Employees' Old-Age Benefits Institution

Ministry of Labour Manpower & Overseas Pakistanis

Government of Pakistan



No. HO/BS/OPS/2002

 August 07, 2002


CIRCULAR NO. 11/2002-03






It has been observed that demand raised in cases of suo-moto registration is seldom sustained in adjudication orders on account of following technical flaws and legal defects:-


  Lack of evidence;


  Non-confrontation of basis of assessment;


  Violation of law of natural justice. "Audi Alterm partrem" i.e. non-provision of opportunity of being heard. It has been held by Supreme Court of Pakistan in a series of cases reported PLD-2002-SC-408, 1991-SCMR-932 & 1997-SCMR-1543 that no adverse inference can be drawn against a person without providing him the opportunity of being heard.

A. Procedure For Issuance Of D&Sc.

The procedure of issuance of Demand and Show Cause has been reviewed and brought in conformity with the Section 12(1) and 12(3). The formats used for issuance of D&SC notices have been redesigned keeping in view the statutory requirements to meet the ends of justice.

(i).   Information. Section 12(1)(a) empowers the "authorized officer" of the Institution to call for information, which he considers necessary for ascertaining correctness of any of the particulars stated in the record or return and for compliance of any provision of the Act. The authorized officers shall, therefore, in the first instance call for necessary information under Section 12(1)(a) to verify correctness of the declaration made in Form SL-001 in the case of new registration and substantial evasion. Specified reminders called "Reminder-I" form SL-001.1 and "Reminder-II" form SL-001.2 may follow the requisition. In case, the information called for is not furnished by the employers or the "authorized officer" believes that the information furnished is not accurate, a notice under section 12(1)(b)/(c) for checking of books of accounts and visit to the establishment shall be issued in form SL-002.

(ii)   Agreed Assessment.

a) Where the employer provides the information called for in the letter under section 12(1) and/or produces books of accounts, an assessment for the contribution due by the employer shall be made under the EOB Act, if no objection is raised by the employer in format SL-002.1.

b) Where the employer raises the objection he shall be confronted with facts and evidence relied upon by the authorized officer. If agreement is reached through discussion on the basis of checking of Book of Accounts, the agreement shall be recorded and signed by both the employer as well as the authorized officer of the Institution on format SL-002.2.

c) After signing the agreement on the assessment the authorized officer shall pass order under Section 12(3) as per guideline issued vide circular No. 12 dated 7-8-2002.

(iii)    Contested Assessment.

Where the employer does not agree with the assessment based on checking of books of accounts, the authorized officer shall pass a speaking order explaining the reasons and basis for computation of number of persons, wages paid and applicability of EOB Act, 1976 as per guideline issued vide circular No. 12 dated 7-8-2002.

(iv) Ex-Pate Assessment.

Where the employer fails to provide the information as well as books of accounts a Show Cause Notice under Section 12(3) shall be issued in format SL-002.3 confronting the employer with evidence available with the authorized officer based on the information furnished by the employer; evidence collected from the employer's premises or from the books of accounts examined at the time of visit or any other evidence collected from reliable and authentic sources giving the employer fifteen days time to file objection, if any. Thereafter the Assessment Orders under Section 12(3) shall be issued in form SL-003 as per guide-lines issued vide Circular No. 12 dated 7/8/2002.

(v) Assessment In Case Of Default In Regular Payment.

Where an employer fails to make regular payment of contribution consecutively for three months, he shall be confronted with the default and requested to make payment of amount due along with statutory increase, failing which demand shall be raised under Section 12(3) in the format SL-002.4.

(vi). Demand Notice.

A Demand Notice under section 12(3) in the form SL-004 shall be prepared on the basis of assessment order to convey the demand U/S 12(3) to the employer for payment on a specified date within fifteen days. The demand notice shall indicate that in the case of non-payment, statutory increase shall be raised in accordance with the following schedule;-

1. Where payment is made within 45 days

No increase

2. Where payment is made after 45 days but on or before 365 days

18 %

3. Where payment is made after 365 days but on or before 730 days


4. Where payment is made after731 days


B. Format For Registers.

Following registers shall be maintained to record the proceedings, demand and arrears;

A. Show Cause Notice Register (SCNR):

Record keeping of Show Cause, and Demand Notices has also been revised as per new format of "Show Cause Notice Register (SCNR)" prescribed as Appendex-001.


The demand created under Section 12(3) shall be entered in the Demand and Collection Register prescribed as Appendex-002. The recovery made out of current demand shall be termed as recovery of current demand. This register shall reveal the number of show-cause notices issued; the evidence relied upon, the number of cases settled and amount realized. The Monitoring & Inspection authorities shall monitor performance of field officers through inspection of this register and comment on the quality of such notices and proceedings and ultimate results in terms of contribution.


The current demand of the contribution which remained un-collected after close of the financial year shall be named as arrears and shall be transferred to another register from Demand and Collection Register" named Arrears Register" prescribed as Appendex-003. Payment made against current demand shall be credited on the basis of PR03 form and entry to that effect shall be made along with date under signature of authorized officer. Remission on account of adjudication orders under Section 33, 34 and 35 shall be recorded by the authorized officer and test checked by Regional Head.


An alphabetical register called "Arrears Ledger" shall be maintained to record year-wise total arrears outstanding against an employer in order to bring together all arrears pertaining to an employer at one place to facilitate recovery and identify big defaulters for systematic recovery action prescribed as Appendex-004. Balances shown in the ledger account shall be corrected/updated as and when payments are made. Cross reference between Demand & Collection Register, Arrears Register and Arrears Ledger shall be made for facility of reference.


The monthly summary of the changes shall made in each Register and figures of performance reconciled and reported from such registers.

The Zonal Head shall acknowledge the receipt of the circular and request for clarification, if any, needed for proper understanding of procedure within seven days of receipt of this circular. In case no query is received it shall be presumed that all field officers have understood the procedure and it shall be adhered to accordingly.



                                                                                                              (Muhammad Shafi Malik)