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Petitioner: ANJUMAN FALAH-E-BAHBOOD VS Respondent: GOVERNMENT OF PAKISTAN and others
Court Name: Sindh High Court Judge(s): Munib Akhtar Title: ANJUMAN FALAH-E-BAHBOOD vs GOVERNMENT OF PAKISTAN and others Case No.: C.M.As. Nos.593 and 595 of 2011 in Suit No,88 of 2011 Date of Judgment:2012-07-16 Reported As: 2013 PLC (C.S.) 465 Result: Application allowed
Judgment ORDER ' MUNIB AKHTAR, J.--- The plaintiffs Nos.2 to 50 were all employees of the defendant No,2, the Pakistan Telecommunication Company Ltd. ("PTCL"). (The first plaintiff is a welfare association of which the remaining plaintiffs are stated to be members.) Most of the plaintiffs left service by taking the benefit of a voluntary separation scheme ("VSS") that was introduced by PTCL in late 2007. A few, it appears, retired in the normal course. In any case, all the plaintiffs are entitled to payment of pension. During the course of their employment, each of the plaintiffs was allotted a flat for residence in an area in Karachi known as the P&T Colony ("the Colony"). PTCL's case is that the Colony and the flats therein were, and are, its property and that each plaintiff was obligated to vacate it within six months of his service coming to an end. None of the plaintiffs has done so. PTCL contends, on the basis of the relevant contractual undertakings given by each plaintiff, that they are liable to pay monthly rent at a specified rate for the period that they continue to retain the flats beyond the six month period. PTCL further contends that it is entitled to adjust the pension payable to each plaintiff against the rent. The rent claimed by PTCL in each case is greatly in excess of the pension, with the result that PTCL has stopped making pension payments to the plaintiffs. Since the plaintiffs continue to retain the flats and the rent payable exceeds the pension, there is, on PTCL's contention, an ever increasing deficit and claim against each of the plaintiffs. 2. The plaintiffs on the other hand contend that the Colony belongs to the defendant No,7 (i,e, the municipal entity for Karachi). At the time of the filing of the suit, this entity was City District Government Karachi ("CDGK") and for convenience will continue to be referred to as such. The plaintiffs claim that (apart from about 15 of them) they have in fact been granted registered lease deeds by CDGK sometime in 2008. .(The remaining 15 plaintiffs, according to the plaint, are also
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entitled to such leases, and their case is therefore pleaded on the same footing). Thus, on their showing, the plaintiffs are, and have been for some years, the owners of the flats in the Colony and their case is that PTCL has no right or entitlement to claim any rent from them. They therefore contend that the stoppage of pension is wholly unwarranted and unlawful. By , means of the two applications that now fall for determination they seek interim relief by way of continuance of payment of pension, and payment also of the arrears that according to them have accumulated in this regard. 3. Learned counsel for the plaintiffs' submitted that at the time of Independence, there used to be a combined postal, telephone and telegraph department. Many years later, it was divided into the postal department and the telephone and telegraph (T&T) department. The latter department is of course the predecessor entity of PTCL. Similarly, the postal department has also been corporatized as the Pakistan Postal Service Corporation, which is the defendant No,3 in the present suit. However, for present purposes, I am only concerned with PTCL and its former employees, the plaintiffs. References to the postal service shall therefore be omitted save as absolutely necessary. It appears that around 1951 or so, the then predecessor to CDGK agreed to sell to the Government of Pakistan a plot of land for purposes of establishing a residential colony for the (then) department of post, telephone and telegraph. This area is of course the Colony. Learned counsel submitted that it was agreed that the land would be acquired by the Government of Pakistan on payment of a sum of Rs,2,17,000. However, only an amount of Rs,150,000 was ever paid by the Government although possession of the Colony was handed over to it and a staff residential colony of some sort was constructed. Learned counsel submitted that on account of the failure of the Government to make full payment for the Colony, the predecessor of CDGK, sometime in 1991, passed a resolution resuming the said property and the plaintiffs' case is that since that time, title and ownership thereof has vested solely in the defendant No,7. It appears that thereafter, the predecessor of CDGK sought to grant leases to the persons residing in the flats in the Colony (who were all of coarse, as presently relevant, employees of the predecessor of PTCL). However, a suit, being Suit No,828 of 1991 was filed by the predecessor of PTCL and the postal service in this Court, whereby declaratory and other relief was sought in relation to the Colony, the plaintiffs therein contending that the Colony belonged to them. Interim orders were made restraining the predecessor of CDGK from granting leases in respect of the flats in the Colony. Thereafter, the employees of PTCL as were in occupation of flats were issued eviction notices, which led to the present plaintiff No,1 filing a civil suit in this Court, being Suit No,1456 of 1997 against PTCL and the postal service (as also the predecessor of CDGK), seeking suitable declaratory and injunctive relief against the eviction notices. This suit was disposed off by order dated 25-8-1999 on an undertaking being given by PTCL that no adverse action would be taken till the decision of Suit 828 of 1991. 4. Although the point is contested by PTCL, learned counsel for the plaintiffs submitted that the interim orders made in Suit 828 of 1991 were not continued and thus, as noted above, sometime in 2008, CDGK started granting leasehold rights to the plaintiffs by means of registered deeds in respect of the flats respectively occupied by them. It is on the foregoing basis that it is contended that the plaintiffs are the owners of the flats and PTCL has no right or authority to charge rent from them, whether by way of adjustment against the pensions or otherwise. Learned counsel submitted that the stoppage of the pensions was wholly unlawful and causing great hardship and suffering to the plaintiffs who were retired persons having no alternative means of income. He submitted that all the ingredients for interim relief were made out in their favour and prayed for relief accordingly. 5. Learned counsel for CDGK supported the case of the plaintiffs. Learned counsel submitted that the predecessor of CDGK had lawfully resumed the Colony and was the lawful owner thereof. CDGK was therefore fully empowered to grant leasehold rights to the plaintiffs and had duly done so, there being no interim orders in Suit 828 of 1991 preventing CDGK from so acting.
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6. Learned counsel for PTCL, strongly opposed the grant of any relief to the plaintiffs. Learned counsel submitted that the Colony was, and remained, at all times the property of PTCL (through its predecessors). The flats were the property of PTCL and the plaintiffs were admittedly employees who had been allowed to reside therein as part of their service conditions. Since that service had ceased, the plaintiffs were bound to vacate the flats and hand over possession thereof to PTCL after a grace period of six months. Learned counsel contended that in any case, "legal" possession of the Colony at all times remained with PTCL. Since the plaintiffs had failed to vacate the flats, they were in unlawful occupation of the same. Learned counsel submitted that the relationship between the parties (i,e, PTCL and each of the plaintiffs) was entirely contractual in nature, and in terms of the relevant contracts, the plaintiffs had agreed that if the flats were not handed over, then they would pay rent at the stipulated rate, which would be adjustable against any pension payable to them. Thus, PTCL had at all times acted strictly in accordance with law and in exercise of its lawful rights. It was fully entitled to adjust the pensions and was doing so on account of the unlawful conduct of the plaintiffs. As noted above, most of the plaintiffs had left service by taking the benefit of the VS8 and learned counsel submitted that the rights being exercised by PTCL were fully covered thereby. In respect of the (few) plaintiffs who retired in the normal course, learned counsel relied on chapter 17 of the PTCL Service Regulations, 1996 ("1996 Regulations"), which deals with allocation of residential accommodation to PTCL employees. Learned counsel, submitted that these regulations were also contractual in nature and fully covered the case of those plaintiffs who had retired in the normal course. 7. Insofar as the lease deeds were concerned, learned counsel submitted that they were void in law and conferred no benefit or right on the plaintiffs. Learned counsel contended that the leases were granted by CDGK in wilful and blatant disobedience of the interim orders made in Suit 828 of 1991 and it was strongly denied that those orders had lapsed in any manner or at any time. Learned counsel further stated that in fact contempt proceedings had been initiated in Suit 828 of 1991, and were pending adjudication. The plaintiffs were, on their own showing, fully aware at all material times of the interim orders and thus had entered into the leases with CDGK in wilful disregard of the orders of this Court and were liable accordingly. They could not benefit from their own wrongdoing and their misconduct disentitled them from any discretionary relief from the Court. Learned counsel submitted that both in law and equity, the matter stood in favour of PTCL and against the plaintiffs and prayed accordingly. 8. I had permitted learned counsel to file written synopses and they did so and relied also on certain case-law, which is considered below as and to the extent as necessary and appropriate. 9. I have heard learned counsel as above, examined the record with their assistance and considered the case-law relied upon. The plaintiffs were all employees of PTCL, who had joined service with its predecessor and had come to be its employees in a manner the details of which are not presently relevant. There can be no doubt that it was only as such employee that each plaintiff was at some point in time given possession of a flat in the Colony, which was entirely on the basis and as part of the terms and conditions of service. (Of course, the plaintiffs contend that thereafter the position changed and they became the owners of the flats in terms as stated above.) It is also not in dispute that the majority of the plaintiffs left service in terms of the VSS that was offered by PTCL in late 2007, while a few retired in the ordinary course. PTCL's case is that the entire relationship was, and is, contractual in nature and the rights being exercised by PTCL are based in the relevant contracts. For reasons that will presently become clear, it will be appropriate to consider the matter on the basis of the stand taken by PTCL. Since the majority of the plaintiffs left service in terms of the VSS, the matter will first be considered in terms of that scheme. PTCL's case in this regard is set out in the following terms in the written synopsis submitted by learned counsel:
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"In respect to the employees who have opted for VSS Scheme, I would refer to the VSS Scheme document (annexed to Rejoinder of the plaintiffs to C.M.A.No,595 of 2011). It is submitted as the regulations 1996 are non-statutory thus the terms and conditions are of contractual nature PLD 2011 SC 132=2011 PLC (C.S.) 632. When the VSS Scheme was introduced the terms and conditions of the employees who opted for it were changed in respect to pension and the rent. It may be noted that for this very reason separate undertakings were willingly executed by the plaintiffs who opted for VSS Scheme whereby they undertook to vacate the premises after the end of certain period in respective case and in case of failure to vacate they undertook that PTCL will be entitled to charge respective amounts as stated in their undertakings and VSS settlement. For illustration the document attached with the rejoinder is of plaintiff No,7 whose monthly pension is Rs,8540 whereas he had given undertaking to pay rent of Rs,11250; thus payment of pension does not arise. It may be noted that the pension under VSS Scheme has also been increased from the normal pension which they were entitled to. It is submitted that the terms and conditions after execution of the VSS Scheme have been modified with consent and therefore the plaintiffs cannot take advantage of their own wrong. 1 would refer to PLD 2003 SC 430; 2003 PTD 739 and PLD 1969 Quetta 13. ' It is respectfully submitted that pension is at best a contractual right of an employee subject to the applicable rules and in this case the terms and conditions of the employment. It is respectfully submitted that the pension of an employee can be deducted and withheld as provided in rules and to recover losses occurred to the departments. It is respectfully submitted that the Lahore High Court and other courts have held that the deduction of rent in case of VSS Scheme employees. ' I would rely on the following cases in support of the above propositions:--- 2005 SCMR 292; PLD 1973 SC 514; 2009 PLC (C.S.) 703 and 2009 PLC (C.S.) 721 [Cases in which PTCL's deduction from pension were held lawful.]" ' It will be seen that learned counsel has referred to the case of plaintiff No,7, Mr. Jalil Ahmed ("Mr. Jalil"), whose documents in relation to the VSS have been placed on record. The case of this plaintiff will therefore serve as the template for all those plaintiffs who left service in terms of the VSS. 10. Before considering the documentation in detail, reference may be made to a basic principle of the law of contract namely that the terms of a contract are to be construed and interpreted objectively. In Muhammad Shahnawaz and others v. Karachi Electric Supply Co. Ltd. 2011 PLC (C.S.) 1579, I had occasion to refer to this principle, citing the following passage from Sirius International Insurance Co. v. FAI General Insurance Ltd. [2004] UKHL 54; [2005] 1 All ER 191, where it was observed as follows:--- "The aim of the inquiry is not to probe the real intentions of the parties but to ascertain the contextual meaning of the relevant contractual language. The inquiry is objective: the question is what a 'reasonable person, circumstanced as the actual parties were, would have understood the parties to have meant by the use of specific language. The ahswer to that question is to be gathered from the text under consideration and its relevant contextual scene." (per Lord Steyn) ' As I had noted, the above observations were not an enunciation of any new principle, but rather the restatement, in modern terms, of a principle that forms part of the bedrock of contract law. This principle is to be kept in mind at all times in the present case as well. 11. The first point to note with regard to PTCL's case is the contention that the VSS "modified" and "changed" the contract of service between PTCL and the relevant employee (see the extract from the written synopsis reproduced in para 9 above). In my view, this is not correct. Proceeding on the basis that (as PTCL contends) the terms and conditions of service were contractual in nature, what the VSS did was to constitute a new contract between PTCL and the relevant employee, whereby the earlier contract came to an end and the terms on which the employee left service were
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governed and regulated by the new contract. After all, the whole purpose of the VSS was to ensure that the employee immediately left PTCL's service. On the contractual plane therefore, the VSS was a novation in terms of section 62 of the Contract Act, 1872. A. New contract (as embodied in the VSS) was entered into between PTCL and the employee, which substituted the earlier contract of service with its own terms and conditions. Therefore, if at all PTCL's case is to succeed on the contractual plane; it must be in terms of the contract constituted by the terms embodied in the VSS. 12., I turn therefore to consider the VSS documentation as filed in relation to Mr. Jalil. On or about 15- 11-2007, this plaintiff received a letter from PTCL informing him that the latter was offering a voluntary separation scheme to those employees who met certain criteria, the plaintiff being one of them. It was emphasized that the scheme was entirely voluntary in nature. The enclosed documentation (referred to therein as the', "circular") gave the details of the terms of the VSS. Certain details particular to Mr. Jalil were also stated (and of course, would have been similarly set out in relation to each of the other plaintiffs in the corresponding letters received by them). Thus, it was noted (on an approximate basis) that Mr. Jalil was entitled to a one-time payment of Rs,19,20,459.88 and a monthly pension of Rs,8,548 (along with certain other benefits). Any employee who wished to avail the VSS was to submit an "option/waiver" form, and the form once submitted was irrevocable. It was expressly stated that "there can be no conditional acceptance of VSS". In other words, the employee had to submit the form on a take it or leave it basis. It was also expressly stated as follows:--- "Employees deciding to opt for the VSS by way of the Option/Waiver Form shall thereby agree to be bound by the provisions and the terms and conditions contained in this Circular." ' The documentation further stated that "management reserves the right to accept or reject any Option/Waiver Forms at PTCL management's prerogative without explanation to the employee". The package also contained a term with regard to those employees who were enjoying the benefit of housing provided by PTCL. It stated as follows: "Employees with PTCL housing will retain their housing for a' period of 6 months after separation from PTCL. ' Employees will also receive a one time payment equivalent to 6 months of House Requisition Allowance based on the maximum eligible House Requisition Allowance for the posted Station." 13. When considered in terms of the law of contract (and that, PTCL insists, is the only valid and correct approach), it is clear that if the employee offered the VSS package decided to file the "option/waiver" form, he would be making an offer to PTCL. That offer would have to be exactly on the basis as communicated to the employee. In other words, PTCL precisely specified the terms in which the employee had to make the offer, which PTCL itself could the accept or reject in its discretion. If accepted (but only then), then of course, a contract would come into being between the employee and PTCL. In other words, the communication of the VSS package by PTCL to the employee did not constitute an offer, which the employee accepted by submitting the "option/waiver" form. If that had been so, then on the submission of the said form, a binding contract would have immediately come into existence between PTCL and the employee and that of course would have made it impossible for PTCL to "accept or reject" the said form. Thus, the references to the employee "accepting" the VSS package or "agreeing" to be bound by its terms should not be construed in the strict or technical sense, i,e,, as understood and applied in contract law. In terms of the law of contract, the employee was the offeror and PTCL was the offeree, and of course, if it accepted the officer, it then became the acceptor. 14. On or about 24-12-2007, Mr. Jalil submitted his "option/ waiver" form to PTCL. This constituted his offer to PTCL, the terms and conditions of the offer being those contained in the VSS circular. On or about 22-1-2008, he received a letter from PTCL, which stated in material part as follows:---
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"Thank you for applying for Pakistan Telecommunication Company Limited's (PTCL) Voluntary Separation Scheme (VSS) programme. At this time, we are pleased to inform you that PTCL Management has accepted your VSS application. ' Your final pay out calculation will be made using your last drawn salary as of your actual departure date of February 18, 2008, which in no case shall come earlier than February 15, 2008. Please be aware that February 18, 2008 will also be considered your last date of employment with PTCL. ' We anticipate that you will receive your final VSS settlement amount on or before April 4, 2008.... ' Before the VSS payout can be issued, you will need to sign and complete the off-boarding paperwork given in the attached checklist .... Delay in submission of paperwork may postpone PTCL's issuance of your VSS payout." (emphasis supplied (sic)) ' The "off-boarding" paperwork referred to included submission of certain forms, of which two are relevant for present purposes. One was a declaration of unqualified consent ("Declaration"), which was to be filed in the form attached. The other was an undertaking ("Undertaking") to be given on Rs,20 stamp paper. Again, the text of the Undertaking as required by PTCL was set out in the letter of 22-1-2008. Mr. Jalil provided both the Declaration and the Undertaking, and it is not in dispute that they were in the forms as specified by PTCL. The Declaration made by him was as follows:--- "I Mr. Jalil Ahmed do hereby give my unqualified consent to permit the department to recover from my pension and/or VSS settlement and/or personal assets on the following items of at any time found to be recoverable from me:--- (1) Recovery as punitive measure in order to make good loss caused to Government as a result of negligence or fraud while in service. (2) Recovery of other Government dues such as over issued of Pay, Allowance or leave salary or admitted and, obvious dues such as House Rent, Postal Life Insurance, outstanding Motor Car, House Building Travelling Allowances or other advances. (3) Recovery of non-Government dues. ' I shall not raise any objection whatsoever for such recovery from my pension and gratuity." ' The Undertaking was given in the following terms:- "I, JALIL AHMED, declare that I shall vacate PTCL provided residence six (6) months after my departure date, February 18, 2008, I understand that I will be liable to pay rent at the rate of PKR 11250 if I fail to vacate PTCL. Accommodation on the expiry of the grace period August 18, 2008." 15. PTCL of course contends that the foregoing constitutes the VSS contract between ,the parties and that in terms of the Declaration, and Undertaking, it is entitled to charge rent for any retention of the flat beyond the six month period and also to adjust the rent due against the pension payable to Mr. Jalil. 16. Now, it is elementary that for an offer (or proposal, which is the term used in the Contract Act) to blossom into a contract it must be accepted, and it is PTCL's acceptance that must be considered in some detail and tested on the anvil of contract law. This is particularly so because neither the Undertaking nor Declaration as such find any mention in the VSS circular. The VSS package did contain a term regarding PTCL housing, which has been reproduced above. In other words, in the offer made by him, Mr. Jalil did not state that if his offer was accepted, he would submit the Declaration and/or the Undertaking. These, along with other forms, find mention for the first time only in PTCL's own letter of 22-1-2008, which of course constitutes the acceptance. The VSS circular (which, as noted above, constituted the terms of the offer made by Mr. Jalil) did provide that the employee would have to "complete and submit some final paperwork". However, the sense conveyed by this is only consistent with the completion of procedural formalities of a routine nature. It is inconsistent with something that is substantial or such as would be regarded by a reasonable person as materially affecting or altering the terms of the offer.
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17. Section 7 of the Contract Act provides that in order for an acceptance to convert an offer into a promise (i,e, a legally binding contract) it must be "absolute and unqualified". An acceptance that does not come up to this standard is not an acceptance in the eyes of law and hence any such "acceptance" cannot convert the offer into a promise, i,e, a contract. The question therefore is whether, in light of the requirement by PTCL that Mr. Jalil should give the Undertaking and make the Declaration, the acceptance of 22-1-2008 was absolute and unqualified within the meaning of section 7. There are of course two possibilities. One is that the question just posed be answered in the affirmative and the other that ,it be answered in the negative. Both possibilities need. To be…
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