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Petitioner: HABIBULLAH VS Respondent: GOVERNMENT OF THE PUNJAB AND 5 OTHERS
Court Name: Lahore High Court Judge(s): Gul Muhammad Khan Title: HABIBULLAH vs GOVERNMENT OF THE PUNJAB AND 5 OTHERS Case No.: Writ Petition No, 1009 of 1979 W. P. No, 1985-S of 1978 Date of Judgment:1979-11-20 Reported As: PLD 1980 Lahore 337 Result: Petitions accepted
JUDGMENT
JUDGMENT ' This order shall also dispose of another Writ Petition No, 748-S-79, as both of them raise common questions of law and are directed against the same order. The grievance of the petitioners arose in the following circumstances. 2. (i) Habibullah petitioner was originally an employee of the Central Government. He was sent on deputation on 1st September, 1955 to the Small Industries Corporation, established under Act XXIX of 1956 of the Central Legislature. Later, he was declared surplus by his parent Department on 30th December, 1959, on account of abolition of his post and was absorbed in the Corporation. Since then he has been with the Corporation and was working as Joint Director (Accounts) in National Pay Scale 19, when the impugned order dated 5th February, 1979, terminating his service was passed. (ii) Riasat Ali petitioner in the other writ petition was appointed as Senior Industrial Credit Officer in the Small Industries Corporation on 25th April, 1961. He has since carried on and was working as Joint Director (C & D) in National Pay Scale 19, when his services were terminated. Both the petitioners were paid 180 days emoluments in lieu of notice and asked to hand overcharge forthwith. 3. (i) Since its inception in 1956, the Corporation has faced many legal developments and it will be useful to narrate the same before dealing with the dispute. The original Small Industries Corporation was created under Act, XXIX of 1956, PLD 1956 Central Statutes 336 enforced on 18th April, 1956, by the President. Its section 46 (2)(k) read with section 13 provided for framing of regulations for the employees. The regulations were made on 9th October, 1957, and a copy of it has been placed on record. On 4th June, 1962, the above Corporation was dissolved by Ordinance
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XXXVI of 1962 of the Central Legislature-PLD 1962 Central Statutes 551. Section 3(b) provided that Officers and employees of the dissolved Corporation shall be transferred to and employed by the Provincial Corporations in such manner and on such terms and conditions as may be specified in the order. (ii) Simultaneously, the Government of West Pakistan was obliged to establish a new body by the name of West Pakistan Industrial Development Corporation under section 3(2) of Ordinance, XXXVIII of 1962. Section 10(1) authorised the new Corporation to appoint Officers to such terms and conditions as it thought fit. Notwithstanding above provisions, section 10(2) obliged the Corporation to appoint, subject to the provisions of subsections (3) and (4), employees and Officers of the dissolved Corporation, as may be transferred to it under Ordinance, XXXVI of 1962. Subsection (3) empowered the Provincial Government to determine the terms and conditions of their employment but till then the previous terms and conditions could apply, if so directed. An order dated 30th June, 1962, was also passed by the Central Government under section 3(b) of Ordinance, XXXVI of 1962 directing that Officers and employees of the Small Industries Corporation were transferred on the same terms and conditions on which they were employed by the Small Industries Corporation. (iii) On 30th September, 1965, the Governor of West Pakistan promulgated West Pakistan Small Industries Corporation Ordinance, 1965, (XXX of 1965). It was provided in section 40 that as from the coming in force of the Ordinance, the Small Industries Division of the West Pakistan Industrial Development Corporation shall stand transferred to the West Pakistan Small Industries Corporation, created under section 3. Section 40(c) provided that:- "All Officers, advisers, consultants and employees of the Small Industries Division of the West Pakistan Industrial Development Corporation shall stand transferred for service under the Corporation on the terms and conditions as were applicable to them on the 18th day of March, 1965." (iv) On 30th June, 1972, the President promulgated the West Pakistan Small Industries Corporation (Dissolution) Ordinance, 1972 (XXIV of 1972). The West Pakistan Small. Industries Corporation as established under the above Ordinance was dissolved and its assets, properties etc. Transferred to the relevant Provinces. As for the employees section 5 provided: "Persons who were in the whole time employment of the Corporation immediately before the commencement of this Ordinance shall be transferred to, and appointed by the Provinces in accordance with the rules made by the President in this behalf; Provided that persons so transferred shall be appointed on such terms and conditions as the President may by order determine." Section 6 took care of any difficulty that might arise. It conferred a power on the President to provide for the removal of difficulties arising out of, or in connection with, the dissolution of the Corporation or for effectively carrying out the purpose of this Ordinance in such manner as he may consider necessary or expedient and without prejudice to the provisions of that Ordinance. (v) On 9th October, 1972, the Governor of the Punjab created the Punjab Small Industries Corporation vide section 3 of the Punjab Small Industries Corporation Ordinance (XVIII of 1972). Section 11(1) empowered the Corporation, subject to such general or special order as Government may give to it from time to time, appoint such Officers, employees etc. As it considers necessary for the efficient performance of its functions on such terms and conditions as it may deem fit. Section 11(2) laid down that the Corporation shall appoint such Officers etc. As may be transferred to it by the Government on such terms and conditions as may be determined by the Government. Section 36 provided as under:- "36. Officers and other employees of the defunct West Pakistan Small Industries Corporation to be transferred to the Punjab Province in pursuance of the provisions of section 5 of the West Pakistan
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Small Industries Corporation (Dissolution) Ordinance, 1972, may be appointed for service under the Corporation on such terms and conditions as may be determined by Government." ' Later Act, XV of 1973, was also passed by the Provincial Legislature on 13th August, 1973, enacting the same provisions as referred to above. 4. A careful perusal of the legal developments referred to above would show that though the various Corporations were created or dissolved under various enactments from 1956 to 1965, the employees of the dissolved one were transferred, on the force of statutes, to the new creation. Their terms and conditions were left to be determined not by the new Corporation but the Government. Ordinance XXIV of 1972, however, transferred the employees not to any Corporation but the Provinces. The petitioners were thus absorbed in the Punjab Provincial Establishment with effect from 30th June, 1972. Their terms and conditions were to be determined by the President. It was more than three months after the petitioners were transferred to be appointed by the Provinces that Ordinance XVIII of 1972 was enforced with section 36 reproduced above. Section 36 states that the employees of the defunct Corporation to be transferred to the Punjab Province . . . . May be appointed on such terms and conditions as may be determined by the Government. This provision is apparently in conflict with section 5 of Ordinance, XXIV of 1972, and must be reconciled or struck down. 5. The factual position leading to the impugned order, as it appears on the record produced by the respondents, is that on 17th October, 1978, the Secretary to the Government of Punjab (Industries Department) sent a copy of a secret letter to the Secretary, Services, General Administration and Information Department (hereinafter referred to as S. G. A. & I. D.), asking the Managing Director of the respondent Corporation to initiate action to implement the Government orders, after observing the prescribed formalities, in accordance with rules/contract governing the appointment of the petitioners. The letter of the S. G. A. & I. D. Stated that it had been decided to terminate services of the petitioners after observing prescribed formalities and payment of salary in lieu of notices. The Managing Director initiated action by putting up a note dated 18th October, 1978. He noted that the petitioners were placed in National Pay Scale 19 and the P. S. I. C. Board was authorised to remove them from service. He, therefore, thought it desirable to get approval of the Board before issuing notices to them. He further noted that as the meeting of the Board was not likely to be held in the near future, the file be circulated to the members. 6. On coming to know of the above action Habib Ullah petitioner filed Writ Petition No, 5077-S-78, on 24th October, 1978, on which an order to maintain status quo was passed by this Court on 25th October, 1978. The other petitioner followed suit. On 3rd February, 1979, Mr. Tanvir Ahmed Khan, Assistant Advocate-General appeared and stated on behalf of the respondents that they would take no action except in accordance with law. The writ petition was accordingly disposed of. 7. It may be mentioned here that after the note of the Managing Director dated 18th October, 1978, referred to in para. 5 above, the file went back to the Secretary Industries who signed it on 25th October, 1978, with the remark 'seen'. The Secretary Finance also signed it on 26th October, 1978, without any observation. The Chairman Planning and Development Board, however, noted on 26th October, 1978: "I would like to see, if possible, the papers leading to the decision of termination." 8. The case was sent back to the Secretary Industries who observed on 28th October, that no previous papers pertaining to that case were available in the Industries Department. According to him the case had been processed by the S. G. A. & I. D. Who conveyed the orders on 17th October, 1978. The S. 0. S. IV stated on 4th November, 1978, that the matter was sub judice. On 19th November, 1978, the Secretary Industries again requested to send the relevant papers leading to the orders of termination, to the Chairman P & D. The Secretary Industries on 4th December, sent the papers to
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the Chairman P & D and further observed that he may call Secretary, Finance and himself for discussion. Tt appears from note 30 that a summary submitted to the Governor/M. L. A. By the S. G. A. & I. D. Was also sent to the Chairman P & D in answer to his querry. He observed on 19th Jannary, 1979, whether, in view of writ petition filed by Habibullah, against the termination order, served on him by the Managing Director, it was still in order to issue termination order, through the Board of P. S. I. C. 9. On 3rd February, when the writ petition was disposed of, the Secretary, Industries noted; "In view of these decisions of the High Court order of the Governor terminating their services can now be implemented." ' The observations of the Secretary Industries, appear to have been approved by the Chairman P & D who merely put his signatures on 5th February, 1979. A third signature without remark seems to be that of the Managing Director. The Secretary P. S. I. C. Then put up a note stating that it had been decided by the members of the P. S. I. C. On 3rd February, and 5th February, 1979, to terminate the services of the two petitioners on payment of six months' salary in lieu of notice in accordance with clause 6(iii) of their appointment letters. This note had been sent to the Managing Director who approved it on the same day and the termination orders were served on the petitioners forthwith. Subsequently, on 12th February, 1979, this decision was ratified and confirmed in a meeting of the Board having the necessary quorum. 10. The above facts on record and the legal position thus clearly prove the following:- (0 Both the petitioners were originally governed by the above-mentioned 1957, Service Regulations as they became employees of the Corpora. Tion in 1959 and 1961; (ii) they stood transferred to be appointed by the Province in accordance with the rules made by the President in that behalf; (iii) the petitioners could be appointed for service under the Corporation on such terms and conditions as may be determined by the Provincial Government (Admittedly no such order has been passed); (iv) the entire exercise undertaken by the respondents was to perfunctorily execute the order of the Government/Governor; (v) no member of the Board thought even for a moment, that the Government/Governor's order pre-required observance of the prescribed formalities before passing termination orders; (vi) neither did the Managing Director state in his note dated 18th October, 1978, if any rules or contracts were applicable to the petitioners nor was it considered by any one of the members before putting their signatures on the file; (vii) none of the members informed himself or the other members that the decision could be taken only in a valid meeting of the members of the Board with the necessary quorum of four, under section 16, after objectively considering the whole case. Rather they appear to have acted as subordinates to the Government and not members of the P. S. I. C. Board; (viii) notes 38 and 39 of the relevant file relied upon by the Secretary of the Corporation, while issuing the termination orders, had signatures of only three members i. e. Secretary Industries, Chairman P & D and the Managing Director and the two notes were meant to implement the order of the Governor. There is no indication that they had to decide the case of the petitioners in accordance with any rules of service or the terms of the alleged contracts; (ix) the Secretary of the respondent Corporation appears to have acted on his own or on the letter dated 7th October, 1978, of the S. G. A. & I. D. To terminate the petitioners' services by paying 180 days' pay in lieu, of notice. There is no decision of that sort by the members of the Board. ' The above inferences do point out conclusively that the impugned orders were passed perfunctorily and mechanically without application of slightest mind to any aspect of the case. The
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Supreme Court in the case of Mian Jamal Shah (1), laid down the following rule covering such a situation:- "There may be error apparent op the face of the record which may be due to an oversight; or the tribunal may not have properly applied its mind to an aspect of the matter before it. There is a duty cast on every judicial tribunal to properly apply its mind to questions of fact and of law. If there be any failure in the proper application of the mind the High Court can always quash the order and direct that the case be decided afresh in accordance with law . ." ' In fact this is now a very firmly established rule. Reference be made to Ghulam Mohi-ud-Din v. Chief Settlement Commissioner (2), Muhammad Farooq Imam v. Claims Commissioner (3) and Syed Azmat Ali v. Chief Settlement and Rehabilitation Commissioner (4). These petitions, therefore, must succeed on that basis alone. 11. The learned counsel for the respondents objected to the maintainability of these petitions on the ground that the relationship between (1) PLD 1%6 SC I (2) P D 1964 SC 829 (3) PLD 1964 SC 585 (4) PLD 1964 SC 260 the petitioners and the respondents being of master and servant, no interference by this Court was warranted, in view of the law laid down by the Supreme Court in R. T. H. Janjua v. National Shipping Corporation (1). The rule laid down in that case was that only an incumbent holding public office can ask for the constitutional relief. The definition of 'public Office' borrowed from Extraordinary Legal Remedies, by Ferris at page 166, was approved. It is as under:- "A public office is the right, authority and duty created and conferred by law by which an individual is vested with some portion of the sovereign functions of the Government to be exercised by him for the benefit of the public, for the term and by the tenure prescribed by law. It implies a delegation of a portion of the sovereign power. It is a trust conferred by public authority for a public purpose, embracing the ideas of tenure, duration, emolument and duties." ' The contention, however, has no force. 12. The import of the above judgment was explained and expounded in the case of Akbar All Bokhari (2), holding that an Assistant Treasurer of State Bank of Pakistan, was a Public Officer. Again the judgment of the Supreme Court that holds the field now is Salahuddin v. Frontier Sugar Mills (3), in which practically the entire case-law was discussed and a criterion has been laid down to show as to who is performing functions in connection with the affairs of the Federation or Provinces. The relevant portion of the judgment is as under:- "It will be seen that the power conferred on the High Court under sub-clauses (a)(i) and (AO of clause (2) of Article 201 of the Interim Constitution can be exercised only in respect of a person performing, without the territorial jurisdiction of the Court, functions in connection with the affairs of the Federation, a Province or a local authority. If the person whose acts, actions or proceedings are challenged before the High Court, does not fall within any of the specified categories, then he would clearly not be amenable to this extraordinary jurisdiction. ' Now, what is meant by the phrase 'performing functions in connection with the affairs of the Federation or a Province'. It is clear that the reference is to governmental or state functions, involving, in one form or another, an element of exercise of public power. The functions may be the traditional police functions of the State, involving the maintenance of law and order and other regulatory activities; or they may comprise functions pertaining to economic development, social welfare, education, public utility services and other State enterprises of an industrial or commercial nature. Ordinarily, these functions would be performed by persons or agencies directly appointed, controlled and financed by the State i. e. By the Federal Government or a Provincial Government. ' Examples of such statutory corporations are the National Bank of Pakistan, the West Pakistan Water and. Power Development Authority; the National Shipping Corporation, the Agricultural
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Development Bank of Pakistan, and the large number of Universities functioning under, their respective statutes. On account of their common attributes, as mentioned in the preceding paragraph, they have all been regarded as persons performing functions in connection with the affairs of the Federation or a Province . . . " ' The respondent is one of such Corporations and the functions it is entitled to perform in sections 18 and 27 of Act XV of 1973, do constitute it as a person performing functions in connection with the affairs of a Province. These petitions are, therefore, maintainable on this short score alone. 13. It is to be noted that the question involved is not whether the petitioners as servants of the respondent-Corporation can get a relief but that the respondent being a person performing functions in connection with the affairs of a Province, was obliged to act in accordance with law, even if it was the employer and wanted to dispense with the petitioners' services. The distinction as referred to above was made by the Supreme Court in the case of Anjuman-e-Ahmadiya (1), as is clear from the following portion of the judgment:- "It is, therefore, clear from the provisions contained in the statute and the conditions in the deed of conveyance that if there has been a valid grant then it cannot be cancelled in the manner in which the authorities have purported to do in the present case. The case was thus clearly one in which the appellant was complaining of a non-performance of a public duty and asking for a direction that the authorities concerned should perform their public duty in accordance with law." ' In view of the above it is quite clear that these petitions asking for performance of action in accordance with law or calling in question the action of a person performing functions in connection with the affairs of the province, are maintainable. These would have been maintainable even otherwise as the respondent-Corporation is a local authority in view of section 30 of Act XV of 1973. 14. On merit the petitioners' contention is that they having been employed under the Corporation before the coming into force of Ordinance XXXVI of 1962, and after Act XXIX of 1956, both of them became subject to the service regulations of 1957 framed under section 46 (2) (k). Regulations 9 and 10 provide for confirmation of an employee after completion of six months or other extended probationary period. The services of a permanent employee could be terminated on abolition of a post preceded by three months' notice or three months' pay in lieu thereof, under Regulation 11. The other two modes provided in Regulations 12 and 13 are by resignation and retirement. As regards disciplinary matters the Government Servants Conduct Rules were made applicable. 15. On the dissolution of the Corporation in view of Ordinance XXXVI of 1962, the employees of the Corporation were to be employed as specified in the order. The order dated 30th June, 1962, allowed them the previous terms and conditions. Section 10(3) of Ordinance XXXVIII of 1962 (1) PLD 1966 SC 639 empowered the Provincial Government to determine the fresh terms and conditions of employment. No action was taken under this provision. The net result was that in the absence of new terms and conditions 1957 Regulations continued to operate. 16. Ordinance XXX of 1965 separated the Small Industries Division from the West Pakistan Industrial Development Corporation and laid down in section 40(c) that the employees of the Small Industries Division shall stand transferred to the Corporation on the terms and conditions as were applicable to them on 18th May, 1965. The case of the respondents is that in the meanwhile the two petitioners entered into an agreement with the Corporation accepting termination of their services on 180 days' notice on either side or payment of 180 days' pay in lieu of notice vide clause 6(iii). It is admitted that the Corporation had extended the offers on 28th January, 1965, and 2nd September 1964, respectively to the two petitioners who accepted it on 2nd March, 1965 and 30th September, 1964 respectively. The contention of the petitioners is that the agreements were void and ineffective. The significance of this objection of the respondents is that if the agreements held the
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field at the relevant time, the same stood validated and made operative by section 40(c) of Ordinance XXX of. 1965. 17. The learned counsel for the respondent heavily relied on a decision of a learned Single Judge of this Court, in Muhammad Nazir Chaudhry v. W. P. S. I. C. Writ Petition No, 1985-S-1978 in respect of an employee of the same Corporation and arising within the same legal framework, to say that in the absence of any terms and conditions having been determined by the Government or rules made by the President, the parties were governed by the contract. It is, however, to be noticed that it was not brought to his Lordship's notice that the so-called contract had no binding force as it had been entered into without any consideration. The question whether the parties could validly enter into a contract, when the previous terms and conditions framed under statutory provisions were still subsisting, was also not agitated or considered. In this view of the matter, I am constrained to say, with the greatest respect, at my command, that the above view cannot be followed in the presence of other dicta that is being referred to hereinbelow. 18. In West Pakistan Province v. Jamshed Miran (1) the Court was called upon to consider and decide the effect of an agreed condition, introduced during the continuance of the service of an employee. The views expressed by a Division Bench of this Court in that case are as under :- "There is another aspect of the case. The respondent was taken in service before Independence of 1947. He was a temporary employee but without a condition that his services would be terminated by one month's notice. He, therefore, under the provisions of sections 240 and 241, had more protection and security of service than such a temporary employee. It was laid down in section 3 of the Punjab Partition (Civil Services) Order, 1947, that any person, who immediately before the appointed day was serving the Punjab Province as an official,…
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