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Petitioner: ANWAR HUSSAIN VS Respondent: THE AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN JUDGMENT
Court Name: Supreme Court of Pakistan Judge(s): Ajmal Mian, Zaffar Hussain Mirza Title:ANWAR HUSSAIN vs THE AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN
JUDGMENT
Reported As: 1992 SCMR 1112 Result: Appeal dismissed Judgment JUDGMENT ' ZAFFAR HUSSAIN MIRZA, J.---This appeal is directed against the judgment of a learned Single Judge of the High Court of Sindh at Karachi, dated 26th April, 1981 whereby the Revision Application filed by the respondents herein, was allowed and the judgment and decree of the trial Court as well as of the Appellate Court were set aside. ' The brief facts leading to this appeal are that appellant, Anwar Hussain, was appointed as Junior Officer in Agricultural Development Bank of Pakistan, respondent No,1 (hereinafter to be referred to as the Bank), on the terms and conditions contained in the letter of offer issued to him on 15th May, 1974, which was accepted and he was posted as Manager in the Branch Office of the Bank at Khairpur. In accordance with the terms and conditions, the appellant executed service agreement in the prescribed form and furnished, security in the sum of Rs,2,000. The service agreement and the personal surety furnished by the appellant was stipulated to remain in operation for five years. Thus, the appellant undertook to serve the Bank for a period of five years. It is the case of the appellant that in view of the aforesaid terms and conditions of his service, he was not allowed to resign from the service and that he had agreed that in case he discontinued or abandoned the service on his own accord before the expiry of the aforesaid stipulated period of five years, he was bound to compensate respondent No,1 to the extent of the security. ' In the events that happened, on 18th September, 1976 the appellant proceeded on medical leave for one month. Thereafter according to him due to compelling circumstances, on 6th October, 1976 he served respondent No,1 with notice which reads as under:-- ' The Chairman,
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' Agricultural Development Bank of Pakistan, ' Head Office, Islamabad. ' Subject:--Submission of Resignation. Dear Sir, ' I have the honour to submit that I hereby give one month's notice for, tendering the resignation which is essential in case of probationary Manager. The period of this notice will be counted from today and will expire on 6-11-1976. As such my resignation may kindly be accepted from 7-11-1976 for which .1 have been compelled by our organisation to tender by creating following circumstances:-- (1) That I have been personally approaching the worthy Chairman and the E.D. (S) for my transfer from Kandhkot to any other Branch near to Larkana since about last 16 months under some circumstances which were explained by me personally from time to time, but even after the promises by the worthy Chairman and the E.D.(S) I were kept on empty hopes for my transfer since March last.' Finally in September, 1976 situation at Kandhkot became such that my life at Kandhkot was in danger which fact I brought into the knowledge of the E.D.(S) personally at Karachi yesterday the 5th instant. But E.D.(S) clearly refused to give me a hearing which is clear proof that E.D.(S) has ill-motive against me. (2) That everybody is being given the posting of his choiced place whoever is that sweet person of E.D.(S) and the Joint Director Administration Zonal Office, Karachi. But since I am not paying anything to the above Officers, I am being victimized at every occasion. In this regard I can quote an instance of refusal of allowing me a TA. Bill for my official tour, by the Zonal Office, Karachi. (3) That the worthy Chairman though has allowed all the Bank employees' and officers to report their grievances direct to him for its removal but these instructions are only placed in the circular files and practically it is not such. I met the worthy Chairman at Islamabad in March last in connection with my transfer problem and the worthy Chairman promised for transferring me from Kandhkot to near place to Larkana. But I am sorry to asking on telephone by the Zonal Office and the Head Office that my proposals for transfer have been lying on the Chairman's table but it were never approved. Frequent transfer orders are being issued by the Zonal Office, Karachi in case of Assistant Manager and other officers but my case of transfer has never been considered. This is a worst instance of favouritism by which corruption is being encouraged in the organisation as corrupt officials are being given facilities only, who pay something to E.D.(S) and Mr. BA. Siddiqui. (4) That at present I am on leave on medical grounds but my posting is remained at Kandhkot where there has arrived an enmity of local people with me. My life at Kandhkot is in a danger. Whereas the worthy E.D.(S) has refused to consider my transfer from Kandhkot. As such I give preference to save my life rather than save my service. In such a way I have been compelled to resign. Had I been transferred from Kandhkot to Larkana or nearer to Larkana, I could have continued to serve. (5) That as per agreement I have been made to serve for the minimum period of 5 years. In other case I have to pay Rs,2,000. But since I am not resigning from the post voluntarily but I have been compelled to resign by creating above-mentioned circumstances, hence I will not be liable to pay Rs,2,000 as per agreement. And if my this plea is acceptable, my resignation may kindly be accepted from 7-11-1976." ' As observed in the aforesaid notice, the appellant had requested that his resignation may be accepted with effect from 7th November, 1976, but before that date the appellant proceeded on medical leave and on 1st November, 1976 sent a telegram to the Chairman of the Bank withdrawing his resignation and requesting for consideration of his transfer case. On 3rd November, 1976, the appellant received a telegram from the Bank which reads as follows:-- "No Admn.1/14(499) reference your letter of October, Sixth(.) Your resignation has been accepted on usual terms(.) Deposit Rupees two thousand as cost of training in Karachi immediately(.) You will
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stand relieved from Bank service from November seventh forenoon-Agrifin." ' Thereafter the appellant submitted representation to the Bank protesting against the acceptance of his resignation which was conditional and had been withdrawn before the effective date of acceptance of the resignation. As the representation submitted by the appellant remained unheeded and on the contrary he was served with letter from the Regional Manager, Larkana, informing him that he had been relieved from service with effect from 7th November, 1976, he instituted a suit for declaration and permanent injunction (Suit No,93 of 1976) in the Court of CiAl Judge, Larkana, challenging the acceptance of his resignation and the termination of his service. ' Besides the Bank the other three officers of the Bank were impleaded as defendants who are respondents Nos. 2 to 4 herein. The respondents contested the suit. The main plea taken by the respondents in their written statements was their denial of the allegation by the appellant that he had withdrawn his resignation on 1st November, 1976 by means of a telegram. It was asserted that even the copy of the telegram allegedly despatched by the appellant was not received. It was further averred that even if the telegram sent by the appellant had been received in due course, it would have been of no avail to him, inasmuch as, his resignation stood accepted on 30th October, 1976 which was duly communicated to him on 2nd November, 1976. The rest of the facts were admitted and are immaterial for the present purposes. The respondents also vehemently contested the plea of the appellant that his resignation was conditional and could, therefore, only be accepted if the Bank was prepared to forego the recovery of Rs,2,000. On the legal plane the respondents challenged the maintainability of the suit. As the question of the forum and maintainability of the suit assumed importance in the present appeal, it may be observed that the contention of the respondents was that the suit for declaration and permanent injunction under section 42, Specific Relief Act was not competent and that the appellant could at best file a suit for damages. However, the trial Court rejected the legal objection raised and held that the suit was maintainable. On the merits, the trial. Court came to the conclusion in favour of the appellant by holding as under:-- "On 6-10-1976 the tendered conditional resignation by way of offer to the defendant No,1. The condition attached with the offer of resignation was that if the A.D.B.P. Foregoes amount of Rs,2,000 then his resignation may be accepted, otherwise not. On 1-11-1976, the plaintiff by telegram withdrew his offer of resignation. On the same day he submitted the copy of his telegram to defendant No,1 through P.IA. Cargo Karachi. His telegram dated 1-11-1976 was received by the defendant No,1 on 2-11-1976 between 7-00 a.m. And 11-00. a.m. He has deposed that the copy of the telegram was also received by the defendant No,1 on 2-11-1976 at 11-30 a.m. The resignation letter is Exh.44. ' The relevant paras of this letter Exh.44 is opening para and para. No,5 which are reproduced below:-- "I have the honour to submit that I hereby give one month's notice for tendering the resignation which is essential in case of probationary Manager. The period of this Notice will be counted from today and will expire on 6-11-1976. As such my resignation may kindly be accepted from 7-11-1976 for which I have been compelled by our organisation to tender by creating following circumstances:-.- (5) That as per agreement I have been made to serve for the minimum period of 5 years in other case I have to pay Rs,2,000. But since I am not resigning from the post voluntarily but I have been compelled to resign by creating above-mentioned circumstances, hence I will not be liable to pay Rs,2,000 as per agreement. And if my this plea is acceptable, my resignation may kindly be accepted from 7-11-1976." ' It is out of dispute that according to service agreement plaintiff was bound to serve the Bank for the period of five years and in case he resigned he will have to re-imburse the Bank the sum of
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Rs,2,000. Office memorandum dated 18/19-11-1976 produced by the plaintiff Exh.60 shows that plaintiff's' resignation was accepted and at the same time he was informed that the amount of Rs,2,000 would be recovered from him. Therefore, the resignation of the plaintiff was accepted without accepting the condition attached with the resignation. ' The trial Court further held that there was documentary evidence to prove that the appellant did withdraw his resignation by telegram, and that the alleged acceptance of the resignation on 30th October, 1976 before the date of the withdrawal' of the resignation, was not substantiated by any cogent evidence. In view of these conclusions and findings, the trial Court decreed the suit of the appellant by judgment and decree, dated 20th June, 1978. ' The appeal filed by the respondents was dismissed and the decree passed by the trial Court in favour of the appellant was affirmed by the learned District Judge, Larkana, by judgment dated 14th December, 1978. ' Ultimately, the respondents challenged the judgments and decrees . Passed by the trial Court and the Appellate Court, in a Revision Application in the High Court of Sindh, Karachi which was allowed by the learned Single Judge by the impugned judgment, dated 26th April, 1981 and the decree passed in favour of the appellant was set aside, on the ground that the suit was not maintainable in the form in which it was brought, in that, the matter was governed by the principle of master and servant, for which the only remedy for the appellant was to bring a suit for damages for wrongful dismissal from service. ' The appellant sought to challenge the aforesaid judgment by means of a petition for leave to appeal before this Court, which was dismissed by judgment dated 14th December, 1981. It was held that the general law of master and servant did govern the present case, in view of the provisions of the Agricultural Development Bank of Pakistan Ordinance (IV of 1961) (hereinafter to be referred to as the Ordinance) as the matter of appointment and terms and conditions of service of the employees were left to be regulated by the Bank under section 30 of the Ordinance which conferred the power of, appointment of officers and advisors upon the Bank on such terms and conditions as may be prescribed by the Regulations framed under Section 39 of the Ordinance. The provisions of sections 30 and 39 of the Ordinance were reproduced and the Court made the following observations:-- "It is clear from the above that the Bank has complete control over its employees, their appointment and dismissal and their terms and conditions of service and that this control is not fettered by any statutory provision. The rule of master and servant will, therefore, apply to the case of the servants of the Bank." ' However, it so happened that it was found by the appellant subsequently that the Ordinance was amended by the Amendment Act XII o 1973, whereby a proviso was added to subsection (2) of Section 39 of the main Ordinance. The effect of the amendment was that Regulations framed by the Board of the Bank in respect of matters mentioned in clauses (e) and (f) o subsection (2) of the section 39 were not to take effect until such Regulations A were accorded approval by the Federal Government. This provision by way o amendment was apparently not taken into consideration while disposing of the petition for leave to appeal filed by the appellant. Accordingly a Revie petition was submitted, which was allowed after hearing the parties by judgment of this Court dated 19th December, 1990 and the petition for leave to appeal was converted into an appeal. ' Now, it may at once be stated that the judgment of this Court dated 14th December, 1981, whereby the petition for leave to appeal filed by the appellant was dismissed in the first instance as reported in Anwar Hussain v. Agricultural Development Bank of Pakistan PLD 1984 SC 194, laid down the law as under:-- "It follows that if the relationship is the result of contract freely entered into by the contracting parties then the principle of master and servant will apply. The principle, however, will not apply if
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some law or statutory rule intervenes and places fetters upon the freedom of the parties in the matter of the terms of the contract. It is on this principle that a civil servant for whom there are constitutional safeguards, is not governed by the principle of master and servant, for he is possessed of a legal character for the enforcement of which he can bring an action. Even where the employee is not a civil servant but there are statutory safeguards governing his relationship with the employer and placing restrictions on the freedom of the parties to act, the general law of master and servant will not apply. In such cases the employer would be bound to follow the procedure provided for in the statute or the statutory rules before terminating the service of the employee and in the absence of conformity to such procedure, the termination of service would not be clothed with validity and the employee will be entitled to an action for his reinstatement." ' As observed earlier the case of the appellant was held to fall within the rule of master and servant, because the amendment made in section 39 of the Ordinance by Act XII of 1973 was not brought to the notice of the Court, with the result that view was taken that there was no fetter placed by the statute on the power of the Bank to regulate the terms and conditions of the service of its employees in regard to appointment and dismissal. However, in view of the amendment the matter took an entirely different character, because by the amendment of 1973, in effect the Regulations relating to .Terms and conditions of service of the employees including the termination, were subjected to the approval of the Federal Government. Therefore, if the proviso was attracted the contracting parties were not free in the matter of contract of service and the rule laid down excluding the principle of master and servant, because of the statutory rule placing fetters upon the freedom of parties, would 4 come into operation. ' It may further be stated that in exercise of powers conferred by clause (e) of subsection (2) of section 39 of the Ordinance, the Board of Directors of the Bank had framed the Agricultural Development Bank (Staff) Service Regulations, 1961, which shall hereinafter be referred to as the 'Service Regulations'. ' After coming into force of the Amendment Act (XII of 1973) on 6th February, 1973, with the approval of the Federal Government Regulations relating to the Efficiency and Discipline of employees were made which are called the A.D.B.P. Officers (Efficiency and Discipline) Regulations, 1975 which are more or less on the same pattern as the Efficiency and Discipline Rules governing the civil servants. These Regulations repealed Regulation 95 in Chapter VI of the Service Regulations of 1961. ' It will now be advantageous to reproduce sections 30 and 39 of the Ordinance as amended in 1973: "30. Appointment of officers and advisors.---The Bank may appoint or employ such persons including advisors as it considers necessary for the efficient performance of its operation on such terms and conditions as may be prescribed by regulations." 39. Regulations.-- - (1) The Board may make regulations not inconsistent with this Ordinance or the rules to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of this Ordinance and the efficient conduct of the affairs of the Bank. (2) Without prejudice to the generality of the provisions of subsection (1), the regulations may provide for:-- (a) ................................................... (b) ................................................... (c) ................................................... (d) ......................................... (e) the recruitment of the employees of the Bank, the terms and conditions of their service, the constitution and management of Provident Funds for the employees of the Bank and all other matters connected with any of these things; (I) the duties and conduct of employees and agents;
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(g) (h) ' Provided that no regulation made with respect to the matters mentioned in clauses (e) and (f) shall take effect until it has been approved by the Federal Government." ' Mr. Fakhruddin G.Ebrahim, learned counsel for the appellant submitted that there is a concurrent finding by the trial Court and the Appellate Court that the appellant had withdrawn his resignation telegraphically on 1st November, 1976 and that there was no evidence to substantiate the plea of the respondents that his resignation was accepted before the said withdrawal on 30th October, 1976, as no original order was produced to that effect. ' The learned Judge in the High Court, on the other hand, did not particularly go into the question of fact whether the resignation tendered by the appellant was conditional and was withdrawn before its acceptance. He held that on the terms of the service agreement executed by the appellant, he was bound to serve the Bank at least for five years and therefore; he was not entitled to resign before the expiry of the said period. He also referred to paragraph 3.22 of the Manual of Administrative Instructions issued by the Bank whereunder the Chairman of the Bank was competent to accept the resignation and under paragraph 3.23 of the said Manual once notice of resignation had been accepted, it would not normally be permissible to the employee to withdraw the resignation. On the strength of these instructions the learned Judge took the view that it was unnecessary to go into the question because the plea of the Bank was that the resignation was accepted in accordance with the said provisions of the Manual. As already observed, the Revision Application of the respondents was accepted on the legal plea advanced on their behalf that the suit as framed was not maintainable. ' The aforesaid position is correct and therefore, the learned counsel have mainly addressed arguments on the question of maintainability of the suit., Mr. Fakhruddin G. Ebrahim submitted that Regulations 13 and 14 of the Service Regulations respectively relate to termination of service and resignation, whereas Regulation 95 related to dismissal from service, which as already stated has now been repealed and replaced by the Efficiency and Discipline Regulations with the prior approval of the Federal Government. It was submitted on behalf of the appellant that his case was that he had withdrawn his resignation before its acceptance, whereas the contention of the Bank was that the appellant's resignation was accepted before its withdrawal. The Courts below had, on the other hand, held in favour of the appellant that the resignation tendered by him was indeed withdrawn before it was accepted and therefore, the net effect of this finding of fact was that the appellant continued to remain in service. Learned counsel pointed out that this finding is not being questioned by the Bank. This being so, the refusal on the part of the Bank to accept and continue the appellant in its service, amounts to his removal from service which is one of the major penalties contemplated by clause (4) of Regulation 95, which could not be imposed without holding proper disciplinary proceedings provided therein. On these grounds learned counsel for the appellant urged that the suit was maintainable as the action of the Bank in treating the service of the appellant as having terminated by resignation, amounts to removal from service in violation of statutory Regulation 95 or the substituted Efficiency and Discipline Regulations, 1975, the position under which is substantially the same as the repealed Regulation. 95. Additionally, the learned counsel referred to the fact that the impugned order purporting to accept the resignation of the appellant called upon him to pay Rs,2,000 which amounts to imposing of penalty by way of punishment under the Efficiency and Discipline Rules. Thus, it was strongly urged that the rule of master and servant was not attracted in the present case. ' On the other hand, it was contended by Mr. Makhdoom Ali Khan, learned counsel for the respondents that even if it is assumed that the findings of the two Courts below regarding the acceptance of the resignation are correct and that the High Court could not have interfered with
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them in the exercise of reversional jurisdiction, then the suit of the appellant for declaration and injunction cannot be decreed, unless he can demonstrate:-- (a) the terms and conditions of his service are governed by Regulations; (b) these regulations are statutory in nature and place a clog on the power of the employer to dispense with the service of the employee; and (c) that in fact such violation has taken place. ' Learned counsel argued that in the absence of the foregoing conditions the general law of master and servant, which disentitles a servant to seek a declaration and injunction for re-instatement in service of an unwilling master, would be applicable. ' Referring to the relevant provisions of the statute applicable to the present case it was. Pointed out by the learned counsel that the Regulations made with the prior approval of the Federal Government relating to efficiency and discipline of the employees, contain no provision relating to resignation. These Regulations replaced Regulation 95 of the Service Regulations of 1961, and the rest of the Regulations remained untouched. In other words after the 1973 Amendment, according to the learned counsel, the remaining Regulations which were not accorded approval to or replaced by fresh Regulations with the prior approval of the Federal Government, did not have the effect of statutory rules or Regulations, but could only be regarded in the nature of mere instructions issued for the guidance of the Board of Governors and officers of the Bank for their internal guidance; and as held in the case of Anwar Hussain PLD 1984 SC 194 the violation of such instructions cannot furnish an employee dismissed from service the right to claim a declaration under section 42, Specific Relief Act, 1877, because the principle of master and servant being applicable, his only remedy would lie in filing a suit for damages. ' Alternatively, learned counsel forcefully contended that even if the aforesaid Service Regulations of 1961 are regarded as statutory regulations, in order to succeed to the relief claimed, the appellant…
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