The Industrial Relations Advisers,

Management & Labour Laws Consultants


Room 3, 1st floor, Falaknuma Building, Near The Laboratory & Haroon Radio, Abdullah Haroon Road, Karachi

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Circular No. C 121                                                                                                                  Date: 19-08-2010



Abuse of the Land Revenue Act, 1967 by the Social Security

Institution and E.O.B. Institution


1.       Section 23 of the provincial Employees Social Security Ordinance, 1965 and Section 13 of the E.O.B. Act 1976 are in para material / identical, both provide increase upto 50% in case of delay in payment of contribution by employers and both provide the arrears including the increase may be recovered as arrears of land revenue.

2.       It is claimed by both the Institutions got their notifications issued declaring their Directors / Regional Heads as Asst Collector Grade-I under the Land Revenue Act, 1967 who made arbitrary claims of contribution and simultaneously also issued notices under Section 81 of the Land Revenue Act, 1967 as a coercive measure to pressurize employers, same were eventually challenged in the Sindh High Court under both the laws which held in the cases reported at NLR 1988 Labour 10=1987 CLC-253, Mumtaz Silk Mills Ltd. v/s SESSI and 1993 PLC 365, General Tyer and Rubber Co. of Pak. Ltd. v/s EOBI that the provisions of the Land Revenue Act, 1967 could be used only after determining due contribution through forum / machinery provided under both the laws and not as the first / starting step, yet these decisions of Double Bench of the High Court have been violated in many cases by both the institutions.

3.       In the case reported at 2009 PLC (C.S.) 799, M/s Exact private Ltd. v/s Province of Sindh & SESSI very Section 23 along with section 20 and 22 of the Provincial Employees Social Security Ordinance, 1965 (which are identical to Section 12 & 13 of the EOB Act, 1976 and equally applicable to it) received detail scrutiny by the Double Bench of the Sindh High Court which held that the after demand of the Institution if employer fails to pay the contribution the same may be recovered as arrears of land revenue as mentioned in Section 23 of the Ordinance but Section 23 of the Ordinance does not provide and confer powers to the Institution or its officials under the Land Revenue Act, 1967 to issue notices or attach any movable or immovable property of the defaulting employer but it provides mechanism to recover the contribution as arrears of land revenue and for this purpose complete and comprehensive procedure is provided in the Chapter VIII of the Land Revenue Act, 1967 and the matter may be referred to the Collector for the purpose of recovery and Section 81 of the Act and the provisions and the mechanism of recovery of land revenue under the Act would come in operation.

4.       From the above detail decision of the High Court it is very clear that both the Institutions and any officials of both the Institution have no powers whatsoever under the Land Revenue Act, 1967 and use of the same by them is totally illegal, inoperative, void ab initio and altra vires to the Constitution of Pakistan which may be noted carefully.

5.       While the employers are required to fulfill their legal obligations under both the laws but they should not allow to be harassed, victimized or black mailed by any misuse of the powers under the Land Revenue Act, 1967 by officials of both the Institutions.


               For M/s S.M. Yaqoob

          Industrial Relations Advisers

          &   Labour Laws Consultants