1988 S C M R 597

Present: Shafiur Rahman, Ali Hussain Qazilbash and Usman Ali Shah, JJ
AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN and 2 others--Appellants
versus
MUHAMMAD SHARIF--Respondent
Civil. Appeal No.89 of 1981, decided on 21st February, 1988.
(On appeal from the judgment and order, dated 14th December, 1980 passed in Civil Revision
No.851979).
(a) Agricultural Development Bank Staff Services Regulations---
---Regln.13(1)--Constitution of Pakistan (1973), Art. 185(3)--Civil service--Leave to appeal,
grant of--Number of decisions of various Courts on subject--Authoritative pronouncement called
for--Leave to appeal granted in order to give an authoritative decision on competence of a civil
suit and the relief of re-instatement in service granted to an employee of Agricultural
Development Bank of Pakistan against an order passed under Staff Services Regulation No.13(1)
of termination of service on three months' notice or pay in lieu thereof, without assigning any
reason therefore.
(b) Agricultural Development Bank Ordinance (VI of 1961)--
--S.39(e)--Agricultural Development Bank Staff Services Regulation, Reglns. Nos.13(1) & 95--
Civil service--Dismissal or termination from between the parties 7/8 years ago, quarrel in respect
of the same re-emerged on the day of occurrence and that accused was armed with a revolver and
on exchange of abuses service--Two distinct powers available to competent authority--Validity
of proceedings against employee--Respondent employee of Agricultural Development Bank, a
statutory Corporation--Allegation of being corrupt--Services terminated under Staff Service
Regulation No.13(1) without assigning any reason, on payment of three months pay in lieu of
notice--Order set aside by Civil Court, and upheld in appeal, on ground that employee having
been found corrupt, action against him should have been taken under Regulation 95 which
provides for procedure and punishment for misconduct--Employer's appeal before Supreme
Court--Termination of service of employee is absolute discretion of Bank--Separate Regulations
dealing with termination of service and providing for procedure and punishment for
misconduct/corruption--Two distinct powers being available to competent authority, there was
no bar, express or implied to competent authority invoking either or anyone in particular--
Authoritative decisions by Supreme Court having consistently conceded such a power to
competent authority, of course not so if it was shown to be mala fide either in fact or in law--
Appeal allowed ex parte and impugned decisions set aside.
Muhammad Ashraf Pervaize v. Agricultural Development Bank of ,Pakistan P L D 1973 Lah.
425 ref.
Anwar Hussain v. Agricultural Development Bank of Pakistan P L D 1984 S C 194; Water and
Power Development Authority v. Muhammad Ali 1987 S C M R 261; WAPDA v. Saeed Ahmad
1986 SCMR 725 and Abdul Karim v. The West Pakistan Province P L D 1956 S C (Pak.) 298
rel.
Raja Muhammad Akram, Advocate Supreme Court and M.A. Siddiqui, Advocate- on-Record
(absent) for Appellants.
Wasim Sajjad, Advocate Supreme Court (absent) and Mahmood A. Qureshi, Advocate- on-
Record (absent) for Respondent.
Date of hearing: 21st February, 1988.
JUDGMENT
SHAFIUR RAHMAN, J.--Leave to appeal was granted in order to give an authoritative
decision on the competence of a Civil Suit and the relief of reinstatement in service granted to an
employee of the Agricultural Development Bank of Pakistan against an order passed under Staff
Services Regulation No.13(1) of termination of service on three months', notice or pay in lieu
thereof without assigning any reason therefore.
2. On the 19th of November, 1974 the respondent who was then Manager of appellant at
Khanpur was communicated the following order:- ,
"OFFICE MEMORANDUM
The services of Mr. Muhammad Sharif Chaudhry, Manager, Khanpur Branch, stand terminated
under S.S.R. 13(1) without assigning any reason on payment of 3 months' pay in lieu of notice.
By order
Sd/- (Rana Shabbir Ahmad Khan)
Director (Administration)."
On 25-11-1974 the respondent instituted a Civil Suit seeking a declaration that his removal from
service was illegal and that he continued in service of the appellant and he also sought Perpetual
injunction against the appellant. The suit was contested on numerous grounds and number of
issues were framed, none being of importance at this stage except issue No.1. It is reproduced
hereunder:-
"1. Whether the order dated 13-11-1974 passed by the defendant No.2 is illegal, void and
ineffective against the rights of the Plaintiff? If so to what effect? OPP."
3. The trial Court held on this issue as hereunder:-
"Under S.S.R.13 the services of an employee can be dispensed with without assigning any
reason. But where an employee is found to be corrupt, then an action U/SSR 95 is contemplated.
The defendant, instead of having recourse to section 95, cut short the matter and dismissed him
from service U/SSR 13(1). According to Ex.P.2 it was not a case of dispensation of the Plaintiffs
services from the Bank. In fact this was a case which was to be governed by Regulation No.95."
The trial Court decreed the suit with costs declaring him to be an employee of the appellant and
the order dated 19-11-1974 to be ineffective against his rights. The perpetual injunction asked for
was refused.
4. An appeal was filed before the Additional District Judge which was dismissed on 2-5-1979
with the following observations:-
"The appellant's counsel has candidly conceded that the procedure terminating the service of the
plaintiff was really defective and that the dismissal should have been as contemplated by
S.S.R.95. In this view of the matter, I shall have to hold that there is no force in this appeal and it
is hereby rejected with costs. However, this rejection will not stand in the way of the Agricultural
Development Bank if they want to proceed against the plaintiff under SSR-95 which was the
proper procedure to be followed in case the Bank wanted to terminate the service of the plaintiff
respondent."
A revision was filed in the Lahore High Court, Lahore which did not succeed with the
observations as hereunder:-
"Actual and real order in this case was passed by the Chairman of the Bank as reproduced above.
The order conveyed to the respondent is in compliance with the aforesaid order which clearly
described the respondent to be enjoying reputation of being corrupt. In view of that according to
law regular inquiry should have been held under Rule 95. Similar view has been taken in
Muhammad Ashraf Pervaiz v. Agricultural Development Bank of Pakistan P L D 1973 Lah. 425.
In that case also the relevant record contained clear allegations on the part of the Bank holding
the petitioners to be corrupt before his services were terminated under SSR 13(1) instead of
following the procedure laid down in SSR 95. It was held that since the services were actually
terminated on account of being corrupt, therefore, the regular procedure should have been
followed and deviation therefore was a fraud on the statute which could not be allowed by law."
5. In the petition for leave to appeal are listed a number of decisions of the Lahore High Court
and of the Sind High Court, Karachi and of this Court on the subject and it was contended that an
authoritative pronouncement on the subject was called for.
6. Raja Muhammad Akram, the learned counsel for the appellant has brought to our notice the
decision of this Court in Anwar Hussain v . Agricultural Development Bank of Pakistan P L D
1984 S C 194 with regard an identical case, at the same time pointing out that it is subject-matter
of a review petition. He has however, drawn our attention to the latest law on the subject wherein
authoritative pronouncement of this Court on the subject is forthcoming and these decisions are
in the case of Water and Power Development Authority v. Muhammad Ali 1987 S C M R 261,
WAPDA v. Saeed Ahmad 1986 SCMR 725. According to the learned counsel these decisions in
fact follow and reiterate the decision earlier given in Abdul Karim v. The West Pakistan
Province P L D 1956 S C (Pak.) 298.
Regulation 13 dealt with termination of service while Regulation 95 with efficiency and
discipline. The operative part of the Regulation 13 which is relevant for our purposes is
reproduced hereunder:-
"13. Termination of service.--(1) The Bank may dispense with the services of an employee other
than an employee on probation or a temporary employee, by giving 3 months previous notice in
writing or 3 months of 30 days substantive pay in lieu thereof, to an employee in Class I or Class
II and one month of 30 days' previous notice or 30 days' substantive pay in lieu thereof to an
employee in Class III and Class IV. In the case of a temporary employee of any class, such
notice or pay in lieu shall be for a period of one month of 30 days. The power to terminate the
service of an employee shall be exercised by the competent authority. Such termination of
service of an employee is in the absolute discretion of the Bank and it shall not be necessary to
assign any reason for the termination and the employee shall not be entitled to any form of
compensation for termination of service."
Regulation 95 provides punishment for misconduct and misconduct has been defined to include a
"persistent reputation of being corrupt"
7. It is clear from these two distinct provisions of Staff Services Regulations applicable to the
respondent that two distinct powers were available to the competent authority and there was no
bar expressed or implied to the competent authority invoking either or any one in particular. In
the case of Abdul Karim v. West Pakistan Province P L D 1956 S C 298 which none of the
Courts has noticed, it was held by this Court that an employee whose services could be
terminated on one month's notice could on the basis of a notice be removed though charge-sheet
had been served with regard to his misconduct and an enquiry was in the offing. It was held that
it is open to the dismissing authority not to have recourse to the power of dismissal which is a
drastic step and which affects subsequent employability of this public servant but to terminate
service on one month's notice in accordance with the condition of his employment. Again in the
case Water and Power Development Authority v. Muhammad Ali 1987 S C M R 261, it was held
that "if the law provides the appellant authority with two different modes for terminating the
services of its employees the mere fact that it has, to begin with, elected to act under one mode
would not in the absence of a bar in the law preclude it from adopting the second mode at a later
stage."
8. We find that the authoritative decisions of this Court have consistently conceded such a power
to the competent authority, of course not so if it is shown to be mala fide either in fact or in law.
9. This appeal is allowed ex parte. The decisions impugned are set aside. The suit filed by the
respondent is dismissed with not order as to costs.
M.I. /A-166/S Appeal dismissed.