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Civil Petition No.19 of 1985, decided on 23rd October, 1985.
‑‑Art. 9‑‑Establishment of the Federal Bank for Co‑operatives and Regulation of Co‑operative Banking Ordinance (XL of 1976), S. 42‑ Notification No. SOA (iv)144‑20/78‑Coop. 7193‑95, dated 19th August, 1979‑‑Termination of Services‑‑Reinstatement through constitutional jurisdiction‑‑Petitioner, employee of defunct bank, permanently absorbed in Bank and no contrary order passed by Provincial Government in relation to petitioner in terms of explanation (iv) to subsection (4) of S. 42 of Ordinance and notification, dated 19‑8‑1979 not applicable in case of employees already absorbed by Board of Directors including petitioner‑‑No statutory service ruler; existing for petitioner's service which could be said to have been violated by order terminating his services‑‑Termination order at most could be said to be illegal for which proper remedy lay in filing a suit for recovery of damages and not a constitutional petition for reinstatement‑‑Constitutional petition dismissed in circumstances.
(b) Establishment of the Federal Bank for Co‑operatives and Regulation of Co‑operative Banking Ordinance (XL of 1976)
‑‑‑S. 42(4)‑‑Notification No.SO A(iv)1440‑20/78‑Coop.7193‑95, dated 19‑8‑1979‑‑Notification, vires of‑‑Government, under S. 42(4) of Ordinance, having power to lay down terms and conditions for purpose of transfer of undertakings of dissolved banks and also having power to dispense with services of employees‑‑Notification issued under said provision of law empowering banks to dispense with services of employees, held, was not ultra vires of Ordinance.
Hirjina Salt & Chemicals (Pak) Ltd. Karachi v. The Union Council. Gharo and another, P L D 1972 Kar. 145; Haji Hashmatullah and 9 others v. Karachi Municipal Corporation and 3 others P L D 1971 Kar. 514 and United Industrial Bank, Ltd. v. (i) Mohan Bashi Saha (ii) The Central Bank of India Ltd. P L D 1959 S C 296 ref.
‑‑‑ Rules‑‑Rule in deviation of main provision of statute or in conflict with or defeating object of Statute, held, could not be relied upon and would be void on account of being repugnant to main statute.
‑‑Art. 9‑‑Establishment of the Federal Bank for Co‑operatives and Regulation of Co‑operative Banking Ordinance (XL of 1976), S. 42‑ Termination of services‑‑Petitioner alleging mala fide against respondent who passed impugned order whereby services of petitioners were terminated‑‑Petitioner giving no material particulars as to persons or reason of there being malice or mala fide against him‑‑Impugned action of respondent, held, could not be said to be mala fide in fact, though it may or may not be mala fide in law.
‑‑S. 54‑‑Establishment of the Federal Bank for Co‑operatives and Regulation of Cooperative Banking Ordinance (XL of 1976), S. 42‑ Provisional Constitution Order (1 of 1981), Art. 9‑‑Expression 'any dispute touching business of a Society in S. 54 of Co‑operative Societies Act 1925, held, would not cover action of wrongful termination of service.
J.J. Miranda v. Fishermen's Co‑operative Society Ltd. Karachi and another P L D 1978 Kar. 990 rel.
‑‑‑Art. 9‑‑Constitutional jurisdiction‑‑Employees of a firm or Corporation do not enjoy constitutional protection of service‑‑Relationship between an employee of a firm or corporation is that of master and servant If a corporation has statutory rules dealing with service matters of its employees, any action in violation of such rules, held, was justiciable through a constitutional jurisdiction.
Evacuee Trust Property Board and another v. Muhammad Nawaz'* 1983 S C M R 1275; Malik and liaq v. Shamsul Islam, P L D 19111 S C 531; Chairman, East Pakistan Industrial Development Corporation and another v Rustam Ali and another P L D 1966 S C 848; Zainul Abidin v. Multan General Cooperative Bank Limited Multan P L D 1966 S C 445; Abdus Salam Metha v. Chairman, WAPDA and another 1970 SCMR 40; Shahid Khalil v. P.I.A. 1971 S C M R 568; Lt.‑Col. Shujauddin v. Oil & Gas Development Corporation 1971 S C M R 566; R.T.H. Janjua v. National Shipping Corporation P L D 1974 S C 146; A. George v Pakistan International Airlines Corporation P L D 1971 Lah. 748; Muhammad Aslam v. National Shipping Corporation Karachi through the Chairman and 2 others P L D 1979 Kar. 246; Anwar Hussain v. Agricultural Development Bank of Pakistan and others P L D 1984 S C 194 and Principal, Cadet College, Kohat and another v. Muhammad Shoab Qureshi, P L D 1984 S C 170 ref.
‑‑‑S. 42(4)‑‑Constitution of Pakistan (1973), Art. 177‑‑Object of provision of S. 42 of Ordinance, _held, was to provide continuity of services to employees of defunct Bank in absence of any contrary decision by Bank or Provincial Government and not intended to provide protection of nature as was provided under Article 177 of Constitution.
‑‑‑S. 71‑‑Byelaws framed by a Co‑operative Society in pursuance of provisions of Co‑operative Societies Act, 1925, held, could not be equated with statutory rules framed by a Government functionary in pursuance of a provision in a Statute.
Noorul Haq v. Islamic Republic of Pakistan through Secretary Establishment Division and another P L D 1984 S C 75 and Faiz Ahmad v. (i) The Registrar, Cooperative Societies West Pakistan Co‑operative Bank Ltd. Pakpattan and (ii) Managing Committee, The Pakpattan Cooperative Bank Ltd. Pakpattan P L D 1962 S C 315 rel.
‑‑‑S. 57‑‑Byelaws of Scheduled Bank which to be submitted for approval to State Bank such fact alone, held, would not make them al par with statutory rules.
Muhammad Ramzan Ansari v. Government of Pakistan and others 1983 P L C (C.S.) 52 ref.
Iftikhar Muhammad and Khalid Malik for Appellant.
Amir‑ul‑Mulk Mengal, A.‑G. and Muhammad Muqim Ansari for Respondents Nos. 2 and 3.
Dates of hearing: 6th, 7th and 16th October, 1985.
‑This petition is directed against the order, dated 31st October, 1979 terminating the petitioner's services. The brief facts leading to the filing of the above petition are that the petitioner was appointed as Cashier in the Divisional Cooperative Bank Limited (hereinafter referred to as the 'defunct Bank) with effect from 16th December, 1964. He was promoted as Manager/ Administrator on 1st August, 1973. While the petitioner was working as the Manager of a Branch of the defunct Bank, the Establishment of the Federal Bank for Cooperatives and Regulation of Cooperative Banking Ordinance, 1976 (hereinafter referred to as the 'Ordinance') was promulgated through a Gazette of Pakistan, Extraordinary, Part I, dated 16th October, 1976 which inter alia, contemplated the dissolution of the existing various Cooperative Banks except in the provinces the Provincial Cooperative Bank Ltd., and also the establishment of a Federal Bank for Cooperatives. In pursuance of subsection (4) of section 42 of the Ordinance, the Registrar, Cooperative Societies Baluchistan (hereinafter referred to as the 'Registrar ) with the approval of the Provincial Government through his order No. 3677 RCS/Bale./76, dated 8th December, 1976 notified, inter alia, that the defunct Bank stood dissolved. This was followed by another order of the Registrar bearing No. 3696 RCS/Baln./F.B./76, dated 8th December, 1976 notifying that the Officers and Employees of the defunct Bank and other dissolved Cooperative Banks shall become Officers and Employees of the Baluchistan Provincial Cooperative Bank Limited. The petitioner has also filed a number of other documents to indicate that for all intents and purposes, he was absorbed in the Baluchistan Provincial Cooperative Bank Limited (hereinafter referred to as the 'Bank') and continued to perform his functions till on 31st October, 1979, when the Secretary of the Bank by his letter No. HO‑16/70/104, dated 31st October, 1979 purported to terminate the petitioner's services. It may be advantageous to reproduce hereinbelow the contents thereof, which read as follows:‑‑‑
"Telegram". Prov: Bank 786 Phone 74926
THE BALUCHISTAN PROV: CO‑OP. BANK LTD.
H.O. (JINNAH ROAD) QUETTA.
Ref. No. HO‑16/70/104, dated 31‑10‑1979
MR. MUHAMMAD IQBAL.
MANAGER,
Div. Coop Bank Ltd. (Dissolved),
Liaquat Bazar, Quetta.
Dear Sir,
TERMINATION OF SERVICE.
I am directed to inform you that your services have been considered surplus by the Committee of the Baluchistan Provincial Cooperative Bank Limited, keeping in view the financial position of the Bank/your service record.
Therefore, you are hereby advised that your services are no longer required by the Bank after 30‑11‑1979 and this letter may be considered as one month's notice.
Yours faithfully,
(Sd.)
Secretary Committee.
GENERAL MANAGER"
On .the same day i.e.; 31st October, 1979, the petitioner was appointed in the Recovery Cell purely on temporary basis. It may also be pertinent to reproduce hereinbelow the above appointment letter, which reads as follows:‑‑
"THE BALUCHISTAN PROV." CO‑OP. BANK LTD.
H.Q. JINNAH ROAD QUETTA.
Ref. No. H 0‑16/79/116, dated 31‑10‑1979
Mr. Muhammad Iqbal,
C/o Baln. Prov. Coop. Ltd.
Hub Chowki (Distt. Lasbella)
Dear Sir,
APPOINTMENT
It has been decided to appoint you in the Bank's Recovery Cell on your existing salary which you are drawing at present in your dissolved bank. The appointment is purely temporary and initially for a period of three months.
We shall be glad if you please convey your acceptance to us in writing by 15‑11‑1979 at the latest.
Yours faithfully,
(Sd.)
(C.M. LATIF),
General Manager."
The petitioner did not accept the above termination and the appointment. but filed an appeal before the respondent No. 1, which was dismissed on 3rd January, 1980. It will not be out of context to mention here that the services of a number of other persons including a Manager, Mr. Maqbool Hussain, were also terminated. He had also filed an appeal against the above order, which was also rejected. The petitioner and said Maqbool Hussain filed Constitutional Petitions Nos. 23 of 1980 and 24/80. During the pendency of the above petitions, the petitioner in pursuance of a consent order, dated 4th January, 1980 started working in the Recovery Cell on the basis of above fresh appointment, dated 31st October, 1979 in terms of his letter, dated 19th April, 1980, addressed to the General Manager of the Bank, wherein it was stated that the petitioner was prepared to accept the job pending the final decision of the Honourable High Court of Baluchistan in Constitutional Petition No. 23/80. It seems that above Constitutional Petition was dismissed in default on 11th March. 1984. Thereupon, the petitioner's services were again terminated by a letter, dated 15th March, 1981. However, the above petition was restored by an order, dated 22nd April, 1984. But the petitioner was not reinstated. The above petition was allowed by a Division Bench of this Court through a judgment dated 11th November 1984 and the cases of the petitioner and of said Maqbool Hussain were remanded to the Appellate Authority with the direction to decide the appeals after nearing the petitioner and the said Maqbool Hussain. The petitioner's appeal was dismissed by an order, dated 26th February, 1985. Consequently, the petitioner has filed the present petition.
It may be pertinent to mention that the appeal of the said Maqbool Hussain was allowed by an order, dated 7th August, 1985, in pursuance whereof, said Maqbool Hussain was reinstated by an order, dated 2nd September, 1985.
2. Mr. Iftikhar Muhammad, Advocate assisted by Mr. Khalid Malik, Advocate appearing for the petitioner has made the following submissions: ‑‑
(i) That the petitioner stood permanently absorbed in the Bank upon the promulgation of the, Ordinance and, therefore, the petitioner's services could not have been terminated;
(ii) That para. 7 (iii) of Notification No. SOA(iv)144‑20/78‑Coop. 7193‑95, dated 19th August, 1979 (hereinafter referred to as the 'Notification') issued by the order of the Governor empowering the Bank to dispense with the services, is ultra vires of section 42 of the Ordinance;
(iii) That even otherwise, the requirements of above para. 7(iii) of the Notification have not been complied with; and
(iv) That the action is mala fide.
On the other hand, Mr. Muqim Ansari, learned counsel for the respondent No. 1 has contended as under:‑‑
(i) That at no point of time, the petitioner was permanently absorbed in the Bank, as it could have been done in pursuance of an order of the Provincial Government;
(ii) That under para. 7(iii) of the Notification, which was issued in terms of subsection (4) of section 42 of the Ordinance the Bank was competent to terminate the petitioner's services;
(iii) That since the dispute related to a Cooperative Bank, the petitioner should have involved section 54 of the Cooperative Societies Act; and
(iv) That the petitioner being an employee of a Bank, the relationship between the Bank and the petitioner is that of Master and Servant and, therefore, the petitioner has no right to maintain the above petition for reinstatement.
3. Adverting to the question, whether the petitioner was permanently absorbed in the Bank or not, it may be pertinent to refer to Explanation IV of subsection (4) of section 42 of the Ordinance, which reads as follows: ‑‑
"(IV) Save as otherwise decided by the Provincial Cooperative Bank, but subject to the order referred to in this subsection of the concerned Provincial Government, all officers and other employees of a cooperative bank, holding office immediately before the commencement of this Ordinance shall become, the officers and employees of the Provincial Cooperative Bank"
A plain reading of the above explanation indicates that all officers and other employees of the dissolved Banks holding office immediately before the commencement of the Ordinance, were to become the officers and employees of the Provincial cooperative Bank, save as otherwise decided by the Provincial Cooperative Bank and subject to the order referred to in subsection (4) of the Provincial Government. We have already referred to above two orders, dated 8th December, 1976 issued by the Registrar (Annexures "B" and "C" to the petition). In addition to the above documents, it may be appropriate to refer to some other documents on record, which have direct bearing on the above question of fact, namely, the Registrar's Memorandum No RCS/BALN/F.B./76, dated Quetta the .. November 1976 addressed to the Secretary. Government of Baluchistan, Cooperation Department, Quetta, which deals with the question of dissolution of Cooperative Banks in Baluchistan and the position of their staff. In this regard, it has been stated that the officers and the other employees, of these Cooperative Banks shall become the officers and employees of the Baluchistan Provincial Cooperative Bank Limited, as laid down in Explanation IV to subsection
(4) of section 42 of the Ordinance. This was followed by the above Annexures "B" and "C". Reference may also be made to the Bank Resolution No. 2, dated 11th December, 1976 (Annexure "D" to the petition) in which, inter alia , it was resolved that the staff of the dissolved Bank would become the staff of the Bank. The relevant portion of the above resolution reads as follows:‑‑
After that the Registrar by his order No. 3798‑RCS/ BALN/F.B./76, dated 29th December, 1976 (Annexure "E" to the petition) issued the posting letter, inter alia, in respect of the petitioner.
In response to the latter Annexure, the petitioner through his letter, dated 30th December, 1976 submitted to the Registrar his joining report as the Branch Manager of the Bank Liaquat Bazar Branch, Quetta with effect from 30th December, 1976, a copy whereof, was endorsed to the General Manager of the Bank. This was followed by the Registrar's letter, dated 7th June, 1977 whereby, the petitioner was allowed temporarily to continue as officiating General Manager subject to the confirmation by the Board of Directors. It may also be pertinent to observe that there was a proposal of closing three branches of the Bank in Quetta Town. In the above proposal, it was also provided that the staff working therein, would continue to be the employees of the Bank and would be provided some other jobs. The above proposal was approved by the Provincial Government and the Martial Law Administrator Zone "D". In this behalf reference may be made to Annexures "J" to "L". But the above proposal for some reason was not implemented. Reference may also be made to Annexure "L‑1", which is a resolution of the Board of Directors of the Bank, dated 26th December, 1978 appointing the petitioner as the Manager of the newly opened branch at Hub Chowki. From the above documents, particularly from the aforesaid resolution No. 2 of the Board of Directors, dated 11th December, 1976, it is evident that the petitioner was permanently absorbed in the Bank. The question, whether the respondent No. 2 could have terminated the petitioner's services and, whether the petitioner is entitled to the relief of reinstatement, is to be dealt with hereinbelow with the question of relationship of that of Master and Servant between the petitioner and the respondent No. 2. However, it was contended by Mr. Muqim Ansari, learned counsel for the respondents Nos. 2 and 3 that the petitioner was paid his salary from the assets of the defunct Bank and that till the approval of the Provincial Government, the petitioner could not have been absorbed in the Bank. The factum that the petitioner was paid from the assets of the defunct Bank, is of no consequences, as admittedly, the said assets stood vested in the Bank. It is also devoid of any force that in the absence of the approval of the Provincial Government, the petitioner could not have been permanently absorbed. As pointed out hereinabove, under explanation (iv) to subsection (4) of section 42 of the Ordinance, the Bank is competent to absorb any employee of the defunct Bank or other dissolved Banks, but this is subject to the contrary order, if any, of the Provincial Government. In the present case, the Provincial Government had not passed any contrary order in relation to the petitioner in terms of the above explanation (iv) and, therefore, on the basis of the above resolution No. 2, dated 11th December, 1976 passed by the Board of Directors of the Bank, the petitioner in terms of the above explanation stood permanently absorbed.
Reliance has also been placed by Mr. Muqim Ansari, learned counsel for the respondents Nos. 2 and 3 on para. 7(iii) of the Notification in support of the impugned order of termination of the petitioner's services. It may not be out of context to reproduce hereinbelow the above para. 7 in toto, which reads as follows:‑‑
"7(i) All officers and employees of the said Banks shall be deemed to be the officers and employees of the Provincial Cooperative' Bank and their seniority shall be fixed from the date they are taken by Provincial Cooperative Bank Ltd.
(11) Such officers and employees shall be governed by the terms and conditions as may be determined by the Provincial Co‑operative Bank Ltd; but such terms and conditions shall not be less favourable than the terms and conditions applicable to them immediately before their transfer to the Provincial Cooperative Bank, but they shall be liable to transfer throughout the Province of Baluchistan.
(iii) Provincial Cooperative Bank Ltd. shall have the right to dispense with the services of the employees of the dissolved banks by paying them dues on preference basis in case they are not considered to be useful for the bank in the light of their qualifications, service record, efficiency or any other reason.
(iv) In case of termination of service of any officer or employee before integration into unified cadre such officer or employees shall be entitled to the benefits which were admissible to them immediately before their transfer to the Provincial Cooperative Bank Ltd.
(v) The Provincial Cooperative Bank Ltd., shall have power to take disciplinary action against such officers and employees, whenever necessary, in accordance with its own Establishment Rules and Standing Orders."
A perusal of the above‑quoted para. of the Notification issued in terms of section 42(4) of the Ordinance, reveals that all officers and employees of the Bank, were to be deemed to be the officers and employees of the Provincial Cooperative Bank and their seniority inter se was to be fixed from the date they were taken by the Provincial Cooperative Bank. It is also clear that they are to be governed by the terms and conditions as might be determined by the Provincial Cooperative Bank Ltd. But such terms and conditions were not to be less favourable than the terms and conditions applicable to them immediately before their transfer to the Provincial Cooperative Bank Limited. It may also be observed that sub‑clause (iii) empowers the Provincial Cooperative Bank Ltd; to dispense with the services of the employees of the dissolved Banks by paying them dues on preference basis in case they are not considered to be useful for the Bank in the light of their qualifications, service record, efficiency or any other reason. It is true that under the above sub‑clause (iii), the Bank has been given the power to dispense with the services of any of the employee, but in order to invoke this provision, it is incumbent to examine the case of the employee concerned on the basis of the criterion provided therein, namely, usefulness of his services to the Bank in the light of (i) his qualifica tions, (ii) his service record, (iii) his efficiency, or (iv) any other reason. But the above para. of the Notification would have been applicable to the petitioner if he would not have been permanently absorbed by that Board of Directors by Resolution No. 2, dated 11th December, 1976 prior to the issuance of the Notification. It cannot be made applicable retrospectively to those employees, who were already absorbed by, the Board of Directors of the Bank in the absence of any contrary order of the Provincial Government. It must follow that para. 7 of the Notification was not applicable.
5. As regards the second submission of Mr. Iftikhar Muhammad, learned counsel for the petitioner that para. 7(iii) of the Notification is ultra vires of section 42 of the Ordinance, it may be stated that under subsection (4) of section 42 of the Ordinance read with explanation (iv), the Government had the requisite power to lay down the terms and conditions for the purpose of transfer of the undertakings of the dissolved Banks, it had also the power to dispense with the services of the employees. The Notification, therefore, cannot be said to be ultra vires of section 42 of the Ordinance. The only question is, whether para. 7 of the Notification was applicable to the petitioner, which aspect has been dilated upon hereinabove.
6. However, Mr. Iftikhar Muhammad, learned counsel for the petitioner has relied upon the following judgments:‑‑
(i) Hirjina Salt & Chemicals (Pak) Ltd., Karachi v. The Union Council, Gharo and another, reported in P L D 1972 Kar. 145, in which, a D.B. of the erstwhile High Court of Sind and Baluchistan while construing the provisions of Basic Democracies Order, 1959,and the West Pakistan Union Councils Dharat (Fees for Markets) Rules, 1961, observed that the rule cannot prevail upon the provision of a statute by simply providing that the rule shall be deemed to be a part of the statute and, in case, of any inconsistency between them, the statute must prevail.
(ii) Haji Hashmatullah and 9 others v. Karachi Municipal Corporation and 3 others, reported in P L D 1971 Kar. 514. In the above case, a D. B. of the erstwhile High Court of Sind and Baluchistan while construing the provisions of Municipal Administration Ordinance (X of 1960) and West Pakistan Municipal Committee (Property) Rules, 1962, held that the rules which deviate from the statute and confer excessive power, are. repugnant to statute and void to that extent.
(iii) The United Industrial Bank, Limited v. (i) Mohan Bashi Saha (11) The Central Bank of India, Limited, reported in P L D 1959 S.C (Pak) 296, in which. it was held that the rules framed under statute cannot defeat clear intention of legislature expressed in statute, and if they are as such, they cannot be relied upon.
The propositions of law propounded in the above cited cases are well settled. If a rule is in deviation of the main provision of statute, or it is in conflict or it defeats the object of the statute, the same cannot be relied upon and will be void on account of being repugnant to the main statute. However, the above cited cases have no relevancy to the instant case, as we have already held that para. 7 of the Notification is not applicable to the petitioner. Furthermore, there seems to be no infirmity in, the above para 7 as to press into service any of the principles enunciated in the above cited cases.
7. Reverting to the learned counsel for the petitioner's contention that the requirement of para. 7(iii) of the Notification has not been complied with, it may be observed that since the respondents Nos. 2 and 3 have not placed the requisite record before us in spite of the order of this Court, it cannot be concluded that factually, whether the requirements of the above para were complied with or not, though the respondent No. 2 in its counter‑affidavit has averred of having done so. But since we have held that above para. 7 of the Notification is not applicable, it is not necessary to probe into the above aspect any further.
8. This leads us to the submission of the learned counsel for the petitioner that the action is mala fide. In furtherance of the above submission, he has referred to the factum that the petitioner was allowed to work on the basis of consent order dated 14th January, 1980 passed in Constitutional Petition No. 23 of 1980 (Hub No. 6 of 1980), but upon the dismissal of the above petition in default on 11th March, 1984 the petitioner's services were terminated allegedly in pursuance of the judgment of the High Court by an order, dated 15th March, 1984 which reads as follows:‑‑
Ref. BPCB 35/84/385, dated 15th March, 1984.
In pursuance of High Court of Baluchistan's judgment, dated 11‑3‑1984 on his appeal and decision of the Administrative Committee taken on 14‑3‑1984 the services of Mr. Muhammad Iqbal Qureshi an Officer of the Recovery Cell of dissolved Banks are terminated with effect from 15‑3‑1984 (afternoon).,
(Sd.)
GENERAL MANAGER.
15‑3‑1984"
It, has been also pointed out that in spite of the restoration of the above petition on 22nd April, 1984 the petitioner was not taken back in service. Though the above facts indicate that the conduct of the respondent No.2 was not desirable, but at the same time, the petitioner has not given material particulars as to the persons or the reason of there being malice or mala fide against the petitioner. It cannot, therefore, be concluded that the impugned action is mala fide in fact, though it may or may not be mala fide in law.
9. Having dealt with the submissions made by the learned counsel for the petitioner, it may be pertinent to take up some of the submissions advanced by the learned counsel for the respondents Nos. 2 and 3. It has been urged by Mr. Muqim Ansari that the dispute relates to operative Bank, therefore, the petitioner should have invoked section 54 of the Cooperative Societies Act, 1954, which reads as follows:‑‑
54. Arbitration:‑‑ If any dispute touching the business of a society other than a dispute regarding disciplinary action taken by the society or its committee against a paid servant of the society arises;
(a) between members or past members of the society or persons claiming through a member or past member or
(b) between members or past members or persons so claiming and any past or present officer agent or servant of the society, or
(c) between the society or its committee, and any past or present member of the society, or
(d) between the society or its committee, and any past or present officer, agent or servant of the society, or a surety of such officer agent or servant, whether such surety is or is not a member of the society,
(e) between a financing bank authorised under subsection (1) of section 34 and a person who is not a member of a society,
it shall be referred to the Registrar for decision by himself or his nominee, or if either of the parties so desire, to arbitration of three arbitrators who shall be the Registrar or his nominee and two persons of whom one shall be nominated by each of the parties concerned.
A dispute shall include the question whether a person is or was a member of a society and also claims by a society for debts or demands due to it from a member, past member or non member or the heirs or assets or a past member or non‑member whether such debts or demands be admitted 'or not:
provided that if the question at issue between a society and a claimant, or between different claimants, is one involving complicated questions of law and fact, the Registrar may, if he thinks fit, suspend proceedings in the 'matter until the question has been tried by a regular suit instituted by one of the parties or by the society. If no such suit is instituted within six months of the Registrar's order suspending proceedings the Registrar shall take action as laid down in paragraph 1 of this section".
A plain reading of the above section 54 indicates that if any dispute touches the business of a society is raised other than a dispute regarding disciplinary action taken by the society or its committee against a paid servant of the society, the same is referable to the Registrar for decision by himself or his nominee, or either of the parties so desire, to arbitration of three arbitrators. It may also be noted that clause (d) provides that any dispute touching the business of a society other than referred to hereinabove, between the society or 114 its committee and any past or present officer, agent or servant of the society, or a surety of such officer agent or servant, whether such surety is or is not a member of the society, is also referable to the Registrar in the above terms. The question, therefore is as to whether the alleged termination of the petitioner's services will be covered by above clause (d). of section 54. To put it precisely, the question is, whether the impugned dismissal order is a dispute touching the business of the society. One of us, namely, Mr. Justice Ajmal Mian, Actg. C.J. had the occasion to dilate on this aspect while sitting as S.B. at the Sind High Court in the case of J.J. Miranda v. Fishermen's Cooperative Society Ltd. Karachi and another reported in P L D 1978 Kar. 990, in which, it was held that the expression "if any dispute touching the business of a society" inter alia in section 54, would not cover service matters, It may be advantageous to reproduce the relevant observation in respect thereof, which reads as follows:‑‑
"16. A comparison of sections 54 and 70 of the Cooperative Societies Act will indicate that the words used in section 54 are "if any dispute touching the business of a society" and whereas in section 70 the words used are "in respect of any act touching the business of the society." In other words, in section 70 the words "any act" have been substituted in place of the words "any dispute" used in section 54.
A dispute generally arises out of an act complained of. If the words "any dispute touching the business of the society" do not cover service matters of an employee of the society, it follows that the words "any act touching the business of the society" shall also not cover the above service matters. The scope of the words "any act" (which have wide import) is restricted by the qualifying words, viz. touching the business of the society In other words, a notice is contemplated under section 70 if the act complained of touches the business of the society.
Their Lordships of the Supreme Court of Pakistan in the above cited case of 1971 S C M R while construing the words "any dispute touching the business of a society" used in section 54, were pleased to take the view that an action by an employee of the society is not covered. As the common words in both the sections are "touching the business of the society" the contention advanced by the learned counsel for the plaintiff that even section 70 is not attracted to the instant case because of the above Supreme Court ruling has force. I am, therefore, of the view that the plaintiff was not obliged to serve a notice under section 70 of the Co‑operative Societies Act before the filing of the suit".
It may be noted that in the above judgment, reliance has been placed on the Honourable Supreme Court case for the purpose of taking the above view.
10. We are also inclined to hold that the above expression, namely, "any dispute touching the business of a society" does not cover then impugned action of wrongful termination of service.
11. Adverting to the submission of Mr. Muqim Ansari, learned counsel for the respondents Nos. 2 and 3 that the petitioner being an employee of a Bank, which is a corporate body, the relationship between the Bank and the petitioner is that of Master and Servant, it may be observed that the consistent view of the Hon'ble Supreme Court till the first reported decision in the case of Evacuee Trust Property Board and another v. Muhammad Nawaz, reported in 1983 S C M R 1275, had been that the employees of a firm or Corporation, did not enjoy the constitutional protection of service and that the relationship between an employee of a firm or Corporation is that of Master and Servant. The above view was followed by the various High Courts. Reference may be made in this behalf to the following cases of the Honourable Supreme Court and the High Courts:‑‑
(i) Malik and Haq v. Shamsul Islam, reported in P L D 1961 S C 531.
(ii) Chairman, East Pakistan Industrial Development Corporation and another v. Rustam Ali and another, reported in P L D 1966 S C 848.
(iii) Zainul Abidin v. Multan General Cooperative Bank Limited Multan, reported in P L D 1966 S C 445.
(iv) Abdus Salam Metha v. Chairman, WAPDA and another reported in 1970 S C M R 40.
(v) Shahid Khalil v. P. I. A., reported in 1971 S C M R 568.
(vi) Lt.‑Col. Shujauddin v. Oil & Gas Development Corporation, reported in 1971 S C M R 566.
(vii) R.T.H. Janjua v National Shipping Corporation, reported in PLD 1974 S C 146.
(viii) A. George v. Pakistan International Airlines Corporation, reported in P L D 1971 Lah. 748.
(ix) Muhammad Aslam v. National Shipping Corporation Karachi though the Chairman and 2 others, reported in P L D 1979 Kar. 246.
12. However, in the aforesaid case of Evacuee Trust Property Board and another v. Muhammad Nawaz, reported in 1983 S C M R 1275, decided on 24th November, 1978, the Honourable Supreme Court while declining leave to appeal against the judgment of the Lahore High Court passed in a Civil Revision, observed that the master's pleasure to dismiss his servant is surrendered to the extent of statutory rules directing otherwise. The relevant observation is as follows:‑‑
"4. Learned counsel, for the petitioners has argued that even though the removal or dismissal of the employee was illegal nevertheless the employee at the most could have sued for damages for wrongful dismissal from service and could not have been granted a declaration of the kind prayed for by him in the suit, because, according to the learned counsel, the relationship between the petitioners and the employee was that of a master and servant whereunder the service of the employee was in the pleasure of the master which could note be tampered with by decree of civil Court. In this respect he referred to R.T.H. Janjua v. National Shipping Corporation, reported in P L D 1974 S C 146 for the proposition that violation of regulations pertaining to the terms and conditions of employees of a Corporate body were not actionable to claim a declaratory decree regarding validity of their removal. The contention has no merit. In the aforesaid case the powers of the master to deal with .the service matters of his employee were not regulated by statutory rules, whereas in the instant case the subject was covered and controlled by regular rules on the subject in the form of efficiency and discipline rules which were adopted by the Evacuee Trust Property Board, as its own rules by means of a proper resolution in their meeting of May, 1969. The matter was considered by a Bench of this Court in C.P.S.L.A. 645/74 titled The Chairman, Evacuee Trust Property Board Lahore etc. v. Noor Elahi and C.P.S.L.A. 646/74, titled the Chairman Evacuee Trust Property Board Lahore, etc. v. Muhammad Ramzan, wherein it was held that dismissal in violation of those rules was illegal. The actual passage in the judgment of this Court, dated 14‑11‑1974 in the above cases reads as follows:‑‑ .."
13. There have been two recent pronouncements of the Honourable Supreme Court in the cases of (i) Anwar Hussain v. Agricultural Development Bank of Pakistan and others, reported in P L D 1984 S C 194 decided on 14th December, 1981, and (ii) The Principal, Cadet College, Kohat and another v. Muhammad Shoab Qureshi, reported in PLD 1984 S C 170, decided on 11th December, 1983. In the former case, a petition for leave against the judgment of a learned Single Judge of the Sind High Court was filed by an employee of the Agricultural Development Bank of Pakistan, the Hon'ble Supreme Court declined leave on the ground that no statutory rules were violated while dismissing the petitioner from the service. However, the following observations were made in line with the above earlier judgment of the Supreme Court referred to hereinabove:‑‑
"It follows that if the relationship is the result of a contract freely entered into by the contracting parties then the principle of master and servant will apply. The principle, however, will not apply if some law or statutory rule intervenes and places fetters upon the freedom of the parties in the matter of the terms of the contract. It is on this principle that a civil servant for whom there are constitutional safeguards, is not governed by the principle of master and servant, for he is possessed of a legal character for the enforcement of which he can bring an action. Even where the employee is not a civil servant but there are statutory safeguards governing his relationship with the employer and placing restrictions on the freedom of the parties to act, general law of master and servant will not apply. In such cases the employer would be bound to follow the procedure provided for in the statute or the statutory rules before terminating the service of the employee and in the absence of conformity to such procedure, the termination of service would not be clothed with validity and the employee will be entitled to an action for his re‑instatement."
14. In the above second case of the Hon'ble Supreme Court, the facts were that a Head Clerk and a Senior Master in the Teaching Staff, both working in the Cadet College, Kohat, were dismissed from service by the Principal of the College and the Chairman Board of Governors of the College respectively. Both the above employees filed constitutional petitions in the Peshawar High Court, which were allowed. The Principal and' the Chairman filed two appeals against the above two judgments in the Hon'ble Supreme Court, which were disposed of by the above judgment, (decided as stated hereinabove, on 11th December, 1983) Both the appeals were allowed on the ground that the Principal or the Chairman had not violated any statutory rules while dismissing the above two employees the case law was reviewed and, inter aila, the following observations were made:
"It is, therefore, evident that where the conditions of service of an employee of a statutory body are governed by statutory rules, any action prejudicial taken against him in derogation or in violation of the said rules can be set aside by a writ petition. However, where his terms and conditions are not governed by statutory rules but only by regulations, instructions or directions, which the institution or body, in which he is employed, has issued for its internal use, any violation thereof will not, normally, be enforced through a writ petition.
In this view of the matter, the holding of a 'public office' by an employee is not all that crucial because, as rightly pointed out by Qazi Muhammad Jamil, learned counsel for the respondent in Civil Appeal No. 17 of 1981, this condition is relevant only in cases wherein a writ in the nature of quo warranto is sought whereby a person holding a public office within the territorial jurisdiction of a High Court may be required to show the authority of law under which he claims to hold the said public office. Thus, apart from the question whether the aggrieved employee of a statutory body was a holder of a 'public office', the more important question will be whether the conditions of his service were governed by any statute and/or a statutory rule, if so whether the statute or statutory rule was disregarded while taking the action which is impugned by him".
"This appeal is liable to succeed on the short ground that a writ petition would not be competent unless the violation of any provision of the statute or of a statutory rule is shown."
15. The ratio‑decidendi of the above recent pronouncements of the Supreme Court seems to be that if a Corporation has statutory rules dealing with the service matters of its employees, any action in violation of such rules, is justiciable through a constitutional petition.
In the above case of the Principal, Cadet College, it was also pointed out by the Honourable Supreme Court that in case of violation of statutory rules, the requirement that the incumbent should hold public office in order to seek a writ of mandamus, is not a pre‑condition.
16. Having dealt with the case law on the point, the question arises, whether in the present case, there has been any violation of any statutory rules. The effect of the resolution of the Bank's Board of Directors bearing No. 2 passed on 11th December, 1976, in. view of explanation (iv) to subdr4ctiun (4) of section 42 of the Ordinance, is that the petitioner stood permanently absorbed in the service of the Bank. It may be observed that para. 7 of the Notification would have been applicable to the petitioner, if he would not have been permanently absorbed before the issuance of it, which is evident from plain reading of the entire para. 7 of it, as was urged by the learned counsel for the petitioner. In this view of the matter, there are no, statutory service rules, which can be said to have been violated. At the most, the termination order, if it is by be construed as having adverse reflection on the efficiency 'or integrity of the petitioner, can be said to be illegal, for which, the proper remedy for the petitioner is to file a suit for recovery of damages But not a writ petition for reinstatement.
17. Though it was convassed at the Bar by the learned counsel for the petitioner that para. 7 of the Notification was not applicable to the petitioner but he did not submit any argument as to the effect of its non‑application. In the above case, the arguments were concluded on 7th October, 1985, but on 12th October, 1985 we framed the following question and asked the learned counsel for the parties to submit their arguments:‑
"If it is to be held that the petitioner was permanently absorbed by Resolution No. 2 of the Board of Directors of the respondent No. 2, dated 11th December, 1976, it follows that para. 7 of the Notification, dated 19th August, 1979 cannot be pressed into service. If that is so what provision of law or statutory service rules have been violated."
Mr. Iftikhar Muhammad, learned counsel for the petitioner adhered to his submission that para. 7 of the Notification was not applicable to the petitioner, but had contended that explanation (iv) to subsection (4) of section 42 of the Ordinance has been violated and, therefore the petitioner is entitled to maintain the petition. Suffice to observe that the object of the above provision was to provide continuity of the services to the employees of the defunct Bank in the absence of any contrary decision by the Bank or the Provincial Government. But the above provision was not intended to provide protection of the nature, which was provided under Article 177 of the late Constitution of 1962. In pursuance of the above provision the petitioner was permanently absorbed as held by us hereinabove by the Bank's resolution No. 2, dated 11th June 1976 and remained as such for about three years. The termination of his services may be illegal, but cannot be said to be in violation of above provision of the Ordinance.
18. Then in the alternative, it was submitted by Mr. Iftikhar Muhammad, learned counsel for the petitioner that since the Bank is a Cooperative Bank incorporated under the Co‑operative Societies Act, 1925 and its byelaws have been framed in terms of section 10 of the said Act read with section 3(a), the same have statutory backing. He has also referred to the rules governing the service of the employees of the Bank, which were applicable from 1st July, 1970. It will suffice to refer to recent pronouncement of the Honourable Supreme Court on this aspect relied upon by Mr. Muqim Ansari, learned counsel for the respondents Nos. 2 and 3 in the case of Noorul Haq v. Islamic Republic of Pakistan through Secretary, Establishment Division and another, reported in P L D 1984 S C 75, in which, the Honourable Supreme Court while construing para. 2(c) of Removal From Service (Special Provisions) Regulation, 1972 (C.M.L.A's No. 114) held that an employee of Cooperative Bank was not a person in service of Corporation and not amenable to action under C.M.L.R. No. 114. Reference may also be made to the case of Faiz Ahmed v. (i) The Registrar, Cooperative Societies West Pakistan, Lahore and (ii) Managing Committee, The Pakpattan Cooperative Bank Ltd. Pakpattan, reported P L D 1962 S C 315.
19. We are inclined to hold that byelaws framed by a Cooperative Society in pursuance of the provisions of the Cooperative Societies Act, cannot be equated with the statutory rules framed by a Government functionary in pursuance of a provision in a statute. Furthermore it has not been pointed out which of the byelaws of the Bank have been
20. It was then contended that the Bank is also a Schedule Bank in terms of State Bank of Pakistan Act, 1956 and that in terms of section 37 thereof, the byelaws of a Schedule Bank are also to be approved and, therefore, they have the above statutory backing. Suffice to observe that merely the fact that the bye laws of a Schedule Bank are to be submitted for approval to the State Bank, would not make them) at par with the statutory rules. He has also referred to the case of Muhammad Ramzan Ansari v. Government of Pakistan and others reported in 1983 P L C (C.S.) 52. in which, a learned Single Judge of the Lahore High Court while dealing with the case of an employee of the National Bank of Pakistan held that violation of a statutory provision can be enforced through a writ. The above case has no application to the present case for the reason that no statutory provision has been violated.
21. For the aforesaid reasons, the petition is dismissed with no orders as to cost.
22. Before parting with the above discussion, we may observe that the respondent No. 2 has already taken into service a number of ex‑employees of the defunct Bank and it will be proper to consider the petitioner's case dispassionately, which will eliminate the possibility of further litigation.
M.Y.H.
Petition dismissed.
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