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Petitioner: SHAZIA BAIG VS Respondent: SECURITIES AND EXCHANGE COMMISSION OF PAKISTANHonorable Justice Shahid Anwar BajwaMuhammad Umer Lakhani,Ashiq Raza
2011 P L C (C.S.) 900
[Sindh High Court]
Before Shahid Anwar Bajwa and Tufail H. Ebrahim, JJ
SHAZIA BAIG and others
Versus
SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and others
M.As. Nos.16 and 18 of 2010, decided on 21st December, 2010.
(a) Constitution of Pakistan---
----Art. 199---Constitutional and appellate jurisdiction---Scope---Distinction and difference existed between jurisdiction under Art. 199 of the Constitution and appellate jurisdiction conferred by statute on a particular forum---If there are no statutory rules even then Constitutional petition is not maintainable if an appellate forum is provided by law.
(b) Appeal---
----Appellate forum---Powers---Appellate forum has same powers as the original forum and it is merely taking the matter from a lower to a higher forum---If departmental authority has a particular power, the appellate forum is not devoid of that power---Appellate Court merely steps into the shoes of original forum, albeit at a higher pedestal than the original authority and, therefore, exercise all such powers as are the powers available to original authority.
(c) Securities and Exchange Commission of Pakistan Act (XLII of 1997)---
----S.34---Companies Ordinance (XLVII of 1984), S. 7---Appeal---Maintainability---Promotion of employees---Appellants were employees of Securities and Exchange Commission of Pakistan who had been granted High Potential but they were not promoted---Validity---Orders of the Commission passed in respect of companies were contemplated by S.34 of Securities and Exchange Commission of Pakistan Act, 1997, and not order of the Commission in respect of its own internal working or matters relating to officers or its employees---Applicability of S.34 of Securities and Exchange Commission of Pakistan Act, 1997, was limited to the order of the Commission in respect of companies incorporated under Companies Ordinance, 1984---Fact that appellant was granted High Potential for a particular year did not ipso facto, without any consideration entitled him to be promoted to next cadre and there was no provision compelling the Commission to promote persons who had been granted High Potential at any given time---Promotion was not a vested right of an employee---Appeal was not maintainable and High Court declined to interfere in the matter under S.34 of Securities and Exchange Commission of Pakistan Act, 1997---Appeal was dismissed in circumstances.
Pakistan International Airlines Corporation v. Tanveer-ur-Rehman PLD 2010 SC 676; Chairman SECP v. Muhammad Ashraf Gondal (Civil Appeals Nos.305 and 306 of 2009); Walayat Ali Mir v. Pakistan International Airliness Corporation and another 1999 SCMR 650; Fazali Rehmani v. Chief Minister, N.-W.F.P PLD 2008 SC 769; Amanullah Khan and others v. The Federal Government of Pakistan through Secretary, Ministry of Finance Islamabad and others PLD 1990 SC 1092; Abid Hassan v. P.I.A.C. and others 2005 SCMR 25; Ms. Zeba Mumtaz v. First Women Bank Ltd. and others PLD 1999 SC 1106; Ghiasuddin Shaikh and others v. Federation of Pakistan and others 2007 PLC (C.S.) 140; Anwar Hussain v. The Agricultural Development Bank of Pakistan and others 1992 SCMR 1112; Muhammad Aslam, A.S.I. v. D.I.G. Police, Faisalabad Range, Faisalabad and 10 others 2001 PLC (C.S.) 1298; The Chief Engineer, Irrigation, Lahore Zone, Old Anarkali, Lahore and others v. Sajjad Hussain Bhatti 2003 PLC (C.S.) 1153; Secretary, Government of Sind Education Department and another v. Syed Riyazul Hassan Zaidi and another 1986 SCMR 64; Abdul Hameed v. Ministry of Housing and Works, Government of Pakistan, Islamabad through Secretary and others PLD 2008 SC 395; Muhammad Mubeen-us-Salam and others v. Federation of Pakistan through Secretary, Ministry of Defence and others PLD 2006 SC 602; Sui Southern Gas Company Ltd v. Engr. Naraindas and others PLD 2001 SC 555; Dr. Muhammad Amjad and another v. Dr. Israr Ahmed and others 2010 SCMR 1466; Pakistan International Airlines Corporation's case PLD 1978 Lah. 748; Riazuddin v. Pakistan International Airlines Corporation PLD 1992 SC 531; United Bank Ltd. v. Shamim Ahmed Khan PLD 1990 SC 990; Pakistan International Airlines Corporation v. Koural Channa PLC 1999 (C.S.) 1539; Managing Director Sui Sonthern Gas Company Ltd. v. Saleem Mustafa Sheikh PLD 2001 SC 176; Farasat Hussain and others v. Pakistan National Shipping Corporation and others 2004 SCMR 1874; Abdul Samad and others v. Federation of Pakistan and others 2002 SCMR 71; Managing Director Sui Southern Gas Company's case PLC 2003 (C.S.) 796 and Mrs. M.N. Arshad v. Naeema PLD 1990 SC SC 612 ref.
Muhammad Umer Lakhani for Appellant (in M.A. No.16 of 2010).
Ashiq Raza, Dy. Attorney-General for Respondent No.1 (in M.A. No.16 of 2010).
Makhdoom Ali Khan for Respondents Nos.2, 4 and 5 (in M.A. No.16 of 2010).
Abid S. Zuberi for Appellant (in M.A. No.18 of 2010).
Ashiq Raza, Dy. Attorney-General for Respondent No.1 (in M.A. No.18 of 2010).
Makhdoom Ali Khan for Respondents Nos.2 to 6 (in M.A. No.18 of 2010).
JUDGMENT
SHAHID ANWAR BAJWA, J--- With the consent of learned counsel for the parties these miscellaneous appeals were finally heard at Katcha Peshi stage and are being decided accordingly.
2. These appeals are filed under Section 34 of the Securities and Exchange Commission of Pakistan Act, 1997 read with section 7 of the Companies Ordinance, 1984. The appellant in Miscellaneous Appeal No.16 of 2010 is working as Deputy Registrar (Companies) in the Securities and Exchange Commission of Pakistan (hereinafter referred to as the SECP) in CPS-07 (equivalent to grade 18). He entered employment in the year 2000. SECP has a Potential Assignment Policy under which policy the officers were rated in one of the categories of; High Potential, Proving stage, Assets or Need Improving. High potential officers are those who "will be promoted within a period of three years depending on availability of suitable vacant posts". It is also provided in the policy that a maximum of 15 per cent of officers in each division/department can be assigned rating of "High Potential". It is also provided that if high potential officer is not promoted after being assigned potential rating for continuous period of three years he may be provided with job enrichment and enhanced compensation/rewards. It is also provided in the policy that potential ratings for each officer will be assigned by the concerned Executive Directors on the potential assessment form and will be endorsed by the concerned Commissioner. It is further provided that division-wise list of officers containing their ratings will then be presented before the Commission for final approval., For the year ending 2008 overall performance of appellant was rated excellent and he obtained an average of 9.19 marks when it was also noted in the performance appraisal form that the appellant was a capable, competent, intelligent, hardworking and devoted officer and needs to be promoted. In the potential assessment form appellant was shown as a high potential employee. In a meeting of Commission held on May 20, 2009 it was decided as under:---
Potential Assessment Rating & Promotions (Working Paper No.104). Chairman stated that potential assessment ratings and promotion recommendation from various Divisions/Departments of SECP as per Potential Assessment Policy have been received by HR Department (duly approved by the concerned Commissioner) including those of Junior Executives and Assistant Directors. It was recommended that all promotions from Junior Executives to Assistant Directors and Assistant Directors to Deputy Directors be made w.e.f. 1st July, 2009.
On the basis of potential assessment ratings and recommendations in respect of each officer, their promotions to next grade be and hereby approved (as per list attached). It was also agreed that a salary increased of 15% in basic salary on promotion shall be given to each promoted officer. Necessary letters in this regard will be issued by the Human Resource Department.
3. Appellant was also recommended for promotion as it was stated in the potential assessment form that he worked beyond expectation. A meeting of SECP was held on April 22, 2009 and following transpired in that meeting:---
(a) Revenue was estimated at Rs.1.358 million and expenses at Rs.1.64.2 million.
(b) Capital expenditure was estimated at Rs.663 million and, therefore expected deficit was at Rs.284 million.
(c) Economy measure was proposed and this included that promotions of Deputy Directors and above be delayed for a period of 6 months to one year.
(d) It was approved that no promotions above the level of Deputy Directors should be made. However, if revenue is improved then promotions issue would be revisited in meeting midterm review in January, 2010.
4. On December 23, 2009 Commissioner (Law) prepared a working paper. After referring to earlier decision on economy measures he stated that there was net surplus of income over expenditure and, therefore, duly recommended officers should be promoted. The matter was taken up in meeting of Commission and after detailed discussion it was decided as under:--
(i)
(ii) Comparatively, the Commission is a top heavy organization which requires a suitable reorganization/adjustment.
(iii) The Commission is already in litigation about its tax status and a threat of huge contingent tax liability cannot be ignored.
(iv) The existing promotion/potential assessment policy needs to be reviewed and a fresh criteria will have to be evolved.
Keeping in view the above, it was Resolved that the proposal may not be supported at this stage unless the specific issues as mentioned above are addressed appropriately. In this connection, Executive Director (HR) be directed to review the existing potential assessment policy in light of the above stated observations and a revised promotion policy be submitted to the Commission for its consideration and approval.
5. Commissioner (Legal) recorded his disagreement.
6. Performance Approval of appellant for the year 2009 was prepared. He was granted marks of 6.62 and rating of Good which was subsequently changed to very good by the appraiser's supervisor.
7. In comments by the SECP it is stated that Promotion Assessment Policy is meant only for internal guidance. It was further contended that it has not been violated. It was also contended that there are no statutory rules and, therefore, employment of the appellant was governed by the law of Master and Servant. It is also stated that although initially appellant was recommended but in the final list approved by the SECP the appellant was not approved for promotion. It was also stated that in 10th meeting of SECP held on 18-6-2010 new promotion policy was proposed. It was also stated that in 2009 appellant was not rated as High Potential but rated as "Assets" and his recommendation for promotion for previous year was withdrawn due to decline in his performance. It was also stated that promotions were approved in June 2010 but appellant was not approved for promotion. In fact no promotion in department of appellant was made. It was summarized that appellant's performance rating and potential rating were as under:---
2007
2008
2009
Performance rating
Good
Excellent
Very Good
Potential rating
Asset
High Potential
Asset
8. In Miscellaneous Appeal No.16 of 2010 appellant is working as Deputy Director in BS-18. In the year 2007 her performance was rated very good and in 2008 her performance was rated excellent. In 2009 her performance is rated good. She stated that since her transfer she has not been given any work. She was also not promoted in the meeting of SECP held on 18-6-2010. It is prayed by both appellants that it be held that they stood promoted as Joint Directors with effect from July 1, 2009 in accordance with working paper as approved by the Commission in its meeting held on 20-5-2009. Consequent directions and reliefs are also sought.
9. Mr. Abid S. Zuberi learned counsel for appellant in M.A. No.18 of 2010 made the following submission:
(a) Learned counsel referred to section 42(1) of the Securities and Exchange Commission of Pakistan Act, 1997 (hereinafter referred to as Act of 1997). and submitted that appellants are civil servants and in terms of subsection (2) section 42 of the Act they are to be deemed to be in the Service of Pakistan.
(b) Learned counsel referred to section 40 of the Act and contended that power to make regulation has been conferred on the SECP but no such regulation have been framed so far, although government has repeatedly asked the SECP to frame regulations. Learned counsel in this regard referred to letter dated March 3, 2008.
(c) Learned counsel referred section 34 of the Act 1997 and section 7 of the Companies Ordinance, 1984 and submitted that appeals are maintainable.
(d) Learned counsel pointed out that present list is not a writ petition and, therefore, judgment of the Supreme Court in Pakistan International Airlines Corporation v. Tanveer-ur-Rehman (PLD 2010 SC 676) is not applicable to the present appeal. Learned counsel referred to judgment of the Supreme Court -in Chairman SECP v. Muhammad Ashraf Gondal (Civil Appeals Nos. 305 and 306 of 2009) announced on 28-4-2010. Learned counsel also relied upon Walayat Ali Mir v. Pakistan International Airliness Corporation and another (1999 SCMR 650) and Fazali Rehmani v. Chief Minister, N.-W.F.P (PLD 2008 SC 769).
(e) Learned counsel extensively referred to performance, appraisal and potential assessment of the appellant to contend that exercise which resulted in denial of promotion to the appellant has been a manoeuvred exercise.
(f) Learned counsel submitted that appellant was recommended for promotion and the promotion was deferred in the meeting held on 20-5-2009 without a valid reason. He referred to the facts that bonus has been given to employees and salary increases have also been given. He submitted that he has to be promoted on the basis of assessment of 2008 and subsequent appraisal could not be taken into the consideration. He relied upon Amanullah Khan and others v. The Federal Government of Pakistan through Secretary,, Ministry of Finance Islamabad and others (PLD 1990 SC 1092) and Abid Hassan v. P.I.A.C. and others (2005 SCMR 25).
10. Mr. Muhammad Umer Lakhani learned counsel for appellant in M.A. No.16' of 2010 on legal points adopted arguments of Mr. Zuberi and referred to performance appraisals etc. of the appellant.
11. Mr. Makhdoom Ali Khan learned counsel for SECP made the following submissions:
(a) The submissions are being made on merits without conceding that appeal is maintainable. However, learned counsel did not argue aspect matter regarding maintainability of appeals.
(b) Learned counsel submitted that promotion is a multi tiered process culminating in final approval by the Commission and unless the Commission has approved, the fact that one level has recommended does not mean that appellant is entitled to promotion. When promotion policy was approved it was clearly stated that marks are mere threshold marks. The fact that an employee has crossed threshold would not mean that he is entitled to be promoted straightaway.
12. Learned counsel referred chronology of evidence and stated that on 12-10-2006 threshold marks for promotion to various categories were approved. On 14-2-2007 appellant applied for ex-Pakistan leave and thereafter on 27-9-2007 he applied for cancellation of ex-Pakistan leave with effect from October, 2007. Meanwhile, in June, 2007 appellant applied for the post of Joint Director. On 20-11-2007 Potential Assignment Policy was approved by the Commission. However, the policy did not create vested right in any person who is assessed in any particular category for being promoted to the next level. On 22-3-2008 performance appraisal of the appellant for the year 2007 was recorded. His performance was rated "Good" and he was rated as "Asset" in terms of potential. On 22-4-2009 a meeting of Commission was held. Deficit was noted and promotions for Deputy Directors and above were decided to be delayed for a period of 6 months to one year and it was also decided that promotions should be restricted that year and no promotion above the level Deputy Directors should be made. It was also decided that if revenue improved promotion issue may be revisited in the midterm view to be held in January, 2010. On 18-5-2009 43rd meeting of the Policy Board was held. The Chairman stated that as a result of liberal promotion policy adopted by the Commission over the last few years the Commission had become a top heavy organization. Therefore, Policy Board decided that promotions upto the level of Deputy Directors may be finalized and promotions of Deputy Directors and above may be deferred till position of revenue improves. Consequently, on 21-5-2009 promotion of officers upto level Assistant Directors were approved and it was also decided that 15 per cent increase in basic salary on promotion shall be given to each promoted officer. On 23-12-2009 the Commissioner (Law) submitted paper referred to in Para 4 above. This paper was considered in the meeting of Commission held on 19th and 20th of January, 2010 and the decision referred to in Para 2 above was recorded. On 9-4-2010 performance appraisal of appellant (Very Good) was recorded and on 21-4-2010 potential assessment of the appellant "Asset" was recorded (It was pointed by Mr. Zuberi that originally it was recorded as Proving Stage and then converted into Asset). On 18-6-2010 in a meeting of Commission promotions recommended in 2009 in respect of Management Cadre Employees were considered. The cases of Management of employees who were recommended in 2008 but not in 2009 were also discussed and Commission agreed with composite recommendation made in assessment year 2009. It was in consequence of this subsequent decision that promotion order dated 1-7-2010 was issued and the appellants were not promoted.
13. Learned counsel submitted that there are no statutory rules. It is only a policy which is merely guideline. The policy has not been violated. Even if policy is violated it has no statutory force and, therefore, it cannot be enforced. In respect of section 34 of the Act of 1997 learned counsel submitted that it only changes the level at which decision is to be scrutinized but it does not change the law which remains law of Master and Servant. Learned counsel in this regard relied upon Ms. Zeba Mumtaz v. First Women Bank Ltd. and others (PLD 1999 SC 1106) and Ghiasuddin Shaikh and others v. Federation of Pakistan and others (2007 PLC (C.S.) 140).
14. On the question that no violation of policy has taken place and, therefore, appeals are not maintainable, learned counsel relied upon Anwar Hussain v. The Agricultural Development Bank of Pakistan and others (1992 SCMR 1112). Learned counsel further submitted that promotion is not a vested right and in this regard he relied upon Muhammad Aslam, A.S.I. v. D.I.G. Police, Faisalabad Range, Faisalabad and 10 others (2001 PLC (C.S.) 1298), The Chief Engineer, Irrigation, Lahore Zone, Old Anarkali, Lahore and others v. Sajjad Hussain Bhatti (2003 PLC (C.S.) 1153), Secretary, Government of Sindh Education Department and another v. Syed Riyazul Hassan Zaidi and another (1986 SCMR 64) and Abdul Hameed, v. Ministry of Housing and Works, Government of Pakistan, Islamabad through Secretary and others (PLD 2008 SC 395).
15. With reference to the case of Muhammad Ashraf Gondal (supra) learned counsel submitted that it appears that the Supreme Court was not properly assisted.
16. There is no mala fide. In any case mala fides have to be properly pleaded and established. The promotions have been granted by Commission unanimously. If an employee is placed in Proving Stage, neither it bars his promotion nor guarantees his promotion, Learned counsel referred to Page 125 in the Appeal No.16 of 2010 and submitted it is not proper appraiser: it is merely written "as appraised by the outgoing Chairman". Learned counsel referred to Muhammad Mubeen-Us-Salam and others v. Federation of Pakistan through Secretary, Ministry of Defence and others (PLD 2006 SC 602) and contended that scope of interference in Appeal under section 34 is very limited.
17. While exercising his right of reply Abid S. Zuberi submitted that policy under which he was assessed is policy of 2007. He submitted that appellants had legitimate expediency as, they had been recommended for promotion and promotion as merely deferred for a period of 6 months and, therefore, fresh exercise or subsequent appraisal could, not be used as basis for denying promotions to the appellants. Learned counsel relied upon Sui Southern Gas Company Ltd v. Engr. Naraindas and others (PLD 2001 SC 555) and Dr. Muhammad Amjad and another v. Dr. Israr Ahmed and others (2010 SCMR 1466). Umer Lakhani filed a statement on behalf of appellant in Court which referred to certain newspaper clippings:
18. We. have considered the submissions made by the learned counsel and have also gone through the record.
19. Mr. Makhdoom Ali Khan submitted that policy has not been violated and even if policy is violated since it has no statutory force and is merely in the nature guidelines meant for internal guidance of its officers and does not confer any right enforceable at law, this appeal is not maintainable. Learned counsel further argued that substantive law remains law of Master and Servant and, therefore even if appeal under section 34 is maintainable it merely changes the level and does not change substantive law. Learned counsel relied upon Ms. Zeba Mumtaz's case (supra). Appellant in that case was an employee of First Women Bank Ltd. and after calling of her explanation her employment was terminated by paying her in lieu of notice period. Since at that time section 2-A of the Service Tribunals Act was effective she approached Federal Service Tribunal and Federal Service Tribunal dismissed her appeal on three counts which were concurred by the Supreme Court:---
(i) She had been given an opportunity of explanation and thereafter employment was terminated;
(ii) She had received notice pay, therefore she was not an aggrieved person and;
(iii) her employment was governed by the law of Master and Servant and, therefore, Service Tribunal could have ordered her reinstatement.
20. Learned counsel also referred to Ghiasuddin Shaikh's case (supra). In that case employment was terminated by giving one month's pay in lieu of notice period. Service Tribunal dismissed appeal holding that since there were no statutory rules the employment was governed by law of Master and Servant. There is plethora of case law starting from Pakistan International Airlines Corporation reported in PLD 1978 Lahore 748 coming right upto the case of Pakistan International Airlines Corporation v. Tanveer-ur-Rehman (PLD 2010 SC 676) in respect of employment governed by the law of Master and Servant. However, all this case law is in respect of maintainability of constitutional petition when employment is governed by the law of Master and Servant there being no statutory rules. On one hand there is case law of Ms. Zeba Mumtaz, Ghiasuddin Shaikh (supra), Riazuddin v. Pakistan International Airlines Corporation (PLD 1992 SC 531), United Bank Ltd. v: Shamim Ahmed Khan (PLD 1990 SC 990) and Pakistan International Airlines Corporation v. Koural Channa (PLC 1999 (C.S.) 1539) where it has been held that Federal Service Tribunal even if it had jurisdiction could not order for reinstatement in view of substantive-law of being law of Master and Servant. On the other hand there is case-law of Managing Director Sui Sonthern Gas Company Ltd. v. Saleem Mustafa Sheikh (PLD 2001 SC 176), Sui Southern Gas Company Ltd. v. Engineer Naraindas and others (PLD 2001 SC 555), Farasat Hussain and others v. Pakistan National Shipping Corporation and others (2004 SCMR 1874), Abdul Samad and others v. Federation of Pakistan and others (2002 SCMR 71), Managing Director Sui Southern Gas Company's case reported in PLC 2003 (C.S,) 796 wherein it has been held that even if there are no statutory rules the Federal Service Tribunal in appeal can order for reinstatement of an employee. Later view also find support from United Bank Ltd's case (supra) wherein it has been held that even non-statutory rule can be implemented or enforced through Section 2-A of the Service Tribunals Act.
21. There is, therefore, distinction and difference between jurisdiction under Article 199 of the Constitution of the Islamic Republic of Pakistan and appellate jurisdiction conferred by statute on a particular forum. It is settled beyond any shadow of doubt that even if there are no statutory rules and therefore writ petition would not be maintainable, if an appellate forum is provided by law, since it is settled law that an appellate forum has…
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