SME BANK LTD. VS CHAIRMAN APPELLATE AUTHORITY, 2013 PTD-ISLAMABAD 1400 (2012)

Employees' Old Age Benefits Act (XVI of 1976)---

----Ss.9 & 47(e) [as omitted by Finance Act (I of 2008) & 47(f)---S.R.O. No.898(I)/2001, dated 29-12-2001---Denial of bank to register itself under Employees' Old Age BenefitsAct, 1976 and pay contribution thereunder for its employees---Bank claimed to be covered by S.47(f) of Employees Old Age Benefits Act, 1976 and not obliged to make such contributions as same was created by Regional Development Finance Corporation and Small Business Finance Corporation (Amalgamation and Conversion) Ordinance, 2001, and was being managed, controlled and financed by Pakistan Government through its Ministry of Finance---Validity---Omission of Cl. (f) of S.47 of said Act by Finance Act, 2008 made applicable the Act to all Banks, Banking Companies and Financial Institutions w.e.f. 1-7-2008---Bank for being registered and operating in name of a Bank was not a statutory body, rather same referred to as a company in S.R.O. No.898(I)/2001, dated 29-12-2001, thus, was subject to the Act---Bank was, held to be bound to abide by terms and conditions of Employees Old Age Benefits Act, 1976 and make contributions thereunder.

Abdul Basir Qureshi, Advocate Supreme Courtfor the Petitioner.

None for the Respondent.

Date of hearing: 6th February, 2012.

ORDER

MUHAMMAD ANWAR KHAN KASI, J.---The petitioner has challenged the orders dated 28-1-2010 and 11-10-2011, passed by the Adjudicating and Appellate authorities of the Employees Old-Age Benefits Institution, whereby its' stand for exemption from the applicability of EOB Act, 1976 was rejected and was asked to be registered under the Employees Old-Age Benefit Act, 1976 and to pay contribution for its employees. In consequence of these orders, petitioner was directed to pay Rs.11,50,2000 as contribution towards EOBI vide demand notice dated 19-1-2012 within fifteen days.

It is contended that SME Bank is a statutory body created by Regional Development Finance Corporation and Small Business Finance Corporation (Amalgamation and Conversion) Ordinance, 2001 and is managed, controlled and financed by the Government of Pakistan through Ministry of Finance and its regular employees are insured and the Bank has its own pension and gratuity schemes, therefore, the petitioner is covered by clause (f) of 47 of the Employees Old-Age Benefit Act, 1976 and, therefore, the Bank is not under legal obligation to make any contribution towards EOBI.

It is reiterated that petitioner is a statutory body and is out of the ambit of the said Act, while Adjudicating as well as the Appellate Authority under the said Act failed to appreciate law and facts of the case.

It is finally contended that amendment in Finance Act No.1 of 2008 is not applicable to them, because they are covered by section 47 of the Act 1976.

Writ Petition No. 1594-2011,

Samina Farzain

Versus

Ministry of Information through Secretary and another

Heard and record perused.

There is no ambiguity about the interpretation of the amendment made through Finance Act No.1 of 2008, which has made the Act applicable to all the Banks, Banking Companies and Financial Institutions w.e.f. 1-7-2008 as clause (e) of section 47 of EOB Act, 1976 was omitted. The petitioner has been registered and is operating in the name of a Bank, therefore, cannot get the status of a statutory body to be out of the ambit of EOB Act, 1976. The banks and financial institutions are not exempted from EOB Act. The stand taken by the petitioner as being a statutory body, is liquified through S.R.O. No. 898(I)/2001, dated 29-12-2001, whereby the petitioner has been referred as a Company. The status of the petitioner is no more than a Public Limited Company operating as a Bank and, therefore, the EOB Act, 1976 is fully applicable and petitioner is required to abide by the terms and conditions of the Act, 1976 by making a contribution towards OBI.

In view of above, I see no reason to interfere in the impugned orders passed by respondents and the petition being forceless is dismissed in limine.

SAK/94/IslPetition dismissed in limine.