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Petitioner: PAKISTAN TELECOMMUNICATION EMPLOYEES TRUST (PTET) VS Respondent: MUHAMMAD ARIFHonorable Justice Gulzar AhmedKhalid Javed Khan,Khalil-ur-Rehman
2015 P L C (C.S.) 1417
[Supreme Court of Pakistan]
Present: Nasir-ul-Mulk, C.J., Gulzar Ahmed and Mushir Alam, JJ
CIVIL PETITIONS NOS.565-568 AND 582-584 OF 2014
(On appeal against common Judgment dated 17-3-2014, passed by the Islamabad High Court, Islamabad, in I.C.A. No.8 of 2012)
CIVIL PETITIONS NOS.1596-1597, 1602, 1643 AND 2064-2067 OF 2014
(On appeal against common Judgment dated 3-7-2014 passed by the Peshawar High Court, Peshawar, in W.P. No. 2657 of 2012)
CRIMINAL PETITION NO.214 OF 2014
(On appeal against common Judgment dated 17-3-2014, passed by the Islamabad High Court, Islamabad, in I.C.A. No. 8 of 2012).
AND
C.M.A. NO. 3540 OF 2014 IN C.P. NO.565 OF 2014
(For impleadment of Telecom Pensioners Association as Respondent)
PAKISTAN TELECOMMUNICATION EMPLOYEES TRUST (PTET) through M.D., Islamabad and others
Versus
MUHAMMAD ARIF and others
Civil Petitions Nos.565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Criminal Petition No.214 of 2014 and C.M.A. No.3540 of 2014 in C.P. No. 565 of 2014, decided on 12th June, 2015.
(a) Pakistan Telecommunication (Re-Organization) Act (XVII of 1996)---
----Ss. 35, 36, 45 & 46(1)(d)---Pakistan Telecommunication Corporation Act (XVIII of 1991), S. 9 [since repealed]---Pakistan Telecommunication Corporation Employees Pension Fund (as created by a Trust Deed dated the 2nd April, 1994), Para. 2-- Constitution of Pakistan, Art. 185(3)---Pension---Serving employees, retired employees and widows of retired employees, who were employed in the Pakistan Telegraph and Telephone Department (T&T Department) and were subsequently transferred to Pakistan Telecommunication Corporation (the Corporation) and then to the Pakistan Telecommunication Company Limited (the Company)---Entitlement of such employees to receive pensionary benefits as fixed by the Federal Government---Grievance of said employees was that pension was being paid to them in accordance with the increase announced by the Federal Government but such increase in pension was abruptly stopped after the year 2009 by the Pakistan Telecommunication Company Limited (the Company)---Validity---Terms and conditions of service of the transferred employees from T&T Department to the Corporation and then to the Company remained unaltered and they continued to be paid the benefits as were admissible to them as employees of T&T Department---Terms and conditions of service and also the rules of service which were applicable to the T&T Department employees while in employment of the Federal Government would continue to be applicable to them on their transfer to the Corporation and then to the Company---Employees of T&T Department who were transferred to the Corporation and then to the Company, would on retirement be entitled to payment of pension according to the one announced by the Federal Government, thus if any increase in pension was announced by the Federal Government for its employees, the same would also apply and be paid to the employees of T&T Department transferred to the Corporation and then to the Company---While the Company may be entitled to fix the terms and conditions of service of its employees so also the provision of pension by the Board of Trustees of the Trust but, as regards the employees of T&T Department transferred to the Corporation and then to the Company, their terms and conditions of service stood protected by the provision of S. 9 of the Pakistan Telecommunication Corporation Act, 1991 [since repealed] and Ss. 35, 36 & 46 of the Pakistan Telecommunication (Re-Organization) Act, 1996, and thus they would be entitled to payment of increase in pension as announced by the Federal Government---Petition for leave to appeal was dismissed accordingly.
Divisional Engineer Phones, Phones Division, Sukkur and another v. Muhammad Shahid and others 1999 SCMR 1526 ref.
(b) Constitution of Pakistan---
----Arts. 188 & 189---Review petition pending against a judgment of the Supreme Court---Until such judgment of the Supreme Court was reviewed and some other conclusion was reached, such judgment remained in field and operated as a law pronounced by Supreme Court.
(c) Civil service---
----Pension, right to---Scope---Pension was part of a civil servant's retirement benefit and was not a bounty or an ex-gratia payment but a right acquired in consideration of his past service which was a vested right with legitimate expectation---Right to pension was conferred by law which could not be arbitrarily abridged or reduced except in accordance with law.
Pakistan Telecommunication Corporation and another v. Riaz Ahmad and 6 others PLD 1996 SC 222 ref.
Khalid Javed Khan, Advocate Supreme Court for Petitioners (in C.Ps. Nos.565 and 566 of 2014).
Zia-ul-Haq Makhdoom, Advocate Supreme Court for Petitioners (in C.P. No. 567 of 2014).
Rizwan Ijaz, Advocate Supreme Court and Zia-ul-Haq Makhdoom, Advocate Supreme Court for Petitioners (in C.P. No.568 of 2014).
Shahid Anwar Bajwa, Advocate Supreme Court and Ms. Zahida Awan, EVP (Legal) PTCL for Petitioners (in C.Ps. Nos.582-584, 1596-1597, 1602 and 1643 of 2014).
Zulfiqar Khalid Maluka, Advocate Supreme Court for Petitioners (in Crl. P. 214, C.Ps. Nos.2064-2067 of 2014).
Hashmat Ali Habib, Advocate Supreme Court for the Applicants (in C.M.A. No.3540 of 2014).
Khalil-ur-Rehman, Advocate Supreme Court for Respondents Nos. 1 to 34 (in C.Ps. Nos.565 and 582 of 2014).
Khalil-ur-Rehman, Advocate Supreme Court for Respondents Nos. 1 to 134 (in C.P. No.566 of 2014).
Ghulam Mahboob Khokhar, Advocate Supreme Court for Respondents Nos. 1-4, 6-9, 11-18, 20-51 (in C.Ps. Nos. 567 and 584 of 2014).
Abdul Rahim Bhatti, Advocate Supreme Court for Respondent No.1 (in C.P. No.568 of 2014).
Ch. Mushtaq Hussain, Advocate Supreme Court for Respondent No.2 (in C.P. No.568 of 2014).
Ch. Mushtaq Hussain, Advocate Supreme Court for Respondents Nos.1-2 (in C.P. No.583 of 2014).
Salah-ud-Din Khan, Advocate Supreme Court for Respondents Nos.1-60 (in C.Ps. Nos.1596 and 2066 of 2014).
Salah-ud-Din Khan, Advocate Supreme Court for Respondent No.1 (in C.Ps. Nos.1597, 1602 and 2064 of 2014).
Salah-ud-Din Khan, Advocate Supreme Court for Respondents Nos.1-805 (in C.P. No.1643 of 2014).
Salah-ud-Din Khan, Advocate Supreme Court for Respondents Nos.1-624 (in C.P. No.2065 of 2014).
Salah-ud-Din Khan, Advocate Supreme Court for Respondents Nos.1-135 (in C.P. No.2067 of 2014).
Dates of hearing: 10th, 27th, 28th November, 1st and 2nd December, 2014
JUDGMENT
GULZAR AHMED, J.--- These petitions have arisen from two sets of proceedings initiated by the respondents against the petitioners (1) at the Islamabad High Court, Islamabad and; (2) at Peshawar High Court, Peshawar. The impugned judgment of the Islamabad High Court, Islamabad is dated 17-3-2014 while impugned judgment of Peshawar High Court, Peshawar is dated 3-7-2014. Initially one set of Writ Petitions were filed in the Islamabad High Court, Islamabad, which were allowed by a learned Single Judge vide common judgment dated 21-12-2011 against which the petitioners filed Intra Court Appeals, which have been dismissed by the impugned judgment. The Writ Petitions in the Peshawar High Court, Peshawar, were decided by its Division Bench, by the impugned judgment.
2. Admittedly, the respondents were the serving employees, retired employees and widows of retired employees, who were employed in the Pakistan Telegraph and Telephone Department (T&T Department) and through various enactments were transferred to Pakistan Telecommunication Corporation (the Corporation) and then to the Pakistan Telecommunication Company Limited (the Company). The enactments under which their services were transferred are dealt with in this judgment herein below. In nutshell the grievance of the respondents who have filed Writ Petitions in the High Courts was that the pension was being paid to the erstwhile employees of T&T Department transferred to the Corporation and then to the Company which was with increase announced by the Government of Pakistan but this increase in pension was abruptly stopped by the petitioners. The respondents have prayed that the pension be paid in accordance with the increase announced by the Government of Pakistan vide its notification dated 5-7-2010.
3. We have heard the learned Advocate Supreme Court for the parties and have gone through the record.
4. Mr. Khalid Javed Khan, learned Advocate Supreme Court appearing for the petitioner Pakistan Telecommunication Employees Trust, after extensively going through various enactments and rules etc., has contended that there is no provision in the Civil Servants Act, 1973 for increase of pension and that whatever increase in pension is granted by the Federal Government is on the basis of its own policy. He also contended that the provision of Civil Servants Act being not applicable to employees of the Company consequently any increase in pension granted by the government to the civil servants will not extend to the employees of the Company. He further contended that though pension is granted as a part of terms and conditions of service but its increase is not the part of terms and conditions as the increase in pension is basically a matter of policy which has to be decided by the Trustees of the Trust. He contended that though the Trust is a statutory Trust but there being no provision in the statute providing for increase in pension, the increase in pension being a matter of policy is granted through an executive order. He admitted that before 2010, the pension to the employees of the Company was being increased as per the one announced by the Government of Pakistan but in 2010 the increase granted by the Government was not followed rather the increase in pension was granted as announced by the Trustees of the Trust. He contended that if the employees are paid pension, as increased by the Government of Pakistan, the provision of Section 44 of the Act of 1996 will become redundant. He further contended that the liability of the Trust to pay pension and its increase to the employees is restricted only to those, who were in employment in 1996, and those who came into employment after 1996 are not governed by the Trust and are merely contract employees and their contribution is paid to the Employees Oldage Benefit Institution (EOBI). He also contended that the petitioner has paid benefit of Voluntary Separation Scheme (VSS) to the employees and those who have received the benefit of VSS cannot maintain the petition as their dues including pensionary dues have been fully paid by the petitioner.
5. Mr. Zia-ul-Haq Makhdoom, learned Advocate Supreme Court for the petitioner in C.P. No.567 of 2014; Mr. Rizwan Ijaz, learned Advocate Supreme Court for the petitioner in C.P. No.568 of 2014; and Mr. Zulfiqar Khalid Maluka, learned Advocate Supreme Court for the petitioner in Crl. P. No.214 of 2014 and C.Ps. Nos.2064-2067 of 2014 have adopted the arguments advanced by Mr. Khalid Javed Khan.
6. Mr. Shahid Anwar Bajwa, learned Advocate Supreme Court for the petitioners, in C.Ps. Nos.582-584, 1596-1597, 1602 and 1643 has contended that after 1996 on PTCL becoming a private Company, all the terms and conditions of service of respondents came to be fixed by the Company with the condition that it should not be less favourable to which they were entitled. He further contended that in considering the increase in pension actuary report is required to be taken into consideration and the actuary report is made on the basis of inflation, financial constraints of the Company to fund the unfunded portion of the increase. He contended that those employees who have opted for VSS in 2007, 2008 and 2009 are being paid pension @ 7% every month according to the terms of VSS and such being the bargain made by the VSS optees, they are not entitled to grant of any other pensionary benefit. He contended that section 45(2) of the Act of 1996 provides for contribution by the Company to the Pension Fund the amount determined by Actuary representing the unfunded proportion of the accrued pension liabilities from the effective date. He further contended that in terms of S.R.O. No.115(I)/96 dated 11-2-1996 the Company has discharged its obligation by making payment to the Trust according to the amount specified in Schedule-III of the said SRO and such became past and closed transaction. He contended that there are two types of regulations; one are statutory and the other are non-statutory and that the PTET Rules are statutory rules and are designed to govern the transferred employees. He further contended that the case of Masood Ahmed Bhatti is being reconsidered by this Court.
7. Mr. Khalil-ur-Rehman, learned Advocate Supreme Court for private respondents in C.Ps. Nos.565, 566 and 582 of 2014 has read the provisions of six Ordinances commencing from Ordinance LI of 1994. The learned Advocate Supreme Court has contended that through Trust Deed dated 2-4-1994 Pakistan Telecommunication Corporation Employees Pension Fund was created and all departmental employees transferred to the Corporation were entitled to be paid pension as defined under the Federal Government Pension Rules. He contended that after promulgation of the Act of 1996, Pakistan Telecommunication Employees Trust was created which took over the liability of the Pension Fund created by the Trust Deed of 2-4-1994 to that there was a continuity of Pension Fund from the one created by Trust Deed dated 2-4-1994 to that of the Pakistan Telecommunication Employees Trust. He referred to the definition of the term 'telecommunication employees' as given in the Act of 1996 and contended that all employees of former T&T Department are entitled to receive pensionary benefits as per the one fixed by the Federal Government. He contended that through vesting order dated 7-2-1996 issued by the Ministry of Communication, Government of Pakistan, the effective date of vesting of all properties, rights and liabilities of the Corporation to that of Pakistan Telecommunication Company Limited was announced to be that of 1-1-1996. Similarly, all employees of the Corporation become employees of the Company also from 1-1-1996 with liability in respect of payment of pension, therefore, the entitlement for payment of pension at the rate fixed by the Federal Government was accepted by the Company. He referred to the provision of subsection (2) of section 59 of the Act of 1996 and contended that all orders passed prior to the promulgation of this Act were saved including the Employees Pension Fund Rules, 1994 and that the Company has assumed the liability and such pension is also protected.
8. Ch. Mushtaq Hussain, learned Advocate Supreme Court for the respondents in C.Ps. Nos.568 and 583 of 2014 has made distinction of 4 kinds of employees that of T&T Department, Corporation Employees, Contract Employees and Company Employees and contended that the respondents are employees of T&T Department and being transferred employees their benefits cannot be reduced from the one they were enjoying as such departmental employees which is inclusive of pension. He further contended that the Transferred Employees are being paid salary and other dues that of a government employees and posed a question as to why the pension as fixed by the Federal Government should not be paid to the respondents.
9. Mr. Salah-ud-Din Khan, learned Advocate Supreme Court for the respondents in C.Ps. Nos.1596, 1597, 1602, 1643, 2064, 2065, 2066 and 2067 of 2014 has referred to the letter dated 5-4-2013 of the Ministry of Information Technology wherein four questions were referred to the Ministry of Law with regard to payment of dues and the opinion of Ministry of Law dated 11-3-2013 where in dealing with the queition of increase in pension it is opined as follows:---
"Whether increase in pension of Federal Government is also allowed to transferred employees of the PTCL the issue is answered in the affirmative because their terms and conditions have been guaranteed by the Federal Government."
10. Mr. Abdul Rahim Bhatti, learned Advocate Supreme Court for the respondents in C.Ps. Nos.568 and 583 of 2014 has contended that the employees of T&T Department were transferred to the Corporation and then to the Company by operation of law with specific provision that their terms and conditions will not be varied to their disadvantage. He contended that the Company has been following the government rules in payment of pension upto 2010 and that such was a guaranteed right of the respondents which cannot be denied. He also referred to the share-purchase agreement and the notifications providing for increase in pension and contended that the increase in pension, as per government rules, having been paid for almost 13 years became practice and such practice cannot be discontinued as it becomes law. He further contended that the Transferred Employees are civil servants and their terms and conditions of service are governed by the Civil Servants Act. In support of his submissions, learned Advocate Supreme Court has relied upon the case of Pakistan Telecommunication Corporation and another v. Riaz Ahmed and 6 others [PLD 1996 SC 222]; Divisional Engineer Phones, Phones Division, Sukkur and another v. Muhammad Shahid and others [1999 SCMR 1526]; and order dated 23-8-2013 passed by this Court in Civil Petitions Nos.717 and 718 of 2013.
11. Mr. Hashmat Ali Habib, learned Advocate Supreme Court for the applicants in C.M.A. No.3540 of 2014 and Mr. Ghulam Mahboob Khokhar, learned Advocate Supreme Court for the respondents in C.Ps. Nos.567 and 584 of 2014 have adopted the arguments of the respondents' counsel referred to above.
12. The functions of telecommunication in Pakistan were being undertaken by the T&T Department of the Federal Government of Pakistan. By the Pakistan Telecommunication Act, 1991 (the Act of 1991), Pakistan Telecommunication Corporation was established with the purpose and function to establish, maintain and operate telecommunication with transfer of assets and liabilities and all employees of T&T Department to the Corporation. Section 9 of the Act of 1991 provided that the employees of T&T Department transferred to the Corporation shall have the same terms and conditions to which they were entitled immediately before such transfer and that the terms and conditions of service shall not be varied by the Corporation to their disadvantage. Subsequently, the Pakistan Telecommunication (Re organization) Act, 1996 (the Act of 1996) was promulgated for the re-organization of Pakistan Telecommunication system in Pakistan by establishing Pakistan Telecommunication Authority, Frequency Allocation Board, National Telecommunication Corporation and Pakistan Telecommunication Employees Trust and transfer of telecommunication service to private sector etc. Under section 34 of the Act of 1996, the Federal Government established a Company known as Pakistan Telecommunication Company Limited incorporated under the Companies Act, 1984, with the principal object of provision of domestic and international telecommunication. Section 35 of the Act of 1996 empowered the Federal Government to issue Vesting Order vesting certain rights and liabilities of the Corporation to the Company from the effective date. The Vesting Order was also to specify the employees of the Corporation to be transferred and become the employees of the Company from the effective date. Subsection (1) of section 36 of the Act disentitled the Transferred Employees to any compensation as a consequence of transfer to the Company. The proviso, however, lays down that the Federal Government shall guarantee the existing terms and conditions of service and rights, including pensionary benefits of the Transferred Employees. Subsection (2) of section 36 provided that the terms and conditions of service of the Transferred Employees shall not be altered adversely by the Company except in accordance with the laws of Pakistan or with the consent of the Transferred Employees and the award of appropriate compensation. Subsection (5) of section 36 provided that in the order vesting property of the Corporation to the Company, the Federal Government shall require the Company to assume responsibility of pensionary benefits of the telecommunication employees and the Company shall not alter such pensionary benefits without the consent of the individuals concerned and the award of appropriate compensation. In terms of section 35 of the Act of 1996, the Government of Pakistan issued Vesting Order dated 7-2-1996, by which all properties and liabilities of the Corporation were vested in the Company w.e.f. 1-1-1996 and all employees of the Corporation except those transferred to Pakistan Telecommunication Authority, Frequency Allocation Board, National Telecommunication Corporation and Pakistan Telecommunication Employees Trust stood transferred to and become the employees of the Company w.e.f. 1-1-1996. It further provided that w.e.f. 1-1-1996 the liability of Corporation in respect of payment of pension to telecommunication employees shall be transferred to the Pakistan Telecommunication Employees Trust and the Company shall be liable for and assume the responsibility to contribute to the Pakistan Telecommunication Employees Trust the amount determined in accordance with section 45. The order further provided that the Corporation without being wound up stands dissolved and ceased to exist w.e.f. 1-1-1996.
13. From the reading of the Act of 1991 and thereafter of the Act of 1996, it is abundantly clear that the employees of T&T Department were transferred to the Corporation with the terms and conditions of their service similar to the one they were enjoying before such transfer. It is not in dispute before us that the employees of T&T Department, whose case is before us, were transferred to the Corporation and they enjoyed the same terms and conditions of service as were applicable to them as employees of T&T Department. Under the terms and conditions of service, such employees were also entitled to payment of pension on their retirement. On 2nd April, 1994, the Corporation executed a Trust Deed establishing Pakistan Telecommunication Corporation Employees Pension Fund. Para 2 of which reads as follows:---
"All departmental employees transferred to the corporation as defined in section 9 of the Pakistan Telecommunication Corporation Act, 1991 shall be entitled to benefits as defined under the Federal Government Pension Rules as applicable to such employees before the formation of PTC."
By section 44 of the Act of 1996, the Federal Government has established a trust called Pakistan Telecommunication Employees Trust (the Trust). Section 45 of the Act of 1996 made provision for issuing of Vesting Order by the Federal Government of vesting of all assets and such Liabilities as are specified in the Trust from the effective date. Section 46 of the Act of 1996 lays down functions and powers of the Trust which, inter alia, provides for making of provision for the payment of pensions to telecommunication employees to the extent of their entitlement with exclusive right to determine the amounts, if any, payable in respect of pension benefits to the telecommunication employees. It has already been mentioned above that by the Vesting Order dated 7-2-1996, inter alia, the liability of payment of pension of telecommunication employees was transferred to the Trust and the Company was liable and has assumed the responsibility to contribute to the Trust, the amounts determined in accordance with section 45.
14. The question that needs to be addressed is about the status in obtaining of pension by the employees of the erstwhile T&T Department, who were transferred to the Corporation from where they were transferred to the Company. It is clear from the reading of provision of the Act of 1991 so also that of the Act of 1996 that the terms and conditions of service of the Transferred Employees from T&T Department to the Corporation and then to the Company remain unaltered and they continued to be paid the benefits as were admissible to them as employees of T&T Department. There seems to be no dispute until 2009 regarding the entitlement of pension to the employees of erstwhile T&T Department inasmuch as they have been paid pension at the same rate of increase as has been provided by the Federal Government to its employees as is apparent from the record of pension payment submitted by the counsel for the Trust by way of C.M.A. No.6331 of 2014, which shows the payment of pension as follows:---
C.M.A. No.6331 of 2014
Pension increased by the Pakistan Telecommunication Company Employees Trust
Year(s)
Category
Percentage
2004-05
(i) Retired before 1-1-96
16% As per GOP
(ii) Retired after 1-1-96
8%
2005-06
(i) Retired before 1-1-96
10% as per GOP
(ii) Retired after 1-1-96
10%
2006-07
(i) Retired before…
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