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Petitioner: STATE BANK OF PAKISTAN through Governor VS Respondent: IMTIAZ ALI KHANHonorable Justice Tariq ParvezKhalid Anwar,Abdur Rahim Bhatti
2012 P L C (C.S.) 218
[Supreme Court of Pakistan]
Present: Iftikhar Muhammad Chaudhry, C.J.,
Tariq Parvez and Ghulam Rabbani, JJ
STATE BANK OF PAKISTAN through Governor and another
Versus
IMTIAZ ALI KHAN and others
Civil Appeal No. 581 of 2011, decided on 19th October, 2011.
(On appeal from the judgment/order dated 7-12-2010 passed by High Court of Sindh, Karachi in Constitutional Petition No. D-1684 of 2006).
(a) State Bank of Pakistan Staff Regulations, 1993--
----Regln. 19---State Bank of Pakistan Officers (Pension-cum-Gratuity) Regulations, 1980, Reglns. 2(i) & 4---State Bank of Pakistan Act (XXXIII of 1956), S. 54(1) [as amended by State Bank of Pakistan (Amendment) Act (II of 1994)]---Constitution of Pakistan, Arts. 185(3) & 199---Voluntary Golden Handshake Scheme, 1997 introduced by State Bank of Pakistan vide Circular No. 9 dated 23-10-1997 for its structuring with a view to improve its efficiency and performance by offering a voluntary exit to its surplus employees upto 22-11-1997 on payment of retirement benefits available to them under existing Rules and Regulations in addition to other normal, benefits as compensation---Bank accepted option of 1400 employees of different ranks and paid them amount of their compensation---Appeals filed after six years by some employees claiming pensionary benefits returned by Service Tribunal---Constitutional petition filed by petitioners accepted by High Court while directing Bank to pay commutation of their gross-pension irrespective of such Scheme---Validity---Supreme Court granted leave to appeal, inter alia, to examine as to whether under such Scheme, employees who had served the Bank for a period of less than 25. years and more than 10 years on having opted such Scheme were paid compensation towards pensionary benefits equivalent to 50% commutation of Gross Pension as full and final settlement as a "Special Case" without creating any precedent, could still claim to be entitled to payment of pension on monthly basis.
Muhammad Mubeen-us-Salam v. Federation of Pakistan PLD 2006 SC 602 ref.
(b) State Bank of Pakistan Staff Regulations, 1993--
----Regln. 19---State Bank of Pakistan Officers (Pension-cum-Gratuity) Regulations, 1980, Reglns 2(i) & 4---State Bank of Pakistan Act (XXXIII of 1956), S. 54(1) [as amended by State Bank of Pakistan (Amendment) Act (II of 1994)] --Constitution of Pakistan, Arts 185(3) & 199---Voluntary Golden Handshake Scheme, 1997 introduced by State Bank of Pakistan vide Circular No. 9 dated 23-10-1997 for its structuring with a view to improve its efficiency and performance by offering a voluntary exit to its surplus employees upto 22-11-1997 on Payment of retirement benefits available to them under existing Regulations in addition to other normal benefits as compensation as full and final settlement---Option of 1400 employees of different ranks accepted by Bank on payment of compensation---Appeal before Service Tribunal after six years by some employees claiming pensionary benefits on ground that by virtue of exercise of such option, their services were terminated and they stood retired---Tribunal returned appeal for its presentation before the competent forum---Constitutional petition filed by petitioners was accepted by High Court while directing the Bank to pay commutation of their gross pension irrespective of such Scheme---Bank's plea was that petitioners having voluntarily opted to leave the Bank on acceptance of such Scheme were not entitled to gross pension, which was payable to an employee after completing service of ten years or above=--Validity---Such Scheme was voluntary and was not imposed upon employees and none was compelled or under duress, pressure or coercion to opt for same---Petitioners had been allowed four weeks' time to ponder over such Scheme and before they exercised their option, they were circulated a print=out copy showing approximate benefit payable to them on its acceptance---Word "retirement" as per State Bank of Pakistan Officers (Pension-cum-Gratuity) Regulations, 1980 would mean retirement of an officer under State Bank of Pakistan Staff Regulations, 1993, meaning thereby that regular retirement of an employee would be either after completion of 25 years service or on attaining of 60 years entitling him to pensionary benefits---According to terms of such Scheme, employees having opted therefor would not be entitled to pensionary benefits, rather they would be paid compensation towards pensionary benefits equivalent to 50% commutation of gross pension, which would be a full and final settlement as a special case---Petitioners had not completed 25 years of service at time of exercising such option---Had petitioner not opted for such Scheme, but had claimed pension on basis of rendering more than 10 years service, then they would have been entitled thereto for same being a regular retirement under the Regulations---Petitioners had not retired from service by application of Regulations, 1980 nor under Regulations, 1993, but they had left service voluntarily after accepting such Scheme, which would govern their cases---Petitioner had remained silent for more than six years after accepting such Scheme without any objection---Petitioners had failed to prove/show infringement of any right and were guilty of laches in approaching legal forum for redressal of their alleged grievance---Supreme Court set aside impugned judgment in circumstances.
Muhammad Mubeen-us-Salam v. Federation of Pakistan PLD 2006 SC 602; State Bank. of Pakistan v. Khyber Zaman and others 2004 PLC (C.S.) 1213; Muhammad Idrees v. Agriculture 'Development Bank of Pakistan and others PLD 2007 SC 681; State Bank of Pakistan v. Muhammad Aslam Khan Civil Appeal No.976-1000 of 2009; Muhammad Masihuzzaman v. Federation of Pakistan PLD 1992 SC 825; Muhammad Ahmed v. Government of Sindh 1999 SCMR 255; Muhammad Anwar Siddiqui v. Lahore Development Authority 2009 SCMR 177; S.A. Jamil v. Secretary to the Government of the Punjab 2005 SCMR 126; Principal, Cadet College, Kohat v. Muhammad Shoab Qureshi PLD 1984 SC 170 and Zia Ghafoor Piracha v. Chairman, Board of Intermediate and Secondary Education 2004 SCMR 35 ref.
(c) Words and phrases--
--"Termination"-Definition.
Judicial Dictionary by K.J. Aiyar 13th Edition ref
(d) Civil Procedure Code (V of 1908)---
---S. 11 & O. VII, Rr. 1(g), 8---Failure of a party to ask for all relief to which he was entitled---Effect---Such relief, even if available and not asked for, could not be claimed by filing a subsequent legal proceedings as same would fall' within mischief of constructive res judicata---Illustration.
United Bank Limited v. Shamim Ahmed Khan PLD 1999 SC 990 and Akram Zahoor v. Federation of Pakistan 2000 SCMR 1232 ref
(e) Laches---
----Doctrine of---Scope---Party having an enforceable right, if failed to exercise/enforce the same within time specified' by law, could not enforce on account of laches---Principles.
Laches is a doctrine whereunder a party which may have a right, which was otherwise enforceable, loses such right to the extent of its enforcement, if it is found by the court of a law that its case is hit by the doctrine of laches/limitation. Right remains with the party, but he cannot enforce it. The limitation is examined by the Limitation Act, 1908 or by special laws which have inbuilt provisions for seeking relief against any grievance within the time specified under the law and if party aggrieved does not approach the appropriate forum within the stipulated period/time, the grievance though remains, but it cannot be redressed because if on the one hand there was a right with a party which he could have enforced against the other, but because of principle of limitation/laches, same right then vests/accrues in favour of the opposite party.
(f) Equity---
---Delay would defeat equity---Equity would aid vigilant and not an indolent. [p. 245] T Jawad Mir Muhammadi v. Haroon Mirza PLD 2007 SC 472; Smith v. Clay (1767) 3 Bro. C.C. 639n at 640n; Snell's Equity by John Meghee 12th Edition at page 35; Member (S&R)/Chief Settlement Commissioner v. Ashfaque Ali PLD 2003 SC 132; S.A. Jameel v. Secretary to the Government of the Punjab 2005 SCMR 126; Pakistan Post Office v. Settlement Commissioner 1987 SCMR 1119; John Objobo Agbeyegbe v. Festus Makene Ikomi PLD 1953 PC 19 and Erlanger v. New Sombrero Phosphate Company 1878 LR 3 AC at page 1279 rel.
Khalid Anwar, Senior Advocate Supreme Court for Appellants.
Abdur Rahim Bhatti, Senior Advocate Supreme Court for Respondents Nos. 1 132, 134 and 137 202
Sardar Asmatullah, Senior Advocate Supreme Court for Respondent No.136.
Atif Hayat Respondent No.133 in person.
Ms. Anjum Naz Respondent No.135 in person.
Date of hearing: 27th September, 2011.
JUDGMENT TARIQ PARVEZ, J.---This appeal, by leave of the Court, is directed against the judgment dated 7-12-2010 passed by High Court of Sindh, Karachi, whereby Writ Petition No.D-1684 of 2006 filed by the respondents has been allowed.
2. The State Bank of Pakistan (hereinafter referred to as `the Bank') is a body corporate, established under the State Bank of Pakistan Act, 1956 (hereinafter referred to as 'the Act, 1956'), with a preamble that the Bank shall regulate the monetary and credit system of Pakistan and to foster its growth in the best national interest for securing monetary stability and fuller utilization of the country's productive resources. It has played a vital role in the development of the economy of Pakistan and is financial backbone.
3. In order to regulate its affairs, mandate has been given to the Bank under the Act, 1956 and to discharge its functions and perform its duties effectively, it has Central Board and other employees at all levels to run its day-to-day business.
In exercise of powers, the Central Board of the Bank on or about 29th day of December, 1979 approved the State Bank of Pakistan Officers (Pension-cum-Gratuity) Regulations 1980 (hereinafter referred to as 'the Regulations, 1980'), which in substance has incorporated the pension scheme of the Central Government of Pakistan. It is to be noted that between the years 1993-1994, number of amendments were made in the banking laws of the country including the Act, 1956 so as to confer autonomy on the Bank. Section 54(1) of the Act, 1956 was amended by means of State Bank of Pakistan (Amendment) Act (Act-II), 1994 (hereinafter referred to as 'the Act-II of 1994') whereby the words 'subject to the approval of the Federal Government' were omitted; thus the exercise of powers by the Central Board of the Bank under that section was made fully autonomous, which does not require previous sanction/ approval of the Federal Government viz its Rules/Regulations making power.
4. Because of such amendment, the Bank acquired absolute discretion in the recruitment process of officers and servants including their terms and conditions of service; constitution of superannuation, beneficial and other funds, with or without Bank's contribution both for officers and servants of the Bank for their welfare and for extending them other amenities including the medical facilities, grant of loans and advances, etc. By omission of the words 'prior approval' for the purpose of section 54 of the Act, 1956, the Bank has become fully autonomous and is not bound by the policies of the Central Government.
5. The State Bank of Pakistan, in exercise of its discretionary powers and in order to modernize its banking as was being done in the private sector Banking, decided its restructuring with a view to improve its efficiency and performance. Considering the best interest of the national economy but simultaneously looking generously to the needs and A requirements of its employees, the State Bank of Pakistan introduced several initiatives one of which was to offer a totally voluntary exit to its employees vide Voluntary Golden Handshake Scheme, 1997 (hereinafter referred to as 'the Scheme'), which was introduced by way of Circular No.9 of 1997 dated 23-10-1997.
6. Circular No.9 of 1997 incorporates the reasons and objects followed by entitlement of its employee in case they opt for it i.e. the Scheme. The object to introduce the Scheme has been highlighted in its opening paragraph by stating that the working conditions requires that the Bank shall also restructure itself in view of modernize procedures B and during the process of restructuring, it was felt that certain offices will become redundant and employees working therein were to be put into surplus pool of the staff and officers at all levels; such staff and officer would be entitled to reduce compensation as compared to other present emoluments; however,- before a need of establishing surplus pool, it was decided to offer an attractive Voluntary Golden Handshake Scheme to all employees, therefore, the Scheme' was introduced wherein the staff and officers were asked that they will be entitled to retirement benefits available under the existing Rules and Regulations and in addition to other normal benefits, the Bank will provide financial benefit package to all its employees. Detail of the Scheme regarding entitlement of the officers/staff members was as under:--
(a) Three (3) months Basic Pay for each completed years of service One and a half months Basic Pay for each remaining months of service, whichever is less, however, subject to a maximum of 90 months basic pay.
PLUS
(b) Benevolent Fund Grant equivalent to 10 years to be paid in lump sum in advance at the time of settlement of dues, as a final payment as per entitlement.
(a) Employees who have completed 25 years of Service or More
(i) Under Old Retirement Benefits.
Provident Fund own and Bank's contribution and Gratuity @ one month's Basic Pay for each completed year of service.
(ii) Under New Retirement Benefits.
General Provident Fund contribution and 50% commutation of Gross Pension and payment of pension on monthly basis
(b) Employees whose services are less than 25 years.
(i) Under Old Retirement Benefits.
Provident Fund own and Bank's contribution & Gratuity @ one month's Basic Pay for each completed year of service.
(ii) Under New Retirement Benefits.
General Provident Fund contribution. Although, such employees are not entitled to pensionary benefits, it has been decided, as a special case and without creating any precedent to allow them compensation towards pensionary benefits equivalent to 50% Commutation of Grass Pension as a full and final settlement.
(c) Leave Encashment subject to a maximum of 180 days.(d) Post retirement medical facilities as admissible under the Bank's rules, or an amount equivalent to two months pay for every year for a total period of 10 years, at the option of the employee.
(d) Post retirement benefits (other than medical facilities) as admissible under the rules. B The above entitlements were, however, subject to exercise of option by the employees and the cutoff date for exercise of option was fixed upto 22-1.1-1997. It was also explained that no option will be entertained after the expiry of the cutoff date and option once exercised shall not be revocable. It was also left to the discretion of the management to accept or reject an option exercised by an employee or it may defer the acceptance of the option or may accept option with such modifications as deemed appropriate, keeping in view the interest of the Bank.
7. During the course of arguments, we have been informed that about 2000 employees of different ranks opted to. exercise the option, out of which about 1400 plus options were accepted by the Bank and the employees whose options were accepted by the Bank were paid their emoluments according to their entitlement as provided in the Scheme, by calculating the length of service of each employee and that without any objection and reservations, the amount so calculated as entitlement was paid by the Bank and accepted by the employees, who opted in favour of the Scheme.
8. It appears from the record that somewhere in June, 2004, after about more than six years, the respondent-employees filed appeals before the Federal Service Tribunal against the Circular No.9 (the Scheme), claiming that they had been deprived of their pensionary benefits/rights; however, in view of decision rendered by 'this Court' in Muhammad Mubeen-us-Salam v. Federation of Pakistan (PLD 2006 SC 602), the Service Tribunal put-off its hand from the case of the respondent-employees as their appeals became abated in view of the judgment supra; but they were, however, directed to take recourse to the competent forum, if so advised, which they followed by filing of Writ Petition No.1684 of 2006 in the High Court of Sindh, Karachi. The Division .Bench of the High Court vide its judgment dated 7-12-2010 allowed the W tit Petition of the respondents with direction to the Bank to pay to the respondents commutation of their gross-pension, irrespective of the scheme.
9. Feeling aggrieved of the impugned judgment dated 7-12-2010, the Bank (appellant) filed Civil Petition No. 295 of 2011, which game up for hearing before Bench of this Court, headed by the Kon'ble Chief Justice of Pakistan, when leave to appeal was granted on 12-7-2011. Operative para of the order is reproduced hereinbelow for convenience:-
"2. Leave to appeal is granted, inter alia, to examine that under the "Voluntary Golden Handshake Scheme" the respondents, who have served the petitioner Bank for a period of less than 25 years and more than 10 years on having opted the said Scheme were paid compensation towards pensionary benefits equivalent to 50% commutation of Gross Pension, as full and final settlement, as a "Special Case" without creating any precedent, can still claim that they are entitled for the payment of pension on monthly basis."
10. The summery of arguments that has emerged out of the submissions made by the learned counsel for the appellant-Bank is given as under:--
(a) That the impugned judgment of the learned High Court is contrary to the principles as laid down by this Court in the case of State Bank of Pakistan v. Khyber Zaman and others [2004 PLC (C.S.) 1213].
(b) That the learned High Court has erred in law and failed to appreciate that the Scheme constituted full and final acceptance of pensionary benefits/entitlement of the respondents.
(c) That the impugned judgment suffers from misinterpretation of Regulations,` 1980 and State Bank of Pakistan Staff Regulations, 1993 (hereinafter referred to as Staff Regulations, 1993).
(d) That the High Court has embarked upon the matter, which was either a past and closed transaction or was birred by limitation being hit by the doctrine of laches.
(e) That the assumption of Constitutional jurisdiction in the subject matter by the learned High Court was uncalled for and was illegal because the services of the respondents-employees are not governed by the statutory rules.
11. Learned counsel after formulating the synopsis of his arguments has argued that the impugned judgment is based on complete misreading and misapplication of the Regulations, 1980 and Staff Regulations, 1993.
According to him the service and pension Rules and the polices of the Central Government in no way are applicable to the respondent-employees of the Bank as their service and pension Rules are governedby the Regulations, 1980 and Staff Regulations, 1993 where the latter Regulations. have overriding effect to the former.
He has argued that the circular issued by the appellant-Bank or the policy introduced and implemented subsequent to acceptance of the Scheme by the respondent-employees have no application to the case of the respondent-employees, therefore, in absence of any fresh legal entitlement, they could not claim any financial benefit, which are not applicable retrospectively but prospectively to the cases of those employees who are or would be in service at the time when any subsequent scheme or incentive or policy is introduced by the appellant-Bank.
He has submitted that service rules and staff regulations of the appellant-Bank are not statutory in nature, therefore, on the strength of decision rendered by this Court in Muhammad Idrees v. Agriculture Development Bank of Pakistan and others (PLD 2007 SC 681) and in. State Bank of Pakistan v. Muhammad Aslam Khan (Civil Appeals Nos.976-1000 of 2009), the jurisdiction assumed by the learned High Court was in contravention of the law laid down by this Court in the above cited judgments.
Learned counsel has further argued that in view of above cited judgment, when it is a matter between employer and employee whose services are not governed by the statutory Rules, their relationship. would be that of master and servant, therefore, it would be beyond the Constitutional jurisdiction of the High Court.
The learned counsel has placed more emphasis on his submission that the learned High Court has completely misinterpreted and erroneously applied the Regulations, 1980 which are to be read in conjunction and in consonance with the Staff Regulations, 1993. He has referred to para-4 of the Regulations, 1980 wherein 'pension' has been. defined as:--
"an officer who retires after completing not less than ten years of total qualifying service shall be entitled to a gross pension."
According to him this entitlement to gross pension is in respect of such employee who retires after completing service of ten years or above and it would not be applicable to an employee who separates himself from the appellant-Bank on acceptance of the Scheme, which Scheme was voluntary one and was subject to exercise of option.
According to the learned counsel, it was not the employer who has removed the employees i.e. the respondents but the respondent-employees have opted for exit from the appellant- Bank on the basis of terms and conditions as spelt out in the Scheme, therefore, such employees could not be brought within the purview of para-4 of the Regulations, 1980, which refers to retirement of an employee and not to an employee who opts to leave the appellant-Bank on acceptance of the Scheme.
Learned counsel has also referred to the definition of the word. 'retirement' as provided in Regulations, 1980 which reads as under:--
"2(i). `retirement' means retirement of an officer under the State Bank of Pakistan (Staff) Regulations and includes termination of service for any reason other than dismissal."
His submission is that an officer who retires in accordance with Staff Regulations,' 1993 may fulfils the criteria as given under the paragraph of 'pension' shall be eligible to receive gross pension. According to the learned counsel the definition of the word 'retirement' under Regulations, 1980 also states that `termination of service other than dismissal'. In his view the acceptance of the Scheme, which was also voluntary to opt cannot be termed as termination of service but it was a voluntary withdrawal by the respondents.
The learned counsel on the strength of his above submissions has also referred to para-19 of the Staff Regulations, 1993, which reads as under: -
"19.(i)An officer or an Executive shall retire from service:---
(a) on such date after he has completed twenty five years of service qualifying for pension or other retirement benefits as the Government may, in the interest of the Bank and for reasons to be recorded in writing in each case direct; or
(b) in any other case, on the completion of the sixtieth year of his age.
(ii) An employee in Clerical and Non-Clerical cadre shall retire on the completion of the sixtieth year of his age.
(iii) The Governor may, on the request of an employee allow him to retire on any day after the completion of 25 years of service in the Bank."'
The learned counsel has also objected to the findings recorded by the learned High Court in the impugned judgment, where it has been held that "voluntary exit of an employees from the SBP through VGHS is a termination of service, and is therefore, a retirement from service ".
According to the learned counsel such interpretation and conclusion drawn.by the learned High Court is entirely erroneous and misconceived because the term 'termination' cannot be read in isolation nor is independent to Staff Regulations, 1993. He has added that if more than ten years service is taken as base for qualifying period for pension and the word 'termination', as used in the definition of 'retirement', is given wider meaning and scope, it would tantamount to frustrate the very object of introducing the Scheme. He has elaborated his submission by giving an example that such wider interpretation shall adversely affect the very purpose of introducing the Scheme. He has given an example that a DMG officer after having served for ten years -period, on attaining the age of 35 years can say that he is entitled to be retired with pension for rest of his life. According to learned counsel if such…
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