Full Judgment Text & Judicial Ruling

2006 P L C (C

2006 P L C (C.S.) 138

[Supreme Court of Pakistan]

Present: Sardar Muhammad Raza Khan, Falak Sher and Nasir-ul-Mulk, JJ

ISHTIAQ AHMED SHEIKH and others

Versus

Messrs UNITED BANK LIMITED and others

Civil Appeals Nos. 991, 992 of 2001 and 441 to 447 of 2004, decided on 20th September, 2005.

(On appeal from the judgments of the Federal Service Tribunal, Islamabad, dated 13-4-1999 passed in Appeal Nos.621 and 622(R) of 1998, and Federal Service Tribunal, Karachi, dated 23-11-2000 passed in Appeals Nos.99, 89(K), 90(K), 102(K), 103(K), 108(K) & 107(K) of 1998 respectively).

(a) Constitution of Pakistan (1973)---

----Art. 212(3)---Termination of service of bank employees---Leave to appeal was granted by the Supreme Court to the employees to consider their submissions that no particular rule or regulation had been either mentioned or relied upon which could be said to have been violated; that documents appended by the employees with their replies to the charge-sheet and produced in appeal before the Service Tribunal and their defence plea had been ignored and their case was decided on the basis of news item about the alleged bad reputation of a customer of the Bank though all along the employees kept the higher authorities aware of the matter, therefore, they could not have been punished and that extreme penalty of dismissal from service could not be imposed for at the most it was a case of negligence and not of corruption even if allegations for the sake of arguments, without conceding, were admitted as correct.

(b) Administration of justice---

----Impression gathered from newspaper reports could hardly be made basis for judicial findings, moreso, when no reference was made to any such report.

(c) Service Tribunals Act (LXX of 1973)---

----S. 4---Appeal to Service Tribunal---When charge-sheet served on the employee did not mention a specific violation, Service Tribunal would proceed on wrong assumption of said violation.

(d) Constitution of Pakistan (1973)---

----Arts. 212(3) & 184(3)---Appeal to Supreme Court---Question of law of "public importance"---Connotation---Phrase "public importance" appearing in Art.212(3) of the Constitution, cannot be accorded restrictive meanings, in view of the very nature of the jurisdiction, which deals with appeals by Civil Servants, a restricted defined class, and not the public at large---Meaning of the Phrase "public importance" appearing in Art.212(3) of the Constitution cannot be- equated with the same phrase used in Art.184(3) of the Constitution, which related to original general jurisdiction of the Supreme Court for the enforcement of Fundamental Rights. ? Lahore High Court v. Muhammad Jahangir Khan Goraya 1999 SCMR 2117 ref.

(e) Civil service-

----Misconduct---Bank employees negotiating Letter of Credit contrary to the instructions on the subject, misconducted themselves by not following said instructions, even if their_ non-observance had not resulted in financial loss to the Bank.

(f) Civil service---

----Misconduct---Penalty---Quantum---Employees of the Bank being guilty of misconduct by acting in violation of the clear written instructions of the Bank regarding negotiation of Letters of Credit by non-correspondent bank were dismissed from service---Validity---Negotiation of such documents was the prime responsibility of the concerned branch of the Bank, however the conduct of the senior officers mellowed down the extent of culpability of the employees---If the senior officers, whose support encouraged the employees to negotiate the said Letters of Credit, had been let off lightly, it would be unjust to punish the employees severely---Supreme Court, in circumstances, partially allowed the appeals of the employees and modified the impugned judgments of the Service Tribunal to the extent that the penalty of the employees of termination/dismissal from service was converted into compulsory retirement from the date on which their orders of termination/dismissal from service were passed by the Authority.

(g) Words and phrases-

--"Public importance"---Connotation.

Abid Hassan Minto, Senior Advocate Supreme Court and Sh. Masood Akhtar, Advocate-on-Record for Appellant (in C.A.No.991 of 2001).

Raja Muhammad Akram, Senior Advocate Supreme Court and Ejaz Muhammad Khan, Advocate-on-Record (absent) for Respondent No.1 (in C.A.No.991 of 2001).

Raja Abdul Ghafoor, Advocate-on-Record for Respondent No.2 (in C.A.No.991 of 2001).

Abid Hassan Minto, Senior Advocate Supreme Court and Sh. Masood Akhtar, Advocate-on-Record for Appellant (in C.A:No.992 of 2001).

Ejaz Muhammad Khan, Advocate-on-Record (absent) for Respondent No.1 (in C.A.No.992 of 2001).

Raja Abdul Ghafoor, Advocate-on-Record for Respondent No.2 (in C.A.No.992 of 2001).

Niaz Ahmad Khan, Advocate Supreme Court and M.Shabbir Ghauri, Advocate-on-Record (absent) for Appellant (in C.A.No.441 of 2004).

Kamal Azfar, Senior Advocate Supreme Court and M.S.Khattak, Advocate-on-Record for Respondent (in C.A.No.441 of 2004).

Manzoor Ali Khan, Advocate Supreme Court for Appellant (in C.A.No.442 of 2004).

Kamal Azfar, Senior. Advocate Supreme Court and M.S.Khattak, Advocate-on-Record for Respondents ((in C.A.No.442 of 2004).

Manzoor Ali Khan, Advocate Supreme Court for Appellant (in C.A.No.443 of 2004).

Kamal Azfar, Senior Advocate Supreme Court and M.S. Khattak, Advocate-on-Record for Respondents (in C.A.No.443 of 2004).

Mazhar Ali B. Chohan, Advocate Supreme Court for Appellant (in C.A.No.444 of 2004).

Kamal Azfar, Senior Advocate Supreme Court and M.S. Khattak, Advocate-on-Record for Respondents (in C.A.No.444 of 2004).

Mazhar Ali B. Chohan, Advocate Supreme Court for Appellant (in C.A.No.445 of 2004).

Kamal Azfar, Senior Advocate Supreme Court and M. S. Khattak, Advocate-on-Record for Respondents (in C.A.No.445 of 2004).

H.A. Jafri, Advocate Supreme Court and Abul Khair Ansari, Advocate-on-Record for Appellant (in C.A.No.446 of 2004).

Kamal Azfar, Senior Advocate Supreme Court and M.S. Khattak, Advocate-on-Record for Respondents (in C.A.No.446 of 2004).

Niaz Ahmed, Advocate Supreme Court and Akhlaq Ahmed Siddiqui, Advocate-on-Record (absent) for Appellant (in C.A.No.447 of 2004).

Kamal Azfar, Senior Advocate Supreme Court and M.S. Khattak, Advocate-on-Record for Respondents (in C.A.No.447 of 2004).

Date of hearing: 20th September, 2005.

JUDGMENT

NASIR-UL-MULK, J.---By this common judgment, it is proposed to dispose of Civil Appeals Nos.991, 992 of 2001 and 441 to 447 of 2004.

2. The appellants were at the relevant time, in the year, 1993-94, employees in three different branches of the United Bank Limited, (hereinafter referred to as `UBL'). Ishtiaq Ahmad Sheikh and Muhammad Naeem Shaikh, appellants in C.As. Nos.991 and 992 of 2001, were serving as Manager/Assistant Vice-President and Incharge, Foreign Exchange Department, Kutchary Bazar Branch, Faisalabad. Zahid Umar Farooqui, Muhammad Feroz and Muhammad Yaqoob, appellants in C.As. Nos.442, 443 and 447 of 2004, were at the relevant time, serving at the Bandar Road Branch, Karachi of UBL, whereas the remaining appellants namely, Nisar Ahmed Ansari, M. Umar Suleman, M. Fayyazuddin and Zahid Hameed, appellants in C.As. Nos.441,444,445 and 446 of 2004, were posted at the Saleh Muhammad Street Branch, Karachi. The services of all of them were terminated in the year 1997. They filed appeals before the Federal Service Tribunal, Islamabad. By a single judgment and order dated 13-4-1999, the appeals of Ishtiaq Ahmad Sheikh and Muhammad Naeem Shaikh, were dismissed. The appeals of the remaining appellants were also dismissed by another common judgment on 23-11-2000. The two judgments are now the subject-matter of these appeals. Leave was first granted in C.Ps. Nos. 1054 and 1055 of 1999 (C.As. Nos.991 and 992 of 2001), on the basis of which leave to appeal was also granted in the remaining appeals. Para. 4 of the leave granting order reads as under:-

"4. Learned counsel for the petitioners has taken us through the impugned judgment and submitted that no particular rule or regulation has been either mentioned or relied upon which was said to have been violated, that documents appended by the petitioners with their replies to the charge-sheet and produced in appeal before the Services Tribunal and their defence plea have been ignored and the case decided on the basis of news item about the alleged bad reputation of Tawakkal Group, that all along the petitioners kept the higher authorities aware of the matter, therefore, they could not have been punished; that extreme penalty of dismissal from service could not be imposed, for at the most it was a case of negligence and not of corruption even if allegations for the sake of arguments without conceding are admitted as correct.

Leave is granted to consider, inter alia, the above submissions."

3. These are three sets of appeals pertaining to three different branches of UBL, namely, Kutchary Bazar Branch, Faisalabad, Saleh Muhammad Street Branch, Karachi and Bandar Road Branch, Karachi. The broad allegations and reasons for the termination of the appellants' services in all the appeals are materially similar though the facts to some extent are varying. Civil Appeals Nos. 991 and 992 of 2001, pertaining to Kutchery Bazar Brahch, Faisalabad, are taken first.

4. The appellants who were respectively posted as Manager and Incharge Foreign Exchange Department of the Branch in the year 1993-94, were issued show-cause notice/charge-sheet on 29-1-1995 by the Senior Executive Vice-President. Allegations against them were that between the period 12-8-1993 to 10-3-1994, they negotiated 356 bills amounting to Rs.759.279 millions, drawn on M/s Tawakkal Limited and their sister concern M/s. 1st Tawakkal Modaraba, against Letter of Credits, issued by M/s East Mediterranean Trust and Banking Corporation, Turkey (for the sake of brevity hereinafter referred to as the "Mediterranean Bank"), out of which, the, proceeds of 147 bills representing an amount of Rs.424.402 millions, had not been repatriated though their date of maturity had passed by much earlier. The charge-sheet spelt out the lapses on the part of appellants that resulted into loss to the Bank, the main three of which are:

"a. The L.C. opening bank was neither our bank's correspondent nor quoted on Banking Almanac, hence prior approval of competent authority was must for negotiating the bills drawn against such L.Cs., you, on your own accorded approval for negotiation of these bills without seeking the same from competent authority and jointly signed vouchers of 44 bills aggregating Rs.124.785. As the matter did not come under your purview, you overstepped your jurisdiction by approving the negotiation of these bills.

b. The credit report of exporters was not obtained prior to allowing the negotiation of such bills which was all the more necessary as M/s Tawakkal Limited had opened their A/C., in your branch only 3 months prior to negotiation while the 4 bills of M/s. 1st Tawakkal Modaraba were negotiated on the very first day, their account was opened in the professional misconduct on your part.

c. Though L.Cs. allowed B/Ls with "Received for Shipment" notation but as precautionary measure and bank's procedure, the subsequent confirmation was not sought from the shipping company as to when the goods have actually been "shipped on board". "

5. The appellants submitted a detailed reply spreading over eight pages supported by documents, the main features, of which are that Tawakkal Group was a renowned business entrepreneur of the country at the relevant time and their business had been secured by the senior officers of the Bank with great efforts. That the bills mentioned in the show-cause notice were negotiated under the verbal permission/approval. of the Zonal/Circle Offices and the Bank's statements regarding these transactions had been periodical by transmitted to the senior officers, who were constantly kept informed of all the negotiation business with the Tawakkal Group. Further that the Foreign Exchange Inspection Team had inspected the Branch on 24-10-1993 and had not raised any objection in their report to the negotiation of the export documents against the L.Cs. of the Mediterranean Bank. On the making of payments against the L.Cs. without the goods having actually been "shipped on board" the appellants explained that the bills were negotiable on presentation of the bill of lading with notation "received for shipment", in accordance with the terms of the L.Cs. which is also permissible under Article 27 of the Bank's Manual of Advances and UCP 400. The above reply was not found satisfactory and hence appellants' services were terminated.

6. Mr. Abid Hassan Minto, Senior Advocate Supreme Court, appearing for the appellants in C.As. Nos.991 and 992 of 2001, read out paras. 4,5 and 6 of the judgment of the Federal Service Tribunal and pointed out that the observations made regarding disrepute of the Tawakkal Group, was based on the personal knowledge of the Members of the Tribunal with no documentary support. That even if the Tawakkal Group had later on landed in some financial troubles, at the relevant time when the L.Cs. were being negotiated, the Group's reputation ranked high in he business circle of the country. The learned counsel pointed out that the findings of the Tribunal in para. 6 of the judgment that the appellants had failed to follow the fax message of 6-3-1994, is based on erroneous assumption that the charge against the appellants was violation of the said direction, whereas, in fact, no L.C. of the Mediterranean Bank was negotiated after the said date, when the Head Office directed to put stop all such negotiations. The learned counsel had further assailed the observations made by the Tribunal regarding conduct of the appellants that they had negotiated the bills the day the Tawakkal Group opened their account in the Branch. The learned counsel argued that the business credibility of a concern may be otherwise be widely known and would not necessarily depend upon the length of their clientage with a particular bank.

7. We found the above contentions valid. The Tribunal had blamed the appellants for dealing with the Tawakkal Group when, "the market reputation of the Tawakkal Group which was known to almost everyone in Pakistan, who reads newspaper. The party had long earned ill-repute due to many fraudulent dealings in privatization and other activities". The Tribunal delivered the judgment in the year 1998 and the remarks regarding reputation of the Tawakkal Group may have some truth at that time but there is nothing on record regarding their such reputation during the year 1993-94. In any case, impression gathered from newspaper reports can hardly be made basis for judicial findings, moreso, when no reference was made to any such report.

8. The fax message was of 6-3-1994 sent by the International Division of the United Bank Limited, Head Office, Karachi, to all Circle Executives to inform them of the decision that export documents drawn under L.Cs. of non-correspondent Bank/Financial Institutions were not be negotiated and they were to be advised to ensure compliance. The message also advised as to how the cases of prime clients might be honoured after clearance from the International Division. It appears that when the amounts of a number of L.Cs. issued by the Mediterranean Bank in favour of Tawakkal Group, were not realized, the Head Office got alerted and sent the above directions. According to the details of L.Cs. negotiated at the Kutchary Bazar Branch, and for that matter, the other two branches involved, no export bill was negotiated after 6-3-1994. Even the charge-sheet did not allege violation of the direction given in the fax message. The Tribunal thus proceeded on the wrong assumption of violation of the fax message by the appellants.

9. Raja Muhammad Akram, Senior Advocate Supreme Court, representing the respondent-Bank in the said two appeals, argued forcefully the lapses by the appellants of negotiating export documents on "received for shipment", without production of the bill of lading issued by the Captain of the Ship, with the result that the payments were made to the exporter on the L.Cs. without the goods having been shipped. Mr. Kamal Azfar, learned Senior Advocate Supreme Court appearing for the respondent-Bank, in the other appeals, to substantiate the said contention, referred to the UBL's Inspection Circular No.27 dated 10-1-1991, issued inter alia to the Managers of the Branches dealing with the foreign exchange, titled "Irregularities repeatedly committed at branches handling foreign exchange transactions" Sr. No.46 of which reads as under:-

"46. Sometimes "Received for Shipment" bills of lading are negotiated which are not documents of title to goods. Exporters should be asked to submit "on Board" bills of lading for negotiation."

10. For accepting the bills of lading with notation "received for shipment", the appellants defended themselves by referring to Article 27 of the Manual of Advances and UCP 400, Clauses `a' and `b' of which states:--

"a. Unless a credit specifically calls for an on board transport document or unless inconsistent with, other stipulation(s) in the credit or with article 26, banks will accept a transport document which indicates that the goods have been taken in charge or received for shipment.

b. Loading on board or shipment on a vessel may be evidenced either by a 'transport document bearing wording indicating loading on board a named vessel or shipment on a document stating "received for shipment", by means of a notation of loading on board on the transport document signed or initialed and dated by the carrier or his agent, and the date of this notation shall be regarded as the date of loading on board the named vessel or shipment on the named vessel."

11. The above article permits acceptance by the Bank of transport documents stating, "received for shipment". It was probably on account of the above article that the charge against the appellants on this account does not refer to violation of any instruction or rule by the appellants as is evident therefrom though L.Cs allowed B/Ls with "Received for Shipment" notation but as a precautionary measure and bank's procedure, the subsequent confirmation was not sought from the shipping company as to when the goods have actually been "shipped on board". The charge reproduced ' above, thus admit that the L.Cs. allowed payments on receipt of documents with endorsement "received for shipment" and that the appellants had failed to take precautionary measures of verifying that the goods had actually been shipped on the board. On behalf of the respondents no instructions or rules had been mentioned that required Managers of the Branches negotiating L.Cs. to ensure the export of the goods. The findings of the Tribunal against the appellants on the afore-stated three points are, therefore, untenable.

12. At this stage, it would be appropriate to advert to a preliminary objection raised by Raja Muhammad Akram, learned Senior Advocate Supreme Court to the maintainability of the appeals on the ground that the jurisdiction of this Court under Article 212(3) of the Constitution of Islamic Republic of Pakistan, 1973, is restricted to substantial question of law of public importance, whereas the question raised in the present appeals cannot be termed to be of "public importance" and thus on this score alone, the appeals are liable to be dismissed. The meanings of "public importance" in the context of jurisdiction of the Supreme Court of Pakistan, under Article 212(3) of the Constitution has been settled by this Court in "Lahore High Court v:. Muhammad Jahangir Khan Goraya (1999 SCMR 2117)", where it was held "If a Tribunal exercising exclusive jurisdiction omits to take into consideration material factors or interprets admitted facts in a manner not warranted by law or fails to pass a valid judgment then a question of law of public importance does arise for keeping such a Tribunal within its jurisdiction." In view of the discussion made above, regarding some of the findings of the Tribunal, we have no doubt that the Tribunal had stepped out of its jurisdiction by taking into consideration matters which it was not entitled to take and by proceeding on a totally erroneous assumption of facts. The phrase "public importance" appearing in Article 212(3) of the Constitution of the Islamic Republic of Pakistan, 1973, cannot be accorded restrictive meanings as the learned counsel for the Respondent Bank would like us to hold, in view of the very nature of the jurisdiction, which deals, in the present case, with appeals by the civil servants, a restricted defined class, and not the public at large. For this reason the meaning of the phrase "Public importance" appearing in this Article cannot be equated with the same phrase used in Article 184(3) of the Constitution of Islamic Republic of Pakistan, 1973, which relates to the original general jurisdiction of the Supreme Court of Pakistan, for the enforcement of Fundamental Rights.

13. Before adverting to the contentious issues regarding negotiation by the appellants of L.Cs. issued by non-correspondent Bank without permission of the competent authority, it will be appropriate to now advert to the charges framed against the appellants in the remaining seven appeals, arising from a common judgment of the Federal Service Tribunal. Nisar Ahmad Ansari, Umar Suleman, Fayyazuddin and Zahid Hameed, respectively appellants in Civil Appeals Nos.441, 444,445 and 446 of 2004, were at the relevant time posted as Second Officer, Manager and Officers Foreign Exchange Division, at the Saleh Muhammad Street Branch, Karachi. They were charge-sheeted on the same day on 2-5-1994. They were alleged to have negotiated/allowed to negotiate 51 bills drawn by M/s National Garments (PVT) Ltd, Sister concern of M/s. Tawakkal Group, during the period 21-2-1993 to 29-7-1993, the L.Cs. having been issued by the East Mediterranean Trust & Banking Corporation Turkey, which was a non-correspondent Bank and not quoted in the Banker's Almanac. The charge alleged that 16 of the 51 bills remained unpaid after their maturity, resulting in loss of Rs.32.43.0 Millions. The appellants submitted their separate replies to the charges, which did not persuade the inquiry officer and thus their services were terminated.

14. Mr. Niaz Ahmed Khan, learned Advocate Supreme Court appearing for Nisar Ahmed Ansari, submitted that the appellant had countersigned only two vouchers as Second Officer of the Branch and further that the amount pertaining to the said vouchers had been realized. He further pointed out that the services of the appellant were terminated just two days prior to his attaining the age of superannuation.

15. Mr. Mazhar Ali B. Chohan, learned Advocate Supreme Court appearing for Umar Suleman and Fayyazuddin, referred to the written permission dated 29-4-1993 by the International Division of UBL for negotiating L.Cs. opened by the Mediterranean Bank. The learned counsel submitted that only four bills had been negotiated prior to the, said permission. It was pointed out that all the 16 export bills, proceeds of which were not realized, were negotiated after permission was granted on 29-4-1993. Mr. H.A. Jafry, learned ASC appearing for Zahid Hameed submitted that the bills countersigned by the appellant had been fully realized after maturity and added that even the Tribunal found the appellant guilty of omission and thus the termination of the appellant's services was not justified.

16. Appeals Nos.442, 443, 447 of 2004 have been filed by Zahid Umar Farooqui, Muhammad Feroz and Muhammad Yaqoob, the former two were posted as Officers Foreign Exchange Division and the third as Accountant in the Department, Bunder Road, Karachi, Branch. The charges against them also pertained to negotiation of bills numbering 54 between 26-6-1993 and 28-8-1993, drawn by the Sister Concern of M/s. Tawakkal Group, issued by the same Mediterranean Bank, 51 of them without prior approval of the competent authority and three of the bills Nos.1613, 1614 and 1615 aggregating 0.252 Million U.S. Dollars were, though purchased on 2-8-1993, after permission was granted on 29-7-1993, but without sufficient guarantee and the bills remained unpaid. The defence taken by the appellants in their respective replies did not find favour of the Inquiry Officer resulting in the termination of their services.

17. Mr. Manzoor Ali Khan, learned Advocate Supreme Court for the appellants submitted that there was no allegation against the appellants of corruption or of acquiring any financial gain for themselves and the charge was only of negligence and omission. He referred to the findings of the Inquiry Officer which he concluded by declaring the appellants guilty of…

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