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Petitioner: NATIONAL BANK OF PAKISTAN VS Respondent: IFTIKHAR RASOOL ANJUM and others
Court Name: Lahore High Court Judge(s): Shahid Karim, Jawad Hassan Title: NATIONAL BANK OF PAKISTAN vs IFTIKHAR RASOOL ANJUM and others Case No.: I.C.As. Nos.120 to 146, 148 to 156, 460 to 464 and 991 of 2016 Date of Judgment:2017-01-16 Reported As: 2017 PLC (C.S.) 453 Result: Petition allowed
JUDGMENT
JUDGMENT ' JAWAD HASSAN, J.--- Through this Intra Court Appeal, the Appellant, namely the National Bank of Pakistan (NBP), has called in question judgment rendered in Constitutional Petitions, including W.P. No, 8260/2014, W.P. No, 31187/2013, W.P. No, 19765/2010, W.P. No,.13400/2010, W.P. No, 13401/2010, W.P. No, 21843/2010, W.P. No, 22757/2010, W.P. No, 8730/2013, W.P. No, 8731/2013, W.P. No, 25207/2013, W.P. No, 27942/2013, W.P. No, 28452/2013, W.P. No, 29211/2013, W.P. No, 29217/2013, W.P. No, 29717/2013, W.P. No, 30704/2013; W.P. No, 32081/2013, W.P. No, 1111/2014, W.P. No, 1112/2014, W.P. No, 2588/2014, W.P. No, 2590/2014, W.P. No,3209/2014 W.P. No, 5903/2014, W.P. No, 5907/2014, W.P. No,7246/2014, W.P. No, 8724/2014, W.P. No, 8798/2014, W.P. No,8956/2014, W.P. No, 8958/2014, W.P. No, 9029/2014, W.P. No,9551/2014, W.P. No, 10590/2014, W.P. No, 10925/2014, W.P. No,2259/2013 and W.P. No,19091/2015, which were heard, on 30.7.2015 and 15.10.2015, and a consolidated judgment was pronounced on 15.01.2016 by the learned Single Judge in Chamber (the "Impugned Judgment"), whereby Constitutional Petitions filed by the Respondents/ Petitioners were allowed and the Appellant/Respondent was directed to release pensionary benefits of the Respondents/ Petitioners in accordance with Circular No,228 dated 26.12.1977 issued by the Appellant/ Respondent within two months from the date of the decision. {{TABLE}} 2. This judgment shall also render decision on connected Appeals bearing numbers I.C.A. No,121/2016, I.C.A. No,122/2016, I.C.A.. No, 123/2016, I.C.A. No,124/2016, I.C.A. No,125/2016, I..A. No, 126/2016, I.C.A. No,127/2016, I.C.A. No,128/2016, I.C.A. No, 129/2016, I.C.A. No,130/2016, I.C.A. No,131/2016, I.C.A. No, 132/2016, I.C.A. No,133/2016, I.C.A. No,134/2016, I.C.A. No, 135/2016, I.C.A. No,136/2016, I.C.A. No,137/2016, I.C.A. No, 138/2016, I.C.A. No,139/2016, I.C.A. No,140/2016, I.C.A. No, 141/2016, I.C.A. No,142/2016, I.C.A.
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No,143/2016, I.C.A. No, 144/2016, I.C.A. No,145/2016, I.C.A. No,146/2016, I.C.A. No, 148/2016, I.C.A. No,149/2016, I.C.A. No,150/2016, I.C.A. No, 151/2016, I.C.A. No,152/2016, I.C.A. No,153/2016, I.C.A. No, 154/2016, I.C.A. No,155/2016, I.C.A. No,156/2016, I.C.A. No, 460/2016, I.C.A. No,461/2016, I.C.A. No,462/2016, I.C.A. No, 463/2016, I.C.A. No,464/2016, I.C.A. No,991/2016. 2. Brief facts for the disposal of instant Intra Court Appeals filed under section 3 of Law Reforms Ordinance, 1972 are that the Respondents/Petitioners are retired officials/officers of Appellant/ Respondent which was constituted under the National Bank of Pakistan Ordinance, 1949 and was governed by the NBP Employees Pension Provident and Guarantee Rules, 1958 and the National Bank of Pakistan (Staff) Service Rules, 1973 made thereunder, duly approved by the Federal Government of Pakistan. During their service with the NBP, the Federal Government launched a new pension scheme which was circulated by NBP vide Instruction Circular No,228(C) dated 26.12.1977. As per Clause 4(b) of the said Circular, the pension of the retired employees of NBP was to be enhanced at the rate of 70% of average emoluments on completion of 30 years qualifying service. The Respondents/Petitioners opted for the aforesaid Scheme. In para-10 of the aforesaid Scheme it was further mentioned that any change or revision in rates/scales of pension or gratuity that may thereafter be made by the Federal Government shall also apply to the officers/ executives of the Bank. In the year 1999, the Management of the NBP issued another Instruction Circular No,37/1999 dated 16.06.1999, whereby the pension was reduced to almost 33% as against 70% and basic pay was increased, which was assailed in the Constitutional Petitions, which ultimately were allowed through the Impugned Judgment. Hence, this Intra Court Appeal. 4. After hearing the arguments of the parties at length on 21.12.2016, 22.12.2016, 26.12.2016, 27.12.2016 and 28.12.2016 following scot points arising out of instant Intra Court Appeals requiring determination upon which through this judgment, the decision shall be rendered by us: A. Whether the Instruction Circular No,228 (C) dated 26.12.1977 is a statutory instrument, having backing of law, or merely executive instrument issued by the Federal Government'? B. Whether the Instruction Circular No,37/1999 dated 16.06.1999 issued by the Board of Directors of NBP repeals and overrides the Circular No, 228(C) dated 26.12.1977? C. Whether the principle of Estoppel is attracted in the instant appeal? D. Whether the petitions suffer from Laches and are liable to be dismissed? 5. Before proceeding further with the matter for determination of above-mentioned points, it is essential to briefly have a look upon the legislative history of entire NBP laws, rules, regulations and circulars: A. THE ESSENTIAL HISTORY OF LAWS RELATING TO THE NATIONAL BANK OF PAKISTAN: On 09.11.1949, the first legislation in respect of the National Bank of Pakistan (NBP) was promulgated, namely National Bank of Pakistan Ordinance, 1949 (the "1949 Ordinance"), to extend banking facilities generally and under Section 3 of the 1949 Ordinance, NBP was constituted to carry on the business of banking. Under Section 12 of the 1949 Ordinance, "the general superintendence and direction of the affairs and business of the Bank shall be entrusted to the Central Board, which may exercise all powers and do all such acts and things as may be exercised or done by the Bank and are not by this Ordinance expressly directed or required to be done by the bank in general meeting." Further, under Section 26(A)(2) of the 1949 Ordinance, the NBP was authorized to "grant or subsidise, from time to time, pensions, gratuities, bonuses or other funds created for the benefit of its officers and staff or their dependents". Further, under Section 32 of the 1949 Ordinance, the Central Board was authorized, with the previous approval of the Federal Government (Central Government at that time), to make bye-laws not inconsistent with this Ordinance. It was made clear in Section 32(2)(xxviii) of the 1949 Ordinance that such bye-laws may provide for "the recruitment of officers and staff of the bank including the terms and conditions of their service,'
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and the constitution and management of staff and superannuation funds for the officers and servants of the Banks" . (ii) In 1958, the NBP Employees Pension Provident and Guarantee Rules, 1958 (the "1958 Rules") were made by the Central Board under Bye-Law 18(a)(V) of the NBP Bye-Laws, with the prior approval of the Central Goverunent. The 1958 Rules created 'the National Bank of Pakistan Employees' Pension Fund', with the objective to provide every employee, who was a member of the Fund with a pension, the amount of which was to be ascertained according to 1958 Rules. Importantly, Rule 17 of the 1958 Rules stated that the pension shall be payable at the rate of one seventieth part for every year's service of the average monthly pay drawn during the last three years of service on the date of retirement. Further, Rule 18 of the 1958 Rules put a ceiling by declaring that the maximum pension shall in no case exceed Rs,650/- per mensem. (iii) Thereafter, in 1973, the National Bank of Pakistan (Staff) Service Rules, 1973 (the "1973 Rules") were made by the Central Board under Bye-Law 18(a)(iii) of the National Pakistan Bye-Laws, with prior approval of the Central Government. Importantly, under Rule 4 of the 1973 Rules, the Central Board was given powers to amend, modify or omit all or any of the 1973 Rules, with the prior approval of the Federal/Central Government, as may be found necessary from time to time. As per Rule 41 of the 1973 Rules, all employees in the permanent service of NBP became members of the Bank's Provident and Pension Funds excluding those who (i) were on contract basis, (ii) had attained age of 35 years at the time of appointment (iii) were in permanent service of NBP and drawing pension from another source. (iv) However, on 11.03.1974, the Banks Nationalization Act, 1974 (the "1974 Act") was enacted in public interest to provide for nationalization of the banking business in Pakistan, and Section 9 of the 1974 Act constituted/established the Pakistan Banking Council (PBC), having functions under Section 9(4) of the 1974 Act, including to make policy recommendations to the Federal Government for directing banking activities towards national socio economic objectives and for formulating policy guidelines for the banks. Section 11 of the 1974 Act provided that the Bank shall have an Executive Board consisting of a President and not less than two and not more than four other members to be appointed by the Federal Government, for general direction and superintendence of the affairs and business of the banks. Section 13 of 1974 Act provided that "... all officers and other employees of a bank, shall continue in their respective offices and employments on the same terms and conditions, remuneration and rights as a to pension and gratuity, as were applicable to them immediately before the commencing day". Further, Section 20 of the 1974 Act provided that "The Federal Government may, by notification in the Official Gazette make rules to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provision of this Act." (v) On 31.11.1977, the Government of Pakistan Finance Division (Internal Finance Wing), vide letter No,17(9)-IF.XI/77 (the "1977 Notification"), addressed to Chairman Pakistan Banking Council conveyed the decision to introduce pension and retirement benefits for the officers/executives of banks along the lines of those introduced by the Federal Government for civil servants and to discontinue the existing scheme of pension in NBP Contributory Provident and Gratuity Fund. The date of effect of these new Pension and retirement benefits was stipulated as May, 1977 at the replica rate and scale mentioned in below 1977 Circular. (vi) On 26.12.1977, an Instruction Circular No, 228(C) (the "1977 Circular") was issued, in respect of 'Establishment of Pensions and Retirement Benefits for Officers/Executives of Banks' (as have been introduced by the Federal Government for Civil Servants) and it was provided in para 2 of the 1977 Circular that "... The contribution made by the bank towards the Contributory Provident Fund shall be withdrawn as that service shall now count for the purpose of pension ...". Further, Clauses 4, 10 and 11 of the 1977 Circular reads as follows:
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"B- RATE AND SCALE OF PENSION (4.a) Pension shall be payable if the total service of an officer/executive at the time of retirement or death is 10 years or more. .... (b) Pension shall be calculated at the rate of 70% of average emoluments on completion of 30 years qualifying service. Where qualifying service is less than 30 years but not less than 10 years, proportionate reduction in percentage shall be made. Any amount of pension in excess of Rs,1000/- shall be reduced by 50%... ' C- GRATUITY FOR SERVICE OF LESS THAN 10 YEARS BUT NOT LESS THAN 5 YEARS 5. ....................................................................................................................... D- GRATUITY AND COMMUTATION FOR PENSIONERS RETIRING AFTER 10 YEARS SERVICE 6. E- FAMILY PENSION 7. ....................................................................................................................... F- PENSIONS/GRATUITIES FOR INJURY OR DEATH IN COURSE OR CONSEQUENCE OF DUTY 8. 9. Since the rates of pension and gratuity given above have been fixed by the Pay Commission for Banks and Financial Institutions on the same lines as obtaining on the side of the Federal Government, the existing provisions and any changes or revision in the rates or scales of pension or gratuity that may hereinafter be made by the Federal Government shall also apply to the officers/executives of the Banks. ' The existing schemes of Pensions, Contributory Provident Fund and Gratuity shall be discontinued." (vii) On 18.08.1979, the Bank (Nationalization) (Amendment) Ordinance, 1979 (the "1979 Amendment") was enacted to amend Section 9, whereby further functions of overseeing foreign, operations, establishing a Research Department, establishing a Central Training Institute, acting as arbiter in inter-bank disputes, appointing lead banks in respect of consortium loans, watching the progress of the implementation of the rulings made in SPB's inspection report were entrusted to the Pakistan Banking Council. Through the 1979 Amendment, Section 11 was also amended and subsections (4-A), (4-B) and (4-C) were inserted as follows: "4-A. A bank shall have a Board of Directors- consisting of the President and all the other members of the Executive Boards, one member of the Council to be nominated by the Council and an official of the Ministry of Finance to be nominated by the Federal Government. 4-B. The Board of Directors shall be responsible for overall policy making in respect of the bank's operations ....... 4-C ..................................................................... (viii)On 01.01.1980, the National Bank of Pakistan Staff Service Rules, 1980 (the "1980 Rules") were made by the Executive Board under bye-law 18(a) (iii) and (iv) of NBP Bye-Laws, read with Section 11(4) of the 1974 Act. While the 1980 Rules did not provide any formula for pension fixation, Rule 41 of the 1980 Rules provided that "All employees in the permanent service of the Bank shall become members of Bank's provident Fund, Benevolent Fund, Pension/Gratuity and Group Insurance Scheme". (ix) On 12.01.1983, the Respondent No,1 opted for the Item No,2, the new retirement benefits w,e.f. 01.05.1977/01.07.1977, in exercise of the option afforded under the announcement of Instruction Circular No,228(I) dated 03.07.1978 regarding. 'Retirement Benefits of Officers/Executives'. (x) On 08.09.1983, another amendment vide Banks (Nationalization) (Amendment) Ordinance, 1983 (the "1983 Amendment"), was introduced by which Section 11(7-A) was inserted and it was provided that '"the Chairman and a member of the Council and the President and a member of an
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Executive Board shall be liable to such disciplinary action and penalties, to be awarded in such manner and by such authorities, as may be prescribed". (xi) On 24.07.1985, an Instruction Circular No,804(N) (the "1985 Circular") was issued, in respect of 'Further Liberalization of Pensions Rules, Indexation of Pension and other Allied Matters -- Officers/Executives and Clerical/Non-Clerical Staff of the Bank'. (xii) On 9.9.1986, an Instruction Circular No,804(ZD) (the "1986 Circular") was issued, in which further concession in pension were granted to all categories of Officers/Executives and Clerical/-Non- Clerical staff of NBP. (xiii)On 22.09.1988, another amendment vide Banks (Nationalization) (Amendment) Ordinance, 1988 (the "1988 Amendment") was promulgated and Section 5(6) was inserted highlighting that "the Federal Government or a corporation owned or controlled by the Federal Government may from time to time, sell all or any of its shares in the capital of a bank, other than the State Bank, to such persons, and on such terms and conditions, as it may determine." Further, Section 9 of the 1974 Act was amended to give more power to the Banking Council, and Section 11 of 1974' Act was amended by substituting subsection (1) through which composition of Board of Directors of every bank was changed by adding, inter alia members of Banking Council and eminent persons from private sector. Further, a new subsection (1-A) was inserted which provided that "the Board shall have an Executive Committee consisting of its President, three Directors and such other senior executives of the banks as the Board may, from time to time, decide and the Executive Committee shall exercise such powers, and perform such functions as may be delegated to it by the Board from time to time." Moreover, subsections (4-A) to (4-C) (earlier inserted vide 1979 Amendment) were deleted. (xiv) On 24.01.1989, the Banks (Nationalization) (Amendment) Ordinance, 1989 (the "1989 Amendment") was promulgated whereby section 9 was amended and functions of Banking Council were added, while by amending Section 11. Board of Directors was constituted for every bank consisting of Executives of Banks, Chief Executives of development financial Institutions, members of. Pakistan Banking Council, eminent persons from private sector and Directors from Federal Government. (xv) On 23.11.1991, the Banks (Nationalization) (Amendment) Act, 1991 (the "1991 Amendment") was promulgated, whereby new Sections 5-A (Sale of Shares) and 5-B (Section 5-A to have effect notwithstanding any other law etc) were inserted. Further, functions of the Council under Section 9 were revised and Section 11 was substituted, whereby Section 11(1) provided that "A bank shall have a Board of Directors consisting of the President and six other members to be nominated by the Federal Government". Further, Section 11(2) also provided that "the finally responded that under section 47(1) the provision of the EOAB Act, did not apply to the petitioner-University. He asserted that the issue in hand was purely jurisdictional, and thus legal, which could be appropriately resolved by this constitutional Court, without determination of any disputed facts. The worthy counsel for the respondent-Institution rebutted the above contention and maintained his preliminary objection non-maintainability of the petition, on the touch stone of the alternate remedy provided to the petitioner under section 33 of the EOAB Act. 11. This Court is a Constitutional Court exercising its jurisdiction under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973, ("Constitution"), which expressly provides for it to entertain grievances of an aggrieved person, who does not have an alternative remedy provided under the law. However, the judicial consensus that has evolved with time and rendered jurisdictional space for the Constitutional Court to assume jurisdiction, when the remedy provided under the law to the aggrieved person would not be, inter alia, efficaciously meaningful or whether the challenge made is purely jurisdictional as is in the present case. The present petitioner is in essence seeking from this Constitutional Court the interpretation of subsection (f) of section 47 ibid. To be more precise,
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the meaning and purport of the term statutory body as committed therein. Thus, in case this Court without indulging in determining factual disputes, can resolve the matter of jurisdiction, then assuming jurisdiction in such like cases, should be the rule, and restraining there from should be an exception thereto. 12. In view of the above, this Court would assume jurisdiction only to the extent of jurisdictional issue, so as to determine whether the petitioner-University comes within the purview of a statutory body, as envisaged under section 47 of the EOAB Act or otherwise. However, in case this Court comes to the conclusion that, factual determination are also to be rendered to resolve this or any other contesting claim of the parties, then this constitutional Court shall surely refrain from assuming jurisdiction. 13. Let us now review the general. Theme envisaged by the legislature in enacting the EOAB Act. As provided in its preamble, EOAB Act is enacted to facilitate and ensure the old age benefits for the persons employed in 'Industrial', 'Commercial' and other organizations and matters related therewith. Section 9 ibid mandates contributions from the Employer of an Establishment or an Industry in respect of every person in its ensureable employment. The contribution so collected by the Institution, are maintained in the Employees Old Age Benefits Fund, established under section- 17 ibid. The contribution received by the Institution in respect of ensured persons is, thereafter, utilized for their various prescribed pensions. The Employer, in case of any erroneous payment made to the Institution, can seek the refund thereof under section 15 of the EOAB Act, which reads; "15. Refund of Contributions paid Erroneously; ' An employer shall be entitled to the refund of any contribution paid to the Institution under erroneous belief that it was payable under the provisions of the Act, and shall be entitled to the refund of excess amount of the contribution where such contribution had been paid at a higher rate than the rate prescribed. ' Provided that no contribution or excess amount of any contribution shall be refunded unless an application for such refund is made within six months of the date on which the contribution was paid." ' In cases of complaints received or any question or dispute regarding crucial matters relating to the contribution, the same are determinable by the Institution itself, in terms of section 33 ibid. The decision made under section 33 is reviewable under section 34 ibid, in case new facts are brought to notice of the Institution, which provides:- "34 Review of Decisions. ' The Institution may, subject to regulations, on new facts being brought to its notice, 'review a decision given by it under section 33." ' While a remedy of an appeal has also been provided under section 35 to aggrieved person against the decision of the Institution under section 33 or its review under section 34 ibid. The said provision provides; "35 Appeal to Board. Subject to rules, a person aggrieved by a decision of the Institution under section 33 or on a review under section 34, may appeal to the Board." ' Now to section 47, ibid, this provision clearly stipulates the persons who do not come within the purview of the EOAB Act. It reads that; "47. Act not to apply to certain persons. Nothing in this Act shall apply to; (a) persons in the service of the State, including members of the armed forces, police force and railway servants; (b) persons in the service of a local council, a municipal committee, a cantonment board or any other local authority; (c) persons who are employed in services or installations connected with or incidental to the Armed Forces of Pakistan including an ordinance factory maintained by the Federal Government
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or Railway administration; (d) persons in the service of Water and Power Development Authority; (e) persons in the service of a bank or a banking company; persons in the service of statutory bodies other than those employed in or in connection with the affairs of a factory as defined in section 2(i) of the Factories Act, 1934 (XXV of 1934), or a mine as defined in the Mines Act, 1923 (IV of 1923); ' Provided that workshops maintained exclusively for the purpose of repair or maintenance of equipment or vehicles used in such statutory bodies shall not be treated as factories for the purposes of this clause; (g) members of the employer's family that is to say, the husband or wife and dependent children of the employer, living in the house in respect of their work for him; and (h) .......................................................... " (emphasis provided) ' Section 37 of the EOAB Act, provides a penal provision for imprisonment, extendable also to two years or with fine or both for, inter alia, violating the specific orders passed under EOAB Act or rules made there under; while the recovery mechanism of unpaid contribution is recoverable as arrears of land revenue under section-13 read with section-9 of the EOAB Act. 14. Now, moving to the relevant facts, leading to the present petition; it all started with Abasyn Institute of Management of Sciences, a sole proprietorship, owned and controlled by Muhammad Imranullah Khan that was carrying on business of imparting various academic courses, while being affiliated with Gomal University Dera Ismail Khan. This business, it is asserted, ended on 19.07.2008, when the said affiliation was terminated. In the meanwhile, Muhammad Imranullah Khan, the sole proprietor of the Abasyn Institute, aspiring to apply for establishing a university under the Khyber Pakhtunkhwa Registration and Functioning of Private Educational Institutions Ordinance, 2001, incorporated a private limited company in the name and style of M/S Abasyn System of Education (Pvt.) Ltd. ("Company"). The Company had four shareholders; Muhammad Imranullah Khan and his son Irfanullah held 50% of the share capital of the Company (25,020 shares of the Company), while the remaining share capital was equally held by Zimran Ihsan and Adnan Ihsan. Muhammad…
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