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Official Citation: 2024 IHC 260
Court / Jurisdiction: Islamabad High Court
Year of Decision: 2023
Decision Date: 2023-12-31
Parties: Parvaiz Akhter Bhatti and others vs Federation of Pakistan, etc
Ruling Summary: This decision was rendered by the Islamabad High Court on 2023-12-31, officially reported as 2024 IHC 260. In this matter between Parvaiz Akhter Bhatti and others and Federation of Pakistan, etc, 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.
Case cited as 2024IHC260
Court Name: Islamabad High Court Judge(s): Mohsin Akhtar Kayani Title: Parvaiz Akhter Bhatti and others vs Federation of Pakistan, etc Case No.:W.P. No. 2250/2019, W.P. No.3512/2019 , W.P. No.1095/2017, W.P. No.4249/2019,
JUDGMENT
Reported As: 2024 IHC 260 Result: Order Accordingly Judgment
JUDGMENT MOHSIN AKHTAR KAYANI, J: Through this single judgment, I intend to decide the captioned writ petitions having similar questions of law and facts along with criminal original and an objection case. 2. The petitioners are mainly aggrieved by the: Appointment of Director/Chairman, Board of Directors, PTVC; Appointment of Managing Director, PTVC; Appointments of the Independent Directors; Appointments made through the head hunting firm; Appointments of Amir Mehmood/Managing Director of PTVC, Ms. Qutrina Hossain/Chief News & Current Affairs, and Khawar Azhar/Head of Content & Marketing PTVC; Appointment of Lt. Col. Hassan Immad Mohamedi as Director Special Assignment in PTVC; Decisions of Board of Directors as per Meeting whereby Clauses 10.20-A & 10.22-A of PTVC Revised Leave Rules, 1984 have been amended, on the basis of which petitioners have been directed vide impugned office order dated 29.11.2019 to proceed on Leave Preparatory to Retirement (LPR); Act of Board of Directors for abolishing the post of Deputy Managing Director; Non-maintaining of the seniority list of working Directors;
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Office order of the PTVC, dated 03.06.2020, whereby services of petitioners namely Samina Mir, Uzma Naveed, Humera Nasreen Rana and Qaisar Ahmed Rana as News Caster/Anchor Person/Analyst have been de-notified; and, Hiring of head hunting firm i.e. M/s Career Pakistan. 3. Learned counsel for the petitioners contended: a) that the very appointment of Arshad Khan as Chairman is in violation of Public Sector Companies (Corporate Governance) Rules, 2013, whereby the Board of PTVC shall have at least one-third of the total number of Directors and five (05) Ex-Officio Director and as such, issuance of notification, dated 03.10.2018, is in violation of the abovementioned law because the Federal Government could not exercise its discretion and pleasure while appointing Director of Public Sector Company as the same has been declared illegal in Atta ul Haq Qasmi case, as such this appointment could be checked under the concept of judicial review and relied upon 2013 SCMR 1159 (Muhammad Ashraf Tiwana v. Pakistan, etc.), PLD 2012 SC 132 (Muhammad Yasin vs. Federation of Pakistan, etc.), 2010 SCMR 1301 (Tariq Aziz ud Din case) and PLD 2020 Islamabad 130 (Saira Rubab Nasir vs. President of Pakistan, etc.); b) that Arshad Khan after his resignation as Chairman could not be appointed again as Chairman or recommended by the Federal Government for such position, especially when he had already received pay package of Rs.1,760,000/- and other service benefits, which otherwise disqualifies him under the Companies Act, 2017 as well as under the Rules of 2013 because Federal Government has directly appointed the Chairman PTVC without adhering to the rule of transparency or competitiveness as also held in 2016 CLD 134 Islamabad (Babar Sattar v. Federation of Pakistan, etc.) and 2019 SCMR 1 (in the matter regarding appointment of Director, PTVC); c) that the Public Sector Companies (Corporate Governance) Rules, 2013 provide complete mechanism alongwith criteria for sound management including the composition of Board of Directors and prescribed qualification, whereby a person should be a fit and proper one not hit by disqualification factors referred in the Appendix/ Annexure under Rule 3(7) of the Rules, 2013 and he should have no conflict of interest; d) that Amir Manzoor (Respondent) cannot hold the public office of Managing Director, PTVC as he has deliberately concealed the material fact of holding dual nationality by his spouse and children, whereas his case for Canadian immigration/nationality is in progress, as such, his appointment has been made without completion of codal formalities i.e. without verification of educational credentials from HEC; e) that Rashid Ali Khan (Respondent) has been appointed as Independent Member/Head of Audit Committee, PTVC in violation of judgment passed by the apex Court in the case of Atta-ul-Haq Qasmi as he is not only overage but has conflict of interest being the Chairman of Nayatel, which provides services to the PTVC, even otherwise, his appointment was made in a non-transparent manner as the advertisement so published was tailored made for his selection and the Selection Board was re-constituted by inducting close allies of the Prime Minister; f) that Farmanullah Jan (Respondent) has been appointed as Independent Member of Board of Directors, PTVC in violation of the apex Court's judgment passed in the case of Atta-ul-Haq Qasmi as said respondent is overage and is a pensioner, as such, his appointment was made without verification of educational credentials from the HEC; g) that Zohair Khaliq (Respondent) has been inducted as new member of Pakistan Broadcasting Corporation (PBC) and PTVC Board despite being overage and associated with telecom industry; h) that Muhammad Ali Bukhari, Member Board of Directors, PBC has neither experience of working in any public sector company nor in the media; i) that the SECP maintains a data bank of persons eligible to be appointed as Director in the companies, but none of the private Directors in the Board of PTVC/PBC has been selected from
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such database maintained by the SECP; j) that according to the principle of equivalence between the Army Ranks with appointment in Basic Pay Scale, as notified on 07.02.1984, Lt. Col. Hassan Immad Mohamedi (Respondent) was supposed to be inducted against Group-8, but he was directly appointed in Group-9 in violation of said principle; k) that amendment in Clauses 10.20-A & 10.22-A of PTVC Revised Leave Rules, 1984 and Office Order changing the terms and conditions of the petitioners' services are unlawful and not tenable in the eyes of law, which otherwise cannot be prospective in nature or applicable to the existing employees; l) that petitioners were legitimately expecting to service till their age of superannuation and to receive all the monetary and other benefits, therefore, such benefits cannot be denied as rights accrued cannot be taken away in an illegal manner based on principle of locus poenitentiae; m) that the Board approving the impugned amendment in Clauses 10.20-A & 10.22-A of PTVC Revised Leave Rules, 1984 was not legally constituted, therefore, the decision taken thereof for being illegal in nature is liable to be set-aside and respondents be directed to grant all the rights and benefits accrued to the petitioners; n) that petitioners namely Samina Mir, Uzma Naveed, Humera Nasreen Rana and Qaisar Ahmed Rana have been meted out with discrimination as the PTVC while adopting the policy of pick and choose has extended the contract period of other similarly placed employees, as such, impugned office order does not contain any reason for de-notifying the services of said petitioners, which otherwise makes it a non-speaking order, even otherwise, this Court in connected writ petitions has already passed status quo order, dated 06.03.2020, qua all the employees of PTVC, who could potentially be affected by the order of PTVC Board, but even then impugned office order, dated 03.06.2020, has been issued; o) that order of this Court, dated 14.10.2019, whereby status quo was maintained, has been violated by the respondents and Hassan Immad Mohamedi has been restrained from performing his official assignments; and, p) that CM has been filed by Asad Ahmad Jaspal for withdrawal of earlier CM with permission to file independent writ petition regarding compensatory allowance and inquiry proceedings, though office has raised objection on the said C.M. 4. Conversely, learned counsel for respondents contended that respondent/PTVC is a public limited company and registered under the Companies Ordinance, 1984 (Companies Act, 2017), owned and control by the Federal Government and falls within the definition of public sector company U/S 2(54) of the Companies Act, 2017, whereas its management lies with its Board of Directors in terms of Section 183 of the Companies Act, 2017 read with Article 89 of the Articles of Associations of the Company; that there are three (03) kinds of Director i.e. Executive Director, Non Executive Director and Independent Director, who are recommended or selected in terms of Section 166 of the Companies Act, 2017; that after resignation of Arshad Khan as Chairman, the Board of PTVC unanimously elected him as Acting Managing Director on temporary basis, which he had to hold till appointment of a regular Managing Director, as such, said acting charge was endorsed by the Federal Government vide office order dated 07.11.2018 and matter of extra remuneration to a Director for providing services, in addition to services of Director, had adequately been dealt with by the law in terms of Section 170 of the Companies Act, 2017, which has been paid according to Clause 87 of Articles of Associations as well as in terms of Rule 19 of the Public Sector Companies (Corporate Governance) Rules, 2013, hence there is no violation of law nor there is any ineligibility on the part of Respondent No.5; that decision of the Board of Directors falls within the concept of policy decision, which cannot be interfered with in writ jurisdiction, as such, the relationship between the respondent Corporation and its employees is of master and servant, who are to be
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governed under the Company rules and same cannot be enforced through the writ jurisdiction in terms of Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973; that it has clearly been held by superior Courts of the country that Board of Directors of PTVC is fully competent to amend, alter, modify, supplement or to frame complete new service rules for the employees of PTVC, as such, the rules of PTVC are non-statutory in nature; that services of petitioners namely Samina Mir, Uzma Naveed, Humera Nasreen Rana and Qaisar Ahmed Rana were de-notified vide impugned office order keeping in view the past performances of petitioners as well as outlook requirements of screen, as such, PTVC is a company incorporated under the provisions of Companies Act, 2017 and has non statutory rules, rendering the relationship between the employer and employee as of Master & Servant. 5. Likewise, learned Additional Attorney General on behalf of Ministry of Information & Broadcasting and the Federation of Pakistan contended that all the statutory requirements have been considered before the recommendation of Arshad Khan/Chairman and as such, no illegality has been committed by the Federal Government in recommending Arshad Khan for the post of Chairman, PTVC. 6. In addition, the learned counsel for SECP (Respondent No.6) contended that PTVC is a public sector company defined in terms of Section 2(54) of the Companies Act, 2017, whereby the Government or any agency of Government has the power to elect, nominate or appoint majority of its Directors, even can recommend for appointment of Chairman or Chief Executive of any public sector company, whereas the role of Chairman is different from that of a Director; that the appointment of Arshad Khan as Acting Managing Director of PTVC has not been reported to the SECP and similarly the Public Sector Companies (Corporate Governance) Rules, 2013 were effective from 08.03.2013 and there was requirement of appointment of Independent Director, which has not been adhered to from the data bank maintained by the SECP, rather the Directors were directly nominated by the Federal Government; that the PTVC has not submitted the compliance report till date, therefore, SECP has not yet confirmed that whether the PTVC has substantially complied with the Rules, 2013, Companies Act, 2017 or otherwise, however it has candidly been stated that PTVC has not complied with Rule 3(1) of the Rules, 2013, even the PTVC has not intimated regarding order of 07.11.2018 for appointment of Arshad Khan as Acting Managing Director, PTVC. 7. Arguments heard, record perused. 8. Perusal of record reveals that the petitioners have called in question multiple and interlinked issues, therefore, for the sake of brevity, same are to be thrashed out independently. STATUS OF PAKISTAN TELEVISION CORPORATION (PTVC) 9. The petitioners have heavily relied upon the Public Sector Companies (Corporate Governance) Rules, 2013 (hereinafter referred to as "Rules, 2013") and Companies Act, 2017 with the view that the PTVC being a public sector company falls within the definition of Section 2(g), which is as under: "Public Sector Company" means a company, whether public or private, which is directly or indirectly controlled, beneficially owned or not less than fifty one percent of the voting securities or voting power of which are held by the Government or any instrumentality or agency of the Government or a statutory body, or in respect of which the Government or any instrumentality or agency of the Government or a statutory body, has otherwise power to elect, nominate or appoint majority of its directors, and includes a public sector association not for profit, licensed under section 42 of the Ordinance." 10. Similarly, it has also been contended that PTVC falls within the definition of public sector company as defined in Section 2(54) of the Companies Act, 2017, which is as under: "public sector company means a company, whether public or private, which is directly or indirectly controlled, beneficially owned or not less than fifty-one percent of the voting securities or voting power of which are held by the Government or any agency of the Government or a
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statutory body, or in respect of which the Government or any agency of the Government or a statutory body, has otherwise power to elect, nominate or appoint majority of its directors and includes a public sector association not for profit, licenced under section 42: Provided that nomination of directors by the Commission on the board of the securities exchange or any other entity or operation of any other law shall not make it a public sector company." 11. By application of above referred two definitions provided in different laws, there is no cavil to proposition that PTVC is a public sector company falling within the said definitions and same was established under the Companies Ordinance, 1984 (now Companies Act, 2017), owned and controlled by the Federal Government and its management for the purpose of business of companies shall be controlled by the Board in terms of Section 183 of the Companies Act, 2017 read with Article 89 of the Articles of Associations of the Company, which lies with its Board of Directors. 12. In essence, the Rules of 2013 provide the following three kinds of Directors: i) Executive Director, who is an employee of company in terms of Rule 2(c) of the Rules, 2013; ii) Non-Executive Director, who is not entrusted with duties of administrative or managerial work in terms of Rule 2(e) of the Rules, 2013; and, iii) Independent Director, who is neither in service of Pakistan nor financially related to public sector companies concerned, usually nominated and selected amongst the list of Directors maintained by the SECP in their Data Bank in terms of Section 166(b) of the Companies Act, 2017 and Rule 2(b) of the Rules ibid. 13. Manifestly, Federal Government has power to appoint Board of Directors in the public sector companies in terms of Rule 4(4) of the Rules, 2013, who has different and distinct responsibility from those of Chief Executive / Managing Director, whereas his role being Chairman of the Board is to ensure that the Board is properly working and all matters relating to governance of public sector companies is based on agenda of the meeting. The Chairman is also responsible for implementation of strategies and policies approved by the Board, making appropriate arrangement to ensure funds and the resources are properly safeguarded and used economically, efficiently and effectively in accordance with all statutory obligations. APPOINTMENT OF ARSHAD KHAN AS CHAIRMAN, PTVC 14. The appointment of Ashraf Khan being Chairman of Board of Directors, PTVC has been challenged on the ground that he was initially appointed through notification dated 03.10.2018 by the Ministry of Information & Broadcasting (hereinafter referred to as "MoIB") in terms of powers under Section 165-B of the Companies Act, 2017 with direction to the newly constituted Board "to elect Mr. Ashraf Khan, Chairman PTVC in the line with the Pakistan Television Corporation Memorandum and Articles of Associations (Article 95)", however he resigned from his position as Chairman of Board of Directors, PTVC on 06.11.2018 to be appointed as Acting Managing Director of PTVC, whereafter office order 07.11.2018 was issued by the MoIB. However, on 14.06.2019, the Federal Government directed the Board of Directors to appoint Arshad Khan as Chairman of the PTVC Board in line with the PTVC s Memorandum and Articles of Associations. 15. Likewise, W.P. No.778/2019 was earlier filed assailing the appointment of Arshad Khan being Acting Managing Director of the PTVC along with his appointment as Director of the Board, vide notification dated 03.10.2018. The said writ petition was adjudicated upon and decided through consolidated judgment dated 07.05.2019, passed in W.P. No.367/2018 (Malik Shabbir Ahmad vs. Federation of Pakistan) in which a prayer was made for appointment of Managing Director of PTVC in accordance with law. Both the said petitions were allowed mainly on the ground that Federal Government was in process of recruitment against the post of Managing Director, PTVC, but due to diverse issues at their end, the appointment could not be finalized. However, the appointment of Arshad Khan being Acting Managing Director of PTVC was withdrawn w.e.f. 11.04.2019 by MoIB, therefore, Federal Government was directed to appoint Managing Director, PTVC
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in accordance with law within the period of three (03) months. As such, the principle of res judicata is not applicable in this case as all other issues were not discussed, adjudicated upon or decided, neither any observation was made regarding other issues except a direction for appointment of Managing Director of PTVC to the Federal Government was issued, even otherwise, in connected writ petitions the appointments have been assailed independently including the appointment of Arshad Khan being Chairman of PTVC on some new grounds not earlier available, even the complete record was not produced before this Court in previous round of proceedings, therefore, the ground of application of res judicata is not available in strict sense in this case. 16. In this round, the appointment of Arshad Khan has again been challenged on the basis of notification earlier considered by this Court in previous proceedings mentioned above, whereby the petitioner has prayed that Arshad Khan has been appointed in violation of law and as per annexure of the Rules of 2013 with the contention that he is not "fit and proper person" for the purpose of appointment as no transparency has been adopted by the Federal Government while appointing Arshad Khan as Chairman, PTVC, even the criteria laid down in 2019 SCMR 1 (in the matter regarding appointment of Director, PTVC), has not been adhered to. 17. The concept of "fit and proper person" in terms of Rule 3(7) of the Rules, 2013 is defined in the following manner: "The appointing authorities, including the Government and other shareholders, shall apply the fit and proper criteria given in the annexure in making nominations of the person for election as Board Members under the provisions of the Ordinance." 18. Whereby, the term "Ordinance" means the Companies Ordinance, 1984 (now the Companies Act, 2017). The annexure under the said Rules, 2013 defined the criteria of determining fit and proper person, which is as under: (1) For the purpose of determining as to whether a person proposed to be appointed as director is a fit and proper person', the appointing authorities shall take into account any consideration as it deems fit, including but not limited to the following criteria, namely:- The person proposed for the said position - (a) is at least graduate; (b) is a reputed businessman or a recognised professional with relevant sectoral experience; (c) has financial integrity; (d) has no convictions or civil liabilities; (e) is known to have competence; (f) has good reputation and character; (g) has the traits of efficiency and honesty; (h) does not suffer from any disqualification to act as a director stipulated in the Ordinance; (i) has not been subject to an order passed by the Commission cancelling the certificate of registration granted to the person individually or collectively with others on the ground of its indulging in insider trading, fraudulent and unfair trade practices or market manipulation, illegal banking, forex or deposit taking business; (j) has not been subject to an order passed by the Commission or any other regulatory authority, withdrawing or refusing to grant any license or approval to him which has a bearing on the capital market; (k) is not a stock broker or agent of a broker; and (l) does not suffer from a conflict of interest; this includes political office holders whether or not in a legislative role. (2) A director shall cease to be considered as a fit and proper person for the purpose, if he incurs any of the following disqualifications, namely:-
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(a) he is convicted by a court for any offence involving moral turpitude, economic offence, disregard of securities and company laws or fraud; (b) an order for winding up has been passed against a company of which he was the officer as defined under section 305 of the Ordinance; (c) he or his close relatives have been engaged in a business which is of the same nature as and directly competes with the business carried on by the Public Sector Company of which he is the director; (d) he does not conduct his duties with due diligence and skill; or (e) his association with the Public Sector Company is likely, for whatever reason, to be detrimental to the interest of the Public Sector Company, or be otherwise undesirable. 19. Keeping in view the above criteria, the following factual aspects have been raised and noted from record, which deals with appointment of Arshad Khan as Chairman, PTVC: S.No.Dates Particular 1. 03.10.2018 Arshad Khan was appointed as Director, PTVC by the Federal Government in terms of Section 165B of the Companies Act, 2017 to be appointed as Chairman of the Company. 2. 08.10.2018 217th Meeting of Board of Directors, whereby nomination of Arshad Khan for appointment as Chairman was approved for period of three years in terms of Clause 95 of the Articles of Associations of PTVC and share of Rs.100 was also transferred in his name. 3. 05.11.2018 Arshad Khan had resigned from his position as Chairman of PTVC Board. 4. 06.11.2018 219th Meeting of PTVC Board, whereby Arshad Khan was unanimously appointed as Acting Managing Director of PTVC against pay package/salary of Rs.1,760,000 (net of taxes) along with chauffeur driven 1800CC car for personal/private use and other service benefits. The Board confirmed the proposed appointment and transferred share of Rs.100 in favour of Arshad Khan. 5. 07.11.2018 Office order issued by the MoIB notifying the appointment of Arshad Khan as Acting Managing Director of PTVC. 6. 11.04.2019 The acting charge of Arshad Khan as Managing Director, PTVC, dated 07.11.2018, was withdrawn by MoIB. 7. 14.06.2019 Office Memorandum issued by the MoIB, whereby Federal Government was pleased to nominate Arshad Khan as Chairman, Board of Directors, PTVC. Board is also directed to elect Arshad Khan as Chairman, PTVC interms of Article 95 of the Articles of Associations. 8. 17.06.2019 226th Meeting of Board of Directors, whereby Arshad Khan has been unanimously elected/appointed as Chairman, PTVC for three years and approved transfer of one share of Rs.100 in his favour.
20. The abovementioned resume of facts is admitted by all the parties, therefore, the only question left for determination by this Court is as to whether any person, who has received a pay/salary with other benefits from PTVC, can be appointed as a Director in terms of Independent Director, or Non Executive Director by the Federal Government in terms of the restriction imposed in the Rules, 2013 as well as in the Companies Act, 2017 or under the criteria of fit and proper person, to be appointed as the Chairman of the Board of Directors, PTVC? 21. The petitioners brought attention of this Court towards Sections 164, 165 & 166 of the…
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