Legal Principle & Question Decided

Ruling Summary: This decision was rendered by the Lahore High Court (Honorable Mr. Justice Malik Muhammad Awais Khalid), officially reported as 2026 LHC 4268. In this matter between Zarai Taraqiati Bank Ltd through Abdul Qayyum & 1 Other and Athar Tabraiz, 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 Muhammad Awais Khalid) DECISION DATE: 29-04-2026 CASE DETAILS: Service 24175/26 ============================================================ Stereo. H C J D A 38. Judgment Sheet IN THE LAHORE HIGH COURT, LAHORE JUDICIAL DEPARTMENT

ICA No.24175 of 2026 Zarai Taraqiati Bank Ltd. and another versus Athar Tabraiz

J U D G M E N T

Date of hearing: 29.4.2026 Appellants by: Mr. Umar Alvi, Advocate Federation of Pakistan by: Mr. Basharat Ali Gil , Deputy Attorney General for Pakistan with Mr. M. Rizwan Ali, FIA.

MALIK MUHAMMAD AWAIS KHALID, J :- The appellants, through instant appeal, has assailed the judgment dated 12.3.2026 passed by learned Single Judge in Chambers, whereby writ petition filed by the respondent has been accepted di recting the concerned agency to ensure payment of pensionary emoluments to the respondent forthwith. 2. Pithily, the facts of the case are that the respondent on attaining the age of superannuation retired from service of the appellants- Department as Vice President on 29.6.2021. However, the Department While issuing ‘ No Demand Certificate’ dated 20.9.2021, recovery of Rs.3,28,66,956/- was also imposed upon him as outstanding amount, thus the pensionary benefits were not released to him, hence the respondent was constrained to file writ petition bearing W.P. No.73602/2022 before this Court which was disposed of vide order, dated 26.1.2023, with a direction to the appellants to decide pending application of the respondent. As the aforesaid order of this Court was not being complied, he then filed a contempt petition bearing Crl. Org. No.37001-W/2023 and during hearing whereof the appellants produced order dated 27.7.2023 whereby the application of the respondent for release of pensionary benefits was rejected, hence the contempt petition was disposed of vide order dated 12.10.2023. The respondent assailed order dated 27. 7.2023 passed by the appellants ICA-24175/2026 (2) through writ petition bearing W.P. No.58581of 2024 before this Court which was disposed of vide order dated 10.4.2025 with a direction to appellant No.2/President, Zarai Taraqiati Bank Ltd., Islamabad to treat the same as representation of the respondent and to decide the same especially with reference to Circular dated 8.1.2018. Thereafter, appellant No.2 declined the representation of the respondent, vide order dated 12.5.2025. The said order was challenged by the respondent in another writ petition bearing W.P. No.37893 of 2025 which was accepted by the learned Single Judge in Chambers , vide judgment dated 12.3.2026, while setting aside the order, impugned in the said writ petition, and directed the appellants to ensure payment of pensionary emoluments to the respondent immediately. Hence this appeal. 3. It is argued by learned counsel for the appellants that the w rit petition filed by the respondent before the learned Single Judge in Chambers was not maintainable as the learned Single Judge while deciding the writ petition escaped notice of the fact that necessary party i.e. the author of letter dated 12.5.2025 had not been made as party, on the basis of said letter the respondent was seeking relief; while issuing ‘No Demand Certificate’ by the appellant -Bank on 20.9.2021, owing to audit objections including missing of documents relating to loan cases, a recovery of Rs.3,28,66,956/- has been imposed by the Department at the time of his retirement ; and a case FIR No.C/313/2023 dated 12.9.2023 had already been registered against the respondent and other co -accused on behalf of the appellants regarding transactions which is still pending adjudication. Lastly, the learned counsel for the appellants prayed for setting aside of impugned order of learned Single Judge in Chambers. 4. Vide order dated 23.4.2026 passed by this Court, a report was called from the FIA Authorities , which has been received showing that during investigation, the respondent has been exonerated in the said case. ICA-24175/2026 (3) 5. We have heard the arguments of learned counsel for the parties and perused the record. 6. The stance of the appellant is that due to audit objections including missing of documents with regard to loan cases, a recovery of Rs.3,28,66,956/ - was imposed by the Department upon the respondent and in this regard a criminal case was registered against the respondent and other co-accused which is still pending, therefore, the learned Single Judge in Chambers could not have passed the impugned order with regard to payment of pensionary emoluments to the respondent. Whereas, during investigation by the FIA the respondent has been exonerated from the criminal case registered against him and without due process under statutory framework , the appellants have no justification to withhold the pensionary dues to the respondent, despite the fact that the learned Single Judge in Chambers has already passed judg ment in his favour in accordance with law . The Hon’ble Supreme Court of Pakistan in numerous judgments has repeatedly held that right to pension of a retiree cannot be denied arbitrarily. Regarding the involvement of respondent in the criminal case and his exoneration during investigation thereof , the report submitted by the Deputy Director, FIA Circle Faisalabad shows as follows:- “It is respectfully submitted that the brief facts and circumstances of the present case are that FIR No. 313/2023 Dated: 12.09 .2023 u/s 5(2) 47 PCA, 420, 468,471 PPC was registered against accused persons Muhammad Yaqoob, Manager ZTBL. (Retired). Sheikh Athar Tabraiz, Vice President, ZTBL (Retired), Raja Wajid Mehmood MCO ZTBL (Retired), Muhammad Imran Liaqat, Shafqat Mehboob MCO , ZTBL, Saleem Ansar MCO, Muhammad Yousaf Patwari, Haq Nawaz Qanoongo, Buand Khan Qanooongo and 45 private persons (borrowers) upon conclusion of enquiry No. 791/2023, ECW FIA Faisalabad wherein it was transpired that 45 bogus loans amounting to Rs. 49,764,000/- were issued to various private individuals. It has been revealed that none of the loanees, except four namely Muhammad Shah s/o Lal Shah, Zafar Shah s/o Haider Shah, Altaf Hussain Shah s/o Muhammad Sharif, and Abid Hussain Shah s/o Shah Din Shah, po ssessed any agricultural land in Mouza Pindi Sheikh Musa. ICA-24175/2026 (4) Furthermore, the mutation record relating to Altaf Hussain Shah and Abid Hussain Shah could not be verified from the Revenue record and remains subject to further verification. Perusal of the questi oned loan files revealed that officials of the Revenue Department, namely Patwaris and Qanoongos, issued fake ownership certificates (Fard), prepared and verified entries in loan passbooks, entered fictitious mutations, and issued Part Patwar documents reg arding such mutations. Subsequently, MCOs (Mobile Credit Officers) issued certificates confirming the genuineness of the Revenue record. Thereafter, Branch Managers sanctioned the loans without conducting proper due diligence or verification. The record cl early reflects that the accused persons formed a criminal nexus to issue multiple fraudulent loans, thereby causing a huge loss to the public exchequer. The Revenue officials played the initial and crucial role by issuing fake Fards, followed by preparation of fake passbooks. MCOs failed to perform their essential duty of verifying the authenticity of passbooks and related entries. After loan disbursement based on forged documents, fictitious mutations were shown in favor of the bank: however, verification of such mutations was not carried out by the MCOs. It is noteworthy that the Revenue record does not contain such mutations, although loan files include Part Patwar documents indicating otherwise. As per job descriptions, the respective Branch Managers and Assistant Branch Managers bear primary responsibility for this scam, while private individuals who benefited from the loan amounts are equally complicit. It is pertinent to mention that a special audit of ZTBL Pul Piran Branch and ZTBL Tandlianwala Branch was conducted from 06.02.2020 to 06.03.2020 by audit teams comprising various officers from Audit Zones Multan and Faisalabad. Despite having clear Terms of Reference (TORs) to verify borrowers and Revenue records through spot inspections, no audit paras were raised regarding the questioned loans. During the course of investigations, it is established that Shafqat Mehboob Javed, while serving as MCO at ZTBL Pul Piran Branch, was responsible for Verification of passbooks issued by the Revenue Department, Ap praisal and recommendation of loan cases, Conducting spot verification. Out of 45 loans, 38 loans were processed by him. He failed to perform mandatory verification as per SOPs. During interrogation, he disclosed that the issuance of loans heavily depended on Revenue Department records and passbooks. He further revealed that after loan disbursement, lands mortgaged to the ICA-24175/2026 (5) bank were later sold off in collusion with Revenue officials and private agents. Investigation revealed that certain individuals, in coll usion with Revenue officials, prepared fake passbooks in the names of their relatives and obtained fraudulent loans. The loan proceeds were withdrawn and shared among the accused persons. Detailed loan cases and family linkages among accused persons have b een identified, showing that loans were issued in the names of close relatives to facilitate the fraud. Statements of certain accused also confirm misappropriation of loan amounts and shifting of repayment liability among relatives. During investigation, R evenue record was requisitioned from Tehsil Tandlianwala on 22.06.2025; however, the same was not provided. Earlier, records relating to passbook registers (2009-2020) were also reported as unavailable. Due to concealment and disappearance of official record, additional offences under Sections 201 and 409 PPC have been incorporated through supplementary report No. 48. Efforts to arrest proclaimed offenders are ongoing, and proceedings under Section 87 Cr.P.C. have already been initiated against the accused persons. During the course of investigation, accused Shafqat Mehboob Javed (MCO) was arrested on 14.06.2025, and a 10 -day physical remand was obtained. During investigation, co -accused Irshad Ahmad Khichi (private Munshi) was nominated via supplementary statement No. 31 and arrested on 18.06.2025. After completion of physical remand, he was sent to judicial lock -up on 24.06.2025 at District Jail Faisalabad. Other accused persons namely Buland Khan, Muhammad Ramzan, Muhammad Yaqoob, Sheikh Athar Tabriaz, Raj a Wajid Mehmood Ali, and Muhammad Imran Liaqat, joined the investigation in the present case after obtaining interim pre-arrest bail. However, accused Sheikh Athar Tabraiz was exonerated by the Investigation Officer and his pre - arrest bail application was subsequently withdrawn before the competent court i.e. Judge Special Court (Offences in Banks-II), Lahore on 13-05-2024. During the course of investigation, sufficient oral as well as documentary evidences have been collected and report u/s 173 Cr.P.C has been submitted in the honorable court of Special Court (Offences in Banks), Lahore which is under trial.”.

The above cited report, therefore, indicates that the respondent has been exonerated by the Investigating Officer of the Federal Investigation Agency, Circle Faisalabad. ICA-24175/2026 (6) 7. Retirement benefits are not bounty . An employee earn s these benefits by his long continuous service and it cannot be withheld without justification and reason. It is settled preposition of law that pensionary benefits of an employ ee, who retire s from service on attaining the age of superannuation , are material part of his service . The grant of pension cannot be refused arbitrarily and if refused it has to be in accordance with the relevant rules. In this case, the respondent was re tired from the appellant -Bank after completing his tenure of service. Since, as is evident from the above cited report of FIA, the respondent has been exonerated by the Investigating Officer during investigation who (respondent) has also withdraw his appli cation for pre-arrest bail from the Court of Judge Special Court (Offences in Banks-II), Lahore on 13.5.2024 on that account, therefore, his pension cannot be withheld, as considerable time has lapsed. 8. It is well settled that an audit objection itself does not constitute a final determination of liability. The directives, in this regard, are recommendatory in nature and require the administrative department to initiate proper departmental proceedings or adjudication. Even the recovery from pensionary ben efits is not permissible without affording him proper opportunity of hearing and without following the prescribed legal procedure. 9. A public office is a public agency or trust created in the interest and for the benefit of the people, and since an incumb ent of a public office is invested with certain powers and charged with certain duties pertinent to sovereignty, the powers so delegated to the officer are held in trust for the people and are to be exercised on behalf of the Government or of all citizens who may need the intervention of the officer. Such trust extends to all matters within the range of the duties pertaining to the office. In other words, public officers are the servants of the people and not their rulers. A public officer is amenable to th e rule which forbids an agent or trustee to place himself in such an attitude toward the principal or cestuique trust as to have his interest conflict with his duty. Where a statute is silent with respect to the time ICA-24175/2026 (7) within which an official act must be pe rformed, the law contemplates that the duty must be performed within a reasonable time. A public official who undertakes to perform an act, even an act which is completely discretionary, must do so reasonably and in complete good faith without such delay a s would frustrate its ultimate objective. One who accepts a public office does so cum onere, or with the burden, and is considered as accepting its burdens and obligations with its benefits. He thereby subjects himself to all constitutional and legislative provisions relating thereto and undertakes to perform all the duties of the office, and while he remains in such office the public has the right to demand that he performs such duties. The acceptance of every public office implies an agreement on the part of the officer that he will execute his duties with diligence and fidelity. The duty of a public officer to fulfil the obligations of his office should take precedence over all other matters. Every public officer is bound to use reasonable skill and diligence in the performance of his official duties, particularly where rights of individuals may be jeopardized by his neglect. In other words, he is bound, virtue office, to bring to the discharge of his duties that prudence, caution, and attention which careful men usually exercise in the management of their own affairs. 10. Wherever wide-worded powers conferring discretion are found in a statute, there remains always the need and the desirability to structure the discretion and the need for this has been poi nted out in the Administrative Law test by Kenneth Culp Davis in the following words:- “Structuring discretion means regularizing it, organizing it, producing order in it, so that decisions will achieve a higher quality of justice. The seven instruments th at are most useful in the structuring of discretionary power are open plans, open policy statements, open rules, open findings, open reasons, open precedents, and fair informal procedure. When legislative bodies delegate discretionary power without meaning ful standards, administrators should develop standards at the earliest feasible time, and then, as circumstances permit, should further confine their own discretion through principles and rules.” ICA-24175/2026 (8)

The movement from vague standards to definite standards to broad principles to rules may be accomplished by policy statements in any form, by adjudicatory opinions, or by exercise of the rule -making power. When legislative bodies delegate discretionary power without meaningful standards, administrators should deve lop standards at the earliest feasible time, and then, as circumstances permit, should further confine their own discretion through principles and rules. Reliance is placed on the case of Chairman, Regional Transport Authority, Rawalpindi vs. Pakistan Mutu al Insurance Company Limited, Rawalpindi (PLD 1991 SC 14). 11. In the case of Haji Muhammad Ismail Memon (PLD 2007 SC 35), the Hon’ble Supreme Court observed in paragraph 7 that it is a pathetic condition that Government servants, after having served for a considerable long period during which they give their blood and sweat to the department, had to die in a miserable condition on account of nonpayment of pension/pensionary benefits, etc. Thus, everyone who is responsible in any manner in delaying the ca se of such retired officers/officials or widows or orphan children for the recovery of pension/gratuity and G.P. Fund has to be penalized. 12. It is distinguished that "pension" articulates the payment of a fix amount according to the scheme of pension i n accordance with the law, rules and regulations or the pension scheme in vogue which is recompensed on a regular basis to a person on his superannuation. The foremost and predominant strength of mind is to afford and safeguard the economic refuge and shel ter and recuperate old -age security. In general phenomena, the superannuation or stepping down is considered a second inning in which a retired person aspires to live up to his highly anticipated imaginings or dreams and devote time to his kith and kin and friends. After retirement, the timely payment of pension is considered as the main source of income for livelihood. Despite serving for a long time with sheer commitment, if the pensionary benefits are delayed or denied without any lawful ICA-24175/2026 (9) justification or without assigning any reason or providing any opportunity of hearing, it would be a deplorable situation for a person who performed his duties with utmost dedication and enthusiasm throughout his career but at the eve of his retirement, he is treated inhumanly, coldheartedly and gets nothing , as was done in this case , because the unfortunate respondent has been deprived of the pensionary benefits merely on the basis of an audit objection. 13. After retirement of respondent, the appellants have no lawful authority to withh old his pensionary benefits. The prolong delay in releasing pension is definitely causing great hardship to the respondent and his family. In this regard the Hon'ble Supreme Court of Pakistan in the case of Government of N.W.F.P. v. Muhammad Said Khan (PLD 1973 SC 514) held as under:- "It must now be taken as well -settled that a person" who enters Government service has also something to look forward after his retirement, to what are called retirement benefits, grant of pension being the mo st valuable of such benefits. It is equally well -settled that pension like salary of a civil servant is no longer a bounty but is a right acquired after putting in satisfactory service for the prescribed minimum period."

14. It has been further held by th e Hon’ble Supreme Court of Pakistan in the case of M. Asghar Janjua and others vs. Federation of Pakistan and others (2026 SCMR 267 ) that e very employee is entitled to the payment of his full and final settlement on his superannuation. Non-payment of grat uity has nothing to do with losses or financial crunch, quite the reverse, the amount of gratuity, provident fund and pension is an inherent/vested right of every retired employee which is deep -seated under law . Every employer without any pretext or deferment is bound to pay off this liability immediately on the eve of retirement rather than delaying or shelving this vested right for an indefinite period or putting this obligation in a state of uncertainty.

ICA-24175/2026 (10) 15 As a sequel to above discussion, while relying on the above cited case law as well as the cases reported as: Niaz Ali vs. President Zarai Taraqiati Bank Limited and 2 others (2024 PLC (C.S) 863) , Muhammad Yousaf vs. Province of Sindh and others (2024 SCMR 1689) and M. Asghar Janjua and others vs. Federation of Pakistan and others (2026 SCMR 267), we find no illegality or irregularity in the impugned judgment of learned Single Judge in Chambers, hence the same is upheld and as a consequence whereof, instant appeal stands dismissed.

(CH. SULTAN MAHMOOD) JUDGE (MALIK MUHAMMAD AWAIS KHALID) JUDGE

Approved for reporting

JUDGE SN

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