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Petitioner: NASIRUDDIN GHORI VS Respondent: FEDERATION OF PAKISTAN through Secretary and 4
Court Name: Sindh High Court Judge(s): Gulzar Ahmed, Shahid Anwar Bajwa Title:NASIRUDDIN GHORI vs FEDERATION OF PAKISTAN through Secretary and 4
JUDGMENT
Reported As: 2010 PLC 323 Result: Petitions dismissed Judgment JUDGMENT SHAHID ANWAR BAJWA, J.---These are petitions by employees of various organizations. Through this order we propose to decide the following two questions in respect of such organizations and these petitions:-- (1) Whether the organization in question is a person within contemplation of Article 199(5) of Constitution of the Islamic Republic of Pakistan? (2) If answer to the first question is in affirmative whether there are statutory rules so that an employee of such an organization can maintain a Constitution Petition in respect of any grievance relating to his employment in such an organization? 2. The employees belong to the following organizations:-- (1) Pakistan Telecommunication Company Ltd. (2) United Bank Ltd. (3) Karachi Electric Supply Company Ltd. 3. Mr. Muhammad Nawaz Shaikh, learned counsel for the petitioners in C.P. No.D-526 of 2004 and C.P. No.D-156 of 2007 relied upon para 15 of judgment in Pakistan Telecommunication Company Limited, through General Manager and another v. Muhammad Zahid and 29 others, 2009 PLC (CS) 1001. Learned counsel with reference to judgment of the Honorable Supreme Court in the case Pakistan International Airlines Corporation v. Tanweer-ur-Rehman, Civil Appeal Nos. 172-K of 2009 submitted that the judgment of the Supreme Court in the case of Muhammad Zahid though a judgment earlier in time has not been dissented/discussed in judgment in the case of Tanweer-ur- Rehman.
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4. Mr. Moula Bux Khoso, learned counsel for the petitioner in C.P. No. D-1871 of 2008 referred to sections 3, 9 and 20 of the Pakistan Telecommunication Corporation Act, 1991. Thereafter the learned counsel referred to various provisions of the Pakistan Telecommunication (Re- organization) Act, 1996, specifically to section 35(2) and section 36 of the Act of 1996. Learned counsel submitted that the Act of 1996 repealed the Act of 1991. He submitted that section 34 provided for incorporation of Pakistan Telecommunication Company Ltd., as a Company, under the provisions of the Companies Ordinance, 1984 and section 36 granted power to the Federal Government to transfer any property, rights and liabilities of the Corporation established under the Act of 1991 to the Company established under the Act of 1996 or to other authorities named therein. Thereafter learned counsel referred to subsection (2) of section 35 and sections 36(1) and 36(2). Same are reproduced as follows:-- 36. Terms and conditions of service of employees.---(1) No person transferred to the Company pursuant to subsection (2) of section 35, hereinafter referred to as "Transferred Employee", shall be entitled to any compensation as a consequence of transfer to the Company. Provided that the Federal Government shall guarantee the existing terms and conditions of service and rights, including pensionary benefits of the Transferred Employees. (2) Subject to subsection (3), the terms and conditions of service of any Transferred Employee shall not be altered adversely by the company except in accordance with the law of Pakistan or with the consent of the Transferred Employees and the award of appropriate compensation." 5. Learned counsel submitted that by virtue of the first proviso to subsection (1) of section 36 the rules framed in respect of employees of PTCL are statutory rules. Learned counsel further submitted that on 12-3-2006 an agreement was entered into between the Government of Pakistan and Messrs Etisalat International Pakistan LLC, a company incorporated at Dubai under the Laws of United Arab Emirates (hereinafter referred to as the Etisalat). By that agreement 26% `B' class shares of PTCL were sold by Government of Pakistan to Etisalat and management of PTCL was consequently handed over by the Government to the Etisalat. Learned counsel further submitted that at present 26% shares are owned by the Etisalat, 62% shares are owned by Government of Pakistan and 12% shares are owned by general public. Learned counsel relied upon Abdul Rahim v. Pakistan Broadcasting Corporation, through Director-General and 8 others, 1992 SCMR 1213 to support his contention that transfer of services of an employee of a Government department to a Corporation on the terms and conditions to which he was entitled before the transfer did not imply that such transfer amounted to change in status of civil servant as he remained civil servant nevertheless. Learned counsel further relied upon Divisional Engineer Phones, Phones Division, Sukkur and another v. Muhammad Shahid and others, 1999 SCMR 1526 for the following observations:-- "In cases of Corporation created by the government through statutory instruments if existing employees are transferred to the Corporation in the absence of any provision to the contrary, the transferred employees continue to remain in the service of Corporation on the same terms and conditions under which they were working before their transfer to the Corporation. Therefore, if an employee of the corporation before his transfer to the corporation was a civil servant, he continues to be a civil servant. In all other cases, where an employee is appointed in the service of the Corporation after the Corporation is established, his service is governed by the Service Rules of the Corporation. If such Rules are not statutory, the principle of master and servant governed the relationship between the employee and Corporation." 6. Learned counsel next relied upon Syed Arshad Ali and 55 others v. Pakistan Telecommunication Company Limited, through its President and 8 others, PLD 2007 Karachi 214 for the contention that since 62% of the shares were still owned by the Government, writ petition would be maintainable. Learned counsel next relied upon Syed Arshad Ali v. Pakistan Telecommunication Company Limited
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2007 SCMR 1786 by which judgment order of the Sindh High Court reported at PLD 2007 Kar. 214 has been up-held by the Supreme Court. 7. Mr. Nishat Warsi, learned counsel for petitioner in C.P. No.D-827/2009 referred to Gazette Notification issued by the Government of Pakistan and published in the Gazette of Pakistan on May 5th 2006 in connection with privatization of PTCL. He pointed out that out of prior to the Gazette notification 88% of `A' and classes were owned by the Government out of them 26% shares of PTCL were sold by Government of Pakistan to Etisalat. He further submitted that PTCL has an issued capital of Rupees 51 billion comprising of 5 billion ordinary shares with a par value of Rs.10. Out of these 3.774 billion shares are `A' class ordinary shares and 1.3226 billion are `B' class ordinary shares. It was stated that in line with the Government of Pakistan privatization agenda, the Government decided to sell Rs. 1.326 billion 'B' class shares (all the `B' class shares) representing 26% of share capital along with management control of PTCL and its group of companies. Regarding respective voting strength of these shares at page 1062 of the Gazette Notification it was stated to be as under:-- "The `A' and `B' ordinary shares rank pari passu in all respects save that for the purpose of election of directors at meetings of the shareholders of PTCL each "B" ordinary share shall carry four votes and each "A" ordinary share shall carry one vote. In respect of dividends, voting rights on all matters (other than election of directors) and all other rights as shareholders; there is no difference between "A" ordinary shares and "B" ordinary shares. 8. Learned counsel further submitted that no election of Directors since sale of share to Etisalat has yet taken place. Learned counsel lastly submitted that 26% does not constitute majority. 9. Mr. Aziz-ur-Rehman and Mr. Shujauddin who appeared for petitioners in C.P. No.D-1332 of 2006 and in a number of other petitions firstly relied upon Muhammad Zahid's case (supra) and specifically on the observations at pages 1016 and 1032. With reference to Tanweer-ur-Rehman's case (supra) learned counsel submitted that since their terms are guaranteed by section 36 of the Act of 1996 and Regulations framed under the Act of 1991 their service is regulated by statutory Regulations. Learned counsel also submitted that section 59(2) of the Act of 1996 protected the Regulations framed under Act of 1991 and keeps rights of employees intact. "59(2) Notwithstanding anything contained hereinbefore, all orders made, actions taken, vesting orders or notifications, issued, property, assets and liabilities of the Corporation vested or transferred and the employees of the Corporation transferred to the Pakistan Telecommunication Authority, Frequency Allocation Board, Pakistan Telecommunication Company Limited, National Telecommunication Corporation or Pakistan Telecommunication Employees Trust, under any of the power conferred or vested under the Pakistan Telecommunication (Re-organization) Ordinance, 1995 (CXV of 1995), the Pakistan Telecommunication (Re-organization) Ordinance, 1996 (XXX of 1996), the Pakistan Telecommunication (Re-organization) Ordinance, 1996 LXXVII of 1996) shall be deemed always to have been lawfully and validly made, taken, issued, vested or transferred under the provisions of this Act and shall continue to be in force unless amended, varied, withdrawn, rescinded or annulled by a person or authority competent to do so under this Act." 10. Learned counsel relied upon Manzoor Ali and 39 others v. United Bank Limited through President, 2005 SCMR 1785 to contend that rights once granted to the employees remain protected and change of ownership does not extinguish such rights. Learned counsel further submitted that the payments required to be made in terms of what he called, so called privatization agreement have not yet been proved to have been made. 11. Mr. Malik Muhammad Aqil Awan, learned counsel for petitioner in C.P. No.D-976 of 2007 submitted in his usual erudite and vociferous style that even where there are no statutory rules if a question other than terms and conditions of employment is raised, Constitution Petitions would be maintainable. He further submitted that even where there are no statutory rules if action is alleged
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to be malafide, writ petition would be maintainable and same would be the position where the action taken is arbitrary. He referred to judgment of full bench of this Court in Muhammad Dawood and others v. Federation of Pakistan and others, 2007 PLC (CS) 1046. Learned counsel also referred to judgment, of the Honorable Supreme Court passed" on 13-4-2010 in C.P. No.1863 of 2009 (Executive Council, (Allama Iqbal Open University, Islamabad, through its Chairman and another v. Dr. M. Tufail Hashmi). Learned counsel bewailed and narrated litany of agonies of the petitioners and submitted that when section 2-A was inserted-the petitioners and a whole lot of others were thrown from Labour Courts, Civil Courts and even from the High Courts to the Service Tribunal and when Muhammad Mubeen-us-Slam's case PLD 2006 SC 602 came they were thrown out of the Service Tribunal. Thereafter this High Court in Muhammad Dawood's case 2007 PLC (C.S.) 1046 and the Service Tribunal in Rehan Butt's case 2008 PLC (CS) 734, 2008 PLC (CS) 734 held section 10 of the Removal from Service (Special Powers) Ordinance, 2000 to be ultra vires of Article 212 of the Constitution of Islamic Republic of Pakistan. In the presence of these two judgments, the Federal Service Tribunal without looking at these two judgments and without referring to them in Humayoon Akhtar and others v. WAPDA House, Lahore and others SBLR Tr. 131 held that the appeals before the Federal Service Tribunal of those employees who had been proceeded against under the RSO would be maintainable. Learned counsel submitted that it is sad and ironic that this was done by the Tribunal, in the face of two judgments one by 'a full bench of this Court and other by an equal bench of the Federal Service Tribunal and thus, the Federal Service Tribunal acted in ignorance of, if not in total blindness, in respect of, the above two judgments. Learned counsel submitted that now in Dr. Tufail Hashmi's case (supra) Supreme Court has practically come to the same conclusion that this High Court had 'done in Muhammad Dawood's case. Learned counsel also relied upon Civil Aviation Authority, through its Director-General v. Jawaid Ahmed, 2009 SCMR 956. Learned counsel also referred to House Building Finance Corporation, through Managing Director Karachi and another v. Inayatullah Shaikh 1999 SCMR 311. Lastly the learned counsel relied upon Ms. Anisa Rehman v. PIAC and another 1994 SCMR 2232 and submitted that at least one door should be kept open for the down trodden and trampled persons. 12. Mr. M. A. K. Azmati, learned counsel for the petitioner in C.P. No.D-2311 of 2008 adopted arguments of Mr. Khoso and Mr. M.M. Aqil Awan and pleaded that this Court be not "influenced" by any judgment. When he was specifically asked as to which judgment he had in mind, the learned counsel stated that he had Tanweer-ur-Rahman's judgment in mind. When it was pointed out to the learned counsel that it was a dictum laid down by the Supreme Court and in terms of Article 189 of the Constitution of the Islamic Republic of Pakistan, it is binding on this Court and therefore, how can this Court not follow that judgment, the learned counsel submitted that it is for this Court to find out a way around that judgment. 13. Mr. Nihal Hashmi, learned counsel for petitioner in (C.P. No.2234 of 2008) and Mr. Masood Ahmad Bhatti in (C.P. No. D-2520 of 2009) who appeared in person adopted arguments of Mr. Khoso. Mr. Muhammad Qutabuzaman learned counsel for petitioner in (C.Ps. Nos. D-594 of 2009 and 851 of 2009) and Mr. Mohsin Imam learned counsel for petitioner in C.Ps. Nos.D-2014 to 2016 of 2006 adopted arguments of Mr. Malik M. Aqil Awan. Mr. M.A. Khan, learned counsel for petitioner in (C.P. No.2506 of 2009) adopted arguments of Mr. Khoso. He however submitted that it is not clear from any document whether PTCL has been sold with assets and liabilities, or only assets have been sold. Mr. Nihal Hashmi, holding brief for Mr. Haseeb Rehman, learned counsel for petitioners in C.Ps. Nos.D-2017 to 2048 of 2008) adopted arguments of Mr. Khoso. 14. Mr. Mushtaq Shaikh, who appeared in (C.P. No. D-720 of 2008, by an ex-employee of United Bank Ltd.) submitted that there are no statutory rules of service in UBL. He pleaded that petitioner was dismissed from service on 15-8-2001 and privatization of U.B.L. took place on 14-11-2002. He submitted that cause of action accrued prior to privatization. Therefore, petition would be
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maintainable. In this regard he relied upon Manzoor Ali and 39 others v. United Bank Limited through President, 2005 SCMR 1785 and Muhammad Dawood and others v. Federation of Pakistan and others, 2007 PLC (C.S.) 1046. 15. Respondent PTCL was represented by five learned counsel: Mr. Haider Waheed, Mr. Khurram Rasheed, Ms. Azeema Naseer, Sanaullah Noor Ghori and Mr. Sakhiullah Chandio. 16. Mr. Haider Waheed who led arguments on behalf of PTCL referred to Article 199(5) of the Constitution of the Islamic Republic of Pakistan and submitted that the key element in respect of a body corporate is that it must be either "any authority of" or "under the control of", the Federal Government or a Provincial Government. He submitted that although the Etisalat owns only 26% `B' class shares but since for the purpose of election of Directors each `B' class share carries 4 votes compared with each `A' class share and since under the Companies Ordinance, 1984 management of affairs of an organization vests in its Board of Directors, PTCL is not an organization under the control of the Federal Government. Learned counsel referred to section 90 of the Companies Ordinance, 1984 and submitted that law permits classification of shares into different classes with varying rights and therefore giving 4 votes to each "B" class shares and 1 vote to "A" class share in the matter of election of Director is not violative of any provision of the Companies Ordinance, 1984. Learned counsel submitted that PTCL was privatized in 2006 and is not an organ of the State and it is managed and controlled by the Etisalat. Learned counsel referred to Province of N.-W.F.P., through Secretary, Local Government and Rural Development, Peshawar v. Pakistan Telecommunication Corporation through Chairman and others PLD 2005 SC 670 to contend that since PTCL is liable to pay certain taxes it cannot be treated as a person within contemplation of Article 199(5) of the Constitution. Learned counsel referred to Salahuddin and 2 others v. Frontier Sugar Mills and Distillery Ltd. Tokhat Bhai and 10 others, PLD 1975 SC 244 and submitted that there is a three fold test for holding an organization to be a person within the contemplation of Article 199(5) of the Constitution of: (i) such organization must be entrusted with a sovereign function of the State, (ii) does the Government control the organization, (ii) who provides bulk of the funds of the organization. Learned counsel next referred to Masood Ahmed Toor and 4 others v. Federation of Pakistan, through the Secretary to the Government of Pakistan, Ministry of Housing and Works, Islamabad and others, 2000 SCMR 928 to contend that primary test must always be whether the functions entrusted to the organization involve some exercise of sovereign or public powers, whether the control of the organization in a substantial manner is in the hands of Government and whether bulk of the funds was provided by the State. Learned counsel then referred to Anoosha Shaigan v. Lahore University of Management Sciences, through Chancellor and others, PLD 2007 Lah. 568 to contend that control for the purpose of Article 199 (5) of the Constitution, must be "absolute control" and "executive control". Learned counsel once again referred to Salahuddin's case in connection with such functions. Learned counsel thereafter referred to the following judgments:- (1) Muhammad Yousuf through Attorney v Chairman, Karachi Electric Supply Corporation and another, 2009 YLR 1038. It was held that since in KESC 73% shares are held by private persons, KESC is not a person within contemplation of Article 199(5) of the Constitution of Islamic Republic of Pakistan. (2) Khalid Mahmood v. State Bank of Pakistan through Manager and 3 others 2005 MLD 1798. It was held that writ petition against private person would not be maintainable. 17. Explaining Muhammad Zahid's case learned counsel submitted that a perusal of Muhammad Zahid's case indicates that it was against a judgment in a High Court Appeal of 2002. Therefore, the writ petition from which the High Court Appeal had arisen must have been filed before or, at the most, during 2002. High Court Appeal was decided in 2004 and Civil Appeal, was filed in 2005. He
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submitted that during all this period PTCL had not been privatized and therefore the judgment is not germane to the question in the present petitions. 18. Regarding the question whether PTCL has statutory rules or not learned counsel submitted that it is only actions which have been saved by section 59(2) and not the law itself or rules or any Regulation under the law. He, therefore, submitted that the. Regulations framed under the Act of 1991 have not been saved by the Act of 1996. He referred to section 36 of the Act of 1996 and section 9 of the Act of 1991. Learned counsel submitted that the petitioners in C.Ps. Nos. 2017 to 2048 of 2009 have availed Voluntary Retirement Scheme benefits and it amounted to a contract within contemplation of section 36 of the Act of 1996. 19. Mr. Mehmood Abdul Ghani, learned counsel for respondent United Bank Ltd., in C.P. No. 720 of 2008 and respondent Karachi Electric Supply Corporation Ltd., in C.P. No.D-613 of 2008 referred to the judgment of the Supreme Court in Executive Council, Allama Iqbal Open University, Islamabad, through its Chairman and another v. Dr. M. Tufail Hashmi (C.P. No. 1863 of 2009) decided by the Honourable Supreme Court on 13-4-2010. Learned counsel referred to the following further case- law: 1.Ejaz Ali Bughti v. PTCL and others 2008 PSC 1224. 2.S.M. Gharib Nawaz Deccawala v. KESC and others Civil Petition No.106-K of 2007, decided by the Honourable Supreme Court on 23-10-2008. 3.Zulfiquar Ali Shar v. Allied Bank of Pakistan, C.P. No.D-109 of 2005. 4.Khalid Mahmood v. Habib Bank Ltd. and others 2005 MLD 1798. 5.M.C.B. Ltd. Retired Executive Welfare Association v. State Bank of Pakistan Writ Petition No. 14499 of 2009, decided by a single bench of Lahore High Court on 15-12-2009. 6.Izhar Hussain, and others v. Allied Bank, and others 2003 CLC 1864. 7.Abdul Malik v. Habib Bank Ltd. and others 2008 CLC 339. 8.Zeba Mumtaz v. First Women Bank Ltd. and others, PLD 1999 SC 1106. 20. Learned counsel also placed on record calculation of type of shares in PTCL as well as a copy of Gazette Notification dated 13th March, 2008 through which notification PTCL has been exempted from the provisions of the Removal from Service (Special Powers) Ordinance 2000. 21. Ms. Azeema Naseer who also appeared for PTCL in a number of petitions relied upon Pakistan International Airlines Corporation v. Tanweer-ur-Rehman, Civil Appeal Nos. 172-K of 2009 and submitted that it is Etisalat which controls PTCL and therefore writ petition is not maintainable. She also submitted that PTCL does not have statutory rules. Mr. Sanaullah Noor Ghori, relied upon Abdul Ghafoor Baluch and 11 others v. Pakistan Telecommunication Company Limited and 11 others 2009 Law Notes 30 to contend that it had been held by the Federal Service Tribunal that PTCL did not have statutory rules. He submitted that this judgment has been upheld by the Supreme Court in Ejaz Ali Bughti v. PTCL and others, 2008 PSC 1224. Learned counsel submitted that he was arguing only on the question of absence of statutory rules and would adopt arguments of Mr. Haider Waheed on the point that PTCL is not an organization owned and controlled by the Government. Mr. Khurram Rasheed another counsel for PTCL while adopting arguments of Mr. Haider Waheed relied upon the following judgments:- (1) Syed Arshad Ali and others v. Pakistan Telecommunication Company Ltd. and others 2008 SCMR 314 on the ground that if alternate remedy is available writ petition would not be maintainable. (2) Ahmed Khan Niazi v. Town Municipal Administration, Lahore, through Town Municipal Officer and 2 others, PLD 2009 Lahore 657 on the point that if the legislated Act stands repealed regulation framed thereunder also stands repealed. On the same point learned counsel also relied upon Muhammad Din v. Nazar Muhammad Khan and others PLD 1966 (W.P) Lahore 780. 22. Learned counsel also referred to Page 1030 of reported judgment of Muhammad Zahid's case. He placed on record a copy of the letter dated November 24, 2009 issued by Member Telecom,
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Ministry of Information and Technology wherein it is-stated that since privatization of PTCL with effect from March 12th 2006 it has no administrative linkages with Ministry of IT and Telecommunication. After PTCL's privatization, management and administrative functions of PTC stand transferred to Etisalat. 23. Mr. Sakhiullah, another counsel for PTCL in certain matters and Mr. Ashiq Raza, learned D.A.-G. adopted arguments of M/s Haider Waheed and Khurram Rasheed. 24. While exercising right of reply, Mr. Shujauddin and Mr. Nishat Warsi, made the following points:-- (1) Chairman of PTCL is Secretary Ministry of Information and Technology and 4 of the 9 Directors are nominated by the Government. (2) PTCL has not yet been privatized because 62% shares are still with the Federal Government. (3) Act of privatization of PTCL is a fraud played with the people of Pakistan. Learned counsel referred to Annual Account of PTCL, which show that an amount in excess of 3 billion, year after year, has been paid by PTCL to Etisalat as technical services and there is no explanation as to what technical services are being provided by Etisalat. Learned counsel also referred to section 37 of the Act of 1996 to content that many of the provisions of the Companies Ordinance are not applicable to PTCL. 25. We have considered the submissions made by the learned counsel have also gone through the record as well as case law cited at the Bar. 26. Before proceeding further, it may be appropriate to refer to the legal provisions and also to the undisputed and admitted facts regarding share holding, share structure and management structure of PTCL. 27. Historically there used to be Pakistan Telegraph and Telephone Department. It was a department of the…
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