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Petitioner: Amjad Ali Khan VS Respondent: Ministry of Energy (Power Division,) Islamabad etc
Court Name: Lahore High Court Judge(s): Shujaat Ali Khan Title: Amjad Ali Khan vs Ministry of Energy (Power Division,) Islamabad etc Case No.: W.P. No.65400 of 2017 Date of Judgment:2018-06-28 Reported As: 2019 P.C.T.L.R. 148, 2019 PLC (C.S.) 300, 2018 LHC 1266 Result: Petition Accepted
Judgment Shujaat Ali Khan, J: - Unnecessary details apart, the facts, forming factual canvas of the instant petition, are that the petitioner joined National Engineering Services Pakistan (Pvt.) Limited (NESPAK), as Engineer in the year 1979. He was appointed as Managing Director (M.D.)/Chief Executive Officer (C.E.O.) NESPAK, on 15.08.2013, for three years. Before expiry of his first term of three years, he was again appointed as M.D./C.E.O. NESPAK for second term of three years pursuant to recommendations of the Board of Directors (hereinafter to be referred as the Board) vide letter, dated 28.06.2016. Later on, Section Officer (Admn.) Government of Pakistan, Ministry of Water and Power, through Office Order, dated 10.04.2017 (the impugned Office Order), notified the retirement of the petitioner w.e.f. 09.04.2017, on attaining the age of superannuation. Aggrieved by the impugned Office Order the petitioner has filed the instant petition. 2. The arguments advanced by learned counsel for the petitioner can be summed up in the words that after appointment as M.D./C.E.O. NESPAK for second term for three years, the petitioner could not be terminated from the said post on account of superannuation; that according to the relevant rules the Board was the competent authority to take action against the petitioner but the impugned Office Order was issued by the Ministry of Energy thus the same was not sustainable; that the impugned Office Order was purportedly issued upon the approval of the Chairman of the Board but the said authority could not approve any action against the petitioner as the Chairman of the Board singly could not be considered as substitute of the Board; that according to the policy of the Federal Government the M.D./C.E.O. of a State owned company can be appointed till the age of 65 years; that as law permits appointment of a person as M.D. for second term the petitioner could not be terminated before expiry of said term; that retention of shares of M.D./C.E.O NESPAK by the petitioner till date is proof positive of the fact that he was not removed under due course of law; that in the past, M.Ds/C.E.Os. were allowed to serve the company beyond 60 years of age; that as there was no mention of superannuation in the recommendations of the Board regarding appointment of the petitioner for second term, he could not be
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terminated from the office of the M.D./C.E.O on account of superannuation; that admittedly salary of the petitioner was revised on 20.07.2017 and if he superannuated on 09.04.2017 there was no necessity for the competent authority to revise his salary package; that as the impugned Office Order has been issued by the Ministry of Energy the real contest is between the petitioner and respondent No.1 but while filing report and parawise comments respondent No.1 has copied those submitted by respondents No.3 & 4 which speaks volumes about collusion of respondent No.1 with NESPAK authorities against the interest of the petitioner; that according to section 198 of the Companies Ordinance, 1984, which was applicable at the time of appointment of the petitioner as M.D./C.E.O. NESPAK, for second time, statutory period of C.E.O. of a company is three years, thus, the petitioner could not be removed from his office before completion of his term; that criteria to remove C.E.O. of a company has been provided under section 202 of the Companies Ordinance, 1984 but the same was not followed at the time of issuance of the impugned Office Order; that as a matter of fact the petitioner was politically victimized inasmuch as the impugned Office Order was issued by the Ministry of Energy on the directions of the then Prime Minister of the country who otherwise had nothing to do with the affairs of NESPAK; that as the M.Ds./C.E.Os. of various other companies have been allowed to serve beyond the age of superannuation it is clear case of discrimination; that the impugned Office Order also offends against judgment, dated 30.07.2013, rendered by the Apex Court of the country in Civil Petition No.937/2013; that the impugned Office Order cannot sustain in view of section 202 of the Companies Ordinance, 1984 read with Article 45 of the Memorandum of Association of NESPAK; that the impugned Office Order was purportedly issued by the Section Officer at the behest of Ministry of Energy but the said authority being alien to the hierarchy of NESPAK had no authority to issue impugned Office Order; that mala-fide on the part of the respondents is also established from the fact that they have issued fresh advertisement for appointment against the post of M.D./C.E.O. NESPAK just to accommodate one consultant of M/s Habib Rafiq Construction Company which is owned by a person having close relation with the persons at the helm of affairs in the previous regime; that the impugned Office Order also offends against the spirit of decision, dated 21.05.2013, passed by the august Supreme Court of Pakistan, rendered in C.M.A. No.2386 of 2013 in CMA No.1564 of 2013; that the members of the present Board are being used for preparation of anti-dated documents to malign the petitioner; that if the termination of the petitioner was ratified by the Board on the grounds other than that mentioned in the impugned Office Order it could have incorporated those grounds in the minutes of the relevant meeting but as the respondents could not bring on record anything adverse against the petitioner , the Board purportedly simply ratified the decision due to the pressure exerted by the then Prime Minister; that inconsistent attitude of respondents No.3 & 4 is manifest from the fact that on the one hand they have taken the objection that this petition is not maintainable in view of the bar contained under Article 212 of the Constitution of Islamic Republic of Pakistan, 1973 but on the other have dubbed NESP AK as a private limited company; that according to the law laid down by the Apex Court of the country in the case reported as Muhammad Hanif Abbasi v. Jahangir Khan Tareen and others (PLD 2018 SC 114) when the foundation of an act is void ab initio the superstructure raised on the basis thereof cannot sustain; that on the one hand respondents No.3 & 4 are of the view that terms & conditions of service of the petitioner were governed under NESP AK Employees Service Rules, 1973 but on the other , in the report and paraw ise comments, they have relied upon various policies of the Federal Government; that admittedly penal order against the petitioner was passed on the initiative of the then Chief Minister Punjab despite the fact that NESP AK being a federal entity , the provincial authorities had no role in its functioning; that on number of occasions the Apex Court of the country has held that the government, either Provincial or Federal, has no role in the affairs of NESP AK but the impugned Office Order speaks volumes about the fact that respondents have scant regard to the verdicts of the Hon'ble Supreme Court of Pakistan despite the fact that they have binding force upon all the organs of the State including the respondents in terms of Article 189 of the Constitution of Islamic Republic of Pakistan, 1973; that the impugned Office Order also offends against the provisions of Article 8 of the Constitution of Islamic Republic of Pakistan, 1973 read with section 199 of the Companies Ordinance, 1984 and Article 45 of the Memorandum of Association of NESP AK; that case of the petitioner is also covered under the principles of locus poenitentiae and legitimate expectancy; that had the petitioner been aware about the fact that he was to serve till his age of superannua tion perhaps he might have not
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accepted his appointment as M.D./C.E.O. NESP AK for second term as he, being a technocrat, could join any other institution. Relies on Punjab Cooperative Board of Liquidation through Chairman v. Muhammad Ilyas (PLD 2014 SC 471) and Crescent Sugar Mills & Distillery Ltd., Faisalabad v. central Board of Revenue, Islamabad and 2 others (PLD 1982 LHR 1 ). Further , in support of his stance that impu gned Office Order was issued as a result of political motivation, learned counsel has produced copy of communi cation, dated 22.03.2017, addressed by Mr. Fawad Hassan Fawad, the then Secretary to the Prime Minister to the Secretary W ater & Power etc. 3. Mr. Saad Rasool Advocate, representing respondents No.3 & 4, while defending the impugned Office Order, states that after ratification of the impugned Office Order by the Board respondents No.3 & 4 are the real contestants, thus, the petitioner cannot take any premium on the ground that the report and parawise comments filed by respondent No.1 are copy of those filed by respondents No.3 & 4; that the query raised by this Court in order, dated 14.12.2017, has not been responded by the petitioner till date; that, as a matter of fact, the petitioner being favourite child of the previous government was appointed as M.D./C.E.O. NESPAK upon recommendations of the then Speaker, National Assembly, namely, Mr. Ayyaz Sadiq, thus, he has no cheeks to plead that his removal was politically motivated; that as the petitioner was appointed M.D./C.E.O. NESPAK in utter disregard to the law on the subject, the same was rightly revoked by the Board; that bona fide of NESPAK authorities is apparent from the fact that proceedings have already been initiated against the persons involved in illegal appointment of the petitioner as M.D./C.E .O. NESP AK without publication of adve rtisement in the national press; that as the petitioner has approached this Court with unclean hands he is not entitled to equitable relief under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973; that as the impugned Office Order was ratified by the Board, no exception can be taken against the respondents on the ground that the termination order was issued by an incompetent authority; that as the petitioner has not incorporated even a single ground in this petition regarding political victimization, his oral assertion cannot be entertained at this stage; that the Board enjoys unfettered powers to terminate the M.D./C.E.O. NESP AK as per criteria laid down under section 202 of the Companies Ordinance, 1984; that as per NESP AK Employees Service Rules, 1973 superannuation age for all employees, including the M.D./C.E.O, is 60 years, the petitioner could not be allowed to claim retention as M.D./C.E.O. NESP AK despite attaining the age of superannuation; that untoward conduct of the petitioner is apparent from the fact that he removed various items from M.D. House, DHA Lahore to his own house without knowledge/permission of the Board, proof positive whereof is that after unearthing of his illegal act he showed his readiness to purchase the articles according to their book value; that as the petitioner , in connivance with the members of the previous Board, committed grave illegalities resulting into colossal loss to NESP AK, respondent No.2 committed no illegality while issuing the impugned Office Order; that with a view to save personal prestige of the petitioner , as per his request, the Board instead of terminating his services with promptitude waited till the age of his superannuation, thus, the petitioner was estopped to challenge the impugned Office Order; that after repeal of the Companies Ordinance, 1984, future events in NESP AK are to be governed under the Companies Act, 2017 and according to section 187(4) of the said Act government has the power to appoint/remove M.D./C.E.O. of a company , thus, the petitioner , even in case of his success in this petition, would not be in a position to rejoin as M.D./C.E.O. NESP AK against wishes of the government; that mala-fide on the part of the petitioner is manifest from the fact that he instead of promptly challenging the impugned Office Order waited for five months before filing this petition; that as a matter of fact after withholding of his terminal benefits by NESP AK, due to pendency of different inquiries against him, the petition er opted to file this petition just to use it as a pressurizing leverage; that after applying for payment of terminal benefits the petitioner was estopped to file this petition; that as the petitioner was serving in NESPAK as Engineer for the last three decades he could not claim himself to be a technocrat; that as the Ministry only recommended the removal of the petitioner from the post of M.D./C.E.O. NESPAK no exception can be taken against the impugned Office Order especially when the same was ratified by the Board; that members of the present Board, after coming to know about the illegalities committed by the petitioner towards awarding of contracts at lower rates as compared to market, has already initiated criminal as well as departmental proceedings against him; that upon having knowledge about misconduct on the part of the petitioner as
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M.D./C.E.O. NESPAK, the then Chief Minister, Punjab referred the matter to the then Prime Minister of the country and as a result of the said move the petitioner was removed from the post of M.D./C.E.O. NESPAK; that it is of common knowledge that the subsequent decision of the Board approves/rescinds its earlier decision and the simply ratification of the impugned Office Order by the Board in its 143 Meeting was supplemented with additional grounds in subsequent Meetings thus the termination of the petitioner on account of superannuation stood merged in the subsequent decision s of the Board; that if for the sake of academic discussion and without conceding it in any manner it is presum ed that respondent No.2 could not retire the petitioner on account of superannuation, the Board could ratify the Impugned Office Order in subsequent meeting as has been done in the case of the petitioner; that while removing the petitioner , procedure laid down under section 202 of the Companies Ordinance, 1984 was followed in letter and spirit; that as per the repealed Companies Ordinance, 1984 as well as the Companies Act, 2017, M.D./C.E.O. of a Company can be removed either by 3/4 majority of the members of the Board or through special resolution ; that during tenure of the petitioner as M.D./C.E.O. NESP AK, 900 appointments were made by him on account of political pressure regarding which his Personal Staff Officer maintained list containing the names of the appointees and those who recommended them and that since neither the government nor the Board is interested to retain the petitioner as M.D./C.E.O. NESP AK the sought for relief cannot be granted. In support of his contentions, learned counsel has relied upon report of the In-house Inquiry Committee regarding regularization of contract employees by the petitioners, report of Fact Finding Inquiry Committee and copy of the application submitted by the petitioner for payment of Provident Fund, Gratuity and Leave Encashment. 4. Mian Irfan Akram, Deputy Attorney General, representing respondents No.1 & 2, in addition to adopting the arguments advanced by the learned counsel representing respondents No.3 & 4, states that since before expiry of his second term as M.D./C.E.O. NESP AK the petitioner reached the age of superannuation he was rightly retired by respondent No.2. When confronted with the query as to under which law the Ministry of Energy had the power to remove M.D./C.E.O. NESP AK, learned Law Of ficer has answered in negative. 5. In rebuttal, learned counsel for the petitioner , while producing a statement showing the dates of birth of previous M.Ds./C.E.Os. NESP AK, their age of superannuation and termination from the said post, argues that according to learned counsel representing respondents No.3 & 4 there was only one exception where M.D./C.E.O. NESP AK was allowed to serve beyond the age of superannuation but the said assertion stands negated from the fact that certain other persons mentioned in the statement were allowed to continue beyo nd their age of superannuation; that according to the Companies Ordinance, 1984 statutory period of contract of M.D./C.E.O. NESPAK is three years but the respondents with a view to distort the interest of the petitioner are relying on NESPAK Employees Service Rules, 1973 which being subordinate legislation cannot be given precedence over the parent enactment; that according to the documents, available at Page No.65 of the report and parawise comments filed by respondent No.3, the post of M.D./C.E.O. NESPAK does not figure there; that as a matter of fact terms & conditions of service of M.D./C.E.O. NESPAK are governed under NESPAK Chief Executive Service Rules, 1977, thus, the petitioner could not retire from service upon attaining the age of superannuation; that the document available at Page No.61 with the report and parawise comments affirms the fact that the petitioner was removed from service prior to ratification of the impugned Office Order by the Board; that a glance over the Minutes of Meeting of the Board, wherein termination of the petitioner was purportedly ratified, shows that the total number of members did not participate in the meeting only for the reason that they were not ready to support the impugned Office Order illegally issued by the Ministry of Energy; that as the petitioner was appointed for second term as M.D./C.E.O. NESPAK, under the provisions of the Companies Ordinance, 1984, the Companies Act, 2017 having prospective effect cannot be applied retrospectively to the disinterest of the petitioner; that the present M.D./C.E.O. NESPAK, who is involved in criminal cases as well as proceedings before NAB, is preparing anti- dated documents just to protect the illegal Office Order issued by the Ministry; that as the Minutes of Meeting, referred by learned counsel for respondents No.3 & 4, were not in the knowledge of the petitioner same were not referred in this petition; that the falsity of the allegations regarding removal of certain items by the petitioner from M.D. House, DHA, Lahore is established from the fact that the Board in its 137 meeting, held in the month ofrd th th
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December, 2013, decided to sell the said house as a result the items, referred by learned counsel for respondents No.3 & 4, were shifted by NESPAK authorities to the house of the petitioner; that as the articles in question have already been received back by NESPAK authorities, no adverse inference can be drawn against the petitioner on the said count; that as per second Note under rule 6 of NESPAK Chief Executive Service Rules, 1977 the petitioner was entitled to purchase the items on the basis of their book value, thus, no illegality was committed by him while submitting application in that regard; that the petitioner is not denying the fact that while serving as M.D./C.E.O. NESPAK he applied for payment of Gratuity and Provident Fund just for the reason that the same stands discontinued upon attaining the age of superannuation by an employee of NESPAK, thus, the same could not be equated with terminal benefits as M.D./C.E.O. NESPAK; that according to Minutes of 144 Meeting of the Board, certain inquiries were initiated against the petitioner on the direction of the Prime Minister of the country, thus, political victimization of the petitioner is established from the record; that according to own showing of the respondents the inquiry committee recommended penalty of censure against the petitioner, thus, the findings of said inquiry committee could not be used as an edifice to terminate the petitioner from the office of M.D./C.E.O. NESPAK; that the allegation of illegal appointments by the petitioner is not tenable for the reason that the petitioner made all appointments after fulfilling requisite codal formalities; that as the petitioner was not associated in any of the proceedings, allegedly initiated against him by the present Board, no exception can be taken against him on said score and that mala-fide on the part of the respondents is manifest from the fact that the persons inferior in rank to the petitioner have been appointed as inquiry officers regarding which the petitioner came to know during proceedings in this petition and that as the petitioner has already been given clean chit by National Accountability Bureau (NAB) no adverse opinion can be formed against him mere on account of initiation of proceedings by the NAB. Further, in support of his contentions, learned counsel has placed on record copy of application, dated 29.03.2017, submitted by the petitioner for payment of Provident Fund and Gratuity, statement showing names of the previous M.Ds./C.E.Os. NESPAK with their respective dates of birth, superannuation and tenure of their service and letter, dated 03.11.2017, addressed by the Manager Administration NESPAK to the petitioner. 6. I have heard learned counsel for the parties at considerable length and have also gone through the documents, annexed with this petition as well as those submitted by the respondents along with the report and parawise comments in addition to the case-law cited at the bar . 7. A perusal of the impugned Office Order shows that the petitioner was terminated from the post of M.D./C.E.O. NESP AK on account of his superannuat ion. While defending the impugned Office Order , learned counsel for respondents No.3 & 4 has referred to Rules 73 & 84 of the NESP AK Employees Service Rules, 1973, according to which age of superannuation of employees of NESP AK, is 60 years. Perhaps, learned counsel appearing on behalf of respondents No.3 & 4 have relied upon said Rules in utter disregard to the fact that admittedly the terms & conditions of service of the petitioner were governed under NESP AK Chief Executive Service Rules, 1977 wherein there is no stipulation regarding retirement of the M.D./C.E.O. on reaching the age of superannuation, thus, he could not be terminated on account of superannuation while relying upon NESP AK Employees Service Rules, 1973. Considering from another angle, a cursory glance over the Minutes of 141 Meeting of the Board shows that at the time of reappointment of the petitioner as M.D./C.E.O. NESPAK for second term the competent authority viz. the Board was well aware about the fact that at the time of expiry of his first tenure as M.D./C.E.O. NESPAK the petitioner was 59 years and 4 months of age. Reference in this regard can be made to the following portion of the Minutes of 141 Meeting of the Board: "The Board was informed that the case for reappointment of present Managing Director for another term of three years is being placed before them for consideration which is in line with the provision of Companies Ordinance as well as Government Policy which enables the Chief Executive to get another term or terms upto the age of 65 years whichever is earlier. However, Mr. Amjad Ali Khan would attain the age of 59 years & 4 months on the expiry of his present term and is eligible for another term of three years." (emphasis provided).th st st
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If appointment against the post of M.D./C.E.O. NESPAK, for second term, was till the age of superannuation, the petitioner could not be re-appointed. Further, in its meeting wherein the petitioner was recommended for appointment against the post of M.D./C.E.O. NESPAK for the second term of three years, the Board specifically referred to the Companies Ordinance, 1984 as well as other government policies regarding the age of M.D./C.E.O. of a government owned company. Moreover, according to section 198 of the Companies Ordinance, 1984, M.D./C.E.O. of a Company is to be appointed for three years, thus, respondent No.2 acted mala fidely while issuing impugned Office Order regarding termination of the petitioner from the post of M.D./C.E.O. NESPAK on account of his superannuation. The Hon'ble Supreme Court of Pakistan, while deciding C.M.A. No.2386 of 2013 in CMA No.1564 of 2013 determined the procedure to be followed for appointment against the post of of M.D./C.E.O. NESP AK, with specific reference to Article 45 of the Articles of Association read with sections 198 & 199 of the Companies Ordinance, 1984 relevant portion whereof reads as under: - "3. It may be noted that NESPAK is a Company incorporated under the Companies Ordinance, 1984. Therefore, it has to be governed in accordance with its Articles of Association and the Companies Ordinance. Article 45 reproduced above makes it abundantly clear that the Chief Executive is to be appointed by the Directors of the Company in accordance with the provisions of Sections 198 & 199 of the Companies Ordinance. It may well be that the Government owns…
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