1993 PLP (C (PLC(CS))

(13) What amount of damages the plaintiff is entitled to? (14) Whether plaintiff is entitled to declaration and relief as claimed in plaint? (15) What should the decree be? The trial Court dealt with issues Nos. 1, 2, 3, 4 and 5 jointly and held that the present respondent could have sought his relief before the Board of Directors according to Regulation No. 33 of the Service Regulations of 1973 of the present applicants; and that remedy does not lie with the Civil Court. Issues Nos. 6 to 10 were also taken up jointly by the trial Court and it was held by the trial Court that Rules of 1973 apply to the present respondent. While Issues Nos. 11 to 14 were also dealt with jointly and it, was held that the present applicants were within their powers and had the discretion to terminate the service of the present respondent. Consequently, the suit of the plaintiff/present respondent was dismissed. Being aggrieved, the respondent preferred the said appeal, which was heard by VIth Additional District Judge, Karachi, who was pleased to set aside the judgment of the trial Court and decreed the suit of the respondent as prayed. Hence this revision application. I have heard Mr. I.H. Zaidi, the learned counsel for the applicants. Learned counsel for the applicants has stated that he would argue only in the following legal points and show that the suit was rightly dismissed by the trial Court. The points urged by him are as under:‑ (A) No legal right enforceable in law has accrued to the respondent. (B) 'The terms and conditions of the service of respondent are governed by the law of Master and Servant. (C) The suit is not maintainable. (D) No damages are claimed against Defendant No. 1 and hence this is only a suit for declaration. The learned counsel for the applicants have submitted that the Presidential Order No. 10 of 1972 was promulgated on 18‑3‑1972 and that by virtue of provisions of section 19(2) of the said order, the present applicants could order the change in the terms and conditions of the service of present respondent. In the same breath, the learned counsel argued that the services of the present respondent were not absorbed in the establishment of applicants and he was not their employee on salary basis and, therefore, no legal right had accrued to him. While arguing the second point, the learned counsel submitted that the present respondent being employee of a Corporation, the terms and conditions of his service were governed by law of Master and Servant and his services could be done away with by the present applicants for which no remedy in Court of law was available to him. With regard to third plea taken by the learned counsel, he has submitted that for the aforesaid reasons, the present suit is not maintainable. He has referred to various documents brought on record. As against this, the respondent who has appeared in person has reiterated his assertions made in the plaint. I have considered the above submissions of the parties and perused the record of the case. It is an admitted position that the present respondent was an employee of Prudential Insurance Company; and that by virtue of the provisions of Presidential Order No. X of 1972, the life insurance business in Pakistan was nationalised and under section 4 of the said Order, the management of all insurers transacting life insurance business vested in the Central Government. It would be pertinent to reproduce the provisions of section 19, subsections (1) and (2), which are the material sections for the purposes of this revision application and read as under "

19. Transfer of service of existing employees of insurers to a Corporation.‑‑‑(1) Every whole‑time employee of an Insurer whose life insurance business has been transferred to and vested in a Corporation and who was employed by the Insurer wholly or mainly in connection with his life insurance business immediately before the appointed date shall, on and from the appointed date become an employee of the Corporation and shall hold his office therein on the same terms and conditions including remuneration, tenure of office, rights and privileges as to pension and gratuity and other matters, as were applicable to him immediately before the appointed date until his employment in the Corporation is terminated or his terms and conditions of service are altered by the Corporation: Provided that nothing contained in this clause shall apply to any employee who has, by notice in writing given to the Central Government prior to the appointed date, intimated his intention of not becoming an employee of the Corporation. (2) Notwithstanding anything contained in clause (1) or in any contract of service, a Corporation may, for the purpose of rationalising the pay scales of employees who have become employees of the Corporation under that clause or for the purpose of reducing the remuneration payable to such employees in cases where, in the interest of the Corporation and its policy‑holders, a reduction is called for, alter the terms and conditions of service of the employees as to their remuneration in such manner as it thinks fit; and, if the alteration is not acceptable to any employee, the Corporation may terminate his employment by giving him compensation equivalent to three months' remuneration unless the contract of service with such employee provides for a shorter notice of termination." As mentioned above, subsection (1) of section 19 provides that every whole‑time employee of an insurer shall on the appointed date become an employee of the Corporation and shall hold his office therein on the same terms and conditions which included remuneration, tenure of office, right and privileges as to pension and gratuity and other matters, as were applicable to him immediately before the appointed date. From these provisions it is clear that the present respondent, who at that time was an employee stood absorbed in or transferred to the service of the Corporation on the same terms and conditions as were applicable to him. Subsection (2) empowers the Corporation to alter the terms and conditions of the service of those employees, who had become the employees of the Corporation for rationalising the pay‑scales and if the interest of Corporation and its policy holders required the reduction in such pay‑scale. Under these circumstances, the contention of the present applicants that the respondent was not the employee of the applicants cannot be sustained as the respondent by operation of law had stood transferred to the service of the applicants on the same, terms and conditions as he had been availing at that time. Now the question which requires consideration is whether the respondent was a salaried employee as claimed by him or merely a field worker on commission basis. It may be observed that the respondent has examined himself and supported his contention made in the plaint and also produced certain documents in evidence. He has not been cross‑examined by the applicants. In such circumstances, the evidence given by the respondent goes unchallenged. A reference to the documents produced by the respondent would show that he was an employee on the salary basis. The first document to be referred is Exh. 1/A, this is letter dated 31st December, 1959 from Prudential Assurance Company Ltd. which shows that during his probationary period, he will be paid salary of Rs.300 per month' travelling allowance Rs.200 per month and development allowance Rs.400 per month. The next document is Exh. 1/A/1. This is superior staff salary voucher dated 8‑3‑1974 issued by the applicants which shows salary for the month of February, 1974 as Rs.1,

070. This document also shows conveyance allowance payable to the respondent and the deductions on account of subscription of provident fund and income-tax. The document Exh. 1/A/4 is a certificate issued by Prudential Assurance Company Ltd. on 27‑4‑1966 which shows that the present respondent is paid a monthly salary and his average monthly net new business frenchise is Rs.80,

000. This certificate also shows that he is being remunerated on salary cum‑bonus overriding commission basis. Exh. 1/C is an agreement entered into between the Prudential Assurance Company and the present respondent on 1‑1‑1961 which shows his confirmation as Development Officer. Schedule‑B attached to this agreement shows that as Development Officer he shall be paid a monthly salary of Rs.350 and also travelling, touring and entertainment expenses. In addition to this, the Company shall also pay in respect of the average monthly net new business a bonus at the rates shown therein. However, in paragraph 23 of this agreement it is provided that the services of the respondent could be terminated by the Company forthwith, without previous notice and without prejudice to any other rights or remedies. All these documents very clearly establish that the present respondent had been a Development Officer on salary basis bonus and commission being additional remuneration, payable to him. In this view of the matter, I am of the view that present respondent had stood absorbed in the applicants' establishment on the salary cum bonus/overriding commission basis and was entitled to such salary. It may be observed that it has now been established law that salary is not a bounty but is a legal right accruing to an employee which can be enforced under law. Of course there is a dispute that the present respondent is an employee of a Corporation and thus his services will be governed by Law of Master and Servant in case there are no rules of service applicable. It is also admitted position that Regulations governing the terms and conditions of the service of the employees have been framed which are applicable in the case; and that under such terms and conditions, an employee is entitled to a notice three months prior to termination of his service. A reference be made to letter dated 3rd December, 1974 Ext. 1/F which is a letter written by the applicant' to the respondent wherein it is mentioned that the respondent has been Paid emoluments at the rate of Rs.1,745 per month till September, 1974. This letter also shows that the performance of the present respondent had performance, and that in case he does not improve upon his performance he will be treated to be a Sales Manager working on commission overriding basis under the new system with effect from 1‑1‑1975. It appear, that this letter has been treated as one month's notice by the applicants are ultimately on 13‑2‑1975 an order has been issued by the applicants which is Exh. 1/W. This order reads as under: "A" Beema Unit Agency and Development Department Dated February 13,1975 AGY: 2046 Mr. F.D. Najmi. Noor Manzil, 455‑Dr. Ziauddin Ahmed Road, Karachi. Dear Sir, ‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑Eligible ‑‑‑‑‑‑‑‑‑‑‑(photo copy) This department's letter of 3rd December, 1964 refers. The thirty days notice given to you vide above-referred letter having expired, this is to confirm that your appointment on salary basis terminated on 2nd January, 1975 afternoon. Effective 3rd January, 1975 you have been placed a Sales Manager on overriding commission basis. Our Accounts Department has been requested to settle your accounts under the said terminated appointment terms. Regards. Yours faithfully, (Sd.) (Allauddin Khan) MANAGER (AGENCY AND DEVELOPMENT)." This order itself is in violation of the terms and conditions of service as modified by the applicants under the Service Regulations. In view of above discussion, it has been established on the basis of the record that the present respondent had been paid emoluments till September, 1974 and would be entitled to his salary and other remunerations from October, 1974 onwards till the date of termination of his service on 13th December, 1975 and in addition to that he will also be entitled to three months' salary and other remuneration in lieu of the notice period. In view of the above discussions, I am of the view that the suit of the plaintiff having been filed challenging the order of his termination as well as claim for salary etc. has to be decreed in above terms that he would be entitled o his salary and other remunerations from October, 1974 till 13‑12‑1975 and further three months in lieu of notice period with 14% mark‑up from the date of filing of suit till payment. However, no declaration can be granted to the effect that he continues to be in service as it was in the discretion of the p applicants to terminate his service as provided in the Service Regulations. There is no material on the record to show that the present respondent has proved any damages against the applicants. Accordingly, this revision application is dismissed and the suit of the respondent stands decreed in above terms with no order as to costs. H.B.T./S‑960/K Order accordingly.