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Petitioner: SENATOR TAJ HAIDER and others VS Respondent: GOVERNMENT OF PAKISTAN, through JUDGMENT
Court Name: Islamabad High Court Judge(s): Miangul Hassan Aurangzeb Title:SENATOR TAJ HAIDER and others vs GOVERNMENT OF PAKISTAN, through
JUDGMENT
Reported As: 2019 [M] C.L.R. 69, PLJ 2019 Islamabad 55, 2018 CLC 1910 Result: Petition dismissed Judgment JUDGMENT MIANGUL HASSAN AURANGZEB, J.---The petitioners, who on the day of the filing of the instant petition were members of the Senate of Pakistan ("Senate"), impugn the appointment of Mr. Tariq Bajwa (respondent No,2) as Governor of the State Bank of Pakistan ("S.B.P."). 2. The record shows that vide notification dated 07.07.2017, the President of Pakistan ("the President") in exercise of his powers conferred by Section 10(3) of the State Bank of Pakistan Act, 1956 ("the S.B.P. Act"), appointed respondent No,2 as the Governor of the S.B.P. for a period of three years. 3. After the issuance of the said notification, 32 Senators signed a resolution recommending that respondent No,2 be immediately removed from his office on the ground that the letter and spirit of section 10 of the S.B.P. Act, had been violated in making the said appcintment. All the Senators who signed the said resolution were Members of the Opposition. The said resolution was received at the Senate Secretariat on 14.07.2017 and numbered as Resolution D.No,62-265/2017-Q. Apparently, the said resolution was forwarded to the Chairman, Senate of Pakistan. 4. Vide letter dated 16.08.2017, the Senate Secretariat informed the Senators who had signed the said resolution that the Chairman, Senate, had held the resolution to be infructuous. Furthermore, it was stated that the appointment of Governor, S.B.P. was the exclusive domain of the Executive and, therefore, such resolutions could be construed as impinging upon the authority of one organ of the State. 5. On 12.09.2017, some of the Senators who had signed the said resolution requested the Chairman, Senate to reconsider the stance taken in the Senate Secretariat's letter dated 16.08.2017 about the
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appointment of Governor, S.B.P. The position taken by the Senators in the said letter was that the resolution had been adopted to ensure transparency in the management of S.B.P.'s affairs and to ensure its independence from bureaucratic clutches and mismanagement. This is where the correspondence between the Senate Secretariat and the Senators who had signed the said resolution ended. 6. The instant petition was filed by 23 out of the 32 Senators who had signed the said resolution. The relief prayed for in the petition is reproduced herein below:- "i) Declare the impugned appointment of respondent No,2 dated July 7, 2017 as unlawful and void ab-initio. ii) Refrain the Respondent No,2 to perform duties and functions under the SBP Act with immediate effect. iii) Order the return ref emoluments/facilities/benefits enjoyed by Respondent No,2. iv) Direct the Government to appoint new Governor State Bank following the constitutional process laid down by the Honorable Supreme Court in PLD 2016 SC 808 and criterion laid down in PLD 2012 Supreme Court 132 and other cases. v) Any other relief, which this Court deems just and appropriate in the given circumstances along with costs to the petitioners." CONTENTIONS OF THE LEE ARNED COUNSEL FOR THE PETITIONERS: 7. Sardar Shahbaz Ali Khan Khosa, learned counsel for the petitioners, after narrating the facts leading to the filing of the instant petition, submitted that under section 10(3) of the S.B.P. Act, the President has been empowered to appoint the Governor, S.B.P. for a term of three years and to determine his salary and the terms and conditions of his service; that under Section 10(1) of the S.B.P. Act, the Governor, S.B.P. is the Chief Executive Officer of S.B.P. and directs and controls the whole affairs of the S.B.P., on behalf of its Board of Directors; that the definition of a "bank" in Section 3(i)(b) of the Banks (Nationalization) Act, 1974 ("B.N. Act") includes the S.B.P.; that section 11(1)(2)(a) of the B.N. Act provides that a bank shall have a Board consisting of a President, who shall be its Chief Executive; that section 11(3) of the B.N. Act provides inter-alia that the Chairman, President and other Members of the Board representing the Federal Government's direct and indirect shareholding shall be appointed by the Federal Government in consultation with the State Bank; that the Governor, S.B.P. who is to be Chief Executive of S.B.P. could only be appointed by the Federal Government in terms of section 11(3)(a) of the B.N. Act and not by the President; that in terms of the law laid down by the Hon'ble Supreme Court in the case of Mustafa Impox v. Government of Pakistan (PLD 2016 SC 808), respondent No,2's appointment as Governor, S.B.P. could only have been made by the Federal Government i,e,, the Federal Cabinet; that furthermore, section 11(3) of the B.N. Act provides inter-alia that the President shall be appointed from amongst professional bankers whose names are included in the panel of bankers qualified to be appointed as Chairman, or President which panel shall be maintained by the S.B.P.; that since respondent No,2 was not a professional banker whose name was included in the panel of bankers maintained by the S.B.P., the impugned notification dated 07.07.2017 was violative of section 11(3) of the B.N. Act; that since B.N. Act was enacted subsequent in time to the S.B.P. Act, in the event of a conflict in the provisions of the said two enactments, the provisions of the B.N. Act shall prevail and have overriding effect over provisions of the S.B.P. Act; and that Section 2 of the B.N. Act gives the said Act an overriding effect over the S.B.P. Act. 8. Furthermore, it was submitted that respondent No,2's appointment was in violation of Article 48 of the Constitution; that it is an admitted position that the President did not appoint respondent No,2 on the advice of the Cabinet, or the Prime Minister; that the President could not exercise his powers, or functions under the S.B.P. Act without the advice of the Cabinet, or the Prime Minister in terms of Article 48 of the Constitution; that the matter regarding respondent No,2's appointment as
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Governor, S.B.P. should have been brought before the Cabinet in accordance with Rule 16(j) of the Rules of Business, 1973; that Rule 15-A of the Rules of Business, 1973, contains a non-obstante clause and requires a summary to be placed before the Prime Minister for rendering advice on any function to be performed, or any orders to be issued by the President; that at no material stage was any summary moved by the Cabinet Division, or the Finance Division for respondent No,2's appointment as Governor, S.B.P.; that the President is a creature of the Constitution and does not have any discretionary power under the Constitution, or any statute; that the only orders that the President can pass in his discretion are listed in Schedule-VI to the Rules of Business, 1973; and that these orders are confined to the orders for the appointment of the caretaker Prime Minister and the order for the dissolution of the National Assembly. 9. Learned counsel for the petitioners further submitted that the S.B.P. Act does not contain any eligibility criteria for the appointment of Governor, S.B.P.; that a person cannot be appointed as the Governor, S.B.P. unless he fulfills the criteria for the appointment of the President, or the Chief Executive of a bank prescribed in the B.N. Act; that even though the National Bank of Pakistan has its own Statute, its President is appointed under the provisions of the B.N. Act; that the post of the Governor, S.B.P should have been advertised and only the person who emerged as the best of the best in a competitive process should have been appointed against the said post; that it is ironic that the lower positions in the S.B.P. are required to be advertised but the Governor, S.B.P. is appointed on the whims and sweet will of the President; that the past practice of not advertising the post of Governor, S.B.P. ought to be done away with; and that the heads of state-owned banks in developed countries are appointed through a competitive process. Learned counsel for the petitioners prayed for the writ petition to be allowed in terms of the relief sought therein. In making his submissions, learned counsel for the petitioners relied on the cases of Syed Mushahid Shah v. Federal Investment Agency (2017 SCMR 1218), Zarka Muzammal v. Provincial Ombudsman (2016 YLR 1739), Habibullah Energy Limited v. WAPDA through Chairman (PLD 2014 SC 47), Muhammad Ashraf Tiwana v. Pakistan and others (2013 SCMR 1159), Ch. Nisar Ali Khan v. Federation of Pakistan (PLD 2013 S.C. 568), Sardar Muhammad v. Federation of Pakistan (PLD 2013 Lahore 343), M. Ashraf Azeem v. Federal Government of Pakistan (2013 PLC (C.S.) 1147), Dr. Altaf Hussain v. Federation of Pakistan (2013 PLC (C. S.) 1178), Muhammad lqbal Khattak v. Federation of Pakistan (2011 PLC (C. S.) 65), Tariq Aziz-ud-Din's case (2010 SCMR 1301), Chief Secretary Punjab v. Abdul Raoof Dasti (2006 SCMR 1876) and Mushtaq Ahmed Mahal v. The Hon'ble Lahore High Court (1997 SCMR 1043). CONTENTIONS OF THE LEARNED COUNSEL FOR RESPONDENT NO.2 (MR. TARIQ BAJWA): 10.On the other hand, Dr. Parvez Hassan, learned counsel for respondent No,2, submitted that the petitioners had failed to identify with particularity the arbitrariness, or capriciousness in the issuance of the impugned notification dated 07.07.2017; that respondent No,2's qualifications for appointment as Governor, S.B.P. had not been questioned in the petition; that the petitioners had not made any allegation as to favoritism in making the impugned appointment; that the prerequisites for filing a writ of quo warranto had not been satisfied in the instant case; that the core ground taken in the petition was that the impugned appointment was not in accordance with the law laid down by the Hon'ble Supreme Court in the cases of Ghulam Rasool v. Government of Pakistan (PLD 2015 SC 6), Muhammad Ashraf Tiwana v. Pakistan (2013 SCMR 1159), Muhammad Yasin v. Federation of Pakistan (PLD 2012 SC 132) and Chief Secretary Punjab v. Abdul Raoof Dasti (2006 SCMR 1876); that the said case law relied upon by the learned counsel for the petitioners is not relevant to the case at hand; that in Muhammad Yasin's case, a candidate who was alleged to have a fake degree, was selected for the position of Chairman, Oil and Gas Regulatory Authority; that in all the said cases, there was no procedure prescribed by law for making the relevant appointments; that all the said cases relate to appointments made by the Federal Government in statutory bodies; that the distinguishing feature in the case at hand is that the appointment of
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Governor, S.B.P. is made by the President; that none of the cases relied upon by the learned counsel for the, petitioners pertain to appointments made by the President; and that the President's power to make the appointment of Governor, S.B.P. was not, in any manner, affected by the law laid down in the case of Mustafa Impex v. Government of Pakistan (supra). 11.Furthermore, it was submitted that under provisions of the S.B.P. Act, the President has been exclusively empowered to appoint as well as to remove the Governor, S.B.P., whereas under sections 9(2)(c) and 10(4) of the S.B.P. Act, the Directors on the Board and the Deputy Governors of the S.B.P., respectively, are to be appointed by the Federal Government; that by promulgating the State Bank of Pakistan (Amendment) Ordinance, 2002, the Legislature consciously took the power to appoint the Governor, S.B.P. away from the Federal Government and conferred it on the President; that although there is no requirement in the S.B.P. Act as to the qualifications for appointment as Governor S.B.P., Section 10(10) of the S.B.P. Act provides for the disqualifications for the said post; that respondent No,2 was eminently qualified and not disqualified under section 10(10) of the S.B.P. Act from being appointed as Governor, S.B.P.; and that respondent No,2 has an unblemished record of public service and has served on exalted positions related to finance and economy. 12.Learned counsel for respondent No,2 further submitted that indeed, under Article 90 of the Constitution, the Executive Authority of the Federation is to be exercised in the name of the President by the Federal Government, consisting of the Prime Minister and the Federal Ministers which are to act through the Prime Minister who is the Chief Executive of the Federation; that under Article 48 of the Constitution, the President, in the exercise of his functions, is required to act on and in accordance with the advice of the Cabinet, or the Prime Minister; that the conditionality of his acting under Article 48 is contingent on the power that he can exercise under the Constitution; that the powers and functions of the President conferred by a statute, as distinguished from the ones conferred by the Constitution, are not required to be exercised on the advice of the Cabinet, or the Prime Minister; and that in exercising a statutory power, the President is not bound to act on the advice of the Cabinet, or the Prime Minister. Learned counsel for respondent No,2 prayed for the writ petition to be dismissed. CONTENTIONS OF THE LEARNED COUNSEL FOR RESPONDENT NO.3 (STATE BANK OF PAKISTAN): 13. Mr. Makhdoom Ali Khan, Advocate, learned counsel for respondent No,3, adopted the arguments advanced by learned counsel for respondent No,2 and further submitted that the laws made by the Legislature are policed by the Courts; that when the law does not cover a certain issue, such an omission cannot be supplied by the judiciary; that if the judiciary enters the domain of legislation, or policy making, there will be no space for the Legislature and the Executive to exercise their functions; that although executive authority is co-extensive with legislative authority but the former has to be exercised within the markers prescribed by the Legislature; that the Executive's role cannot be exercised by the judiciary, or else we may have to say goodbye to the Executive; that writ jurisdiction exercised by this Court is regulated by Article 199 of the Constitution; that under Article 199(1)(ii) of the Constitution, the three essential requirements for the issuance of a writ of quo warranto are that (i) the High Court must have territorial jurisdiction over the matter, (ii) that the appointment challenged must be to a public office and (iii) that the office must be held under the authority of law; and that the relevant law in the instant case is the S.B.P. Act. 14.Furthermore, it was submitted that in the petition, there was no allegation as to violation of any provision of the S.B.P. Act in making the impugned appointment; that the petitioners' case was that the observations made by the Hon'ble Supreme Court in the judgments on which the learned counsel for the petitioners placed reliance on should be read into and applied in the case at hand; that there was no requirement in the S.B.P. Act for the post of Governor, S.B.P. to be advertised; that the petitioners being from the other side of the political divide had opposed respondent No,2's
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appointment; that the appointment of three Governors, S.B.P. made between 2008 and 2013 were exactly in the same manner as respondent No,2's appointment; that in the petition, there is no pleading as to respondent No,2 being tainted with any disqualification, or being bereft of ability for appointment as Governor, S.B.P.; and that there was no specific pleadings as to malafide in the writ petition; and that the petitioners had a collateral political purpose and had an axe to grind as regards the present government and, therefore, could not be termed as probono publico. 15.Learned counsel for respondent No,3 further submitted that the B.N. Act had no application in the appointment in question; that section 54A of the S.B.P. Act as well as section 2 of the B.N. Act contained non-obstante clauses but since section 54A was inserted in the S.B.P. Act subsequent to the enactment of the B.N. Act, the provisions of the S.B.P. Act would prevail over those of the B.N. Act; that it is well settled that where two statutes have non-obstante clauses, the statute later in time shall prevail; that even otherwise the S.B.P. Act being a special law will prevail over the B.N. Act which is a general law dealing with the management of a host of nationalized banks; and that the S.B.P. is not like any other commercial bank but is a regulator of banks in Pakistan. 16.Learned counsel for respondent No,3 further submitted that under Article 48 of the Constitution, the President is required to act on the advice of the Prime Minister, or the Cabinet only in the discharge of his Constitutional functions as opposed to the exercise of powers expressly conferred on him by a statute; that the Legislature was at liberty to have enacted section 10(3) of the S.B.P. Act in such a way as to obligate the President to appoint the Governor, S.B.P. on the advice of the Prime Minister, or the Cabinet; that the President has been made the appointer of the Governor, S.B.P. by virtue of a specific conferment of that authority by section 10(3) of the S.B.P. Act; and that the impugned appointment does not suffer from any legal infirmity. Learned counsel for respondent No,3 prayed for the writ petition to be dismissed. CONTENTIONS OF THE LEARNED DEPUTY ATTORNEY-GENERAL: 17.Mr. Rashid Hafeez, learned Deputy Attorney-General, submitted that the instant petition was not maintainable; that the petitioners had approached this Court with soiled hands; that the instant petition was filed after the petitioners failed to achieve their goal on two occasions before the Senate of Pakistan; that the instant petition is politically motivated and aimed at harassing respondent No,2; that the President in appointing respondent No,2 as Governor, S.B.P. has exercised his discretion in good faith; that respondent No,2 has impeccable credentials and was qualified in every respect to be appointed as Governor, S.B.P.; that the power to appoint the Governor, S.B.P. vests in the President and not in the Federal Government; that till date, out of the 19 Governors, S.B.P., 07 were civil servants, 01 was a civil servant-cum-economist, 03 were economists, 07 were bankers and 01 was a chartered accountant; that until 2002, the Governor, S.B.P. was appointed by the Federal Government, whereas after 2002, the said appointment was made by the President; that the B.N. Act has no application in the Governor, S.B.P.'s appointment; that there is no reason to read into the statute and interpret section 10(3) of the S.B.P. Act in such a way as to make the appointment of the Governor, S.B.P. through a competitive process mandatory; that indeed, under Article 48 of the Constitution, the President, in exercise of functions under the Constitution, is bound by the adVice of the Cabinet and the Prime Miinster; and that as regards the exercise of powers by the President conferred by a statute, the President need not act on the advice of the Cabinet, or the Prime Minister. Learned Deputy Attorney-General prayed for the writ petition to be dismissed. CONTENTIONS OF THE LEARNED COUNSEL FOR THE PETITIONERS IN REJOINDER: 18.Learned counsel for the petitioners rejoined with the well prepared brief on the subject and submitted that through the Constitution (Eighteenth Amendment) Act, 2010, enacted on 19.04.2010, many of the President's Constitutional powers were taken away and conferred on the Federal Government; that under Article 90 of the Constitution, the executive authority of the Federation is to be exercised in the name of the President by the Federal Government; that the appointment of the
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Governor, S.B.P. is an executive act which should have been performed by the Federal Government; that the impugned appointment was made by the President in exercise of the executive authority of the Federation under Article 90 read with Article 97 of the Constitution; that although the provisions of the S.B.P. Act do not mandate for the post of Governor, S.B.P. to be advertised, it was the President's obligation to have appointed the best of the best person against the said post; and that the only way this purpose could have been achieved was if the said post had been advertised. 19.I have heard the contentions of the learned counsel for the contesting parties as well as the learned Deputy Attorney-General and have perused the record with their able assistance. 20.The facts leading to the filing of the instant petition have been set out in sufficient detail in paragraphs 2 to 6 above and need not be recapitulated. 21.The impugned notification dated 07.07.2017 issued by the Finance Division (Government of Pakistan) shows that respondent No,2 was appointed as the Governor, S.B.P. for a period of three years by the President in exercise of his powers under section 10(3) of the S.B.P. Act. 22.Prior to the enactment of the State Bank of Pakistan (Amendment) Ordinance, 2002, the power to appoint the Governor, S.B.P. vested in the Federal Government. Section 10(3) of the S.B.P. Act was amended by the said Ordinance. By virtue of the said amendment, the power to appoint the Governor, S.B.P. was taken away from the Federal Government and conferred on the President. Section 10(3) of S.B.P. Act in its present form reads as follows: "(3) Subject to subsection (11), the Governor shall be appointed by the President for a term of three years, and on such salary and terms and conditions of service as the President may determine, except that neither the salary of the Governor nor his other terms and conditions of services shall be varied to his disadvantage after his appointment: Provided that the Governor be eligible for re-appointment for another term of three years: Provided further that no person shall hold the office of the Governor after attaining the age of sixty-five years." (Emphasis added) 23.The petitioners seek the issuance of a writ of quo warranto against the appointment of respondent No,2 as Governor, S.B.P. In essence, the petitioners' case is that respondent No,2 was not selected through a competitive process and that the said appointment is violative of the provisions of the S.B.P. Act, Rules of Business, 1973, the B.N. Act and the Constitution of Pakistan. 24.The only power conferred on the President under the provisions of the S.B.P. Act is the power to appoint and remove the Governor, S.B.P. The S.B.P. Act confers a range of powers on the Federal' Government. For instance, under section 10(3A), the power to appoint an Acting Governor, S.B.P. lies with the Federal Government; under section 10(4), the Deputy Governors of the S.B.P. are to be appointed by the Federal Government; under section 9(2)(c), eight Directors on the Board of S.B.P. are to be appointed by the Federal Government; under section 9B(1)(vi), the power to appoint two eminent macro, or monetary economists with proven record of research and teaching on the Monetary and Fiscal Policies Co-ordination Board has been conferred on the Federal Government; and under Section 9D(1)(d), three external members on the Establishment of Monetary Policy Committee are to be appointed by the Federal Government on the recommendations of the Board of Directors of S.B.P. Given the fact that specific powers have been conferred by the S.B.P. Act on the Federal Government, it cannot be held. that the power to appoint and remove the Governor, S.B.P. having been conferred on the President, are also to be exercised by the Federal Government. Holding otherwise would render the amendment brought about in Section 10(3) of the S.B.P. Act through the State Bank of Pakistan (Amendment) Ordinance, 2002, an exercise in futility. It would also amount to attributing absolute redundancy to the term "President" inserted in Section 10(3) of the S.B.P. Act through the said Ordinance. 25. It is evident from the bare reading of section 10(3)'of the S.B.P. Act that the exclusive and
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absolute authority to appoint the Governor, S.B.P. vests with the President. No role has been assigned to the Federal Government in the appointment of the Governor, S.B.P. There is no doubt as to the clear legislative intent in this regard. Where the Legislature intended to give the Federal Government the power to make appointments in the S.B.P., it clearly did so through the provisions referred to herein above. The only power that the Federal Government can exercise with respect to the Governor, S.B.P. is to grant him leave under Section 10(11) of the S.B.P. Act. 26.As regards the petitioners' stand that the President could not have made respondent No,2's appointment without an advice in this regard from the Cabinet, or the Prime Minister in terms of…
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