1. ' KHILJI ARIF HUSSAIN, J.---Plaintiff filed suit seeking following reliefs:-- "(i) Declare that the impugned Letter, dated December, 26, 2006 is illegal, unlawful, unjust and void ab initio and as such, it is liable to be set aside;
(ii) Declare that defendant No,1 does not have any authority to terminate the said agreement without either serving upon the plaintiff 12 months' notice in writing or payment, including full salary and benefits for the relevant period in lieu of notice;
(iii) For an amount of USD 200,000 as damages on account of mental torture, agony, anxiety, and distress and loss of reputation against the defendants;
(iv) Permanent injunction (i) restraining defendant No,1 from terminating the plaintiff's employment except in the manner provided for in the Said Agreement (ii) restraining thedefendants from denying plaintiff access into the office building - of defendant No,1 and/or access to and provision of all such facilities which are necessary for the performance of the plaintiff's duties and responsibilities as COO of defendant No,1 and which were previously available to the plaintiff and from creating obstacles and/or hindrances of any kind, whatsoever, for the plaintiff in carrying out his daily duties and responsibilities during subsistence of his employment with defendant No,1 under the terms of the said agreement;
(v) Cost of the suit;
(vi) Any other relief(s) that -this Hon'ble Court may deem fit in the circumstances of the case."
2. ' Along with the plaint plaintiff filed an application under Order XXXIX Rules 1 and 2 read with section 151, C.P,C. With a prayer to pass an order restraining the defendant No,1 from terminating the plaintiff's employment except 'in the manner provided for in the Employment Agreement, dated January 1, 2005, and restraining the defendant from denying plaintiff access into the office building of defendant No,1 and/or access to a provision of all such facilities which are necessary for the performance of the plaintiff's duties and responsibilities as COO of defendant No,1 and which were previously available to the plaintiff and from creating obstacles and/or hindrances of any kind, whatsoever, for the plaintiff in carrying out his daily duties and responsibilities under the terms of the Said Agreement.
3. ' Heard Mr. Arshad Tayebaly, learned counsel for the plaintiff, and Mr. Muhammad Masood Khan, learned counsel for the defendants.
4. ' The facts which are necessary for the purpose of deciding listed-application can be summarized as that by an Employment Agreement, dated 1-1-2005 between plaintiff, who is a German national, and defendant No,1 plaintiff was appointed as Chief Operating Officer (COO) in the company defendant No,1. It was alleged that the plaintiff along with two other colleagues has created, conceived, and pioneered the concept of a scheme which is known as Hero Pakistani Collector's Card Series. The plaintiff has developed the said scheme along with other two pioneers even before the formation of defendant No,1 and in fact defendant No,1 was incorporated specifically in the management of Hero Pakistani by the other two pioneers who are the sponsor shareholders thereof, and plaintiff has invested his time and expertise not only in developing "Hero Pakistani" but also in forming defendant No,1 alongside the sponsors shareholders with the firm understanding that he would be compensated for his time and effort once defendant No,1 had been incorporated.
5. ' While plaintiff was on his annual holidays defendant No,1 sent the plaintiff letter, dated 26-1-2006 signed by defendant No,2 wherein it was stated that the services of defendant No,1 is no longer required by the plaintiff and his employment is terminated effective immediately. It was alleged that contents of the letter are blatant breach of the agreed terms of the Agreement and did not provide any reason whatsoever, for abandoning the procedure of termination that should have been adopted under the Agreement and under the provisions of the relevant laws and unless the plaintiff's employment is terminated in the manner provided for in the said Agreement, plaintiff's right as an employee cannot be impinged upon.
6. ' Mr. Arshad Tayebaly, learned counsel for the plaintiff, argued that defendant No,1/Company was incorporated in Dubai with an office in Pakistan and by an Employment Agreement, dated 1-1-2005 plaintiff joined service with defendant No,1 in terms of Agreement. Learned advocate in support of his contention that plaintiff employment was wrongly terminated, heavily relied upon clause 2.2 of the Agreement and argued that service of the plaintiff can be terminated by either party by giving to the other not less than twelve months' notice in writing and since no notice has been given as required under Clause 2.2 of the Employment Agreement termination notice was illegal, unlawful, and ought to have been ignored. It was argued by the learned advocate for the plaintiff that while plaintiff was on Christmas holidays notice, dated 26-12-2006 was served upon the plaintiff terminating his service without any show cause or providing an opportunity of hearing. The plaintiff after joining service of the defendant No,1 called his wife along with two children in Pakistan and now the said two children are taking education in one of the school at Karachi and due to termination of the service without any notice it becomes almost impossible for him to maintain his family and meet their educational expenses.
7. ' As regards allegation of misconduct, in the counter affidavit learned advocate for the plaintiff argued that no document about the alleged misconduct has been filed by the defendant No,1 and further since the allegation has been levied against the plaintiff now it is not possible for the plaintiff to join service in any other reputable institution. The allegation which defendant has levied in his counter affidavit it was the basis of termination of his service, since admittedly the plaintiff has not been provided an opportunity to meet the alleged allegation, impugned letter of termination is void in law liable to struck down. Learned advocate in support of his arguments relied upon the cases of Shahid Mahmood v. Karachi Electric Supply Corporation Ltd., 1997 CLC 1936, Arif Majeed Malik and others v. Board of Governors Karachi, Grammer School, 2004 CLC 1029, Muhammad Mushtaq v. Chancellor, Government College University, Faisalabad, 2005 PLC(C.S.)
8. 1300, Javed Akhtar Mashi v. Board of Intermediate and Secondary Education, Faisalabad v. 2003 PLC (C.S.) 1479, Agha Salim Khurshid and another v. Federation of Pakistan and others, 1998 SCMR 1930, Mrs. Anisa Rehman v. P.I.A.C.. And another 1994 SCMR 2232.
9. ' Mr. Muhammad Masood Khan, learned Advocate for the defendants, in reply argued that the plaintiff has claimed a sum of US $200,000 as damages and as such application for grant of jurisdiction (sic.) on this sole ground is liable to be dismissed. Learned advocate argued that since the employment of the plaintiff was terminated due to misconduct, plaintiff was not entitled for any notice or salary. Learned advocate relied upon Clause 13 of the Employment Agreement and argued that the service of the plaintiff can be terminated on account of misconduct without serving notice of 12 months as required under Clause 2.2 of the Agreement Mr. Khan, learned advocate for the defendants, to support his arguments about misconduct argued that taking advantage of his position plaintiff got health insurance coverage of his personal drivpr meant for the employee of the defendant only and insurance premium was paid from the account of defendant No,1 learned Advocate argued that plaintiff is not entitled for any prior notice before the termination of his service and even if it is accepted that notice was required to be served, remedy available to the plaintiff is only damages which can be granted at the time of final hearing of the suit and listed application is liable to be dismissed. In support of his contention, Mr. Muhammad Masood Khan, learned advocate for the defendant, relied upon the cases of Shahid Mahmood v.
10. Karachi Electricity Supply Corporation Ltd., 1997 CLC 1936, United Bank Limited and others v. Ahsan 'Akhtar and others, 1998 SCMR 68, Islamic Republic of Pakistan v. Muhammad Zaman Khan and others, 1997 SCMR 1508, Muhammad Umar Malik v. The Muslim Commercial Bank Ltd., 1995 SCMR 453, Qazi Inamul Haq v. Heavy Foundry and Forge Engineering (Pvt.) Ltd., 1989 SCMR 1855, Tahir Mahmood Rana v. The Tourism Development Corporation of Punjab, Lahore and 2 others, 1994 CLC 2004, Anwar Hussain v.. Agricultural. Development Bank of Pakistan and others, PLD 1984 SC 194 and Marghub Siddiqi v. Hamid Ahmad Khan and 2 others, 1974 SCMR 519.
11. ' I have taken into consideration respective arguments advances by the learned advocates for the parties and perused the record. From the perusal of the record, it appears that by an Employment Agreement, dated 1-1-2005, plaintiff joined service of defendant No,1 as Chief Operating Officer
(COO) of the Company. In order to appreciate respective contentions of the learned advocate for the parties it would be beneficial if relevant Clauses 2.2, 2.3, 5.7, 13.1(a) to (f), 13.2, 15.1, 16.1, 16.2 of Employment Agreement be reproduced:-- "Employment Agreement (2.2)This agreement is effect from the date of signing and, subject to clauses 2.3, 2.4 and 13 (Term and Termination), shall continue until terminated by either party giving to the other not less than twelve months' notice in writing.
12. (2.3)Notwithstanding Clause 2.2, this agreement will therefore automatically terminate (without prior notice land without compensation) at least on the day on which the Executive attains the age of 65.
13. (5.7)With effect from the Trigger Date, the Executive will be entitled to receive a further $100,000 from the Company in respect of housing allowance payable monthly in 12 equally instalments normally on the first day of each calendar month. The first such instalment shall be paid on the first day of the month of following the Trigger Date.
14. (13.1) This agreement shall be subject to termination by the Company by summary notice in writing without compensation if the Executive shall have:--
(a) been guilty for any material failure to perform his obligations under this agreement or committed any serious breach or unremedied and persistent breach of this agreement; or
(b) been guilty of any fraud, serious negligence gross neglect or gross-misconduct in connection with or affecting the Company; or
(c) been guilty of any serious act of bad faith in relation to the company; or
(d) become patient under any mental health legislation;
(e) been convicted of an offence under any statutory enactment or regulation relating to fraud, insider dealing, or leading to imprisonment for more than six months; or
(f) been absent through sickness or injury for a consecutive period of more than 90 days or for a total of 90 days in any consecutive period of six months.
15. (13.2) The Company may its sole discretion make a payment in lieu of notice or of any un-expired period of notice. For the avoidance of doubt, this right will apply whether notice is given by the Executive or by the Company. For these purposes the Executive agrees that pay in lieu of notice will consist of his full salary and benefits for the relevant period of notice.
16. (15.1) The Executive will comply with all the Company's disciplinary rules and procedures from time to time. In the circumstances that disciplinary action is required in relation to be Executive's Employment it will be conducted by the Board. The Company's disciplinary rules and procedures do not form part of this agreement and do not have contractual effect.
17. (16.1) Any notice or other document to be given under this agreement shall be in writing any may be given personally to the Executive or to the secretary of company (as the case may be)
18. (16.2) Any such notice shall be deemed served when in the ordinary course of the means of transmission it would first be received by the addressee in normal business hours".
19. ' The defendant No,1 through letter, dated 26-12-2006 informed the plaintiff that unfortunately due to current situation defendant No,1 no longer requires plaintiff's service and his employment is terminated effective immediately.
20. ' On reading clauses 2.2 with clause 13 of the Employment Agreement it appears that either party can terminate Agreement of Employment by giving to other not less than 12 months' notice in writing however clause 2.2 is subject to clauses 2.3, 2.4 and 13 of the Employment Agreement.
21. Clause 2.3 provided that on attaining the age of 65 service of the plaintiff automatically terminated without prior notice and without compensation. Clause 13 is the clause which provided that service of the plaintiff/employee can be terminated by summary notice in writing, without compensation, if plaintiff has been guilty of any material failure to perform his obligations or committed any serious breach or un-remedied and persistent breach of this agreement, guilty and fraud, serious negligence, etc., being guilty of any serious act bad faith in relation to the Company or become a patient under any mental health legislation, been convicted of an offence under any statutory enactment or regulation relating to fraud, insider dealing, or leading to imprisonment for more than six months or been absent through sickness or illness for a consecutive period of 20 days.
22. ' The defendant No,1 in his counter-affidavit gave details which according to defendants were acts of bad faith, unethical behaviour of plaintiff towards defendants No,
1. It was alleged that in April, 2006, the plaintiff insisted that the defendant No,1 restructure his salary for the purposes of avoiding payment of tax in Pakistan. In 2005 when the plaintiff was in-charge of the Administration Department of the defendant No,1, the plaintiff utilized rental cars from Eurocar for personal use of his wife and did not settle the bill for same, until Eurocar was written off to defendant No,1. And defendant No,2 had to ask the plaintiff to settle personal expenses before the end of the week.
23. Theplaintiff also did not settle bills pertaining to his personal expenses. The plaintiff got his personal driver covered under health scheme of defendant No,1 employee and further did not pay premium personally etc. The defendant No,1 also denied that Scheme known as "Hero Pakistani" Collector's Card Service ":as created and developed by the plaintiff. However, Mr. Muhammad Masood Khan, learned advocate for the defendants concedes that no show-cause notice or personal hearing has been provided to the plaintiff before the termination of plaintiff service.
24. ' To appreciate the respective contentions of the learned advocates for the parties, and whether after the termination of the service plaintiff can be reinstated in employment and if not what relief can be granted in the circumstances of the case, I would like to discuss various case law relied upon by the learned counsel for the parties.
25. ' In the case of Shahid Mahmood (supra), the plaintiff/employee seeks interim relief to restrain the defendant No,1 employer from giving effect to a letter purporting to terminate the service of the plaintiff and taking action in consequence thereof pending disposal of the case. While issuing notice of application under Order 39 Rules 1 and 2, C.P.C., learned Judge in his Chambers suspend the operation of the impugned letter and matter thereafter was listed for hearing before another learned Judge of this Court. The termination letter was issued by the defendant on the ground that to re-structuring and re-organising the affair of the company it has been decided that 200 posts of officers in different cadres be abolished including post held by the plaintiff in that suit. The employee questioned the letter of termination on various grounds including that fair and reasonable criterion should have been adopted which was not done, an arbitrary pick and choose attitude was adopted and while plaintiff was being sacked, several others in his line of specialization with lesser experience and profession skill were being retained, and that no opportunity of show cause was given to the plaintiff and impugned action was arbitrary, unjust, mala fide and violative of the principles of natural justice, and in the background it was held:-- "(13). The next question that arises is whether expression "law" is confined here to mean only a provision of statute or statutory instrument or whether it concludes judicial principles laid down from time to time by the superior Court and required to be followed by all Courts and tribunal in adjudiciatory process. In this context it may be pertinent to refer two relatively recent judgments of the Hon'ble Supreme Court. In the case of Karachi Development Authority v. Wali Ahmad Khan, (1991 SCMR 2434) a decision of the High Court, directing reinstatement of the respondent in the employment of the appellant was assailed, inter alia, on the ground that the rules of employment in the appellant were not statutory and the principle of master and servant was applicable. The Supreme Court found this contention to be correct. Nevertheless it declined to reverse the finding of the High Court on the ground that the impugned action had been found to be mala fide. In the case of Anisa Rehman v. P.I.A. (1994 SCMR 2232), the appellant, who was an employee of the respondent, was demoted to a lower rank without show-cause notice. The Honourable Supreme Court held that the rules of employment were not statutory and the principle of master and servant applied. Nevertheless it found the impugned action to be unlawful, because the principles of natural justice, required to be treated as part of the law, were not followed. At page 2240 of the report Ajmal Mian, J. Observed:-- "The above violation can be equated with the violation of a provision of law warranting pressing into service Constitutional jurisdiction under Article 199 of the Constitution, which the High Court failed to exercise. The fact that there are no statutory service rules in respondent No,1 Corporation and its relationship with its employees is of the Master and Servant will not negate the application of the above maxim audi alteram partem."
26. ' Obviously there is no specific statutory provisions requiring public authorities to act in good faith or to adhere to the principle of natural justice. Nevertheless such duties have always been treated to inhere in public functionaries as matter of law and the Honourable Supreme Court found them enforceable, irrespective of the consideration that the employment was contractual. In view of the above I am clearly of the opinion that the expression "law" has been used in its broader sense.
(14) It may now be considered whether the plaintiff is seeking enforcement of the provisions of a contract or a duty ordained by law. The plaintiff has nowhere complained that any particular provisions of the term of his contract of employment contained in the appointment letter have been violated. He has only asserted that the action taken against him is mala fide, arbitrary, unfair and unreasonable. He has further complained that he was entitled to an opportunity of showing cause before the impugned action could be taken. In view of the weighty pronouncements of the Supreme Court in the above two cases, I am quite clear in my mind that he has only sought enforcement of obligation arising from law. These obligations exist independently of the terms of the contract and can be enforced notwithstanding the fact that the nature of his appointment was contractual. Theplaintiff is entitled to an injunction provided a case for its grant is made out on merits.
27. ' 'Mr. Muhammad Masood Khan, learned Advocate for the defendants Nos. 1 and 2 also relied upon the case of Shahid Mahmood (supra) and draw my attention to para. 12 of the said Judgment, which read as under:-- "(12) The crucial question that has arisen before the Court on several occasions is whether the obligations that the petitioner or the plaintiff seeks to enforce arises from a contract or from law. It is in this context that the question. Whether the rules of service were statutory or otherwise was Considered decisive, inter alia, in the cases of Cadet College, Kohat v. Shoaib Qureshi (PLD 1984 SC 170), Anwar Hussain v. Agricultural Development Bank of Pakistan (PLD 1984 SC 194), Riazuddin v.
28. P.I.A. (PLD 1992 SC 531). When such rules were framed by the Government under power conferred by the statute they obviously ..Had the force of law and obligations created thereunder could be specifically enforced. On the other hand when the Corporation framed rules or regulations for their internal management such regulations could not acquire the force of statutory rules. They could only be treated as implied terms of contract between the employer and the employee and hence the rule of master and servant was held to be applicable. The only basis of distinction therefore, in my humble opinion was whether the rules/ regulations had the force of law or merely terms of contract of an employment. Relief of injunction or reinstatement could be granted in the former case but not in the latter. Obviously if a contract of service could not be enforced even in case of violation of law, a Civil Court would in no circumstances have power to grant relief of reinstatement."
29. ' In the case of Arif Majeed Malik and others v. Board of Governors Karachi, Grammer School, (2004 CLC 1029), the same learned Judge while sitting in DB held, since students were removed from the school not in exercise of absolute discretion vested in the respondent but on account of certain specific allegations which created a permanent stigma which could also affect the prospects of their admission in any other school and while relying upon the principle laid down in the case of Muhammad Siddiq Javed v. Government of West Pakistan (supra), 1974 SC 393, allowed the appeal and set aside impugned order passed.
30. ' In the case of Muhammad Mushtaq v. Chancellor, Government College University, Faisalabad 2005. PLC (C.S.) 1300, learned Single Judge relied upon the case of Farasat Hussain and others v.
31. Pakistan National Shipping Corporation, 2004 SCMR 1874, where his Lordshipheld that "relationship of master and servant does not confer unbridled or unfettered powers to act whimsically or capriciously in violation of principles of natural justice and well settled norms of justice.
32. ' In the case of Javed Akthar Masih v. Board of Intermediate and Secondary Education, Faisalabad, 2003 PLC (C.S.) 1479, it was held , that even if services of petitioner were liable to be terminated within the terms of order the principles of natural justice and are required to be observed. In the case of Mrs. Anisa Rehman v. PIAC and another, 1994 SCMR 2232, it was held that "the effect of the application of the master and servant rule is that an employee of the Corporation in the absence of violation of law or any statutory rule cannot press into service Constitutional jurisdiction or civil jurisdiction for seeking relief of reinstatement in service, his remedy for wrongful dismissal is to claim damages."
33. ' In the case of Agha Salim Khurshid and another v. Federation of Pakistan and others, 1998 SCMR 1930, while relying upon the case of Secretary, Government of Punjab v. Riaz-ul-Haq 1997 SCMR 1553, it was held that "there is marked distinction between simpliciter termination of service in accordance with the terms of appointment and the termination of service on the ground of misconduct, and if a person is to be condemned for misconduct, in that event, even if he is a temporary employee or person employed on contract basis or a probationary, he is entitled to a fair opportunity to clear his position, where it means that there should be a regular enquiry in terms of the efficiency and discipline rules before condemning him for the alleged' misconduct.
34. ' Mr. Muhammad Masood Khan, learned Advocate for defendants Nos. 1 and 2, opposes the application on the ground relationship between the plaintiff and defendant was of a master and servant and even if service of the plaintiff has been wrongfully terminated he cannot be reinstated and his remedy is to file a suit for compensation/damages and further that service of the plaintiff was terminated in terms of Clause 13 of the Employment Agreement and as such there was no need to sere any show-cause notice nor the defendant is entitled for 12 months' notice of termination as contemplated under Clause 2.2 of the Employment Agreement nor there was any need to serve show-cause notice while taking action of termination under Clause 13 of the Agreement.
35. ' In support of his contention learned Advocate relied upon the case of UBL v. Ahsan Ali and others, 1998 SCMR 68, in which Hon'ble Supreme Court held that relationship between corporation and its employee was that of master and servant and that the remedy for wrongful termination of service of an employee was suit for damages and not relief for reinstatement.
36. ' In the case of Islamic Republic of Pakistan v. Muhammad Zaman Khan, 1997 SCMR 1508, it was held that Court grant interlocutory relief of the nature which would amount to allowing main case without trial/hearing of the same should not be granted.
37. ' In the, case of Muhammad Umar Malik v. MCB, 1995 SCMR 453, it was held that on termination of service not governed by statutory rules nor does the petitioner claim to be a workman having any right under the Labour Law and relationship between the parties are of master and. Servant, it is well-settled that no relief as asked for can be granted nor petitioner can be reinstated in service.
38. ' In the case of Qazi Inamul Haq v. Heavy Foundry Forgei Engineering (Pvt.) 1989 SCMR 1855, while dealing with the contention that if temporary injunction was not granted the petitioner would suffer irreparable loss such as he had to vacate the house provided and education of his son would be disturbed. It was held that the reasons stated might lead to some inconvenience but same did not make it a case of irreparable loss. In the case of Anwar Hussain v. ADBP, PLD 1984 SC 194, it was held that an employee of a Corporation, in case of wrongful dismissal from or termination of service, principle of master and servant will fully apply and he can only claim damages but not reinstatement to his post.
39. ' In the case of Syed Ijaz Ahmed v. Bolan Bank Ltd. 2002 CLC 854, learned Judge of this Court held that in a case where by a contract between master and servant and master agreed to pay the salary and the servant agreed to render personal service it is obvious that money compensation is full relief that servant was entitled under the contract, and breach of contract rise only relief for damages and not for specific performance.
40. ' Same view was followed in the case of Shahid Mehmood (supra)
41. ' Keeping in view principle laid down by the Apex Court, and in various cases referred to hereinabove, the question whether due to alleged misconduct the defendant has rightly terminated the service in my view, except in exceptional circumstances, service on the allegation of misconduct can be terminated only after show-cause notice providing an opportunity to employee to explain his position. However, in any case A plaintiff's service can be terminated by giving 12 month's notice in writing and further since Employment Agreement between the parties is . Not capable of specific performance and an unacceptable employee cannot be imposed upon an employer the balance of inconvenience also lies in favor of defendants as the plaintiff was appointed as COO a very important post in the defendant No,1 Company and in discharge his duties was required to take administrative as well as other major decisionabout the working of the Company and to re-induct the plaintiff to same position may affect the entire working of the defendant No,1 Company.
42. ' However, matter not ended here unlike other employment agreement providing notice to terminate service as to two to three months. Employment agreement provided 12 months notice and taking in consideration all these facts and principles laid down by the Apex Court, plaintiff is not entitled for the injunction and the listed application is, disposed of, directing the defendant No,1 Company to deposit six months' salary and other benefits of the plaintiff with the Nazir of this Court which plaintiff can withdraw on furnishing security equivalent to the amount deposited to the satisfaction of the Nazir of this Court.