Full Judgment Text & Judicial Ruling

2018 P L C (C.S.) 975 [Sindh High Court] Before Muhammad Ali Mazhar, J SHARIQ-UL-HAQ and 5 others Versus PAKISTAN INTERNATIONAL AIRLINES CORPORATION LIMITED and another Suits Nos.1498, 1499, 1500, 1501, 1502 and 1508 of 2017, decided on 8th February, 2018. (a) Master and servant--- ----Relationship---Scope---Relationship of master and servant does not mean that in each and every case, recourse should be made only for claim of damages. (b) Contract Act (IX of 1872)--- ----Ss. 3, 8 & 9---Memorandum of Understanding (MoU)---Object, scope and purpose---Agreement may be made which expressly or impliedly anticipates that it will be superseded by a later, more formal agreement and Letter of Intent is one example of such agreements---Where court finds that parties have intended to enter into a binding legal agreement but have not expressly agreed all necessary terms, court may imply terms by reference to past practice of parties or any relevant trade custom in order to give effect to their intentions---If intention is key factor in assessment of enforceability, it must be remembered that test of intention is objective---Memorandum of Understanding (MoU) means a document that expresses mutual accord on an issue between two or more parties---Memorandum of understanding is generally recognized as binding even if no legal claim could be based on rights and obligations laid down in them---To be legally operative, a MoU must (i) identify contracting parties; (ii) spell out subject matter of agreement and its objectives; (iii) summarize essential terms of agreement; and (iv) must be signed by contracting parties---It expresses a convergence of will between parties indicating an intended common line of action---MoU most often, is used in cases where parties either do not imply a legal commitment or in situations where parties cannot create a legally enforceable agreement---MoU is put in place to establish a clear understanding of how the deal will practically function and each party's role and compensation. (c) Civil Procedure Code (V of 1908)--- ----O. I, R. 10---Impleading of necessary party---Court, powers of---Court at any stage may order addition of a person as a necessary or proper party suo motu---For purposes of addition of parties, court is governed by provisions of O.I, R.10, C.P.C.---Power of adding parties is not a question of initial jurisdiction but of judicial discretion which has to be exercised in view of all circumstances of case---Object of O.I, R.10, C.P.C. is to discourage contests on technicalities and to save honest and bona fide claimants from being non-suited---Addition of parties is a matter of discretion of court---Expression 'at any stage of the proceedings' includes even up to stage of passing of final decree in suit---Any person may be added as party when he ought to have been joined as plaintiff or defendant and is not joined so or when without his presence, question in suit cannot be completely decided. (d) Specific Relief Act (I of 1877)--- ----Ss. 42 & 54---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Suit for declaration, injunction and damages---Interim injunction, grant of---Master and servant, relationship of---Scope---Plaintiffs were pilots who were employees of Pakistan International Airline Corporation---Grievance of plaintiffs was that Corporation had not followed Memorandum of Understanding (MoU) between Corporation and their representative association with regards to procedure of promotion---Plea raised by Corporation was that relationship between the parties was that of master and servant and plaintiffs could only sue for damages but could not seek declaration---Validity---Two genris of lawsuits encompassing relationship of master and servant existed---One scenario could lead to claim of dismissed or terminated employee who approached court of law for reinstatement or in alternate, award of damages/compensation against his wrongful dismissal/termination in which proceedings, master could say that he was prepared to pay damages for breach of contract of service but would not accept services of servant---Other genris in same relationship was the case where an employee though in service and performing his duty satisfactorily but he was denied salary/wages and some other benefits payable to him during service---In such distinct and discreet class of cases, all such employees who were neither covered under definition of 'workers' or 'workmen' so that they could approach Labour Courts or NIRC, nor they were civil servants to move Service Tribunal nor they could file Constitutional petition under Art.199 of the Constitution, due to lack and non-existence of statutory rules of service, so only remedy was left with such employees was to file civil suit for satisfaction of their claims accrued to them during service including damages for loss sustained due to non-payment or refusal/denial of such service benefits by employer without any lawful justification---High Court directed parties for negotiation for working out a methodology in terms of MoU---High Court further directed management of Pakistan International Airline Corporation not to compel plaintiffs to join disputed training courses for promotion and that plaintiffs would continue to perform their duties as per roster till such time outcome of negotiation was intimated---High Court directed the Corporation not to disturb actual seniority of plaintiffs in their present cadre and their flying licenses would be regulated in accordance with law---Application was disposed of accordingly. [case-law referred] Muhammad Haseeb Jamali and M.Saad Siddiqui for Plaintiffs. Abdul Haleem Siddiqui for Defendants. Captain Uzair Khan, Director Flight Operations, PIAC. Anwar Nadeem, General Manager, Flight Operations, PIAC. Captain Waqar Hassan, Chief Pilot, Planning and Scheduling PIAC. Captain Zarak Khan, Chief Pilot Training, PIAC. Ahmed Rauf, Consultant Legal and Syed Fayyaz Ali Shah, Law Officer, PIAC. Dates of hearing: 18th September, 18th October and 2nd November, 2017. ORDER MUHAMMAD ALI MAZHAR, J.--- The aforementioned lawsuits have been set in motion to aim at declaration, permanent injunction and damages. Together with the main suit, the plaintiffs have also filed interlocutory applications under Order XXXIX, Rules 1 and 2, C.P.C. for suspending the operation of impugned letter dated 25.5.2017 issued by defendant No.2 for Transition Training ATR-P1 Course scheduled as of 12.6.2017. Subsequently, except the plaintiff in Suit No.1508/2017, other five plaintiffs also moved applications under Sections 94 and 151, C.P.C. for restraining the defendants from grounding them from flying duties or deducting salaries and other fringe benefits. 2. The epigrammatic facts of the case are that the plaintiffs are serving senior B-777 First officers. They claimed promotion on A-320 Aircraft under the Amended Carrier Plan by dint of Memorandum of understanding but the management offered them Transition Course on ATR. They took up the matter with PALPA and PIAC for redress of their grouse and grumble but their association PALPA as well as PIAC management both failed to respond. Due to non-availability of any other expedient and efficacious remedy for alleviation, the plaintiffs have approached this court for implementation of MOU dated 18.3.2016. In essence the plaintiffs move in on to protect and safeguard their rights and interest conferred and bequeathed in the aforesaid MOU. As an interim measure this court directed the defendants not to force the plaintiffs to join the impugned Transition Training Course and afterwards in addition to earlier interim orders, this court further directed the defendants not to draw any adverse inference against the plaintiffs in respect of the flying licenses. 3. The learned counsel for the plaintiffs argued that out of six plaintiffs, the PIAC management called upon only three plaintiffs to attend impugned transition course, two of them were kept stand by and one of them was not even in the list of the course. When the plaintiffs raised the voice for their vested right of promotion in terms of MOU, the management detached them from flying duties and treated them at par with suspended pilots with further directions not to leave the station (Karachi, Islamabad or Lahore). The plaintiffs are presently entitled to fly B-777 as First Officers and they are also entitled to be promoted on A-320 as Captain. The learned counsel pointed out that vide order dated 14.7.2017, this court has already directed the defendants not to draw adverse inference against the plaintiff in respect of flying license. It was averred that the prime issue involved is the implementation of the MOU and its binding effect. Once a principal decision was taken to promote the Plaintiffs on A-320 Aircrafts, the Defendants have no right to unilaterally place them for a training course on ATR aircraft. It was further contended that the conditions mentioned in the MOU have become the part of the Working Agreement. The management has admitted execution of MOU and they have acted upon the same independently of Admin Order No.7 of 2016. The MOU cannot be unilaterally annulled simply for the reasons that Clause 1.9 of the Working Agreement expressly protects MOUs executed between PIAC and PALPA for the benefit of Pilots. The Execution of MOU shows that in principal the decision had been taken to send First officers of B-777 as Captains on A-320. The Clause 2 of the MOU has to be read as a whole. The first and second limb of the clause are connected with each other, the implementation of the first limb paves way for implementation of 2nd limb. It is a concluded contract executed by both PALPA and PIAC in terms of Clause 5.10 read with clauses 1.5 and 1.3 of the Working Agreement in vogue. The learned counsel further argued in fact the management went on to implement the MOU, the Advertisement dated 19.05.2016 is an ample prove through which interested pilots were offered contracts as Captains on ATR Aircrafts. This was done even prior to the issuance of Admin Order No.7 of 2016 dated 31.5.2016. The independence of MOU is further established that the Admin Order No.07/2016 neither provides for hiring of contract pilots on ATR nor provides for promotion of B-777 First Officers as Captains on A-320 aircraft. The learned counsel added that presently there is a serious shortage of flying crew on A-320 and B-777 Aircrafts especially Captains on these two aircrafts. 4. The learned counsel for the plaintiff concluded that the plaintiffs have a strong prima facie case. The defendants are attempting to mislead this Court by claiming that methodology is yet to be framed where in reality as per their letter dated 20.4.2017 they have unilaterally attempted to wriggle out of their obligations under MOU. The balance of convenience also lies in favour of the plaintiffs and no loss or injury will be caused to the defendants if they comply with the terms of Clause 2 of the MOU but on the other hand if the injunction is refused, serious prejudice will be caused to the plaintiffs and their seniority. The plaintiffs have already suffered a lot and now their flying licenses granted by CAA are at stake, further non-flying or any more negative inference on their license can seriously prejudice their livelihood and their future. The plaintiffs have always served PIAC with pride and will continue to do so but in accordance with law, applicable rules, working agreement and their entitlements under superior clauses as agreed by PIAC and PALPA in working agreement. He referred to following judicial precedents:- 1. 1994 MLD 476 (Province of Punjab through the Secretary to Government of the Punjab, Communication and Works Department and another v. Malik Muhammad Ilyas and 2 others). Document embodying a contract is to be interpreted according to intention of the parties; construction thereof, must be reasonable, liberal and with a spirit to save rather than destroy it; ordinary sense of the words is to be followed; and the whole of the document is to be looked at in order to gather the intention of the parties. 2. 2016 PLC 335 (Sadiq Amin Rahman v. Pakistan International Airlines Corporation through Managing Director and 3 others). (a) Specific Relief Act (I of 1877). Sections 42 and 54. Suit for declaration and injunction. Plaintiff was a pilot and was aggrieved of refusal made by the Airline Corporation declining him to send him to transition training B-777 in view of agreement executed between the Corporation and Association of Pilots. Management of Airline Corporation was not supposed to act recklessly or sabotage professional norms and transparency in the affairs of their management. Airline Corporation should follow principle of good governance and maintain transparency and fair-mindedness in its affairs. By misapplication of phrase 'master and servant' management feels that an employee cannot raise voice of his rights even though an oppressive attitude and behavior of management which is an incorrect exposition of law. 3. 1980 SCMR 89 (Bakhtawar etc. v. Amin etc.). (b) Civil Procedure Code (V of 1908), Order XXXIX, Rule 2 (3). When by contravening an injunction order the party against whom the order is passed has done something for its own advantage to disadvantage of the other party, it is open to the Court under its inherent jurisdiction to bring back the party to a position where it originally stood, as if the order had not been contravened. 5. Quite the reverse, the learned counsel for the defendants argued that in the supporting affidavits of injunction application, the plaintiffs have failed to disclose prima facie case, balance of convenience and irreparable loss therefore they are not entitled for the discretionary relief. The plaintiffs have taken the ground for change of carrier plan in Working Agreement 2011-2013 executed between PALPA and PIAC but no Admin Order was issued by the PIAC with the mutual consent as regard to the change in the agreement relevant to carrier plan. It was further contended that PALPA is a registered association under the Societies Registration Act, XXI of 1980 whose members are pilots employed by PIAC. The PALPA is empowered to negotiate on their behalf to regulate the working conditions of the pilots as contained in the Agreement and all pilots including the plaintiffs are discharging their duties under the said Agreement, hence the terms and conditions enumerated therein are binding upon the plaintiffs. The Association has not been made party in this suit with mala fide intentions so the suit is hit by non-joinder of necessary party. There is no dispute between PALPA and PIAC on the working Agreement or any of its provision nor any dispute to the MOU. 6. While referring to the Minutes of Meeting dated March 31, 2016, the learned counsel added that the minutes only reflect the discussions, suggestions and opinion of the Directors present in the meeting which cannot be treated as Resolution. However, Board of Directors of PIAC approved the increase in salary structure of pilots and other allowances. The Career plan attached with the Agreement shows that the First Officer B-777 is promoted as Captain ATR. In the Admin Order No. 7 of 2016 dated May 31, 2016, it is clearly mentioned in Clause-1(w) that "The PALPA, PIAC Working Agreement 2011-2013 stands reviewed to the extent of above agreed Clauses", meaning thereby those clauses which are specifically mentioned in the said Admin Order shall be the terms and conditions of Agreement but there was no change in carrier plan. The Admin Order 07/2016 was issued after MOU in which it is mentioned that all other terms and conditions shall remain as per existing PALPA Working Agreement 2011-2013 until further orders. Whereas in Clause 1.1 of Agreement it is provided that all arrangements and agreements in respect of the terms and conditions shall continue unless otherwise modified, cancelled or amended and in the event of any conflict between the provisions of this agreement and that of the aforesaid arrangements/ agreements, provisions of this agreement shall prevail. Since the parties of MOU did not decide the methodology as mentioned in Clause-2 of MOU therefore Clause 1.1 of agreement shall prevail. The Clause-2 of MOU should be read with Clause-3 which states that the negotiations for a complete working Agreement should start from March 28, 2016 and shall be concluded by April 11, 2016 but parties have not completed the negotiations. So far as the Advertisement in daily Jang dated May 19, 2016 is concerned, it was clearly mentioned in it that the contract Pilot will be required to submit a Bank Guarantee of Rs.25,00,000/- refundable after two (2) years of the productive service. In the MOU the ATR Captains were to be hired on contract basis which may extend up to five (5) years, whereas advertisement contained requirement of Bank Guarantee for two (2) years only, therefore the said advertisement was not issued in terms of Clause-2 of MOU. 7. It was further contended by the learned counsel for the defendants that the management offered to all First Officers to join as Captain ATR which has no relevancy with the MOU. The management had made this offer as per Clause 3.26 of Agreement. This offer circulated vide letter dated December 1, 2016 was opted by many Pilots. The plaintiffs were fully aware to this offer but they never raised any objection with regard to any effect on their seniority. So at this stage their objection is hit by the principle of estoppel. 8. He further argued that Clause 12.4 of the Working Agreement provides the mechanism for the redress of Pilots Grievances which the plaintiff failed to avail. Without resorting to the Departmental remedy by way of appeal or review/representation an aggrieved person could not approach this court directly. The learned counsel for the defendants further argued that in terms of Clause 1.8 of Agreement, the dispute with regard to the Agreement and or the interpretation of any terms and conditions shall be settled by an arbitration board. He further contended that the plaintiffs are governed under the Working Agreement 2011-2013 so in the event of any breach, the plaintiffs may sue for damages but they cannot file suit for declaration under Section 42 of Specific Relief Act. It was further averred that under Section 56 (f) of Specific Relief Act, injunction cannot be granted to prevent the breach of contract the performance of which would not specifically enforced nor a contract of personal service can be enforced. He further opposed the grant of injunction for the reason that contract of personal service cannot be specifically enforced. The learned counsel for the defendants referred to following judicial precedents in support of his arguments: 1. PLD 2000 Karachi 269 (Century Link Development Corporation (Pvt.) LTD v. Habib Bank Ltd. and others). (b) Civil Procedure Code (V of 1908). Order XXXIX, Rules 1 and 2. For the purpose of grant of interim injunction, it is imminent that besides prima facie case, exposure to irreparable injury must be shown, additionally a plaintiff is obliged to establish balance of convenience in favour of grant of injunction and for the purpose of interlocutory matters, affidavits alone, have to be considered. 2. 2013 PLC (C.S.) 768 (Ghulam Nabi Shah v. Pakistan International Airlines Corporation and others). Suit for declaration, damages and permanent injunction. Plaintiff being employee of Pakistan International Airlines (PIA) sought implementation of decree for correction of his date of birth in service record and extension in his service accordingly. Plaintiff on alleged wrong date of birth had joined service, secured promotions and completed his tenure, but remained silent during such a long period, thus, his conduct was hit by principle of estoppel. Plaintiff while reaching age of superannuation had obtained such decree in order to get extension in service. Plaintiff at such belated stage was not entitled to claim any discretionary relief. 3. 1974 SCMR 519 (Marghub Siddiqi v. Hamid Ahmad Khan and others). Principles governing grant of permanent injunction under Specific Relief Act, 1877. Contract for personal service being contracts not specifically enforceable grant of injunction in service matters, held, opposed to principles governing grant of injunctions. 4. PLD 1961 Supreme Court 531 (Messrs Malik and Haq and another v. Muhammad Shamsul Islam Chowdhury, and 2 others). The master is always entitled to say that he is prepared to pay damages for breach of contract of service but will not accept the services of the servant. A contract for personal service as will appear from section 21(b) of the Specific Relief Act, 1877 cannot be specifically enforced. If specific performance be barred the only relief available is damages. 5. PLD 1997 Supreme Court 835 (Obaidullah and another v. Habibullah and others). For a breach of a contract of employment in the absence of any Constitutional guarantee or other, statutory guarantee of continuity, compensation in money is an adequate relief in case of non-performance of a contract. 6. PLD 1984 Supreme Court 194 (Anwar Hussain v. Agricultural Development Bank of Pakistan and others). Principle of master and servant applicable. Employee of such Corporation could not claim to be person possessed of any legal character within meaning of S. 42, Specific Relief Act, 1877 and in case of his wrongful dismissal from or termination of service, principle of master and servant will fully apply and he can only claim damages but not re-instatement to his post. 9. In rebuttal the learned counsel for the plaintiffs articulated that the issue of Arbitration does not arise, the Working Agreement is between PALPA and PIAC and remedy is restricted to a dispute between them however the members of PALPA are the beneficiaries of this working agreement but no right is vested in them to invoke arbitration clause individually. Neither PALPA nor PIAC has chosen to invoke Clauses 1.7 and 1.8 of the working agreement. So far as non-availing the alternate remedy is concerned; he argued that the procedure for redress of grievance provided in Clause 12.4 of the Working Agreement does not apply. This grievance mechanism is not a remedy which could have resolved the dispute in hand, i.e. challenging the illegal action of the defendants so the plaintiffs have rightly approached this court and their suit is not barred or hit by any provisions of Specific Relief Act or any other law. So far as plea of estoppel is concerned, the learned counsel argued that when the course was fixed in June 2016, no pilot was out of turn hired either on Contract or on Option as Captain on ATRs but once the Captains on ATR were hired on contract basis, then vested rights created in favour of the plaintiffs in terms of Clause No.2 of MOU. At this moment the plaintiffs are entitled to be promoted directly on A-320 aircraft. No principle of Estoppel is attracted rather the principle of creation and protection of vested right and legitimate expectation has accrued in favour of the plaintiffs. 10. Heard the arguments. The wholeness of wrangle and difference of opinion between the parties is wandering and roaming around the implementation and enforcement of Memorandum of Understanding (MoU) dated 18.3.2016 executed between Director Flight Operations PIAC and PALPA through its President. In Clause 2 of this MoU it was coincided that for ATR Captains qualified human resource would be engaged on contract extendable up to 5 years. The methodology shall be worked out to place first officer of Boeing 777 as captain of A-320 subject to completion of training as per seniority. It was further agreed in Clause 3 that negotiation for a complete working agreement should start from 28th March, 2016 and shall be concluded by 11th April 2016. As a goodwill gesture management of PIAC also agreed to provide some ad hoc relief to the captains and first officers. For the ease of reference the text of MoU is reproduced as under:- "Memorandum of Understanding Dated: 18th March 2016 After thorough discussion, it was decided as follows: 1. The aircrew travelling on A-320 will be booked in Economy Class. However, subject to availability they shall have priority over all non-revenue passengers to be upgraded to Business Class. 2. For ATR Captains qualified human resource would be hired on contract basis which may extend up to 5 years. The methodology shall be worked out to place First Officers of Boeing 777 as captain of A320 subject to completion of training as per seniority. 3. Furthermore, negotiation for a complete working agreement should start from 28th March 2016 and shall be concluded by 11th April 2016. The TOR for the working agreement shall include: i. Fix salary package ii. Rationalization of career plan iii. Rationalization of base strength as per…

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