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Official Citation: 2026 LHC 3148
Court / Jurisdiction: Lahore High Court (Honorable Mr. Justice Shahid Karim)
Ruling Summary: This decision was rendered by the Lahore High Court (Honorable Mr. Justice Shahid Karim), officially reported as 2026 LHC 3148. In this matter between the Petitioner and the Respondent, 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.
COURT: Lahore High Court (Honorable Mr. Justice Shahid Karim) DECISION DATE: 30-04-2026 CASE DETAILS: Service 29159/25 ============================================================ JUDGMENT SHEET IN THE LAHORE HIGH COURT, LAHORE JUDICIAL DEPARTMENT
W.P No.29159 of 2025 Shahid Haider Versus Federation of Pakistan & others J U D G M E N T
Date of Hearing. 30-04-2026 PETITIONERS BY: M/s Shezada Mazhar, Ch. Imran Raza Chadhar, Syed Samir Sohail, Irfan Dawood and Iftikhar Ahmad Almas, Advocates. RESPONDENTS BY: M/s Muhammad Shoaib Rasid, Hassan Pervez and Daniyal Mirza, Advocates. Mr. Asad Ali Bajwa, D.A.G with Muhammad Yasin Badar, Director Legal, LESCO.
Shahid Karim, J :-. This j udgment will decide two constitutional petitions . The instant petition challenges the letter of explanation (“the Letter ”) issued to the petitioner by the Chief Executive Officer, LESCO dated 07.05.2025. This has been issued under Rule 5(iv) of the Pakist an WAPDA Employees (E&D) Rules, 1978 ( “the 1978 Rules”). The challenge primarily is on the ground that the letter has been actuated by malice and is the outcome of dictation from the Federal Government. In this regard, reference has been made to the notification dated 02.01.2025 issued by the Ministry of Energy (Power Division), Government of Pakistan by which the Prime Minister constituted a Committee to investigate issues relating to LESCO and the terms of reference of the Committee are also mentioned i n that notification. The petitioner alleges W.P No.29159 of 2025
2 that LESCO was prompted by the Federal Government to initiate inquiry against him and constitution of the Committee by the Prime Minister is also ultra vires and unlawful. Reliance has been placed on the provi sions of State-Owned Enterprises (Governance and Operations) Act, 2023 (“the 2023 Act” ) to assert that the 2023 Act governs the administrative oversight and corporate affairs of public sector companies such as LESCO which must be undertaken through its Board of Directors and none else. In a nub, it is submitted that no act can be done by the Board of Directors or by CEO LESCO under dictated exercise of jurisdiction or under influence of the Prime Minister or the Federal Government. 2. W.P No.16784 of 2026 is a challenge to the culmination of letter of explanation into an office order dated 04.07.20 25 (the Office Order ) by the CEO LESCO by which the following decision was made: “Consequent upon consideration of the above mentioned facts read with the provisi ons of Rule 7 of Chapter 1 of WAPDA Pension Rules 1977, it is found that Mr. Shahid Haider, Ex -Operation Director/ Chief Executive Officer LESCO is guilty of charges in this case. Therefore, I being authorized officer by the competent authority hereby impose the penalty of ‘Removal from service’ upon him.” 3. It may be stated that the petitioner had, during this period, retired from service yet disciplinary proceedings were initiated against him under the 1978 Rules read with Pension Rules, 1977 which are also engaged in this matter. This Court is not concerned with the merits of the allegations in the letter of explanation but is only concerned W.P No.29159 of 2025
3 with the legality of the procedure adopted by LESCO in passing the impugned Letter and Office Order. 4. In the b eginning, a threshold objection has been taken by learned counsel for LESCO as to the competen ce of these petitions. It is contended that jurisdiction of this Court is constricted as the matter relates to non -statutory rules which cannot be enforced in th e constitutional jurisdiction of this Court. This has been stated on the basis of a rule settled over the years by superior courts by which this Court’s jurisdiction is barred in matters where statutory rules have not been enacted and therefore the enforc ement of rules which are non -statutory cannot be claimed by invoking the constitutional jurisdiction of this Court. A plethora of judgments support this proposition. 5. In order to rebut this objection the learned counsel for the petitioner has relied u pon the offer of employment dated 24.02.2003 in respect of the petitioner. The recital of this offer provides that: “You are aware that this Company was formed with a view to taking over part of the work of the Power Wing of WAPDA. We are pleased to infor m you that the Company has decided to make an offer of regular employment to those regular employees of WAPDA who are already serving in the Company. This offer is subject to the terms and conditions appearing below. To the extent that the said terms and c onditions purport to apply to WAPDA and the Officers and employees of WAPDA, and purport to indicate the policies intended to be followed by WAPDA in this behalf, the general approval of the Authority (as defined in the Pakistan Water and Power Development Authority Act 1958, XXXI of 1958, as amended from time to time) to the said terms and conditions has been duly conveyed by WAPDA to the Company.
W.P No.29159 of 2025
4 6. What follows are the general terms and conditions on which the petitioner was employed. Clause 4 alludes to the applicability of rules relating to service, discipline and other matters and provided that: 4. Rules relating to Service, Discipline and other matters 4.1. You will be governed by the Company's rules and regulations relating to service, discipline and other matters, after such rules and regulations are notified by the Company . For your information, these rules and regulations will be based on the corresponding rules in force in WAPDA, and the Company will adopt the same to the maximum extent possibl e after approval of the board of directors of the Company. 4.2. Until such time that the Company notifies its own rules and regulations, you will continue to be governed for all intents and purposes by the rules and orders in force in WAPDA at this time. 7. There is no contention that the petitioner was a regular employee of WAPDA and was serving in LESCO at the time of offer letter. The offer letter was executed pursuant to an offer made to the petitioner for regular employment in LESCO and which was generally made to regular employees of WAPDA who were already serving in the company. Clause 4 above clearly provides that the petitioner after joining LESCO would be governed by company’s rules and regulations relating to service, discipline and other matter s after such rules and regulations are notified by the company. Until the time that the company notified its own rules and regulations it was provided that the petitioner’s services will continue to be governed for all intents and purposes by the rules an d orders in force in WAPDA at that time. It is undisputed that on January 1, 2005 a meeting of the Board W.P No.29159 of 2025
5 of Directors of LESCO was held and inter alia resolved as follows: “Resolved that the WAPDA service Rules and Regulations will be applicable to LESCO till such time the same are developed by LESCO and approved by Board of Directors.” 8. Thus, LESCO by a decision of the Board of Directors resolved that WAPDA service rules and regulations will be applicable to LESCO till the time new rules are developed by LESCO and approved by Board of Directors. This was tantamount to adoption of WAPDA rules previously in place and by this act it will be deemed that th ose rules were notified by the company as its own rules. This begs the question whether the petitioner would still be governed by WAPDA rules as previously enacted and which were statutory in nature or post-adoption would be governed by new rules adopted by LESCO which, at best, are internal rules relating to service, discipline and other matters and upon such adoption are to be treated as non-statutory rules. 9. The word adoption, inter alia , means ‘the act of beginning to practice’ or use something’. (Merriam - Webster dictionary). This device is often referred to as incorporation by reference as it is fa irly common to apply earlier legislation to a new context. It has the benefit of brevity and can help to promote consistency across similar entities. LESCO was making clear that it was applying an existing and well understood regime to the new case. Incorporation by reference does not make it statutory by the mere fact. The statutory aspect is quite distinct and flows W.P No.29159 of 2025
6 from different considerations altogether. The process of being statutory is embedded in law and is a well -worn concept by which the legislature through its delegates retains an overarching power over rule -making and hence retains supervisory role in matters regarding which rules are enacted. As a necessary corollary, this Court’s jurisdiction can be involved to enforce such rules in case of violation. This is the significance of statutory rules in contradistinction to non-statutory ones. 10. If LESCO is a company incorporated under the Companies Act, 2017 it follows indubitably that its decisions are made independently by its Board of Dir ectors. Those decisions are subject to Federal Government’s scrutiny only to the extent delineated in the 2023 Act and not beyond that. None of the provisions in that statute oblige LESCO to make service Rules and Regulations with parliamentary approval. The act of Board of Directors to adopt certain rules merely means it has power either to make new rules or to adopt any existing ones. In essence, in both cases the power lies in the Board of Directors and none else. The question is: would the petitioner have raised this issue if the Board of Directors had framed entirely new rules instead of adoption? The answer to this query is in the negative. Thus if the Board of Directors does not exercise statutory powers, by implication, all its decisions are n on-statutory and are merely decisions of a company made under its Articles. At the heart of the controversy is the locus of W.P No.29159 of 2025
7 decision-making powers. Doubtless, it is the Board of Directors of LESCO. 11. This question has often come up before the superior courts. Suffice to refer to two judgments, one by the Supreme Court of Pakistan “Pakistan Electric Power Company v. Syed Salahuddin and others ” (2022 SCMR 991 in which the question before the Supreme Court was formulated as follows: “5. The learned counse l for Respondents Nos. 1 and 2 has however defended the impugned judgment. He maintains that the employees of QESCO and Pakistan Electric Power Company ("PEPCO") are governed by the statutory rules in view of the fact that Pakistan WAPDA Employees (Efficie ncy and Discipline) Rules, 1978 have been adopted by the Board of Directors of QESCO in its meeting dated 28.06.2005. Therefore, by reason of such adoption, the employees of QESCO and PEPCO are governed by the statutory rules.” The above question was a nswered in the following terms: “We find that in the first place, there was no ground to hold that the Respondents were governed by the statutory rules. Admittedly, the Respondents by their own choice had joined QESCO which is a distinct and separate legal entity having been incorporated in the erstwhile Companies Ordinance, 1984 and has its own Board of Directors. Just by reason of the fact that QESCO had adopted existing rules of WAPDA for its internal use does not make such rules statutory in the context of QESCO. It was clearly and categorically held by this Court in Pakistan Defence Officers Housing Authority (ibid), Pakistan Telecommunication Company Ltd. through its Chairman v. Iqbal Nasir and others (PLD 2011 SC 132) as well as Pakistan International Airlines Corporation and others v. Tanveer ur Rehman and others (PLD 2010 SC 676) that where conditions of service of employees of a statutory body are not regulated by rules/regulations framed under the Statute but only by rules or instructions issued fo r its internal use, any violation thereof could not normally be enforced through constitutional jurisdiction and they would be governed by the principle of "master and servant". The learned High Court appears to have not been assisted properly in the matte r and therefore omitted to notice the said principle of law laid down in the aforenoted case and W.P No.29159 of 2025
8 reiterated repeatedly in a number of subsequent judgments of this Court. 11. Further, while assuming jurisdiction in the matter, the learned High Court omitted to appreciate that in case of an employee of a Corporation where protection cannot be sought under any statutory instrument or enactment, the relationship between the employer and the C employee is governed by the principle of "master and servant" and in such case the constitutional, jurisdiction of the High Court under Article 199 of the Constitution cannot be invoked….” “…We are therefore in no manner of doubt that in view of the fact that QESCO does not have statutory rules governing the terms and condi tions of service of its employees, the relationship between the Appellant -PEPCO and Respondents Nos. 1 and 2 was governed by the principle of "master and servant" and the Respondents could not have invoked the constitutional jurisdictional of the High Court for redress of their grievances.” 12. It can be seen from a reading of the portions of the judgment that the question answered by the Supreme Court is squarely the question engaged in the instant petitions. It was unequivocally held in Syed Salahuddin that adoption of rules of WAPDA for internal use does not make those rules statutory by that mere fact. They would still remain rules for the internal use of LESCO (QESCO in that case) and any violation thereof could not be enforced through constitutional jurisdiction. The principle of master and servant was invoked by the Supreme Court while so holding. 13. This question also arose before this Court and a distinguished learned Single Judge of this Court while relying upon the judgments across the spectr um including “Sui Southern Gas Company Limited and others v. Saeed Ahmed Khoso and another ” ( 2022 SCMR 1256 ) and a number of other judgments concluded that constitutional petition was not maintainable in respect of LESCO which does not have statutory rules . The learned counsel for the W.P No.29159 of 2025
9 petitioner has cited contrary judgments which cannot be relied upon as the question has already been decided conclusively by precedents of the superior courts to which a reference has been made and which binds this Court on t he issue. 14. The learned counsel for the petitioner raised the issue of dictation by the Federal Government pursuant to which , it is alleged, proceedings against the petitioner were triggered under the 1978 Rules. Firstly, the Letter does not allude to any such dictation by the Federal Government nor does it refer to the notification dated 02.01.2025 by which the Prime Minster had constituted a Committee to investigate certain issues related to LESCO. It merely refers to an inquiry report but does not ma ke a reference to the specific inquiry report from which it could be inferred that the letter of explanation was actuated by an inquiry report compiled by the Committee constituted by the Prime Minister or that the officers of LESCO were acting under compu lsion of such report. Secondly, this argument of the learned counsel runs counter to the earlier argument regarding statutory rules to govern all matters of service of the petitioner. To reiterate the learned counsel in the first instance submits that the service rules of the petitioner were statutory and therefore the instant petition was competent. This has already been rebutted in the earlier part of this judgment. Yet the counsel, leaning on this argument, submits that since LESCO is a public sector company incorporated under the W.P No.29159 of 2025
10 Companies Act, 2017 all its decisions are made by the Board of Directors which is an independent entity from the Federal Government and cannot take dictation as such. Therefore, by the petitioner’s own showing if the Board of Directors is an independent decision -making body then this argument leads to the inference that no statutory rules govern the service of its employees and all decisions including decisions regarding employment of its employees are taken by the Board of Directors independently. 15. Be that as it may, the provisions of the 2023 Act on which the petitioner has relied make it clear upon a holistic reading that the Federal Government exercises wide ranging powers to oversee the functions of LESCO as a state -owned enterprise and has power to issue a management policy by virtue of section 4 for giving effect to the objectives of the Act. The policy would include inter alia the objective that fiscal risks associated with state -owned enterprises are effectively managed and the role of Federal Government is also provided in the governance of the state -owned enterprises. The petitioner does not dispute the fact that LESCO is a public sector company and a state -owned enterprise within the meaning of the 2023 Act. S ection 5 of the 2023 Act refers to general principles which includes the principle that a state -owned enterprise must operate efficiently and effectively as also the principle of responsible management according to which the management must be competent, h onest and accountable. W.P No.29159 of 2025
11 Moreover, by section 10 a Board Nominations Committee shall be constituted comprising of nominees of the Federal Government and it shall be responsible for identifying and recommending the candidates to the Federal Government for appointment as independent directors. 16. The learned counsel for the petitioner relied upon section 17 to emphasize the independent nature of the Board of Directors of LESCO. Section 17 provides that: 17. Independence of the Board.⸻(1) The Board shall be given autonomy and independence in the discharge of its functions under this Act or any other applicable law in accordance with the adopted business plan and no administrative or standing instructions b y any Division of the Federal Government shall be applicable to any state - owned enterprises unless prior approval of the Federal Government has been obtained and any such instructions already in field at the time of coming into effect of this Act shall req uire Federal Government ratification within a period of six months, failing which they shall be deemed to be rescinded. (2) State -owned enterprises shall maintain independent procurement policies with the approval of the Federal Government, which comply wi th the Chartered Institute of Procurement and Supply's Global Standards of Procurement and Supply and shall only be responsible for compliance of the provisions of the Public Procurement Regulatory Authority Ordinance, 2002 (XXII of 2002) to such extent as may be directed by the Federal Government: Provided that until the procurement policy of state -owned enterprise is prepared and approved by the Federal Government, the Public Procurement Regulatory Authority Ordinance 2002, (XXII of 2002) apply mutatis mu tandis to it. 17. A reading of the above provision shows that no doubt the Board has autonomy and independence in the discharge of its functions under the Act but this autonomy and independence and discharge of functions is to be in accordance with adopted business plan. Moreover, although no administrative or standing instructions by any Division of W.P No.29159 of 2025
12 the Federal Government is applicable to a state -owned enterprise yet it would become applicable with prior approval of the Federal Government. Therefore, in such matters too the Federal Government has a dominant position and can sway the decisions of the Board of Directors while issuing administrative and standing instructions. More importantly by sub -section (2) of section 17, a state -owned enterprise is to maintain independent procurement policies with the approval of the Federal Government. It will be borne in mind that several allegations in the letter of explanation constitute allegations of corruption and illegal procurement processes and irregularities . Thus, the Federal Government could in such matters issue standing instructions for compliance by LESCO. Section 29 refers to role of the Federal Government and provides that: “29.Role of Federal Government. ––(1) Subject to this Act, the Federal Government shall exercise all the powers and rights that shareholders have in relation to the state - owned enterprise under the law or the constitution of the state-owned enterprise.
(2) The manner of exercise of shareholders rights with respect to the state -owned enterprise shall be prescribed in the state -owned enterprise ownership and management policy and shall include, without limitation⸻
(a) the designation of the officers authorized to act as shareholder on behalf of the Federal Govern ment at statutory meetings; and (b) any other matter necessary for the efficient exercise of shareholder rights by the Federal Government.
(3) The provisions of this section shall have overriding effect over any procedure to the contrary in any other applicable law”.
W.P No.29159 of 2025
13 18. By sub -section (2), set out above, the Federal Government may prescribe the ownership and management policy in state -owned enterprise regarding manner of exercise of shareholders right with respect to such enterprise. By section 31 the Federal Government shall establish a Central Monitory Unit in the Finance Division to maintain an electronic data base of the financial and operational performance of state -owned enterprise. Section 35 is an important power conferred upon the Federal Government by the 2023 Act and provides that: 35.Power to issue directives, circulars, guidelines, etc⸻ The Federal Government shall have the power to issue such directives, codes, guidelines, circulars or notifications as are necessary to carry out the purposes under this Act and the rules made hereunder.”
19. By the above provision the Federal Government has the power to issue directives, guidelines, circula rs or notifications as are necessary to carry out the purposes of the Act. There is no doubt that the notification issued by the Federal Government on 02.01.2025 is within the broad powers conferred by section 35 as the said notification aims to carry out the purposes of the 2023 Act. 20. From the above discussion, it is clear that the Federal Government is not powerless in matters relating to LESCO or any other state -owned enterprise and it would be fallacious to contend that any notification issued by the Federal Government would constitute dictation and LESCO in all such matters would be well within its powers to ignore such a notification. This i s notwithstanding the fact that W.P No.29159 of 2025
14 there is no evidence to compel this Court to hold that the letter of explanation and the Office Order were the outcome of dictation by the Federal Government. 21. In view of the above, these petitions are dismissed.
(SHAHID KARIM) JUDGE
Approved for reporting. JUDGE
* Rafaqat Ali