Legal Principle & Question Decided

Ruling Summary: This decision was rendered by the Lahore High Court (Honorable Mr. Justice Malik Javid Iqbal Wains), officially reported as 2026 LHC 2412. 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.

Full Judgment Text & Judicial Ruling

COURT: Lahore High Court (Honorable Mr. Justice Malik Javid Iqbal Wains) DECISION DATE: 16-02-2026 TAGLINE: The decision of the Federal Cabinet Committee on Energy (CCoE), culminating into the impugned notification regarding monetization of free electricity units for officers in BPS-17 and above, constitutes a considered policy determination in the context of financial restructuring of the power sector. The monetization was undertaken, with the aim of streamlining administrative processes, reducing operational inefficiencies, and ensuring uniformity of benefits across public sector entities. Such executive decisions, being policy in nature, are entitled to judicial deference. Unless patent illegality, arbitrariness, or constitutional infirmity is demonstrated, this Court cannot interfere in matters concerning financial and administrative policy. CASE DETAILS: Utility Services 171/24 ============================================================ Stereo.HCJDA 38. JUDGMENT SHEET. LAHORE HIGH COURT, LAHORE JUDICIAL DEPARTMENT Writ Petition No.171 of 2024

(GEPCO Engineers & Officers Association (Regd.) through its Chairman, etc.) versus (Federation of Pakistan through Ministry of Energy (Power Division), etc.)

JUDGMENT

Date of hearing: 16.02.2026

Petitioners by: M/s Muhammad Ramzan Chaudhary, Barrister Abdul Qudoos Sohal and Ch. Ghulam Rasool, Advocates. Respondent No.1/Federation of Pakistan by: Malik Tanveer Ahm ad Awan, Assistant Attorney General for Pakistan. Respondents No.5 & 6 by: M/s Aurangzeb Mirza and Mr. Muhammad Irfan Hanjra, Advocates.

Respondent No.7 by: M/s Syed Ghazanfar Ali and Syed Salman Ali, Advocates. MALIK JAVID IQBAL WAINS, J .:- By way of this Constitutional Petition, filed under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973, the petitioners have assailed the vires of notification dated 05.12.2023 (“impugned notification”), issued by the Deputy Secretary (DISC Os), Ministry of Energy (Power Division), Islamabad, following a decision by the Federal Cabinet Committee on Energy (CCoE), whereby the Committee while taking into consideration the summary dated 20 th September, 2023 acquiesced by the Power Division regarding “Monetization of Free Electricity Units admissible to Employees of WAPDA and XWAPDA Companies (DISCOs), GENCOs, NTDC, PITC)” approved the proposal in the following terms:- i. In the first phase, the electricity facility to in-service Officers (BS -17 and above) of WAPDA, DISCOs, W.P.No.171 of 2024 2

GENCOs, NTDC and PITC may be monetized as detailed below which has been calculated according to supply tariff notified vide S.R.O. No.938 -947(1)/2023 dated 26.07.2023 excluding taxes and duties and the same shall be frozen: - BPS Free Units for Non - Generation Electricity Monetization for Non - Generation (Rs.) Free Units for Generation Electricity Monetization for Generation Free Units for WAPDA Electricity Monetization for WAPDA (Rs.) 17 450 15,858 650 24,570 450 15,858 18 600 21,996 700 26,460 600 21,996 19 880 37,594 1000 42,720 880 37,594 20 1100 46,992 1100 46,992 1100 46,992 22 1300 55,536 1300 55,536 - - ii. Henceforth, all the in -service employees in grade 17 and above of the above -mentioned entities shall pay the electricity bills issued by the respective DISCOs against the reference numbers already available with the DISCOs. iii. In the earlier circulated version WAPDA employees were not included, which have been added in the light of discussions held in a meeting at Prime Minist er’s office dated 27 th August 2023 duly attended by Chairman WAPDA; iv. For future, these rates stand frozen. 2. The grievance of the petitioners, as articulated in the pleadings of this writ petition , is that respondents No.4 to 6 inducted the members of the petitioners-association into service through a competitive recruitment process at various intervals. It is contended that upon their appointment s to diverse posts, both within the engineering and officer cadres, the terms of their engagement and provision of a designated quantum of free electricity units were mentioned in their appointment orders. 3. It is maintained that since the ir induction into the department , the members of the Association have consistently and uninterruptedly availed this facility of free electricity units. The petitioners emphasize d that this utility benefit has remained an intrinsic part of their remuneration, as per the settled terms and conditions of their employment. W.P.No.171 of 2024 3

4. Further asserted that respondent No.2 vide impugned notifica tion on the basis of decision of Federal Cabinet Committee on Energy (CCoE), has withdrawn free electricity units from officers BPS -17 and above by way of monetization as detailed mentioned hereinabove , which act is illegal, unlawful and unconstitutional. 5. Learned counsel for the petitioners contends that the impugned notification has been issued without lawful au thority and is liable to be set-aside, being violative of the principles of financial and administrative autonomy. It is contended that the el ectricity units in question are generated and managed by WAPDA through its own generation s, transmission and distribution margins, and do not constitute any financial burden upon the Government of Pakistan or the national exchequer. Learned counsel further argues that the provision of electricity to employees of the power sector is on the analogy of the facilities extended by other departments and corporations, such as education, freight and telephone to their employees. 6. It is further contended that the facility of electricity is being extended to employees in BPS -1 to BPS -16 within the power sector, therefore, withdrawal of the same exclusively from officers in BPS -17 and above amounts to discrimination inter se amongst similarly placed employees, partic ularly the members of the petitioners’ Association. Learned counsel adds that the withdrawal of free electricity units, without any corresponding increase in salary or alternative compensatory mechanism, effectively reduces the overall remuneration package of the officers. It is also argued that the Cabinet lacks the requisite jurisdiction to frame or alter policy decisions concerning service benefits, including the withdrawal or modification of free electricity units. 7. Learned counsel further maintains that the principle of locus poenitentiae is fully applicable in the present matter, as it recognizes the authority of a decision -maker to reconsider, modify, or withdraw a decision prior to its final implementation, wherever, in the instant case, the facil ity in question has been abruptly withdrawn without affording W.P.No.171 of 2024 4

due opportunity for reconsideration, thereby offending the settled contours of the above said principle. Lastly, it is contended that the impugned notification is contrary to the spirit and mand ate of Articles 4, 9 and 25 of the Constitution of the Islamic Republic of Pakistan, 1973. 8. Learned counsel appearing on behalf of respondents No.1 and 2 contends that the petition is not maintainable under constitutional jurisdiction, as the petitione rs are employees of corporate entities incorporated under law and are governed by a master and servant relationship. Further submits that since n o statutory rule has been violated and the impugned notification constitutes a policy decis ion within the execu tive domain, therefore, the impugned notification was issued to rationalize and streamline the finances of State -Owned Enterprises in view of severe financial constraints in the power sector, including mounting circular debt and projected losses. Adds that the facility of free electricity units has not been withdrawn but monetized, as the admissible amount is now included in the officers’ pay, and payment is made by them at the prescribed rate. This change in modus operandi was necessitated by administrativ e complications, risk of duplication, delays in recoveries, and liquidity concerns of loss-making entities. 9. Learned counsel for respondents further argue s that no discrimination or infringement of constitutional rights has been violated as the petitione rs cannot compare themselves with employees of other entities governed by distinct service frameworks. The policy was adopted uniformly and upon recommendations of the Ministry of Finance the decision of discontinuation of such facility was made. Further m aintains that t he plea of locus poenitentiae is misconceived, as no vested right accrued, and merely the benefit has been monetized. 10. Learned counsel for respondents No.5 and 6 submits that Gujranwala Electric Power Company (GEPCO) is a company incorporated under the Companies Act and wholly owned by the Government of Pakistan. Its policy decisions are taken by the Board of Directors in accordance with the guidelines issued by the Federal W.P.No.171 of 2024 5

Government, which retains authority to issue directions in respec t of operational and service matters. Although the facility of free electricity units forms part of the service conditions of employees, yet the relationship between GEPCO and its employees is governed by the master and servant principle, therefore, such benefits, being non-statutory in nature, may be modified or withdrawn by the competent authority as a matter of policy. The continuation or discontinuation of the facility lies within the discretion of the employer and cannot be challenged merely because similar benefits have been extended by other entities. 11. It is further contended that the impugned decision was taken after due consideration by the Cabinet Committee on Energy (CCoE), on the basis of a summary submitted by the Power Division, Ministry of Energy, concerning the monetization of free electricity units admissible to employees of WAPDA and ex -WAPDA companies, including DISCOs, GENCOs, NTDC, and PITC. The decision was made in the best interest of the organization and in view of the prevailing an d changed circumstances. No issue of discrimination arises, as extension of benefits to one category of employees does not create a legal obligation to extend the same to another. It is asserted that s ince the service conditions are contractual and non -statutory, they are not amenable to constitutional jurisdiction, the matter pertains purely to internal organizational policy of a government -owned company and, as such, the writ petition is incompetent and not maintainable , hence liable to be dismissed. 12. Arguments heard. Record perused. 13. In the present constitutional petition, the question of maintainability has been raised on the ground that the petitioner s’ association itself is not an aggrieved entity in respect of the impugned notification issued by the respondents. Learned counsel for the petitioners, however, submits that the members of the petitioner s’ association are directly aggrieved from the said notification. It is also an admitted position that the instant petition has been filed by the petitioners’ association through its office bearers, who are employees of W.P.No.171 of 2024 6

the respondents and are themselves affected from the impugned notification. Therefore, this Court deems it appropriate to decide the matter on merits rather than on mere technicalities. 14. GEPCO is a public sector entity wholly owned by the Government of Pakistan and operates under the policies framed by the Federal Government. Being a public utility responsible for the provision of electricity to the general public, the company function s within the administrative and financial framework prescribed by the Federal Government and is required to manage its resources in accordance with broader policy objectives. In performing these functions, the organization must balance its obligation of se rvice delivery with financial sustainability, particularly in light of the prevailing fiscal constraints within the power sector, including the issue of mounting circular debt and anticipated operational losses. 15. In this backdrop, the controversy requir ing determination is whether the facility of free electricity units constituted a vested or statutory right capable of enforcement through constitutional jurisdiction, and whether its monetization through the impugned notification suffers from illegality, arbitrariness, discrimination, or any constitutional infirmity. The scope of examination by this Court, therefore, remains confined to assess the legality and propriety of the decision making process leading to the issuance of the impugned notification. 16. The decision of the Federal Cabinet Committee on Energy (CCoE), culminating into the impugned notification regarding monetization of free electricity units for officers in BPS -17 and above, constitutes a considered policy determination in the context of financial restructuring of the power sector. The monetization was undertaken, with the aim of streamlining administrative processes, reducing operational inefficiencies, and ensuring uniformity of benefits across public sector entities. Such executive deci sions, being policy in nature, are entitled to judicial deference. Unless patent illegality, arbitrariness, or constitutional W.P.No.171 of 2024 7

infirmity is demonstrated, this Court cannot interfere in matters concerning financial and administrative policy. 17. Insofar as the facility of free electricity units is concerned, the same was in the nature of a service -linked perk and privilege extended to employees with a view to facilitat e the discharge of their duties and providing an incentive in service. Such benefits, by th eir very character, do not constitute core service rights, statutory entitlements, or pensionable benefits. While employees are entitled to remuneration in accordance with the terms and conditions of their appointment, non - statutory allowances and privileg es remain within the administrative discretion of the competent authority and may be altered, monetized, or withdrawn having regard to operational requirements and financial considerations. 18. The decision to reconfigure the facility of free electricity u nits by substituting it with a monetized component cannot, therefore, be said to be arbitrary or prejudicial, particularly when the overall remuneration of the employees remains unaffected. Such a measure merely reflects a policy decision aimed at rational izing the benefit in accordance with the organizational framework and administrative exigencies. 19. In order to demonstrate that the facility of free electricity units had acquired a binding character, learned counsel for the petitioners placed reliance u pon certain appointment letters issued to members of the Association and invited the Court’s attention to Clause 20 thereof, wherein it is mentioned that the employee “will be entitled to the concession of free electricity supply as admissible under the Ru les.” However, when specifically asked by the Court to identify these statutory rules, regulations, under which such entitlement had been conferred, learned counsel was unable to point out any such provision. No statutory rules or regulatory instruments su bstantiating the alleged entitlement were appended with the petition. 20. Conversely, the learned Law Officer appearing for the respondents categorically refuted the existence of any formally framed rules granting W.P.No.171 of 2024 8

such right and submitted that the facilit y had merely been extended as an administrative concession, not emanating from any statutory mandate. This aspect considerably undermines the petitioners’ assertion that the benefit constituted an enforceable legal right. 21. Even otherwise, it is a settle d principle of law that where service conditions are not governed by the statutory rules , but arise purely from administrative instructions or contractual arrangements, such terms are ordinarily not enforceable through constitutional jurisdiction. Although GEPCO, being a public utility company wholly owned by the Government, may fall within the ambit of constitutional jurisdiction on the basis of the functional test, the enforcement of purely non -statutory service benefits is governed by a distinct legal fo oting. In absence of a statutory foundation, the alleged entitlement remains contractual in nature and cannot be elevated to the status of a fundamental or vested right capable of enforcement through constitutional proceedings. 22. The objections raised by the petitioners on the grounds of discrimination, diminution of remuneration, and the applicability of the doctrine of locus poenitentiae are equally without substance. The impugned policy of monetization has been applied uniformly to all officers in BPS -17 and above, thereby maintaining parity within the relevant cadre. The facility in question was neither statutory nor vested in character but was extended merely as a discretionary service concession; consequently, its reconfiguration does not infringe an y accrued legal right. The doctrine of locus poenitentiae , which contemplates reconsideration before a right becomes final, is inapplicable in circumstances where no n-statutory entitlement had crystallized. Likewise, the doctrine of legitimate expectation cannot be invoked to restrain a lawful policy adjustment undertaken in public interest, particularly where the benefit was inherently subject to modification and did not confer an indefeasible right merely by virtue of its continued enjoyment. W.P.No.171 of 2024 9

23. The petitioners contention that the facility has not been withdrawn for employees in BPS -1 to BPS -16 and the impugned action is discriminatory, is misconceived. The law does not mandate identical treatment in all circumstances; different categories of employees ma y legitimately be treated differently where the distinction is founded upon an intelligible differentia having a rational nexus with the object sought to be achieved. A classification is constitutionally valid where it is based on a clear and reasonable di stinction logically connected with the purpose of the policy. In the present case, officers in BPS -17 and above constitute a distinct cadre within the service hierarchy, and the policy of monetization has been introduced as part of fiscal rationalization a t higher grades. The differential treatment is therefore based upon a reasonable classification and does not amount to unlawful discrimination. The Hon’ble Supreme Court of Pakistan while upholding the RULES/ POLICY FOR MONETIZATION OF TRANSPORT FACILITY F OR CIVIL SERVANTS (BS -20 TO BS -22) in case reported as Syed Azam Shah v. Federation of Pakistan through Secretary Cabinet Division, Cabinet Secretariat, Islamabad and another (2022 SCMR 201) has held as under:- “12. The decision of Steering Committee was not particularized or person specific to the appellant but it was made applicable across the board for all Principals, Professors and Teachers in BS-20 and above which does not seem to be discriminatory or arbitrary but on account of reasonable classificati on with rational nexus. The compass and magnitude of judicial review of governmental policy is now well settled and defined in which neither the court can act or represent as appellate authority with the aim of scrutinizing the rightness, fittingness and a ptness of a policy nor may act as advisor to the executives on matters of policy which they are entitled to formulate. The extensiveness of judicial review of a policy is to test out whether it violates the fundamental rights of the citizens or is at varia nce to the provisions of the Constitution, or opposed to any statutory provision or demonstrably arbitrary or discriminately. The court may invalidate laws, acts and governmental actions that are incompatible with a higher authority more so, an executive d ecision may be invalidated for being unlawful and also maintains check and balance. This can be sought on the grounds that a decision arises when a decision - maker misdirects itself in law, exercises a power wrongly, or improperly purports to exercise a po wer that it does not have, W.P.No.171 of 2024 10

which is known as acting ultra vires; a decision may be challenged as unreasonable if it is so unreasonable that no reasonable authority could ever have come to it or a failure to observe statutory procedures. The dominance of ju dicial review of the executive and legislative action must be kept within the precincts of constitutional structure. In the case of Abdul Hameed and others. v. Water and Power Development Authority through Chairman, Lahore and others (2021 SCMR 1230), this Court held that the roles of each organ of the State are defined within the Constitution of the Islamic Republic of Pakistan, so also in different laws. It is not the role of the Courts to interfere in policy decisions, unless it is manifest that such a p olicy decisions are the outcome of arbitrary exercise of power, mala fides, patently illegal or manifestly unreasonable. The court placed reliance on the case of Asaf Fasihuddin Khan v. Government of Pakistan (2014 SCMR 676), in which it was held that the duty of the Court is to confine itself to the question of legality, whether a decision making authority exceeded its powers; committed an error of law; committed a breach of the rules of natural justice; reached a decision which no reasonable tribunal woul d have reached or abused its powers.“ 24. Further, t he Hon’ble Supreme Court while deciding the case of “Special WAPDA Allowances” of WAPDA employees in case reported as Abdul Hameed and others v. Water and Power Development Authority through Chairman, La hore and others (2021 SCMR 1230) has enunciated as under:- “11. The roles of each organ of the State are defined within the Constitution of the Islamic Republic of Pakistan, so also in different laws. The learned Tribunal has elaborately dealt with this issue, and, has relied on a judgment of this Court reported as Muhammad Shabbir Ahmad Nasir v. Secretary Finance Division Islamabad (1997 SCMR 1026) and Muhammad Farid Khattak v. Chief Secretary Government of N.W.F.P. (2009 SCMR 980). A transgression of thos e roles by one organ would amount to the usurpation of the power of another, which would be against the spirit of Article 7 of the Constitution of the Islamic Republic of Pakistan. It is not the role of the Courts to interfere in policy decisions, unless it is manifest that, such a policy decisions are the outcome of arbitrary exercise of power, mala fides, patently illegal or manifestly unreasonable. Reliance in this regard is placed on the case of Asaf Fasih Uddin Khan v. Government of Pakistan (2014 SCMR 676) of which, the relevant part is reproduced as: - “It is to be noted that the duty of the Court is to confine itself to the question of legality. Its content should be whether a decision -making authority exceeded its powers; committed an error of law; W.P.No.171 of 2024 11

committed a breach of the rules of natural justice; reached a decision which no reasonable tribunal would have reached; or abused its powers.” 12. The Respondent-Authority has to evaluate its fiscal capacity and cannot simply dole out allowances at any d ate and time and, at the whims of anyone who may feel aggrieved of an order which is otherwise properly passed by an. authority competent to do so. It is the prerogative of the authority to ascertain which class of employees should receive additional allow ances and from which date. Such decision would obviously depend on various factors including available financial resources, nature of job of the employees and reasons to allow additional incentives to a certain class of employees. The argument of the learn ed ASC for the Appellants and the Petitioners that others were granted the Allowance from an earlier date with arrears, whereas, they were left, out, is untenable. Each case must be examined in the light of its peculiar facts and circumstances and not on t he basis of a generalized allegation of discrimination. Nothing has been placed on record that may constitute convincing evidence of discrimination. Further, there is a clear and understandable differentia between different classes of employees who have be en given the allowance from different date for valid reasons. We are therefore not convinced that a case for discrimination is made out. The learned Counsel for the Appellants/Petitioners has repeatedly been asked to point out any illegality in the order o f the - Respondent-Authority so also the F.S.T. He has been unable to do so”. 25. The scope of judicial review in such matters is limited to examin e the legality of the decisions making process. It is well settled that economic and fiscal policy decisions fa ll within the domain of the executive and are not open to judicial substitution unless shown to be manifestly arbitrary or violative of constitutional provisions. Courts do not sit in appeal over policy…

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