' MUHAMMAD NAWAZ ABBASI, J.---SME Bank Limited, petitioner No,1 herein, through this petition under Article 212 of the Constitution of Islamic Republic of Pakistan, 1973, has sought leave to appeal against the judgment dated 9-7-2002 passed by Federal Service Tribunal, Islamabad in a service appeal.
2. The facts giving rise to this petition in small, compass are that Mahfooz Elahi Peracha, respondent No,1 herein, was employed as Senior Executive Vice-President in Regional Development Finance Corporation. This corporation by virtue of Ordinance LVI of 2001, RDFC was converted into a public company, namely SME Bank and under section 7 of the Ordinance, the services of the employees of RDFC were transferred to the petitioner Bank without any change in the terms and conditions of service. The respondent No,1 was assigned the position of Advisor to the President and CEO of the Bank. Subsequently, the President of the Bank, terminated the services of the respondent without notice vide order dated 19-4-2002 in the following terms:- "We regret to inform you that your services are no longer required by SME Bank Limited, therefore, your services are hereby terminated with immediate effect.
' In terms of your appointment letter dated November 13, 1983 and SME Bank Limited Employees Services Regulations, you are entitled to receive three months pay in lieu of the notice. You may receive the same alongwith any other dues according to the terms of your service from our accounts department.
' Thanking you. Yours truly. (Sd.)
' Kaiser H. Naseeni."
3. There being no statutory rule providing the remedy of departmental appeal, review or revision, the respondent filed an appeal under section 4 read with section 2-A of the Service Tribunals Act, 1973 before the Federal Service Tribunal, Islamabad and the petitioners while raising preliminary objection to the maintainability of appeal before the Service Tribunal, sought its dismissal. The Federal Service Tribunal having come to the conclusion that respondent being a regular employee of RDFC would not loose the said status on promulgation of the Ordinance No,LVI of 2001 and would he entitled to avail the remedy of appeal before the Service Tribunal by virtue of section 2-A of the Service Tribunals Act, 1973 and consequently while setting aside the order impugned in the appeal, directed for reinstatement of the respondent in service with back benefits.
4. In support of this petition, learned counsel for the petitioners has raised the following contentions.
(a) That without availing the remedy of appeal in terms of Regulation 10.7 of RDFC Employees Service Regulations, 1989, the appeal before the Service Tribunal filed by the respondent was not maintainable;
(b) That service of the petitioners was not being regulated by statutory rules, therefore, neither the respondent could avail the remedy of appeal under section 4 of the Service Tribunals Act, 1973, nor the Tribunal would have the jurisdiction to entertain and adjudicate upon the matter;
(c) That the subsequent approval of order of termination passed by the President of the Bank by the Board, would cure the irregularity, if any, and the termination simpliciter as per terms contained in the appointment letter dated 13-11-1983 would not be challengeable on any ground. In nutshell, the learned counsel for the petitioners has contended that the appeal before the Tribunal was no maintainable and the service of the respondent with the petitioner-bank was not being regulated by statutory rules therefore, there was no need of giving the notice and assigning of any reason for termination.
5. The respondent while appearing in person has submitted that he was a regular employee of RDFC and upon dissolution of the Corporation and its conversion into a Company under Ordinance LVI of 2001 the services of the employees of the Corporation were transferred to the Company on the same terms and conditions and in case of any violation of terms and conditions of their service by the Company, the remedy of appeal before the Tribunal was available to them by virtue of section 2-A of the Service Tribunals Act, 1973 and that the appeal preferred by the respondent against his termination before the Service Tribunal was competent.
6. The respondent was initially appointed as Grade-III Officer on probation in terms of Regulation 2.8 of RDFC Employees Service Regulations, 1989. Clause 5 of the appointment letter dated 13-11- 1983 provided as under:-- "5. After successful completion of the period of probation, you will be taken on the permanent strength of the Corporation and thereafter your services will be liable to termination in three months notice or pay-in lieu thereof on either side provided that in the event of such notice of termination you will be deemed to remain liable to service RDFC until you have fully handed over the charge of all the responsibilities assigned to you."
' RDFC Employees Service Regulation 2.8 provides as under:- "2.8 PROBATION;
(i) All employees appointed to a post shall on appointment be placed on probation as follows:
(i) Category A & B 3 Months
(ii) Category C, D & C 6 Months
(ii) The competent authority may at its discretion waive the whole or any part of the probation period or extend the probationary period for a period not exceeding one year. Such extension shall be conveyed to the employee on or before the expiry of the probationary period in writing specifying the duration of extension. If no such order is conveyed the period shall be deemed to have been extended. If no order terminating the probation period is issued before expiry of the extended period the probation shall be deemed to have been satisfactorily completed.
(iii) CONFIRMATION: ' An employee will be confirmed on satisfactory completion of the probationary period."
7. The respondent having successfully completed the period of probation was confirmed and while serving in the Organization as a regular employee was no more on probation to be governed by Regulation 2.8 and could not be removed from service except for the grounds mentioned in Regulation 10.2 of RDFC Employees Regulations 1989 which were made applicable mutates mutandis to the employees of the above said Organization on transfer to the SME Bank under Ordinance LVI of 2001. Regulation 10.2 under which the service of an employee could be terminated, provides as under:-- "10.2 Offences and Punishments/Grounds for Penalties:
(i) Where an employee who:
(a) commits breach of the regulations of the Corporation, or
(b) commits breach of discipline,' or r
(c) acts in a manner prejudicial to service discipline or good order or contrary to regulation 10.1;
(d) contravenes or deliberately ignores instructions/cadres/directions issued to hint in connection with his official work, or
(e) displays negligence, inefficiency or indolence, or
(f) knowingly does anything detrimental to the interest of the Corporation, or
(g) is guilty of any other act of misconduct or in sub-indolence.
' The competent authority may impose on him one or more of the following penalties given in sub- regulation (ii).
(ii) The following are the penalties which may be imposed on an employee;
(a) Reprimand.
(b) Postponement or stoppage of increment(s) or promotion.
(c) Reduction to a lower scale of pay in his grade or to a lower grade,
(d) Recovery from' pay of the whole or part of any pecuniary loss caused to the Corporation by the employee.
(e) Forfeiture of pay for any period of unauthorized absence from duty, (1) Compulsory retirement from service,
(g) Removal from service which does not disqualify for future employment, and
(h) Dismissal which will involve permanent disqualification of further employment in the Corporation:
8. The perusal of above regulation shows that a regular employee RDFC could be awarded one or more penalties provided in sub-regulation (ii) of the above said Regulations by the competent authority only on the grounds mentioned in sub regulation (i) of the said regulation. The competent authority under the above service regulations was the Board of Directors whereas in the present case, the President of Bank assuming the powers of competent authority while treating the respondent still on probation after passing the order of his termination from service referred the matter to the Board of Directors for ex post facto approval. Under the regulations in question, except in the case of disciplinary action as provided in Regulation 10.2 even the Board of Directors would not be competent to terminate the service of respondent and this position was conceded by the learned counsel who represented the petitioner before the Service Tribunal. The examination of Ordinance LVI. Of 2001 together with RDFC Service Regulations 1989, would reveal that by virtue of section 2-A of the Service Tribunals Act, 1973 the remedy of appeal before the Service Tribunal was available to the respondent and in absence of any statutory rules providing right of departments appeal, review or revision, the order impugned in the appeal could be directly challenged before the Tribunal, therefore, the objection regarding maintainability of service appeal before Tribunal without approaching the departmental authorities, was rightly overruled by the Tribunal in the light of law laid down by his Court in Syed Aftab Ahmed v. KESC (1999 SCM R 197), Abdul Hafeez Abbasi v.
PIAC (C.A. 2117 to 2134 of 2001 and C.A. 12 of 2002), Engineer Nairands v. Federation of Pakistan (2002 SCM R 82) wherein it was held that in absence of any statutory rule providing the remedy of departmental appeal, review or revision, the employees can directly approach the Federal Service Tribunal. We, therefore, in the light of foregoing discussion take no exception to the competency of appeal before the Service Tribunal.
9. The next question for determination in the service appeal would relate to the status of the respondent in the employment of RDFC at the time of promulgation of Ordinance 2001. The respondent was initially appointed as Grade-III Officer on probation under regulation 2.8 supra for a period of six months extendable to a maximum period of one year. This regulation provides that if on expiry of maximum period of probation the service of an employee is not terminated, he shall be deemed to have successfully completed the probationary period and would acquire the status of a confirmed employee. The respondent was serving in RDFC for that last about eighteen years and at the time of promulgation of Ordinance No,LVI of 2001, he was ,holding the position of Senior Executive Vice-President, therefore, the termination of service of the respondent in terms of clause 5 of his appointment letter, after lapse of such a long period, would not be possible as he was no more on probation and on expiry of maximum initial period of one year probation, would acquire status of confirmed employee. Visualizing the situation, the plea of mala fide and bias taken by the respondent that President of the bank having developed malice against him due to his pointing out the irregularities in the appointments in the Bank and such other matters connected with the administration of the bank was annoyed with him and in retaliation, terminated him from service, is borne out from the record.
10. We having examined the Regulation 10.2 by virtue of which the service of the respondent was terminated, find that it was not at all attracted in his case, therefore, notwithstanding the approval given by the Board of Directors, the legal defect in the order of termination of the service of respondent would not be cured. The Chief Executive of the bank can competently make appointments against the vacant posts in the bank in exercise of his powers delegated to him by the Board of Directors but the power of termination of service of an employee under RDFC Regulations would lie with the Board of Directors under Regulation 3.4 which provided as under:-- "Nothing contained in Chapter X and in the other regulations and procedures shall affect the inherent right of the Corporation to terminate the service of an employee by proper notice or payment of salary in lieu of notice period."
11. The perusal of regulation 3.4 and 10.2 of RDFC Service Regulations 1989 would show that only the Board of Directors enjoys the powers of termination of an employee and such power is exercisable subject to the giving of proper notice. The President or any other authority, without delegation of powers by the Board in this behalf, could not exercise the authority of the Board of Directors. The Regional Development Finance Corporation was created by the Federal Government under Regional Development Finance Corporation Ordinance, 1985 and RDFC Service Regulations 1989 was framed under the authority of Federal Government to regulate the services of its employees and on the insertion of section 2-A in the Service Tribunals Act, 1973, through an amendment in the said Act in 1997, the employees of the Corporations would definitely acquire the status of civil servants for the limited purpose of section 4 of the Service Tribunals Act 1973. The above regulation although had no statutory sanction but it being used as service rules in respect of the terms and conditions of service of the employees of the organization would having binding force and in case of violation of any regulation in respect of any terms and condition of service of an employee, the Service Tribunal redress the grievance of such an employee in service appeal. The status of RDFC as statutory Corporation and the transfer of service of employees of RDFC who were being governed by RDFC Service Regulations 1989, to SME Bank on amalgamation of RDFC in SME Bank, on same terms and conditions under Ordinance XLI of 2001 is not disputed, therefore, notwithstanding the non-statutory status of Service Regulations, 1989, the same would have force of law, qua the matters relating to the service of the employee of RDFC. The reference may be made to National Bank of Pakistan v. Manzoor-ul-Hassan (1985 PSC 440), University of the Punjab v. Sardar Ali (1988 SCM R 123), and Muharram Ali v. Government of Punjab (1984 SCM R 289).
12. We having examined the matter in detail with the assistance of learned counsel for the petitioners and the respondent, who appeared in person find that there can be no exception to the view of the matter taken by the Tribunal. This petition is accordingly dismissed. Leave is refused.