1. ' This Miscellaneous application has been filed against the judgment dated 16-1-2001 passed by respondent No,1 in Appeal No,5 of 1998 by which the order dated 12-5-1998 of the respondent No,2 was upheld and the appellant was found to be liable to pay Social Security Contribution as demanded by the respondent No,3. The facts of the matter are that the appellant is engaged in manufacturing of Rubber Tyres and Allied Products, and have their Factory premises at H-23/2, Landhi, Karachi. The head office of the appellant is situated in Beaufort Building, 1.1. Chundrigar Road, KarachiThe appellant is duly registered with the Social Security Institution and is paying contribution regularly in respect of its secured person who fall within the definition of the term employee as defined under section 2(8)(t) of the Provincial Employee Social Security Ordinance, 1965 and that there has been no default in this behalf. That on 25-11-1991 and again on 27-11-1991 appellant received two claims from the respondent No,3 one was a general circular addressed to all the employers registered.At the Landhi Directorate of the Social Security Institution and the second was addressed to the appellant in which reference to earlier circular letter dated 25-11-1991 was made. In these two letters the claim made by the respondent No,3 was that the employees whoe wages have exceeded Rs,1,500 per month shall continue to remaining secured persons and contribution in their respect shall be payable up to the daily wages of Rs,60 per day. This claim was made on the basis of interpretation of the judgment of the Hon'ble Supreme Court of Pakistan in the case of Sessi v. M/s Dawood Cotton Mills Ltd. In PLD 1988 SC 1. It is also stated in the letter dated 27-11-1991 that the workers who have crossed the wage limit of Rs,1,500 per month were not exempted from the Social Security Scheme and that contribution on their behalf be paid. It appears that record of the appellant was inspected under section 22 of the Provincial. Employees Social Security Ordinance, 1965 whereafter the respondent No,1 sent his letter dated 13-12-1992 to the appellant alleging that it has been observed that the appellant has not paid contribution in respect of 519 Workers whose wages have exceeded Rs,1,500 per month on the presumption that these workers cease to exist as secured worker. In this letter the respondent No,3 made reference to various provisions of the Provincial Employees Social Security Ordinance, 1965 and concluded that in case wages of secured person exceed Rs,1,500 per month, such person will not cease to be secured person and contribution on his behalf shall be payable on his daily rate of wages up to Rs,60 per day and such observation is based upon section 20(4)(a) of the Provincial Employees Social Security Ordinance, 1965. On this basis the respondent No,1 made an assessment of Rs,28,70,280 and demanded its payment within seven days of the receipt of the letter dated 13-12- 1992 with observation that if such demand is disputed, a proper representation duly supported by documentary evidence be made to the respondent No,3. The appellant has sent its letter dated 5- 1-1993 to the respondent No,3 in which the appellant informed that a Constitutional Petition No,D- 1278 of 1992 has been filed by the appellant against the Social Security Institution in which the respondent No,3 was also impleded and in which petition, the counsel appearing from the side of the Social Security Institution has given an undertaking that no recovery of the dues will be made till the disposal of the said petition. It was stated that the said Constitutional petition was filed challenging the instructions of the head office of the Social Security Institutions wherein its Directorate was advised to recover Social Security Contribution on the basis of the interpretation given by the head office on the aforesaid judgment of the Hon'ble Supreme Court of Pakistan. The appellant in its letter dated 5-1-1993 also challenged the assessment on merits and ultimately prayed for having the notice dated 13-12-1992 withdrawn. It appears that the said reply dated 5-1- 1993 of the appellant was not considered by the respondent No,3 who issued notice dated 7-1-1993 under section 81 of the Land Revenue Act, 1967 read with Rule 118 of the Land Revenue Rules, 1921 to the appellant demanding payment of Rs,28,70,280 for the period January, 1989 to December, 1991.
2. The appellant challenged the said notice of demand by way of petition under section 57 of the Provincial Employees Social Security Ordinance, 1965 filed before the respondent No,2. The respondent No,2 vide its decision dated 12-5-1998 and upheld the demand made by the respondent No,3 and directed the appellant to deposit Rs,28,70,280 within a period of 30 days from the date of announcement of the decision. This decision of the respondent No,2 was challenged by the appellant by tiling an appeal under section 59 of the Provincial Employees Social Security Ordinance, 1965 before the respondent No,
1. The respondent Institution contested the said appeal.
3. After hearing the parties. The respondent No,1 gave its judgment dated 16-1-2001 maintaining the decision given by the respondent No,2. The appellant has tiled this appeal under section 64(2) of the Provincial Employees Social Security Ordinance, 1965 by which the said judgment of the respondent No,1 is challenged.
4. I have heard the arguments of Mr. Mehmood Abdul Ghani, learned counsel for the appellant and of Mr. Khalid Habibullah, learned counsel appearing for the respondent. It is contended by the learned counsel for the appellant that the issue raised in the present appeal has been decided by the Hon'ble Supreme Court of Pakistan vide its judgment dated 27-7-2001 in the case of the Commissioner Sindh Employees Social Securities Institution and another v. Messers E.M. Oil Mills and Industries Ltd. S.I.T.E., Karachi and 2 others reported in 2002 SCM R 39. At page 46 of this judgment, the Hon'ble Supreme Court of Pakistan has held as follows:- "8. The fate of all the appeals essentially hinges on the interpretation and application of the judgment of this Court reported as Sindh Employees Social Security Institution v. Dawood Cotton Mills Ltd. (PLD 1988 SC 1). Brief facts of that case are that demands made by. The Institution on the Mills in respect of certain payments made to its employees were challenged by the Mills through an appeal wherein it was pleaded, inter alia, that some of the employees drawing more than Rs,20 per day were not covered by the Ordinances. The appeal was dismissed by the concerned Appellate Court as a result of which an appeal was tiled before the High Court of Sindh. Karachi which was partly allowed and the case was referred back to the Institution with the observations that the Mill was not liable to pay the contribution in regard to the employees whose wages are more than Rs,20 per day because the employees whose wages exceed Rs,20 per day are to be excluded in computing the amount of contribution in view of subsection (4) of section 20 of the Ordinance. Aggrieved by the Judgment of the High Court the Institution filed a petition for leave to appeal which was granted to examine whether the Mill was not liable to make contribution in respect of the employees who' are covered by the definition of employee but the wages being drawn by them exceed Rs,20 per day. The appeal was allowed and the direction by the High Court to the Institution for further investigation into the formulated question was withdrawn with the following observations:- "It does not require or permit the exclusion of an employee vis-a-vis the contribution simply because he is receiving more than Rs,20 as wages per day. On the other hand, a more natural construction of this provision would mean that the amount "in excess of Rs,20 per day paid as 'wages' to an 'employee' would not qualify for contribution to the Institution, i,e,, the amount corresponding to the excess. Therefore, if an employee was getting Re.1 in excess of Rs,20 per day as wages contribution would be payable on the wages up to Rs,20 per day; but no contribution would be payable on the excess wages, i,e, Re.1 per day. Thus, interpreted there would be no clash between the definition of employee as contained in section 2 and section 20(4)(a) of the Ordinance. In doing the proper exercise for discovering whether any amount payable as wages is liable to be subjected to the contribution, it would first have to be seen whether the employee falls within the definition as contained in section 2(8). After this, if it is found that a certain employee is covered by the definition the liability to the contribution would have to be determined under section 20(4)(a) read with the other provisions of the relevant law which deal with the amount of wages payable to an employee."
(9) The appellants in the first set of appeals i,e, the institution and the appellants in the second set of appeals, namely the establishments both have claimed that the dictum supports their view point. It was urged by Mr. Khalid Habibullah with great vehemence that notwithstanding the quantum of wages mentioned in the unarnended clause (f) of subsecticn (8) of section 2 of the Ordinance an employee shall remain secured and contribution would be payable up to the amount mentioned in section 20 thereof. The learned counsel representing the establishment took the stance that .The law laid down in the said authority leaves no room for doubt that unless a person falls within the definition of the term 'employee' the establishment is not liable to make contribution envisages by section 20 of the Ordinance. The plea of the Institution was considered and referred in the impugned judgment giving rise to the first set of appeals but in the impugned judgment dated 11-12-2000 reference to the law laid down in the said authority was made in passing and relief was granted to the Institution mainly. For the reason that proviso to section 2(8)
(f) of the Ordinance being declaratory, beneficial, curative, remedial and welfare legislation would apply retrospectively. Be that as it may, in view of the observations "In doing the proper exercise for discovering whether any amount payable as wages is liable to be subjected to the contribution, it would first have to he seen whether the employee falls within the definition as contained in section 2(8). After this, if it is found that a certain employee is covered by the definition the liability to the contribution would have to be determined under section 20(4)(a) read with the other provisions of the relevant law which deal with the amount of wages payable to an. Employee" (underlining is ours) highlighted- above there is no difficulty in holding that the view point of the establishment has an edge over that of the Institution and law laid down in the authority is fully attracted. An employee whose wages exceeded Rs:1,500 per month did not qualify to be an employee for the purpose of the Ordinance and as such no contribution was payable in respect of such employee during the period preceding the promulgation of Labour Laws (Amendment) Ordinance, 1993 and Labour Laws (Amendment) Act, 1994."
5. ' It is not disputed by the learned counsel for the respondent that the issue in this Matter stands decided by the above-referred judgment of the Hon'ble Supreme Court of Pakistan, he however, tried to argue that the above mentioned, reported judgment of the Hon'ble Supreme Court of Pakistan should not he applied this case as there are some additional grounds rendering the judgment of the Hon'ble Supreme Court of Pakistan distinguishable from this case. I am afraid that I cannot subscribe to the submissions of the learned counsel for the respondent. The main reason is that in view of the judgment of the Hon'ble Supreme Court of Pakistan deciding the law point which is similarly raised in this appeal, this Court is bound to follow the judgment of the Hon'ble Supreme Court of Pakistan.
6. ' In this view of the matter, it is not necessary for me to consider the other grounds raised by the learned counsel of the respondent. This appeal has arisen out of the demand raised by the respondents against the appellant for payment of contribution in respect of employees whose wages have exceeded Rs,1.500 per month and such employee having been held as not qualifying to be an employee under the, Ordinance pursuant to the above referred judgment of the Hon'ble Supreme Court of Pakistan, the appeal has to succeed and is allowed and the impugned orders of the respondents are set aside and the demands of the respondents of Rs,28,70,280 against the appellant, is also set aside as being not in accordance with law. There will be no order as to costs.
7. CMA 298 of 2001 is also disposed of in the above terms.