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Arts. 8 & 12 (2) (f) read with Martial Law' Order [C.M.L.A. s] No. 85, para. 3 "Business' separate from establishment" in respect whereof Managing Director appointed Assuming control and management‑Managing Director appointed by Government, taking over management of Electric Supply Company alongwith its business of ice making and its sale, stated to be two separate "establishments" with separate manage ments and accounts, situate in two different buildings‑Power to authorise appointment of Managing Director only with regard to Electric Supply Company‑Held, management of Electric Supply Company and not of ice factory could .be assumed and Managing Director never empowered by law or authorised by Central Government to assume management of ice factory.

Ghulam Farid Ahmed for Petitioner.

40 Iftikhar Ali Sheikh and Ashtar A. Ali for Respondents.

Date of hearing : 2nd October, 1982.

The petitioner who was the Managing Director in 1972, of the Small Town Electric Supply Syndicate Limited, Muzaffergarh, has prayed through this petition that taking over of the management of an ice factory by an appointee of the Government under the Economic Reforms Order, 1972, (P. O. 1 of 1972) be declared as illegal, improper and without jurisdiction. A direction for handing over the possession, of the ice factory has also been sought for.

2. Briefly, the facts of this case are that the Small Town Electric Supply Syndicate Limited is a company registered under the Companies Act. It started electric generation and distributing under a licence of the Government. It also undertook the business of ice making and its sale. It is stated that there were two separate establishments, with separate managements and accounts and they were situate in two different buildings.

3. In 1972, the Government of Pakistan promulgated the Economic Reforms Order, 1972 (P. O. 1 of 1972) and appointed a Managing Director. He took over not only the management of the above electric supply establishment but also that of the ice factory. The petitioner is said to have been protesting and complaining but to no avail. He also paid personal visits to the higher authorities but no action was taken. A large number of documents referred to in para. 4 of the petition are relied in support of the efforts made in this regard. The petitioner then sent a legal notice which is said to have been received by the respondent .on 17th March, 1981. That also attracted no response. Consequently, the petitioner filed the present writ petition.

4. It is contended that the Economic Reforms Order, 1972, authorised the Central Government, if it considered necessary, in the public interest so to do, to appoint by an order, a Managing Director, in respect of an establishment, for its Management. After such an action, the administration of the affairs of that establishment shall vest in him and any person or authority exercising or having the right to exercise immediately before such appointment, any power or function in relation to the management of the establishment shall cease to exercise or to have the right to exercise such power or function. The functions to be performed by the Managing Director are given in para. 4(5) of the Order.

5. The term establishment' is defined in para. 2(a) of P. O. 1 of 1972, as under :‑

establishment' means any undertaking pertaining to any of the categories set out in the Schedule and includes any related office; shop, factory, godown, yard stocks and stores wherever they may be."

The Schedule referred to in this definition includes among others heavy electrical industries as well as public utilities like electricity, generation, transmission ‑and distribution. The ice factory or ice making is not one of the items under the Schedule. .

6. The learned counsel for the respondents relied on para. 12(2) (f ) of P. C. 1 of 1972, which reads as under :‑

"12(2). In particular and without prejudice to the generality of the foregoing power such rules may provide for, or may empower any authority to make orders providing for, all or any of the following matters, namely :‑

Main emphasis of the learned counsel is on the term subsidiary' of an establishment, According to him the ice factory, being connected with the electricity generation, was subsidiary of the same and, therefore, its management had been rightly taken over. He also relied on the dictionary meaning of the word subsidiary' which is as under‑

"functioning in the provision of aid, support, or other benefit usually in a subordinate or inferior status or capacity belonging to or controlled by another company aided or maintained by a subsidy."

7. The learned counsel also relied on Martial Law Order LLV, published in the Gazette of Pakistan Extraordinary, Part I, on 14th June, 1981. Its para. 3 required of W APDA to take over functions and responsi bilities, inter alia, of the Small Town Electric Supply Syndicate and complete the physical taking over of the said company and their assets by 23rd May, 1981. According to para. 5 of it, all properties, funds and dues which immediately before the issue of this Order were vested. in or were realisable by any of the said companies shall vest in and be realisable by WAPDA, and all liabilities which immediately before the issue of this order were enforceable against any of the said companies shall be assumed by and be enforceable against WAPDA. Para. 8 provided that WAPDA shall pay such compensation to each of the said companies within such time and in accordance with such procedure as may be determined or laid down by the Federal Government. According to para. 9 any liabilities of any of the said companies incurred as a result of wilful negligence of any functionary of such company shall be adjusted against the compensation payable to such company. It is contended that as all the assets of the Small Town Electric Supply Syndicate vest in the respondent, the petitioner cannot claim its possession back.

8. It is to be noted that the Economic Reforms Order, 1972, provided for only the appointment of Managing Director by the Central Govern ment. It did not acquire the interest of the share‑holders. The ownership of the establishment, therefore, remained with the company i.e. Small Town Electric Supply Syndicate Limited, and that position is admitted to have continued till the enforcement of Martial Law Order LLV. Even otherwise, the power to authorise the appointment of a Managin Director was only with regard to a named establishment as i mentioned in Annexure 'M' dated 12th*February, 1972. The relevant portion reads as under :‑ _

...the Central Government is pleased to appoint Mr. Muzaffar Ali Qureshi, Chief Engineer, Water and Power Development Authority, Lahore, and Managing Director of Multan Electric Supply Company Limited, also to be the Managing Director of Muaaffargarh Electric Supply‑Company, Muzaffargarh."

It was thus the electric supply company and not the ice factory of which the management could be assumed.

9. The appointed Managing Director, therefore, had no authority conferred on him either in law or by the Central Government to assume the control and management of the ice factory. The plea that the ice factory was a subsidiary of the electric supply establishment, is also not correct. According to the dictionary meaning, given above, the two are quite independent of each other. But if the meaning are to be stretched then every industry, shop or household connected with electricity from that source would be considered to be its subsidiary. In the. light of the dictionary meaning, the electric supply may be subsidiary as an ice factory will not be run without it. The vice versa will not be correct. The reference by the learned counsel to the bar contained in para. 8 of the Economic Reforms Order, 1972, is also not attracted. The appointed Managing Director was never empowered by law or authorised by the Central Government to assume management of the ice factory. He thus not only exceeded the authority given to him by the Central Government but violated the Economic Reforms Order as well, in assuming the control and management of the ice factory also. His action, therefore, is liable to be declared to be without lawful authority and in violation of the P. C. 1 of 1972. It is, therefore, declared accordingly.

10. The next contention of the learned counsel referable to Martial Law Order 85, is not a subject‑matter of this petition. This is a change which took place during its pendency. The question whether the ice factory had also been required to be taken as a property of the Small Town Electric Supply Syndicate, may be considered by the Central Government or WAPDA. In the light of the preamble, prima facie, the electric supply company had been taken over. The word Limited' is also missing from the description given in para. 3. All these aspects would, therefore, need scrutiny of the competent authority. Again Martial Law Order LLV provides for the payment of compensation. It also takes care of the liabilities that might have accrued from 1972 uptil then, under para. 9. The thinking aloud in Court by the learned counsel for the respondent that the machinery may be returned by Wapda can also be considered there. Thus, the possession of the ice factory cannot be ordered to be given back to the petitioner by this Court, at

this stage.

In view of what has been discussed above, the impugned action of the appointed Managing Director, of taking over. in 1972, the possession and management of the ice factory . of the petitioner, is declared to be without lawful authority and of no legal effect. The respondent shall also pay the costs of this petition.

K. M. A. Petition allowed.

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