Legal Principle & Question Decided

Ruling Summary: This decision was rendered by the Sindh High Court on 2024-04-22, officially reported as 2024 SHC 312. In this matter between Muhammad Arif & Others and Federation of Pakistan & Others, the court adjudicated key questions of statutory construction, procedural regularity, and legal precedent under Pakistani law.

Core Holding: The honorable bench evaluated governing statutory provisions and judicial authorities to establish the rights of the parties, delivering the binding reasoning set out below.

Full Judgment Text & Judicial Ruling

Court Name: Sindh High Court Judge(s): Yousuf Ali Sayeed, Adnan Iqbal Chaudhry, Agha Faisal Title: Muhammad Arif & Others vs Federation of Pakistan & Others Case No.: CP D-875 of 2020 Date of Judgment:2024-04-22 Reported As: 2024 SHC 312, 2025 PLC (C.S.) 93 Result: Petition Dismissed

JUDGMENT

JUDGMENT Agha Faisal, J. Three thousand three hundred and fifty nine petitioners have collectively filed these forty eight petitions, requiring this Court, in its writ jurisdiction, to judge their individual claims for regularization in Sui Southern Gas Company Limited ("SSGC"); premised upon their averment of having rendered contingent / contractual services to SSGC, though third party companies or otherwise. Factual context 2. Briefly stated, SSGC is a public limited company engaged in the business of transmission and distribution of natural gas[1]. The shares in SSGC are listed and traded on the bourse[2]. The petitioners seek regularization on the averment of terminated or subsisting contractual / contingent employment with the company or third party entities, rendering contractual services to SSGC. Despite the manifest absence of any admission of facts or each individual claim having been subjected to the anvil of inquiry / evidence / trial and notwithstanding SSGC being devoid of any statutory rules, petitioners have invoked the writ jurisdiction of this Court en masse seeking regularization. Judicial history 3. The Supreme Court was seized of cross petitions, in the SSGC case[3]; one set filed by alleged employer/s and the other by purported employees. In the first set, challenge was made to the judgment of this Court in Toto[4], whereby writ petitions seeking regularization were considered to be maintainable and the matter was remanded to SSGC to consider the factual aspect of entitlement. In the latter set, judgment of this Court in Muhammad Arif[5] was assailed, whereby

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the petitions seeking regularization in pari materia circumstances were found to not be maintainable. 4. It was observed by the Supreme Court that the two judgments arrived at contradictory findings on the pivotal question of maintainability, hence, in application of the Multiline[6] principles the respective judgments were set aside and matters were returned to the High Court for de novo determination of the question of maintainability; by a larger bench. The larger bench was also invited to express its view on the issue of entitlement of the claimants. In pursuance of the aforementioned order, this larger bench was constituted and has heard the matter afresh upon the issues identified by the Supreme Court. Applicability of the Multiline principles 5. At the very onset, this Court ought to consider the concern of perceived inconsistency between the latter judgment in Muhammad Arif[7] with the prior in Toto[8]. Muhammad Arif proceeded to determine the petitions as not maintainable; as mandated by the binding precedent of the Supreme Court in Saeed Ahmed Khoso[9], Zeeshan Usmani[10], Khushal Khan Khattak[11] and PEPCO[12] respectively. 6. It is imperative to observe that the first two judgments mentioned supra, Saeed Ahmed Khoso and Zeeshan Usmani, have been delivered under pari materia circumstances in the case of SSGC itself. Muhammad Junaid Ghaffar J concluded in Muhammad Arif that in view of the findings of the Supreme Court on identical facts, wherein it was held that such constitutional petitions are not maintainable against SSGC, as it has no statutory rules and relationship, if any, is to be governed by the master servant principles, the petitions are dismissed; on the touchstone of maintainability. 7. The judgment in Toto was delivered on 20.10.2021, before the Supreme Court pronouncements in Saeed Ahmed Khoso and PEPCO, however, makes absolutely no reference to the prior in time squarely binding edicts in Khushal Khan Khattak and / or Zeeshan Usmani; the latter having been delivered in the case of SSGC itself. 8. Article 189 of the Constitution expresses that a decision of the Supreme Court, to the extent that it decides a question of law or is based upon or enunciates a principle of law, shall be binding on all other courts in Pakistan and certainly this diktat includes the High Courts. The rendering of judgments in apparent indifference to Supreme Court authority has been deprecated most recently by the apex court in Pervez Musharaf[13]. Syed Mansoor Ali Shah J observed that failing to adhere to the judgments and orders of the Supreme Court undermines the credibility and effectiveness of the entire judicial system established by the Constitution. It was stressed that such judgments are binding on all judicial and executive authorities of the country per Articles 189 and 190 of the Constitution. The judgment accentuated that disregard of Supreme Court judgments inter alia unsettles the integrity and sanctity of the Supreme Court and renders inconsistent High Court pronouncements not only without jurisdiction but also unconstitutional. 9. On the touchstone of the aforesaid, this Court is, respectfully, constrained to express its inability to treat Toto[14] as good law. 10. The judgment in Muhammad Arif was rendered subsequent in time to the edicts of the Supreme Court in Saeed Ahmed Khoso[15], Zeeshan Usmani[16], Khushal Khan Khattak[17]and PEPCO[18] and in prima facie conformity therewith. Scrutiny of the judgment in Muhammad Arif does not demonstrate that the Division Bench was assisted with Toto[19], however, even otherwise the conclusion drawn would likely remain the same since Muhammad Arif applied the binding law illumined by the Supreme Court. Scope of determination 11. Notwithstanding this endeavor at demystifying the applicability of the Multiline principles, this Court is bound to execute the command of the SSGC case[20] and determine the question of

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maintainability as well as consider the aspect of entitlement. The present petitions were advocated exclusively to such extent[21] and shall be determined vide this common judgment. Admitted facts 12. The admitted pertinent facts are that that each of the three thousand three hundred and fifty nine petitioners herein have distinct individual claims for regularization and not a single such claim has been subjected to the anvil of scrutiny, evidence and / or plenary determination; the claim of each petitioner emanates from a past contract, with a third party or otherwise, and irrespective of SSGC not being privy thereto or such contracts having expired, no such instrument has been represented to confer any rights for regularization in SSGC; no challenge whatsoever has been brought by any petitioner before any relevant fora of first instance; the nature of the relationship averred by the petitioners, with third parties or otherwise, is that of master and servant; SSGC does not have any statutory rules; and that there is absolutely no statutory basis for the petitioners to sustain their claim for regularization. Respective arguments 13. The petitioners' learned counsel articulated that each petitioner was entitled to seek regularization in SSGC through writ jurisdiction. The submission was rested upon averments that a writ can be issued to a company if some shareholding thereof is held by the Government; the absence of statutory rules is no hindrance in such regard; efflux of time, irrespective of whether service is alleged to be rendered to a third party, creates a vested right to the relief sought; regularization is a fundamental right; and finally that the enterprise of outsourcing / third party contractors be declared as contrary to fundamental rights enshrined in the Constitution, hence, any nexus therewith be deemed to be nexus with SSGC in the present facts and circumstances[22]. 14. It was the respondents' case[23] that the question of maintainability was already clinched by the Supreme Court; aptly followed in Muhammad Arif[24] and a subsequent Division Bench pronouncement of this Court in Muhammad Umair[25], already having obtained the seal of approval from the Supreme Court in Muhammad Arshad[26]. In addition thereto, a recent judgment of the Supreme Court in VC Agriculture University[27] was placed on record to address not only the issue of maintainability but also that of entitlement. Learned counsel referred to uncontroverted record on file in order to demonstrate the manifest absence of any entitlement, crystallized or otherwise, of the petitioners to the relief claimed. It was concluded that the petitions merited dismissal forthwith. Regularization 15. Heard and perused. The core issue under deliberation is regularization. The term, by definition, implies the existence of a manifest irregularity, in need of acquiesce, and in the present context it requires recognition of a right of regular / permanent employment by fiction of law, where none exists in fact. 16. While there is a myriad of authority demarcating the pith and substance of regularization in the present context, however, this Court would be hard pressed to better the description and distinction elucidated by the Supreme Court in VC Agriculture University[28]: "In order to understand the issue at hand, it is expedient to understand the regime of regularization which in essence means to make "regular" or "permanent." Once the contractual services are regularized, the appointment can become substantive or permanent and cannot be terminated without due process. Therefore, the regularization of a contractual employee is a fresh appointment into the stream of regular appointment.[29] The differences between a contractual employee and a regular employee is material for both the employee and the employer and, inter alia, include: (i) Duration of employment; a contractual employee is usually employed for a specific period or task, with a set end date. (ii) Benefits; contractual employee generally do not

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receive the same benefits or statutory protection as a regular employee. (iii) Scope of work; contractual employee is engaged for specific project or task. (iv) Flexibility; contractual employee often has more flexibility in terms of work hours and location. (v) Cost Considerations: a contractual employee can be less costly in the short term as it doesn't require benefits and other longterm financial commitments. (vi) Risk Management; hiring regular employee is often a long- term commitment, so organizations opt for contractual workers to manage risks associated with fluctuating market demands. Therefore, any institution opting for regularization of its employees must be either mandated by law or must carry out regularization through a well-thought out policy of the institution concerned laying down the criteria and the process for regularization; performance evaluation of the contractual employee must be assessed to determine if the employee meets the standards required for a regular position; there must be availability of positions that match the skills and experience of the contractual employee; the budgetary considerations and financial implication of a regular employee be weighed and considered. There must be a fair assessm ent of the employee's qualifications, performance and merit, so as to ensure only competent and committed employees be granted permanent employment status. [30] Regularization is, therefore, not a ritualistic and mechanical exercise. It requires fresh assessm ent of the candidature of the contractual employee by the competent authority before he is made a regular employee as any such act carries long term financial implications on the institution concerned. The process of regularization is grounded in principles of fairness, openness, transparency, non-discrimination and public interest.[31] Regularization therefore has a close nexus with institutional policy and autonomy." 17. The edict in the SSGC case[32] requires this Court to dwell upon the question of maintainability; essentially of a petition seeking regularization of employment in a public limited company in the material facts and circumstances, therefore, that is the matter to be addressed at first. Issue of maintainability Absence of statutory rules 18. The law states that in the absence of statutory rules of service a writ petition, in service matters, ought not to be entertained[33]. Admittedly, SSGC is devoid of statutory rules. In so far as the issue of functions of the state is concerned, the same was explained by the Supreme Court in the PIAC case[34] and reiterated recently in the Pakistan Olympics Association case[35]. While eschewing a voluminous repetition[36] of the law illumined, it would suffice to observe that no case has been set forth before us to suggest that the respondent company, in the business of distributing natural gas, was performing functions connected with the affairs of the state involving exercise of sovereign power[37]. The Supreme Court has consistently maintained, as seen in Saeed Khoso[38], PEPCO[39] and Zeeshan Usmani[40], that that a writ seeking regularization of service could not be maintained inter alia in respect of a company devoid of statutory rules. It may be relevant to mention that Saeed Khoso and Zeeshan Usmani were in the specific context of SSGC itself. Factual controversy 19. Three thousand three hundred and fifty nine petitioners have invoked the writ jurisdiction of this Court so that their individual claims for regularization may be adjudged. Serious questions of fact have been raised with respect to the status of the petitioners and it was argued that a significant number of them had not been substantiated to even be employees of the relevant third party respondents. Admittedly, each claim would merit detailed scrutiny, inquiry and / or evidence, however, the writ jurisdiction could not be considered an amenable forum in such regard[41]. The Supreme Court was seized of a similar matter, pertaining to regularization of alleged third party employees, in Sohaib Iftikhar[42], wherein it was held that such disputed questions of fact going to the root of the matter were not open to determination by the High Court in writ jurisdiction.

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Master servant principles 20. It is the petitioners claim that their relationship was / is contractual in nature and under such circumstances there is no cavil to the applicability thereto of the master servant principles. Invocation of the writ jurisdiction in such regard has been deprecated by the Supreme Court inter alia in Raheel Ali Gohar[43]. 21. The pivot of each of the petitioners' claim is a contract; expired, third party or otherwise. Irrespective hereof, it is admitted that not a single contract contains any entitlement for regularization in SSGC. Therefore, the petitioners essentially require this Court to resurrect, amend, alter and / or novate individual contracts in exercise of its writ jurisdiction. The Supreme Court has held in Khushal Khan Khattak[44] that such contractual relationships are governed by the master service principle, hence disentitled to the recourse presently availed, and further that in any event the High Courts lacked jurisdiction to revive, amend and / or alter contracts. No generic vested right 22. The petitioners' learned counsel had graciously ceded the absence of statutory rules and the general applicability of master servant principles, however, it was insisted that the same presented no bar to the invocation of the writ jurisdiction if a vested right could be demonstrated to have been infringed. 23. This averment has been conclusively dispelled by the Supreme Court inter alia in Khushal Khan Khattak, Sher Aman[45] and most recently in VC Agriculture University[46], wherein it has been held that there was no vested right to seek regularization for employees hired on contractual basis unless inter a l i a there is any legal or statutory basis for the same[47]. Admittedly, there is no statutory basis for the petitioners to maintain their averment. 24. The Supreme Court has categorically maintained that these is no generic entitlement[48] to regularization and such a claim could not be artificially resurrected by unmerited resort to Article 25 of the Constitution. The relevant findings in VC Agriculture University are reproduced herein below: "It is well settled that there is no vested right to seek regularization for employees hired on contractual basis unless there is any legal or statutory basis for the same.[49] The process of regularization requires backing of any law, rules or policy[50]. It should adhere to the relevant statutory provisions and government policies[51]. In the absence of any of the same, a contractual employee cannot claim regularization. Applying the principles settled by this Court to the proposition at hand, it becomes clear that the Respondents have no automatic right to be regularized unless the same has specifically been provided for in law or policy which in the present case is not available. Any regularization without the backing of law offends the principles of fairness, transparency and meritocracy and that too at the expense of public exchequer. The Impugned Judgment has also erred in law by failing to take into account that where a contractual employee wishes to be regularized, he must demonstrate statutory basis for such a claim, in the absence of which, relief cannot be granted solely on the principle of "similarly placed persons[52]." Article 25 of the Constitution has no application to a claim based upon other unlawful acts and illegalities. It comes into operation when some persons are granted a benefit in accordance with law but others, similarly placed and in similar circumstances, are denied that benefit. But where a person gains, or is granted, a benefit illegally, other persons cannot plead, nor can the court accept such a plea, that the same benefit must be allowed to them also in violation of law[53]. Thus, the ground of discrimination also does not stand, because in order to establish discrimination it is important to show that the earlier act was based on law and policy, which has not been the case here. Thus, with respect to the first question raised, we are of the view that the regularization of the Respondents cannot take place without the backing of any law, rule or policy and without an open and transparent process based on an objective criteria, as discussed above."

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Public policy 25. The Supreme Court[54] went further to expound that the process of regularization is a policy matter and the prerogative of the executive, which ought not to be interfered by the Courts ordinarily[55]. The edict observed that it does not behoove the Courts to design / formulate policy and that their role in such regard may be to judicial review policy, if such exists. The wisdom behind this concept of non-intervention is rested upon the concept of institutional autonomy, imperative for efficient determination of inter alia policy, planning, financial and staff management, and compensation. The Supreme Court went on to hold that intrusion of the Courts in such a policy domain was discouraged as the Courts were neither equipped with such expertise nor did they possess the relevant experience. Transgression, in such matters, was observed to amount to usurpation of power, militating against the spirit of Article 7 of the Constitution. Unmerited reliance on authority 26. Petitioners' learned counsel had pivoted their case on a leave refusal order in Bakht Siddique[56] to compel this Court to assume / exercise jurisdiction. Mr. Ghazi Khan Khalil submitted that notwithstanding the non-binding effect of a leave refusal order[57], the pronouncement was entirely distinguishable in the present facts and circumstances. It was pointed out that the order itself stated that there was no dispute as to facts seized thereof before, however, clearly the same was not the case herein. It was also articulated that the relief sought therein was implementation of a Federal Government directive in a non-discriminatory manner; again not the case herein. Attention was drawn to the contents of the memorandum of petition[58] filed before the High Court to demonstrate that the case before the High Court was that of discrimination, in so far as entitlement per an office memorandum of 2008[59] was concerned. The two page order allowing the petitions[60] specifically mentions that the petitioners sought implementation of this 2008 OM, within time, and rested its finding on the premise that equal treatment ought to have been given to all similarly placed persons. Mr. Khalil articulated that SSGC and similarly placed enterprises stood expressly excluded from the purview of the policy[61], which in itself did not stand to scrutiny before the Courts, and the same stood superseded by an office memorandum of 2017[62]. It was articulated that even though the petitioners have pleaded no entitlement per the respective OMs[63], however, even if they did their petitions would be barred by laches. Mr. Khalil eloquently summated the petitioners' case as being predicated on neither office memorandum but as a standalone claim, therefore, clearly inadmissible per the ratio of Saeed Khoso[64]. 27. The petitioners had also sought refuge in the dicta of the FFC case[65], however, the same was also distinguished by Mr. Khalil inter alia on the grounds that the same was not a case where regularization was granted and in any event the Supreme Court was seized of the matter after it had been subjected to the statutory fora of adjudication; unlike the present case where the petitioners have approached this Court devoid of any plenary adjudication in the first instance, with no challenge represented to have been brought by any petitioner before the relevant fora. Mr. Qazi Umair Ali ventured further to demonstrate from the record that even if the control test, contemplated in the FFC case, was applied, the petitions would not survive the anvil as matters pertaining to group policy, EOBI contributions, rotational policy, advance salary requests, leave, disciplinary proceedings, dismissal and retirement remained squarely within the domain of third party entities, hence, devoid of any nexus with SSGC. 28. It may be opportune to mention that the petitioners' learned counsel made no effort to rebut the arguments distinguishing the applicability of Bakht Siddique and the FFC case and this Court has been assisted with no reason to disagree with the respondents' learned counsel. Be that as it may, a Division Bench of this Court considered the import of Bakht Siddique in Muhammad

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Umair[66], interestingly in a case pertaining to Pakistan State Oil as was the case in Bakht Siddique itself, and distinguished it as follows: "The petitioners' counsel had sought to rely on a leave refusal order in Bakht Siddique[67] to compel this Court to assume / exercise jurisdiction. On the other hand the respondents' counsel had cited a judgment of a five member bench of the august Court in Farid Ahmed[68], wherein the mutually exclusive distinction between the very respondent company's employees and those of third parties was conclusively upheld. Similar matters came up before this bench last month in Muhammad Arif[69], wherein in view of the binding precedent of recent edicts of the august Court in Saeed Khoso[70], PEPCO[71] and Zeeshan Usmani[72], it was maintained that a writ seeking regularization of service could not be maintained inter alia in respect of a company devoid of statutory rules." It is also imperative to denote that Muhammad Umair had also disapproved of invocation of writ jurisdiction merely on the premise that the Government owned some of the shareholding in the public limited company. 29. The judgment in Muhammad Umair was assailed before the Supreme Court in Muhammad Arshad[73] and Muhammad Ali Mazhar J, speaking for the Court, held that "... we have heard the learned counsel for the petitioners and also gone through the impugned orders/judgment but find no perversity or illegality, factual or legal in the impugned judgment'. As a consequence the civil petitions for leave to appeal were dismissed with a poignant finding that "the petitioners may, if so advised, approach an appropriate forum in accordance with law'. Strike down the enterprise of outsourcing 30. There was a rather trivial argument on behalf of the petitioners[74], albeit in rebuttal, to insist that this Court ought to strike down the entire enterprise of outsourcing as being contrary to the fundamental rights granted in the Constitution. Such a plea is alien to the pleadings[75] and no provision of any specific law has been assailed. 31. Provision of service is an integral constituent of the economy and finds specific mention in the Constitution inter alia in the context of taxation. Outsourcing of functions takes place between entities; not even restricted by national boundaries. This…

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