2010 PLP (C (PLC(CS))

IFTIKHAR MUHAMMAD CHAUDHRY, C J.

These petitions for leave to appeal have been filed under Article 212(3) of the Constitution against the judgment dated 16-6-2005 passed by the Federal Service Tribunal.

2. Relevant facts for disposal of the case are that the petitioner organization while dealing in the State Life Insurance appointed the respondents as Area Managers from time to time, subject to performance standard incorporated in the appointment letters. As identical questions of law and facts are involved and the appeals have been decided by a single judgment, therefore, relevant condition from one of the appointment letters, dated 8-2-1996 from C.P. No.2094 of 2005 is reproduced hereinbelow:-- "I am pleased to inform you that you have been appointed as an Area Manager "A" Category with effect from 25-8-1994 on the following terms and conditions:-- (1)

(2)

(3)

(4) Performance Standard As agreed by you, target, for 1996 is given below:- (i) F.Y.P. Rs.50,00,000. (ii) 2nd year persistency 85% (whole year) (iii) Operating Cost (a) Direct cost (excluding incentive Bonus and additional incentive Bonus) not to exceed 5%. (b) Office cost (including 1/3rd of expenses on reimbursement of office expenses to your EOAS or a maximum 2% of your FYP whichever is less) not to exceed 5%. (c) The persistency ratio (2nd Policy year Premium collection in a calendar year 100% 1st year Premium in previous calendar year) should not be less than 73%. (5) Review Your performance will be reviewed by the Zonal Head under rules 4(ii)(c)(1) and (2) of the State Life Employees Service Regulations 1973 on a six monthly basis or for such shorter period as may be deemed necessary by the Board. If on such review is found that your performance falls short of the prescribed standards, such measures including, but not limited to, reduction curtailment or withdrawal of your emoluments or perquisites or all such measure together, shall be taken by the Zonal Head as may generally or specifically prescribed by the Board. The performance standard prescribed by the Board your to maintain costs both direct (including incentive and additional incentive Bonus) and office expenses respectively within 5% each, fulfil your annual quota and ensure that your persistency ratio is not lower than 90% failure to achieve all or any of these requirements will necessitate curtailment of your emoluments or taking any or all such measures as prescribed above." Subsequent to issuance of appointment letters the performance of the respondents were evaluated from time to time and it seems that they failed to achieve the requisite targets of the business. Thus, show-cause notices were issued to them, wherein they were shown the standard of their performance during the period of one year and they were called upon to explain the reasons for the same. Show-cause notices were contested but ultimately their services were terminated. However, on completion of nodal formalities they approached the Federal Service Tribunal and succeeded in getting relief, as such these petitions have been filed.

3. Before dilating upon the arguments put forward by the learned counsel for the parties, it would be appropriate to mention their performance indicated by the Service Tribunal in the judgment, which read as under:- Names of petitioners Required FYP and Persistency in the year 2000 Performance in the year 2000 Hassan Ali Shah (C.P. No.2094 of 2005) First Year Premium: 30 lacs 546,180 Second Year Persistency: 70% 42.76% Abdul Ghafoor Arain (C.P. No.2095 ofr2005) First Year Premium: 18 lacs 547,753 Second Year Persistency: 70% 28.28% Manzoor Hussain Arain (C.P. No.2096 of 2005) First Year Premium: 18 Lacs 478,310 Second Year Persistency: 70% 39.33% Zakir Hussain (C.P. No.2097 of 2005) First Year Premium: 18 lacs 3,09,263 Second Year Persistency: 70% 43.91% Ghulam Mustafa Khan (C.P. No.2098 of 2005) First Year Premium: 15 lacs 5,52,920 Second Year Persistency: 70% 36% Abdul Aziz Abbasi (C.P. No.2099 of 2005) First Year Premium: 30 lacs 6,94,529 Second Year Persistency: 70% 55% Syed Barkat Ali (C.P. No.2100 of 2005) First Year Premium: 30 lacs 3,37,004 Second Year Persistency: 70% 47.76% Muhammad Akram Ansari (C.P. No.2101 of 2005) First Year Premium: 30 lacs 501,962 Second Year Persistency: 70% 57.81% Shaukat Ali Arain (C.P. No.2102 of 2005) First Year Premium: 30 Lacs 354,525 Second Year Persistency: 70% 12.76%

4. A perusal of the above report clearly indicates that the respondents have failed to achieve the target assigned to them. Learned Tribunal accepted their appeals mainly relying upon the judgment in the case of Chairman, State' Life Insurance Corporation of Pakistan and another v. Ali Muhammad Bangash 2002 SCMR

936. It is to be noted that the Tribunal has relied upon the said judgment without taking into consideration that no law was declared therein as it is evident from its contents wherein it find mention "No question of law of public importance is either involved or made out in this petition. It is a case of personal grievance and a question of fact has been decided by Service Tribunal to which no exception can be taken." Therefore, we are of the opinion that granting of relief on the basis of the judgment wherein no law has been declared in terms of Article 212(3) of the Constitution was applicable. Be that as it may, subsequent thereto this Court has occasion to examine the provision of Regulation No.4(ii),(C)(1)and(2) of the State Life Employees (Service) Regulations, 1973 in the case of Mazullah Khan v. Zonal Head, State Life Insurance, Peshawar and others 2008 SCMR 617 and on having considered the provision of law quoted hereinbefore, which relates to measuring the performance of the Area Manager/personal involvement in the insurance business, it was held as follows:-- "It is an admitted fact that appellant's performance for the year 1997 was poor. It is also an admitted fact that respondent's Corporation is a Commercial Organization whose existence depends on the performance of its employees. His appointment order, dated 24-7-1995 (relevant para. reproduced above), clearly stressed in the performance standards and in case of poor performance or the performance falling short of the prescribed standards, the competent authority was competent to terminate the appellant's services under regulations mentioned in the show-cause notice, which has been reproduced above. The appellant has not been able to show any illegality in the same. In identical situation, this Court, after taking into consideration the relevant aspects of such-like cases, vide judgment, dated 3-10-2003 passed in C.Ps. Nos.1213 to 1215 of 2003, held as follows:-- "It is an admitted position that for the concerned year as it was alleged in the show-cause notices the respondents have failed to achieve the target of business assigned to them by the competent authority for which each of them is responsible independently. As per the terms and conditions of the respondent's service, their performance was liable to be reviewed by the Zonal Head under Rule 4(ii)(C)(1) and (2) of the State Life Employees Service Regulation, 1973 on six months basis or for such shorter period as may be deemed necessary by the Board. Thus in exercise of such powers the competent authority in view of admitted material on record reviewed the performance of the respondents individually and concluded that they have failed to achieve the requisite target. It is to be seen that in organizations like Insurance Companies etc. every member is bound to contribute towards its commercial advancement failing which no one else will share responsibility with him and he had to loose the assignment on account of poor performance." Since the respondents had not shown good performance as they failed to achieve the target of business, therefore, the petitioner legally dismissed their services rejecting the explanation submitted by them for not doing so."

5. Learned counsel for the petitioners contended that in view of above law laid down, the Service Tribunal had no jurisdiction to allow the appeals filed by the respondents. Whereas on the other hand learned counsel for the respondents submitted that as the reliance was rightly placed on the earlier judgment in the case of Ali Muhammad Bangash (ibid), therefore, the judgment admits no interference. He added his arguments by saying that there are so many persons who had not shown performance but they were reinstated subsequently.

6. We have heard the learned counsel for the parties and have gone through the judgments relied upon by them. It is an admitted fact that according to performance reports, reproduced hereinabove, respondents had failed to achieve the target assigned to them to show performance as Area Managers. Therefore, the judgment relied upon by the Service Tribunal in the case of Ali Muhammad Bungash (ibid) was not applicable because in the said case, law has not been incorporated on the subject. Whereas in the case of Mazullah Khan (ibid) relevant law has been incorporated.

7. It would be out of context to note that as far as performance standard is concerned, it is in fact the condition prescribed under the Regulation No.4(ii)(c)(1) and (2) of the Regulations, 1973. As it has been noted in the case of Mazullah Khan (ibid) that the petitioner organization is commercial one, therefore, its employees are bound to show performance otherwise, it would be difficult for the organization to continue its existence, therefore, in such-like situation where commercial activity is the basis for running of the same, the relevant rules/regulations are to be construed/applied and incorporated strictly.

8. Thus, for the foregoing reasons, we are of the opinion that impugned judgment is not sustainable, as a result whereof, petitions are converted into appeals and allowed leaving the parties to bear their own costs. M.H./S-24/SC Appeals accepted.