2010 PLP (C (PLC(CS))

CH. IJAZ AHMED, J.

We intend to decide the aforesaid appeals by one consolidated judgment having similar facts and law.

2. Necessary facts out of which the aforesaid appeals arise are that respondents were Area Managers of Appellants-Corporation under the name and style State Life Insurance Corporation of Pakistan. Respondents were served with show-cause notices by which they were called upon to explain as to why their services be not terminated under Regulation No. 4(ii)(c)(2) of State Life Employees Service Regulations, 1973. It was alleged in the said notices that the average performance of the respondents for the years 1997, 1998 and 1999 respectively was poor. Respondents submitted replies to the show-cause notices which were not found satisfactory by the competent authority of the appellants-Corporation. The services of the respondents were terminated by the competent authority of the Appellants-Corporation vide following orders: Hamayun Irfan`6 4 2000 Malik Asghar Ali`8 10 1999 Abdul Ghafoor`26 4 2001 Respondents filed departmental appeals on 15-11-1999, 1-5-2000 and 11-5-2001. Their appeals were not decided by the appellate authority. Respondent Hamayun Irfan filed Writ Petition in the High Court with the prayer that the appellants be directed to decide his departmental appeal. Thereafter on 14-12-2000 respondent Hamayun Irfan filed an appeal before the Federal Service Tribunal along with an application for condonation of delay whereas Malik Asghar Ali and Abdul Ghafoor filed appeals before the Service Tribunal on 8-3-2000 and 9-8-2001 respectively. The learned Service Tribunal accepted the appeals of the respondents and set aside the impugned orders passed by the appellants and respondents were reinstated in service with back benefits. However, appellants were allowed to evaluate the performance of the respondents according to the criteria fixed by the apex Court and that criteria is that performance of three years shall be considered for initiating disciplinary proceedings against the respondents. Appellants being aggrieved filed C.Ps. Nos.3031-L, 3259-L and 3260-L of 2004 which were fixed before this Court on 30-12-2004 and leave was granted to the petitioners/appellants to consider the following questions:- "(1) As to whether competent authority has jurisdiction to review the performance of the respondents after a period of one year or their performance should have been reviewed after three years in view of the judgment in the case of Chairman, State Life Insurance Corporation of Pakistan and another v. Ali A Muhammad Bangash 2002 SCMR 936. (2) As to whether the performance of respondents has rightly been adjudged on the closing of period of one year as it is mentioned in the appointment letter, in view of the judgment of this Court in the case of The Chairman, State Life Insurance Corporation of Pakistan and others v. Muhammad Siddique (Civil Petitions Nos. 1213 to 1215 and 131(sic) to 1315 of 2003, decided on 3rd October 2003). (3) As to whether respondents in view of the facts and circumstances of the case were entitled for back benefits. Operation of impugned judgment is suspended, however, office is directed to fix the appeals arising out of instant petitions after a period of three months, as question of employment of respondents is involved."

3. The learned counsel for the appellants had reiterated the contentions raised by him as noted in the leave granting order reproduced hereinabove. He further urges that regulations already framed by the appellants under Article 49 of the Life Insurance (Nationalisation) Order, 1972 (P.O. No. 10 of 1972) are not statutory regulations. He further submits that Government had no control with regard to the functions of the Corporation and the Corporation has unlimited power to terminate the services of the respondents as is evident from regulation 22 of the said regulations. In support of his contention he relied upon the following judgments:-- (1) Pakistan Red Crescent Society and another v. Syed Nazir Gillani PLD 2005 SC 806, (2) Anwar Hussain v. Agriculture Development Bank of Pakistan and others PLD 1984 SC 194, (3) Chairman WAPDA and others v. Syed Jamil Ahmed 1993 SCMR 346.

4. The learned counsel for the respondents has supported the impugned judgment.

5. We have given our anxious consideration to the contentions of the learned counsel of the parties and perused the record. It is better and appropriate to reproduce the relevant provisions of the aforesaid President Order and Regulations framed under the said Order:--

2. Definition.-- (d) "Corporation" means a Corporation set up under Article 11; (e) "Director" means a Director of the Corporation; (i) "trustee" in relation to an insurer means the trustee appointed under Article 4 in respect of such insurer and includes a sub-trustee performing the functions of a trustee;

4. Vesting of management of insurers in the Central Government. As from the specified date, the management of all insurers transacting life shall all vest in the Central Government and all persons vested with such management immediately before the specified dater shall be divested of such management.

5. Appointment of a trustee for managing the affairs of insurer.-(1) The Central Government may appoint a trustee for the management of the affairs of one or more insurers transacting life insurance business in relation to such business.

11. Establishment of Life Insurance Corporation.

(1) (2) A Corporation shall be a body corporate to be known by a distinct name and having perpetual succession and a common seal with power, subject to the provisions of this Order, to acquire, hold and dispose of property, and may by its name sue and be sued.

12. Constitution of Corporation.

(1) A Corporation shall consist of such number of directors as the Central Government may think fit to appoint; and one of the Chairman of the directors shall be appointed by the Central Government to be the Chairman of the Corporation.

13. Capital of Corporation.- The initial capital of a Corporation shall be provided by the Central Government and the amount of such capital and the terms and conditions relating to its provision shall be such as may be determined by the Central Government.

14. Functions of Corporation.- (1) Subject to the rules, if any, made by the Central Government in this behalf, it shall be the general duty of a Corporation to carry on life insurance business whether in or outside Pakistan, and the Corporation shall so exercise its powers under this Order as to secure that life insurance business in developed to the best advantage of the community.

49. Power to make regulations.

(1) The Corporation may, with the previous approval of the Central Government, by notification in the office Gazette, make regulations not inconsistent with this Order and the rules made thereunder to provide for all matters for which provision is expedient for the purpose of giving effect to the provisions of this Order. (2) In particular and without prejudice to the generality of foregoing power such regulations may provide for (a) .. (b) the method for recruitment of employees and agents and employers of agents of a Corporation and the terms and conditions of service of such employees or agents or employers of agents; Regulations Notification No.S.R.57(I)/73 dated, 1st January 1973. In exercise of the powers conferred by Article 49 of the Life Insurance (Nationalisation) Order 1972 (P.O. No. 10 of 1972), the State Life Insurance Corporation of Pakistan, with the previous approval of the Federal Government hereby makes the following Regulations: - 4.(i) The employees of the Corporation are graded and their pay scale fixed as under:-- (ii) Area manager Special basis.(a) An area manager on special basis shall draw pay in the scale of Rs.1000-75-1750: Provided that after the 31st day of March, 1973, no person shall be appointed Area Manager on special basis. Ordinary basis. (b) An Area Manager on ordinary basis shall draw a fixed pay of Rs. 1,000 p.m. plus a special incentive bonus of such amount and on exceeding such performance standards as may be prescribed by the Board from time to time. (c)(1) An Area manager shall be required to meet such performance standards regarding new business, persistency and other operational factors as the Board may prescribe from time to time. (2) The performance of an Area Manager shall be reviewed by the General Manager on a six monthly basis or for such shorter periods as may be deemed necessary by the Board. If on such review it is found that his performance falls short of the prescribed standards, such measures including, but not limited to, reduction, curtailment or withdrawal of his emoluments or perquisites or all such measures together, shall be taken by the General Manager as may be generally or specifically prescribed by the Board.

22. Termination of service.

(1) The appointing authority may terminate the service of a confirmed employee by giving him 3 full months notice in writing without assigning any reason. Mere reading the aforesaid provisions of the Order clearly envisages that Corporation has an authority to frame regulations with regard to the terms and conditions of their employees with the .previous approval of the Central Government. The aforesaid regulations were framed with the previous approval of the Federal Government vide notification duly published in the official Gazette. According to the mandate of Article 49 and P.U. the following ingredients must be complied with while framing the regulations:-- (1) previous approval of the central government (2) by notification, in the official gazette (3) regulations not inconsistent with the Order All the aforesaid ingredients are fulfiled and complied with by the competent authority, therefore, the regulations in question have status of statutory regulations. The judgments cited by the learned counsel of the appellants are distinguished on facts and law. In the cited case Pakistan Red Crescent Society and another v. Syed Nazir Gillani PLD 2005 SC 806, section 5 of the Pakistan Red Crescent Society Act (XV of 1920) is reproduced hereunder to find out the status of the rules framed therein:-- "

5. Power to make Rules. The Managing Body shall within 6 months of its constitution make Rules for the management, control and procedure of the Society. The Rules may provide among other matters for the following namely...." Mere reading of the aforesaid provision of law clearly envisages that rules are framed by managing body without the approval of the central government. Therefore such rules framed under the said provision are not statutory rules as law laid down by this Court in various pronouncements. See:-- (1) Zia Ghafoor Piracha v. Chairman Board of Intermediate and Secondary Education Rawalpindi and others 2004 SCMR 35. (2) Asad Bashir v. Chairman Board of Intermediate and Secondary Education Lahore and others 2006 PLC (C.S.)

110. In case Article 49 of the aforesaid Order and section 5 of the Pakistan Red Crescent Society Act are put in juxtaposition then it is crystal clear that the rules framed by Red Crescent Society are not statutory rules which are having a status of internal arrangement as law laid down by this Court in Principal Cadet College Kohat v. Muhammad Shohaib Qureshi PLD 1984 SC

170. Generally speaking, a statutory regulation means regulations which are legislative (as opposed to executive) made by a rule making authority in exercise of statutory power with the approval of the Central Government or Provincial Government. Precisely it is the exercise of the delegated legislative power by the rule making authority. Ordinarily it is necessary also that making and promulgation of a rule should be attended by certain formalities e.g. publication in government Gazette as law laid down by this Court in various pronouncements. See Subedar Muhammad Asghar v. Mst. Safia Begum and another PLD 1976 SC

435. The scope and power to make rules has been examined by Mr. S.M. Zafar in his book `Understanding Statutes'. The relevant portion from the said book is reproduced hereunder: "When rules are framed they may be referred to any power in the Act which validates them." Gulabbai v. Board of Revenue AIR 1957 M.P. 43.

6. In view of what has been discussed above we find that the regulations framed under the statutory power after completing all the legal formalities are within the ambit of the relevant statute and their status is of statutory regulations. See National Bank of Pakistan and another v. Punjab Labour Appellate Tribunal and others 1993 SCMR 105 and unreported judgment dated 6-10-2009 in C.P. No.1188-L of 2004 (Chief Manager, State Bank of Pakistan Lahore and another v. Mohammad Shafi).

7. The second case Anwar Hussain v. Agriculture Development Bank of Pakistan and others PLD 1984 SC 194 relied by the learned counsel of the appellants is judgment per incurium as observed by this Court subsequently in Anwar Hussain v. Agriculture Development Bank of Pakistan and others 1992 SCMR 1112 as highlighted at pages 1119 to 1120. Subsequently it was also highlighted in an unreported judgment dated 17-2-2010 in C.P. No.2726 of 2004 (Dr. Muhammad Amin v. President Zarai Taraqiati Bank Limited).

8. The third case 1993 SCMR 346 relied upon by the learned counsel for the appellants was decided by the two honourable Judges of this Court and held that rules framed under section 18 of WAPDA Act 1958 are not statutory rules whereas larger Bench of this Court had taken a contrary view. The rules framed under section 18 read with section 29 are statutory rules as was held in Yar Muhammad v. Water and Power Development Authority through Chairman and 2 others 1995 SCMR

46. It is settled principle of law that in case of conflict between the judgments of the apex Court then judgment of the larger Bench shall prevail as law laid down by this. Court in Multilines Associate's case IE PLD 1995 SC

423. The net result is that regulations in question are statutory regulations. The judgments relied upon by the learned counsel of the appellants on merit have also no relevancy to resolve issue in question in view of the law declared by this Court. During pendency of the appeals in question in Mazullah Khan v. Zonal Head, State Life Insurance Corporation of Pakistan, Peshawar and others 2008 SCMR 617 the findings recorded by the learned Service Tribunal are in consonance with the latest view of this Court.

9. It is better and appropriate to reproduce the basic facts with regard to the performance of the respondents as alleged by the appellants while initiating disciplinary proceedings against them which is as under:-- (1) Respondent Hamayun Irfan had shown outstanding performance in the year 1996 due to which he was confirmed as Area Manager. His services were terminated in the year 1997 for four months and he was reinstated by the Board after accepting his appeal. However he could only work for six months in the year 1998 and his services were terminated. However, on appeal he was reinstated. Show-cause notice was received by him and he submitted his reply wherein he had taken a stand that his performance was average during the said period. (2) Malik Asghar Ali, respondent, was issued show-cause notice qua his poor performance. He submitted reply stating therein that he was promoted as an Area Manager on 1-10-1996 and appellants revoked his promotion which was restored by the appellant on 29-7-1999, therefore, he could not be in a position to show his performance as he was not assigned the 'post in question for the period for which appellants had required performance from him. (3) Abdul Ghafoor had received show-cause notice with regard to his poor performance which was denied by him through his written reply. The competent authority had terminated his services without assigning any reason coupled with the fact that Service Tribunal had decided the appeals of the respondents in view of the consistent judgments passed by the Service Tribunal on the subject on 29-7-2004.

10. We have examined the aforesaid facts with the assistance of the learned counsel of the appellants and perused the record ourselves. The competent authority had terminated the services of the respondents without application of mind. It is settled proposition of law that it is the duty and obligation of the public functionaries to decide the cases of their subordinates after application of mind in view of Articles 4 and 5(2) of the Constitution of the Islamic Republic of Pakistan. After addition of section 24-A in the General clauses Act, it is the duty and obligation of the competent authority to decide the cases of their subordinates after application of mind with reasons. The impugned orders passed by the authority against respondents did not disclose any reason and application of mind, therefore, impugned orders passed against the respondents are not sustainable in the eyes of law as law laid by this Court in various pronouncements. See Messrs Airport Support Services v. The Airport Manager, Quaid-e-Azam International Airport, Karachi and others 1998 SCMR 2268. It is pertinent to mention here that show-cause notices issued by the appellants to the respondents are also defective in nature and competent authority did not advert to the replies of the respondents at the time of passing the termination order. The contentions raised by the counsel of the appellants and noted in the leave granting order are not attracted in the cases in hand in view of the aforesaid distinguished facts and circumstances as highlighted hereinabove.

11. This Court generally does not interfere with the finding of fact recorded by the leaned Service Tribunal while exercising power under Article 212(3) of the Constitution as law laid down by this Court in Ch. Muhammad Azim v. Chief Engineer, Irrigation and others 1991 SCMR

255. It is also an admitted fact that learned Service Tribunal had accepted the appeals of the respondents vide impugned judgments dated 16-9-2004, 27-10-2004 and 18-10-2004 respectively. It is settled principle of law that constitutional jurisdiction is always discretionary in character. Keeping in view the aforesaid circumstances coupled with the fact that substantial justice has been done by the Service Tribunal through impugned judgments, we are not inclined to exercise our discretion in favour of the appellants. Even otherwise appellants have failed to raise any question of public importance as contemplated in Article 212(3) of the Constitution.

12. In view of what has been discussed above the appeals have no merit and the same are dismissed.

13. The above are the reasons of our short order of even date which is to the following effect: "For reasons to be recorded later, it is held that respondents-employees of State Life Insurance Corporation are governed by statutory regulations framed under Article 49 of the Life Insurance (Nationalisation) Order, 1972 (P.O. No.10 of 1972). Similarly on merits no case is made out for interference in the judgment of the Service Tribunal. Consequently appeals are dismissed and respondents are reinstated with all back benefits and costs shall be paid to them by the appellants". M.H./C-6/SC Appeal dismissed.