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Petitioner: TARIQ AKBAR KHAN VS Respondent: FEDERATION OF PAKISTAN
1998 P L C (C
1998 P L C (C.S.) 221
[Lahore High Court]
Before Muhammad Nawaz Abbasi, J
TARIQ AKBAR KHAN
versus
FEDERATION OF PAKISTAN through Secretary,
Petroleum and Natural Resources, Islamabad and 2 others
Writ Petition No. 317 of 1997, decided on 6th June, 1997.
(a) Marketing of Petroleum Products (Federal Control) Act (XVII of 1974)---
----S. 5---Constitution of Pakistan (1973), Art. 199---Constitutional petition---Demotion and subsequent termination of petitioner (employee) assailed in Constitutional petition---Competency---Petitioner employee of statutory corporation under the direct control of Federal Government---Such corporation being public company dealing with essential commodities in public sector was, performing functions in relation to affairs of Federation-- Where statutory body or person in public sector through improper exercise of jurisdiction or authority had committed irregularity in prescribed procedure or exercise of power in violation of principles of natural justice affecting injuriously, some justiciable right of a person, such action would be amenable to Constitutional jurisdiction of High Court under Art. 199 of the Constitution---Wrongful dismissal of employee by Authority in exercise of powers under general law of master and servant although was not questionable in Constitutional jurisdiction yet if service of employee of such corporation or public company was governed through same statute providing express or implied protection and creating some legal right, enforceability of such right through Constitutional jurisdiction was not barred.
Sheikh Maqbool Elahi and others v. Khan Abdul Rehman Khan and others PLD 1960 SC (Pak.) 266; Tariq Transport Co. v. Sargodha-Bhera Bus Service PLD 1958 SC (Pak.) 437; Zainul Abidin v. Multan Central Cooperative Bank Limited, Multan PLD 1966 SC 445; The Chairman, East Pakistan Industrial Development Corporation, Dacca and another v. Rustam Ali and another PLD 1966 SC 848 and R.T.H. Janjua v. National Shipping Corporation PLD 1974 SC 146 ref.
(b) Constitution of Pakistan (1973)--
---- Arts. 29 199 --- Natural justice, principles of judicial review of administrative action --- Validity of action complained of, could not be as assailed on the touchstone of principles of policy as provided in Chap. 2, part11 of the Constitution --- Where, however, such action was against law and had been taken in violation of any right or excess of authority or breach 0f Principles of natural justice, same would be liable to judicial review of the High Court.
(c) Constitution of Pakistan (1973)---
----Art. 199---Administrative decision---Judicial review of administrative decision---Essentials stated.
(d) Contract Act (IX of 1872)---
----S. 2(h)---Marketing of Petroleum Products (Federal Control) Act (XVII of 1974), S. 5---Constitution of Pakistan (1973), Art. 199---Constitutional petition---Respondent-company originally being private company, management and control thereof, was subsequently taken over by Federal Government and its affairs were regulated by statutory law i.e. Marketing of Petroleum Products (Federal Control) Act, 1974---Employee, thereafter, being in the service of statutory body could invoke jurisdiction of High Court for redress of his grievance.
(e) Marketing of Petroleum Products (Federal Control) Act (XVII of 1974)--
----S. 5---Constitution of Pakistan (1973), Art. 199---Constitutional petition---Maxim: "Audi alteram partem"---Applicability---Dispensation of services of employee of statutory corporation without notice and without providing him opportunity of being heard---Validity---Provisions of Marketing of Petroleum Products (Federal Control) Act, 1974, nowhere provided dispensation of service of employee by Managing Director of such corporation without notice and without providing him opportunity of being heard---Principle of law embodied in maxim "audi alteram partem" has to be accepted invariably and same is equally recognised as principle of Islamic law---Statutory employee, subject to law, having acquired status of regular/confirmed employee, would be entitled to continue his service for full length and in case he was ousted from service in derogation of law, unless specifically debarred by some law, could not be restrained from invoking Constitutional jurisdiction of High Court, by simply taking plea of relationship of master and servant.
Anjuman-e-Ahmadiya, Sargodha v. The Deputy Commissioner, Sargodha and another PLD 1966 SC 639 ref.
(f) Marketing of Petroleum Products (Federal Control) Act (XVII of 1974)--
----S. 5---Constitution of Pakistan (1973), Arts. 2A, 227(1) & 199---Person illegally deprived of beneficial position---Remedy in terms of Islamic law and the principles thereof---Injunctions and tenets of Islam being of higher status than general law, any action not approvable as fair and just in the spirit of Islamic law was not legal---Islamic law having overriding effect must prevail in every field of life---Right of people must be weighed and judged in terms of Islamic dispensation of justice to advance command of Islamic system free of any element of unfair and oppressive action.
(g) Marketing of Petroleum Products (Federal Control) Act (XVU of 1974)---
----S. 5---Constitution of Pakistan (1973), Art. 199----Constitutional petition---Employee of statutory body---Termination of service without show-cause notice and without affording opportunity of being heard-- Termination of service of petitioner/employee being in violation of principles of natural justice and illegal exercise of Authority, was set aside in circumstances.
Abdul Baseer Qureshi for Petitioner.
Muhammad Bashir Kiani, Standing Counsel for Respondent No. 1.
Samad Mehmood with M. Hamayun for Respondents Nos. 2 and 3.
Date of hearing: 5th June, 1997.
JUDGMENT
The petitioner was employed as General Manager in Pakistan State Oil, a public limited company, established under the Marketing of Petroleum Products (Federal Control) Act, 1974, controlled by the Government of Pakistan through Ministry of Petroleum and Natural Resources. Initially, the petitioner joined Pakistan State Oil Company as Management Trainee on 3-3-1975 and having confirmed as regular employee thereof was appointed as District Sales Officer in Group VII with effect from 6-5-1976 and thereafter, was promoted in Group II with effect from 13-9-1990.
2. The Board of Management consisting upon seven Directors namely Managing Directors, P.S.O., Parco, N.L.R. Director-General, Oil, F.A. Ministry of Petroleum and Managing Director, I.C.P, under the Chairmanship of the concerned Minister, constituted under section 7 of Marketing of Petroleum Products (Federal Control) Act, 1974 (hereinafter to be read as Act XVII of 1974), promoted the petitioner in Group-1 and appointed him as General Manager vide order dated 24-8-1996. Subsequently, the Managing Director of the Company, respondent No. 3, without disclosing any reason demoting the petitioner through an order dated 2-2-1997 transferred him to Karachi.
Being aggrieved of the demotion order, petitioner questioned the validity thereof through a civil suit and pleading the personal malice of respondent No. 3 against him stated that during the Caretaker Government of Mr. Balakh Sher Mazari, an inquiry was initiated against the petitioner, but the allegations having not proved, he was exonerated and two complainants categorically stated before the Inquiry Officer that the complaint was lodged against him at the instance of respondent No. 3 but pending disposal of the same, respondent No. 3 terminated his services from the employment of Pakistan State Oil vide order dated 20-2-1997. The petitioner challenging the legality of termination of his service through this Constitution petition assailed the impugned order inter alia on the ground firstly that respondent No.3 due to personal reasons and having malice against him, passed the impugned order without notice in violation of the principle of audi alteram partem, and, secondly, that respondent No. 3 being not competent to terminate the services of the petitioner and pass the impugned order, the same was coram non judice.
3. Respondents Nos. 2 and 3 in their written statement to the writ petition raising the preliminary objection to the invocation of Constitutional jurisdiction in the matter asserted that services of the petitioner with Pakistan State Oil, a public limited company established under Companies Ordinance, 1984, is not regulated by any statutory rules but being governed by principle of Master and Servant, the Constitution petition under Article 199 of the Constitution is not maintainable. While commenting upon the requirement of notice, the stand taken was that contract of service of the petitioner could be terminated at any time with payment of one month salary and that respondent No. 3 being the competent Authority has validly passed the impugned order.
4. The confirmation of the petitioner as regular employee of the company was made on the terms incorporated in the letter dated 5-3-1976, reproduced as under:--
"Further to our Letter MST/PF/T(TAK), dated 18-2-1975 we are pleased to confirm you in your employment with the Company on regular basis with effect from 1st March, 1976 on the following terms end conditions:
(1) Effective 1-3-1976 you will be a confirmed permanent employee of the Company. If you wish to leave service, you will be required to give one month's notice or surrender one month's pay. The company will be at liberty to dispense with your services by giving one month's notice or one month's pay in lieu thereof. Such notice will not be necessary if your services are terminated by the Company for disciplinary reasons.
(2) Your salary will be Rs.650 per month (Rupees six hundred and fifty only) per month.
(3) You will be paid House Rent Allowance at 25 % of your salary which works out to Rs. 162.50 per month on your present salary.
(4) You will also be paid Special Cost of Living Allowance at 10% of your salary, as per Employee Cost of Living (Relief) Act, 1974, which works out to Rs.65 per month on your present salary. This will be in addition to Rs.35 per month Cost of Living Allowance payable to you under the Employees Cost of Living (Relief) Act, 1973. You will also be paid Rs.25 per month in accordance with the provisions of the Employee's Cost of Living (Relief) (Amendment) Act, 1975.
(5) Subsequent increase in your salary will be at the sole discretion of the Company.
(6) The company has a Car Policy applicable to its confirmed employees whose mobility is essential as per their job assignment. Until such time that you are not covered under Company's Car Policy you will be paid Conveyance Allowance at Rs.100 per month.
(7) You will be entitled for membership to the Company's Provident Fund Scheme upon completion of one years' continuous service as per Company's Rules and Regulations. When eligible you will be entitled to contribute to the Staff Provident Fund at 7 % of your salary as per Staff Provident Fund Rules and Regulations.
(8) You will be eligible to leave and other benefits in accordance with the current policies of the Company, as may be amended from time to time, and as applicable to your assignment.
(9) During the course of your employment, you are liable to be transferred to any location of this Company's operations in Pakistan or on an assignment in any suitable capacity to be determined by the Company with any other affiliated Company anywhere in Pakistan.
(10) This letter supersedes Letter MST/PF/T(TAK), dated 18-2-1975 giving terms and conditions of your assignment as Management Trainee.
(11) You will treat the contents of this letter as Private and Confidential and any other confidential information that you may possess by virtue of your employment shall be treated by you as such and shall not be disclosed without proper authority to any person.
Please signify your acceptance of terms and conditions set forth above, by signing the duplicate of this letter."
The order dated 24-8-1996 by virtue of which the petitioner was promoted in Group-I is to the following effect:--
"I am pleased to advise you that the appropriate authority has approved the revision of the salary scales and allowances of the management employees of Pakistan State Oil Company Ltd. The new scales and allowances shall be called hereinafter as 'Revised Salary and Allowances'. Under the revision your salary and allowances have been revised with effect from 1st July, 1996.
1. Basic Salary.
Your monthly basic salary will be Rs.19,475 (Nineteen thousand four hundred and seventy five only).
2. Allowances and Pre-requisites.
(a) Cost of Living Allowance @ Rs.25 per month will be paid as admissible under Cost of Living Relief Act, 1970 as amended by Act No. LXI of 1975.
(b) You will be paid an Entertainment Allowance @ 10% of basic salary subject to a maximum of Rs.1,000 per month.
(c) You will be entitled to Leave Fare Assistance @ Rs.40,073 per annum. You can accumulate this allowance upto two years.
(d) You will be provided with a Company owned Staff Car maintained by the Company.
(e) You will be reimbursed with expenses on gasoline upto a maximum of 350 liters per month.
(f) Upto Rs.2,385 per month will be paid to you as reimbursement of the Driver's salary who will be on your personal payroll.
(g) You will be entitled to Company leased accommodation upto a maximum rental of Rs.9,680 per month.
(h) You will be reimbursed with Rs.2,385 per month for engaging Chowkidar, Mali and Sweeper at the Company leased accommodation.
(i) The Company will pay the actual expenses on utilities on presentation of the monthly bills pertaining to the Company leased accommodations as follows:
(ii) Actual bills of domestic electricity upto a maximum of 1,350 units per month.
(ii) Actual bills of domestic telephone upto a maximum of 900 calls per month.
(iii) Actual expenses on domestic gas, water and conservancy.
3. Travel Allowances:
You will be entitled to reimbursement of travelling expenses as per Company's Business Travel Policy. You are entitled to the following expenses:
(a)
Mode of Travel
By Air (club class) or by Rail (Ist Class acc.).
(b)
Hotel Accommodation::
Actual Hotel Bills (excluding Five Star Hotels), P.S.O. Guest House at Islamabad, Lahore and Karachi.
(c)
Daily Allowance in lieu of (b) above:
Rs. 200 per day.
(d)
Local Transport
Actual taxi fare for visiting places of business while on tour (full time and daily basis engagement of taxi is not allowed).
4. Transfer Allowances:
You will be entitled to reimbursement of expenses for self, wife and children below 18 years of age, on transfer as per Company's Staff Transfer Policy. Under this policy, you will be entitled to the following expenses:-
(a)
Mode of Travel:
By air (economy class) or by rail (Ist class acc.).
(b)
Personal Effects:
1500 cft by rail or two truck loads.
(c)
Packing and Forwarding:
Upto Rs. 2,500.
(d)
Setting allowance for a period upto 15 days at new location:
(i) For employee and wife (each):
Rs. 150 per day.
(ii) For children upto 18 years (each):
Rs. 75 per day.
The rest of the terms and conditions of service as conveyed to you earlier shall remain unchanged. Your salary, terms and conditions of service being a matter strictly between you and the Company, must be treated as Private and Confidential. "
The order dated 2-2-1997 passed by respondent No. 3, whereby the petitioner was demoted in Group-II is read as under:-
"The competent Authority has decided to examine/re-assess promotions/placements of all General Managers appointed and placed during the last three years.
As a result of careful scrutiny of the promotion given to you, it has been found that the same was wrongfully allowed.
Resultantly, the promotion granted to you vide letter, dated 24th August, 1996 is hereby rescinded with immediate effect and as such you are advised to report to Sr.G.M.(R) for further assignment.
BASIC SALARY:
Your monthly basic salary has been revised as Rs.20,160 (Rupees twenty thousand one hundred and sixty only).
ALLOWANCES AND PERQUISITES:
(a) You will be entitled to Leave Fare Assistance Q Rs.35,447 per annum.
(b) You will be reimbursed with expenses on gasoline upto a maximum of 270 liters per month.
(c) Upto Rs.2,210 per month will be paid to you as reimbursement of the Driver's salary who will be on your personal payroll.
(d) You will be entitled to Company leased accommodation upto a maximum rental of Rs. 8,470 per month.
(e) You will be reimbursed with Rs.2,210 per month for engaging Chowkidar, Mali and Sweeper at the Company leased accommodation.
(f) The Company will pay the actual expenses on utilities on presentation of the monthly bills pertaining to the Company leased accommodation as follows:
(i) Actual bills of domestic electricity upto a maximum of 850 units per month.
(ii) Actual Bills of domestic telephone upto a maximum of 550 calls per month.
(iii) Actual expenses on domestic gas, water and conservancy.
The rest of the terms and conditions of service as conveyed to you earlier vide letter, dated 24th August, 1996 shall remain unchanged. Your salary, terms and conditions of service being a matter strictly between you and the Company must be treated as Private and Confidential."
The order dated 20-2-1997 by virtue of which the petitioner has been terminated is read as under:--
"We regret to inform you that your services being no longer required, are hereby terminated with immediate effect on payment of one month's salary in lieu of notice as per terms and conditions of your contract of employment.
Your dues, if any, would be cleared at the earliest."
5. Learned counsel for the petitioner raised the following points to be considered in support of this petition:--
(a) That the Pakistan State Oil, a Public Limited Company, having established under Act XVII of 1974 and discharging function in relation to the affairs of the Federation is under direct control of the Federal Government.
(b) That the Federal Government as Controlling Authority to run the affairs of the Company, appoints a governing body with the name of Board of Management with the powers to regulate the services of the employees of the Company through the Regulations framed thereunder. .
(c) That the petitioner being regular employee of a public limited company controlled by the Federal Government is governed by the service regulation to be framed under the Act in question and his employment being no more contractual but statutory, the relationship of master and servant does not exist.
(d) That the termination of service without any reason and notice is mala fide and the same having done in violation of the principles of natural justice is not lawful.
(e) That the jurisdiction of a public Company discharging the affairs in connection with the Federation or Government cannot claim immunity for their official action from judicial scrutiny under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973.
6. Learned counsel for respondents Nos. 2 and 3 argued that as per terms of employment contained in the contract of service, the same could be dispensed with at any time with one month's notice or one month pay in lieu thereof and that in case of termination for disciplinary reasons, even no such notice was required. According to them, no statutory protection being available to the petitioner against dismissal from service, he cannot claim reinstatement in service through invoking the Constitutional jurisdiction of this Court.
7. The preliminary question relating to the status of respondent No. 3 under the Act XVII of 1974 and the nature of service of the petitioner whether contractual or statutory requires determination. For the benefit of proper appreciation of the points involved therein and to resolve the controversy, it would be appropriate to reproduce the relevant provisions of Act XVII of 1974 dealing with the subject:--
Section 5. Power to take over management or acquire shares or business of marketing company.
(1) The Federal Government may, if it considers necessary in the public interest so to do, by an order,--
(a) take over the management of any marketing company and, as from the date of such order, the previous management shall stand divested of such management;
(b) acquire the whole or a portion of the shares from all or any of the shareholders of such marketing company and, as from the date of such order, the shares so acquired shall vest in the Federal Government Provided that, no order shall be made under this section for the acquisition of the shares held in a marketing company by an institution owned or controlled by the Federal Government, including the National Investment Trust and the Investment Corporation of Pakistan or the shares held by a foreign investor:
Provided further that, the Federal Government may, by notification in the official Gazette exempt from acquisition shareholdings of any shareholder upto such maximum amount as may be specified in the notification.
(2) Where the Federal Government makes an order under subsection (1) for taking over the management of any marketing company, no dealings or business relating to the shares of such company shall be transacted on any stock exchange and no transfer of such shares shall be registered in the share register of the company for a period of ninety days from the date of such order or such shorter period as may be notified by. the Government.
Section 6. Appointment of Manning Director.---(1) Where the Federal Government has made an order under section 5 in respect of a marketing company, it may appoint a Managing Director in respect of such company.
(2) Upon the appointment of a Managing Director in respect of a marketing company, the administration and the management of the affairs of the company shall vest in the Managing. Director and any person or authority exercising or having the right to exercise, immediately before such appointment, any powers or functions in relation to the management of the company shall cease to exercise or to have the right to exercise such powers or functions.
(3) The Managing Director shall-
a) hold office during the pleasure of the Federal Government;
b) in the discharge of his functions, be subject to such orders and such directions of the Federal Government and of the Board of Management as the
Federal Government or the Board of Management may from time to time give in writing; and
c) receive such remuneration and be subject to such other terms and conditions of appointment and service as the Federal Government may determine.
(4) The Managing Director appointed in respect of a marketing company shall exercise and perform all the powers and functions of the board of directors of the company. Section 7. Board of Management.---(1) The Federal Government may set up a Board of Management to control, manage and direct the affairs of the marketing companies in respect of which Managing Directors have been appointed.
(2) The Board of Management shall consist of a Chairman and such number of members, not exceeding nine, as the Federal Government may appoint.
(3) The Board of Management shall be a body corporate having perpetual succession and a common seal, with power to acquire and hold property and shall be its name sue and be sued.
(4) The Chairman and members of a Board of Management shall hold office during the pleasure of the Federal Government on such terms and conditions as it may determine.
Section 10. Officers, etc. of the Board.---(1) The Board of Management may from time to time appoint. such officers, servants, experts and consultants as it may deem fit.
(2) The Board of Management may appoint one or more committees of the Board with such composition and to perform such functions as it may determine.
Section 16. Continuance in service.--In the case of a managed company, all persons employed in, by or for the purpose of the business of the company, by whomsoever appointed or engaged, shall continue in their respective employments on the same remuneration and other conditions of service as were applicable to them immediately before the appointment of the Managing Director in respect of that company, unless the Managing Director directs otherwise in a particular case or their terms and conditions of service are altered in accordance with law or any rules applicable to such managed company."
The Federal Government being empowered to take management and acquire the share and business of the company in the public interest has direct control over all affairs of Pakistan State Oil. The Managing Director, appointed by the Federal Government under section 6 of the said Act to regulate the affairs and discharge and functions in relation to the State owned company, is required to act in strict observance of rules, policy…
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