ' In support of the petition Mr. R.F. Veerjee, Advocate has vehemently asserted the abovementioned grounds and has laid particular stress on the fact that it was only after the petitioner having voluntarily deposited the difference in the contribution, that the respondents have served the impugned notice and demanded the penalty, due to the late deposit of the said difference. Mr. Veerjee has further asserted that in any event the provisions of section 23 of the Ordinance, which provide for the penalty for late payment, are not attracted in the pecular circumstances of the case. In support of this contention learned counsel has relied upon R.C.D. Ball Bearing Limited v.
5. Sindh Employees Social Security Institution, Karachi (PLD 1991 SC 308), M/s. Hindustan Steel Ltd. v.
6. The State of Orissa (AIR 1970 SC 253). As regards the maintainability of the petition learned counsel has relied upon Shabbir Ahmad v. Mst. Kabir-un-Nisa (PLD 1975 SC 58), United Sugar Mills Ltd.
7. Karachi v. District Magistrate, Sulaur and another (PLD 1979 Kar. -410), Haji Hashmatullah and 9 others v. Karachi Municipal Corporation and three others (PLD 1971 Kar 514).
8. ' On the other hand, Mr. Habibullah learned .Counsel for the respondents has opposed the petition on the ground that as per the scheme of the Ordinance the petitioner is under a statutory duty to pay its contributions to the Institution and in this regard there is no need of any prior notice or demand. So also he has contended that the provisions of section 23 of the Ordinance whereby penalty has been imposed for late payment via the impugned order does not oblige the Institution to issue any show-cause notice before such imposition. Learned Counsel has in support of his contention relied upon the case of R.C.D. Ball Bearings (supra) as well as Annoor Textile Mills Ltd. v.
9. The Federation of Pakistan (PLD 1994 SC 568). He has also cited the case of Kohinoor Chemical Co.
10. Ltd. And another v. Sindh Employees Social Security Institution and another (PLD 1977 SC 192).
11. ' We have heard learned counsel for the parties and our conclusions are as under: There is no cavil with the argument that where the impugned action/order is without or in excess of jurisdiction or is otherwise unlawful either being violative of a petitioner's Fundamental Rights under the Constitution including the right to be heard, or in violation of any other law, then certainly this Court can interfere in exercise of power under Article 199 of the Constitution. As such is a well- settled principle of law and to that extent there is no need of any further discussion either of the case law relied upon by learned Counsel for the petitioner in support of the petition or further pronouncements handed down by the Superior Courts.
12. ' It, therefore, remains to be considered whether the impugned demand is violate of any fundamental right which the petitioner possesses or is otherwise violative of any other law or without jurisdiction etc. In this context it would be beneficial to examine the relevant provisions of the Ordinance regarding the petitioner's obligation to pay contributions to the. Institution on behalf of their employees. As per section 20(1) of the Ordinance the employer (i,e, petitioner in this case) is bound to pay in respect of every employee, a contribution to the Institution, at such rate and time and subject to such conditions as may be prescribed. Section 23 thereafter provides for an increase in the unpaid contribution by the employer (in accordance with section 21) and its recovery where it fails to pay on the due date the contribution payable. However, said increase cannot be more than 50% of the amount due and is recoverable as arrears of land revenue. Both the above provisions of the Ordinance have been considered by the Hon'ble Supreme Court in the cases of Kohinoor Chemical Co. Ltd. And Messrs R.C.D. Ball Bearing Ltd. (supra) It was held inter alia in Kohinoor Chemical Co. Ltd. That the employer was under a statutory duty to pay the contribution under section 20 of the Ordinance and keep the necessary records under section 21 thereof irrespective of any action to be taken or initiated by the Institution or any demand being made thereto. This case was followed by the Hon'ble Supreme Court in R.C.D. Ball Bearing Ltd. Wherein it was further held that as per section 20 of the Ordinance the accrual of the liability to pay the contribution is automatic and the charge is created by law unconnected with any proceedings for determination of the same. In the instant case the provisions of section 23 of the Ordinance were also considered with regard to the levy of increase in case of the Employer's failure to pay its contribution. A distinction was made between the words "fail" as used in section 23 and "default" and it was held that these are not synonymous. Consequently the Hon'ble Supreme Court, came to the conclusion that the employer could not avoid the penal provisions of section 23 of the Ordinance unless it was established that there was no failure on its part to make the contribution but on account of the acts/omissions on the part of the Institution. In was further held that, "the reasonable interpretation of the word "fail" used in section 23 of the Ordinance will be that in order to attract the penal provisions of the levy of increase contained in the above section there could be in-excusable neglect or omission on the part of the 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.
13. Consequently on the facts of the particular case the Hon'ble Supreme Court came to the conclusion that as the High Court had stayed recovery of the amount on which increase in terms of section 23 of the Ordinance was sought to be recovered, the employer was not bound to pay such increase during the period when the stay was operative.
14. ' Accordingly in the present case we are of the view that in terms of section 20(i) and/or section 23 of the Ordinance, the Institution was not bound to serve any demand, show-cause notice or give any personal hearing to the petitioner either before the petitioner's obligation to pay the initial contribution became operative or at the time of the impugned demand for increase. The only reason for the delayed payment canvassed at the Bar on behalf of the petitioner was the genuine belief on their part that due to the pendency of C.P. No,601 of 1994, they were not liable to pay contributions on the basis of enhanced wages can hardly held the petitioners as mere pendency of a case in Court challenging the vires of any amendment -in any law is no excuse not to abide by such amendment whatever be the consequences. In this regard, the case of R.C.D. Ball Bearings is distinguishable because there a valid stay order was in operation on the basis of which the obligation to pay the increase was excused. Accordingly we hold that the petitioner's failure to pay the increase in the circumstances of the case was due to its own negligence and not due to any other reason.
15. ' Mr. Veerjee's next contention is that the impugned demand under section 23 has been made- after nearly sixteen months of the date when the petitioner voluntarily paid the enhanced contribution and to that extent the demand is mala fide and should be struck down on this score. In this regard, we have already held that the provisions of section 20 oblige the petitioner to pay the contributions without any prior demand or hearing by the institution. Section 23 of the Ordinance, therefore, needs to be construed in this perspective i,e, the petitioner's statutory obligation to pay contributions in terms of section 20 of the Ordinance. It is trite law that once the operation of . Any provision of any statute is set in motion, particularly a fiscal statute such as the one under consideration, obliging a person/company to do a certain act, then, unless that act is violative of any of that persons rights or of any law or otherwise defective its operation cannot be .Complained of. However, where that particular statute itself limits the operation of any of its provisions or creates terms and conditions for such operation then such limitations, terms and conditions would have to be observed. A perusal of the Ordinance would indicate that the petitioner's obligation to pay contributions under section 20 to the Institution are not circumscribed or limited by any term or condition as to either any demand/hearing as already held by us or as to the cessation of such obligation with the passage of time. In facts section 23 of the Ordinance provides for precisely the situation where the petitioner does not pay its contributions within time and provides for penalties thereto. Similarly the penalty provided for in section 23 do not lapse or otherwise disentitle the Institution to receive the same either with the passage of time or failure on their part of demand the same due to any lapse of time. Consequently we are of the opinion that mere delay on the part of the respondents in demanding an increase from the Petitioner's in terms of section 23 of the 0, finance is not fatal to such demand and to that extent do not find the impugned demand to be defective in any manner so as to warrant interference by this Court in its Constitutional jurisdiction.
16. ' Finally Mr. Veerjee has contended that section 23 of the Ordinance is a punitive provision of law and places an unfair and unreasonable restriction on the petitioner's right under Article 10 of the Constitution to engage in its business of stevedoring etc. There is of course again no cavil with the proposition that person/company can engage in any lawful business, trade or profession which is a fundamental right of citizens under Article 18 of the Constitution. However, we are unable to see how a fiscal statute such as the one in question requiring the petitioner to make contributions to the Institution for the welfare of its employees can be considered to be in violation or in derogation of Article 18 of the Constitution. Similarly section 23 imposing a penalty on the petitioner for late payment in making such contributions cannot also be construed to be in violation of the petitioner's right to engage in any lawful business activity. To hold otherwise would lead to absurd results, not the least of which would be to question the right of the State to tax its citizens or to impose other financial burdens upon them in accordance with the provisions of a Statute. Mr. Veerjee was not able to place any case law on this point or even expand his arguments any further and consequently we are of the opinion that section 23 of the Ordinance being by way of penalty for the petitioner's failure to make payments in accordance with section 20 thereof cannot be impugned on the basis of Article 18 of the Constitution.
17. ' For all the foregoing reasons, we see no force in the petition and accordingly dismiss the same.
18. There will, however, be no order as to costs. Order accordingly.