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2008 PLC (C.S.) 1326

ABDUL HAQ and others vs SECRETARY, MINISTRY OF FINANCE, ISLAMABAD and

Citation2008 PLC (C.S.) 1326
CourtFederal Service Tribunal
Judge(s)Nazar Muhammad Shaikh, Muhammad Zubair Kidwai
ResultPetition allowed

' NAZAR MUHAMMAD SHAIKH (MEMBER).- These appeals contain common question of law and facts and are, therefore, being disposed of by this single order. Appeal of appellant, Abdul Haq, bearing No,1287(R)(C.S.) of 2003 being the lead appeal is discussed in this order.

2. The background of the case is that the appellant was serving the Government of Pakistan as Section Officer when he retired on 13-10-1990 on attaining the age of superannuation. At the time of retirement, Appellant was drawing the fallowing emoluments:--- Officiating Pay Rs.3,762 Additional Compensatory AllowanceRs.369 Special Conveyance Allowance Rs.161 Personal Allowance Rs.737 Total salary Rs.5,029 ' While computing his pensionary benefits the Personal Allowance amounting to Rs,737 was not computed towards pensionary benefits. Appellant had rendered thirty-five (35) .Year's qualifying service for pension and his gross pension was worked out at Rs,2,896.74. Appellant made a representation to respondent No,1 on 11-8-2003 for computing his Personal Allowance towards his pensionary benefits in the light of the ruling of the Honourable Supreme Court and FST's judgment in case of Muhammad Asghar Ali and others which was upheld by Honourable Supreme Court in its judgment dated 25-7-2002. Appellant did not receive any response to his representation from Respondent No,1 obliging him to file this appeal before this Tribunal on 6-12-2003.

3. The learned Counsel for the appellant tracing the history of the case stated that the Finance Division vide its O.M. Bearing No,1(3)IMPII/88 dated 1-7-1988 introduced the grant of Secretariat Allowance to the employees working in the Federal Secretariat @ 20% of their basic pay. He stated that the Finance Division vide its O.M. Dated 18-12-1989 discontinued the Secretariat Allowance with effect from 11-12-1989 for the new incumbents and the existing recipients of the Secretariat Allowance were allowed to retain it as Personal Pay subject to certain conditions. He stated that the Finance Division vide its O.M. Dated 1-2-1990 the Secretariat Allowance was discontinued but Personal ' Pay was converted into Personal Allowance. The said OM is reproduced below:--- "Government of Pakistan Finance Division (Regulation Wing)

' No,F.7(15)R.13/88(Pt.) Islamabad, the 1st February 1990 Office Memorandum Subject: Discontinuance of Secretariat allowance for the new incumbents ' In pursuance of this Division's Office Memoranda of even number dated the 10th December and 26th December, 1989, the undersigned is directed to say that the Federal Government has decided that 20% Secretariat Allowance admissible under this Division's O.M. No,F.1(32)-Imp.II/88, dated 1st July, 1988 and subsequent amendments made thereto will not be admissible to the new incumbents to the Secretariat, CBR, PTV and PBC etc. With effect from 11-12-1989. However, the existing recipients of the Secretariat Allowance have been allowed to retain it as 'personal allowance' subject to the following conditions:---

(i) The amount of Secretariat Allowance being drawn by the existing recipient as on 10-12-1989 would be frozen.

(ii) It will be subject to income-tax and House Rent recovery.

(iii) It will be admissible during leave and entire period of leave preparatory to retirement except during extra ordinary leave.

(iv) It would not be admissible during the period of suspension, and

(v) It will not remain admissible to the recipient on their transfer from the Secretariat, CBR,PTV and PBC etc."

(Sd.) Bashir Ahmed Bhatti, Deputy Secretary"

' The learned counsel for the appellant argued that in terms of CSR 38(c)(1) the Personal Allowance was required to be computed towards the pensionary benefits and at this stage read out the said rule which is as under: "1.Personal Allowance is treated, for the purposes of calculating leave allowances and pensions, as part of an officer's substantive pay, but not for purpose of travelling allowance, unless it has been granted to protect from loss an officer, the pay of whose appointment has been changed:"

'He further stated that this rule was , however , amended on 23-5-1996 whereby the Personal Allowance was not to be included in the emoluments for the purpose of calculation of pension. He further argued that the Secretariat Allowance/Personal Allowance was altogether abolished with effect from 1-7-1988 with the promulgation of Presidential Ordinance No, XII of 2000 on 30-3-2000 with the caption of "Secretariat Allowance (Rescission of Order) Ordinance 2000. Appellant's learned Counsel contended that all these changes in the Secretariat Allowance/Personal Allowance and its abolition had taken place much after the appellant had retired on attaining the age of superannuation and that this Ordinance cannot be validly and justly applied retrospectively and in support of his contentions, he referred to the rulings of the Honourable Supreme Court reported in PLD 1997 SC 315 wherein it was held that: "....It is a well-settled principle of interpretation of notification/order/or any executive order that the same can operate prospectively and not retrospectively. This principle is equally applicable to a statute in the absence of any express or implied intendment contrary to it."

' He further pointed out that similarly aggrieved person had agitated the matter before the FST and then before Honourable Supreme Court which was upheld and the matter was finally decided in favour of the appellant through judgment dated 26-4-1999 in Asghar Mahmood's case (Competent Authority-1298/95) and FST's judgment in Appeal No,222(R)(C.S.) of 2001 and judgment of the Apex Court in the case of Pakistan v. Asghar Ali and others. He further argued that in the light of the principle laid down in Hamid Akhtar Naizi's case reported in 1996 SCMR 1185, the judgment in the aforesaid cases should also be applied to the appellant and the Personal Allowance be computed towards his pensionary benefits. He also stated that the appellant is similarly placed in case of other employees who have been allowed the computation of Personal Allowance towards their pensionary benefits. In support of his contention he relied on the ruling of Honourable Supreme Court reported in PLD 1996 SC 86 wherein their Lordships held as under:--- "Referring to the last submission of the appellant, it may be mentioned that the Government functionaries are supposed to act fairly and justly and not to discriminate inter se between the persons belonging to the same class placed in similar position and situation. Reference may be made to the case of I.A. Sharwani and others v. Government of Pakistan through Secretary, Finance Division, Islamabad and others 1991 SCMR 1041."

' The learned counsel for the appellant also cited the judgment of Honourable Supreme Court reported in 1999 SCMR 1904 wherein on the point of applicability of the relevant pension rules, their Lordships held as under:--- "However, a pensioner may have a legitimate grievance if he is not treated alike with the other pensioners, for example, if the legislature/Government increases pension amount by 10% say on 1- 1-1991, but provides that this benefit will be available to those pensioners who have retired on or after 1-1-1989. In other words, the pensioners who had retired prior to 1-1-1989 are deprived of the above benefits. This would be violative of Article 25 of the Constitution unless the Government can demonstrate that the above sub-classification within the class of pensioners is based on an intelligible differentia and that the latter has rational nexus to the object sought to be achieved by the relevant classification under the statute or statutory rule."

' The learned counsel further relied on the judgment of the FST dated 27-2-2004 in the case of M.M.

Alam Qazi and others v. Secretary, Finance Division (Appeal No,161(R)(C.S.) of 2003 and others).

4. The learned counsel for the respondent opposed the appeal and stated that the contention of the appellant's learned counsel was not conceived in its correct perspective and pointed out that the appellant was drawing Secretariat Allowance and, as such, he was not entitled to compute Secretariat Allowance for the purpose of pensionary emoluments. He further pointed out that the Honourable Supreme Court ruling in the case of Asghar Mahmood was only in respect of those who were drawing Personal Allowance on the eve of retirement during the period from 16-6-1994 and 23-5-1996 whereas the Appellant retired much before this target date and, as such, he was not entitled to count Personal Allowance for the purpose of pensionary emoluments. He also further referred to the rulings of Honourable Supreme Court in Civil Petition No,37 of 2000 in the case of Federation of Pakistan through Secretary Finance v. Muhammad Farooq where their Lordships held that respondent has retired much prior to the target date, therefore, no benefit of the judgment could be extended to him. He further pointed out that on promulgation of Ordinance XII of 2000 the claim of the appellant cannot be sustained. He further pointed out that CSR 486 as amended and reproduced in Compendium of Pension Rules and reprinted in 1984, Personal Allowance has not been included in the term emoluments. He further stated that the Finance Division vide its OM No,7(15)Reg-13/88 dated 26-12-1989 clarified that "Personal Pay" will not be treated as part of emolument for the purpose of pension computation.

5. We have carefully considered the submissions made by the counsel from both sides and examined the record and perused the citations.

6. The moot issue in these appeals is whether Personal Allowance drawn by the appellants in lieu of the abolished Secretariat Allowance could be counted towards computing pensionary benefits of the retirees. In order to appreciate the issue in its correct perspective it would be imperative to recall the historical backdrops of this allowance. We will, therefore, walk through the various OMs issued by the Government on the subject which are detailed hereunder:---

(i) Secretariat allowance equal to 20% of basic pay was sanctioned to all Federal Government Employees working in the Federal Secretariat, President and Prime Minister's Secretariat, National Assembly and Senate Secretariat with effect from 1-7-1988, vide Finance Division's O.M. No,F1(32)- Imp.II/88, dated 1-7-1988.

(ii) Later the payment of Secretariat Allowance was made inadmissible to the new incumbents vide Finance Division's O.M. Dated 18-12-1989 but the existing incumbents working in the Secretariat, CBR, PTV and PBC were allowed to retain as Personal Pay with effect from 11-12-1989.

(iii) Finance Division vide its O.M. Dated 26-12-1989 clarified its O.M. Dated 18-12-1989 that Personal Pay shall not be treated as part of emoluments for the purpose of calculation of pension and commutation but the exiting incumbents working in the Secretariat, CBR, PTV and PBC were allowed to retain as Personal Pay with effect from 11-12-1989.

(iv) In suppression of the Finance Division O.Ms. Dated 11-12-1989' and 26-12-1989, Finance Division issued yet another 0.M. Dated 1-2-1990 reiterating that Secretariat Allowance shall not be admissible to the new incumbents to the Secretariat, CBR, PTV and PBC with effect from 11-12-1989 but allowed existing recipients of the Secretariat Allowance to retain it as Personal Allowance subject to certain conditions.

(v) Finance Division reintroduced Secretariat Allowance at the rate of 20% all employees of the Federal Secretariat vide its O.M. No,F.8(12)R.13/92(Part-48), dated 18-9-1993. The nomenclature of the Personal Allowance was also changed into Secretariat Allowance with effect from 18-9-1993.

(vi) Secretariat Allowance was finally abolished vide Finance Division's O.M.No,1(2)-Imp/94(i) dated 15-6-1994 with the introduction of the Revised Basic Pay Scales and Fringe Benefits and the amount drawn as Secretariat Allowance as on 31-5-1994 was converted into Personal Allowance. Para-5 of this O.M. Is, inter alia, reproduced as under:--- "5. Allowances:

(i) Secretariat Allowance:--- With the introduction of new scales of pay, the Secretariat Allowance is abolished w,e,f, 1-6-1994 and the amount actually drawn on 31-5-1994 will be converted into Personal Allowance. Such Personal Allowance in case of Government employees iu BPS 17-22 shall be reduced by the amount of annual increments, by which the Government employee's pay may be increased after 1-6-1994, and shall cease as soon as his pay is increased by an amount equal to/or more than his Personal Allowance. Those in BPS 1 to 16 will be exempted from this adjustment to the extent that their Personal Allowance will not be reduced/adjusted."

(vii) Finally, the President of Pakistan promulgated Ordinance No,XII of 2000 on 30-3-2000 captioned Secretariat Allowance (Rescission of Orders etc.) Ordinance, 2000 whereby Secretariat Allowance/Personal Allowance was abolished forever with effect from 1-7-1988.

' Thus, chronologically speaking, Secretariat Allowance, Personal Pay and Personal Allowance remained operative as under:--- Allowance Period

(i) Secretariat Allowance (a) 1-7-1998 - 17-12-1989

(b) 18-9-1993- 31-5-1994

(ii) Personal Pay (in lieu of Secretariat Allowance) 18-12-1989 - 31-1-1990

(iii) Personal Allowance (in lieu of Secretariat Allowance)1-2-1990 - 17-9-1993 1-6-1994 - 29-3-2000 ' It will also be relevant to reproduce the relevant provisions of the Civil Service Regulation. CSR 38(c)(1) reads as under:--- "(1) Personal allowance is treated, for the purpose of calculating leave allowances and pensions, as part of an officer's substantive pay, but not for purposes of travelling allowance, unless it has been granted to protect from loss an officer, the pay of whose appointment has been changed."

' Personal Allowance for the purpose of calculating pensionary benefits was deleted vide S.R.O.50(KE)/96 dated 23-5-1996 which was published in Gazette on 23-7-1996. Another relevant rule is CSR 486 which defines emoluments reckonable for pension. It provides as under:--- "486. The term "emoluments" means the emoluments which the officer was receiving immediately before his retirement and shall include:---

(a) Pay as defined in FR 9 (21) (a) (i);

(b) Senior Post Allowance;

(c) Special Pay of all types and nature;

(d) Personal Pay;

(e) Technical Pay;

(f) Indexed Pay;

(g) Increments accrued during leave preparatory to retirement;

(h) Any other emoluments which may be specially classed as Pay."

7. With this backdrop of the Government instructions on the subject and relevant provisions of the CSR it would be appropriate to refer to the rulings on the subject to determine the outcome of this appeal. Appellant during the course of submission relied on the ruling of the Honourable Supreme Court in the case of S.A.M. Wahidi v. Federation of Pakistan through Secretary Finance and others reported in 1999 SCMR 1904 wherein the apex Court was pleased to allow the Appellant the benefit of Rs,100 qualification allowance towards computation of pension as allowed to other pensioners.

This judgment was based on the principle enunciated in the case of I.A. Sharwani v. Government of Pakistan 1991 PLC (C.S.) 1205 wherein it was held that the pensioners have to be treated as a group and any benefit allowed to some pensioners and if disallowed to others on the ground that they had retired earlier would be violative of the Article 25 of the 1973 Constitution. Appellant referred to the case reported in PLD 1996 SC 86 which also touches the issue of discrimination and does not deal with the question of computation of Personal Allowance/Secretariat Allowance towards calculation of pensionary emoluments. In Asghar Mahmood's case [Civil Appeal No, 1298/95] the Personal Allowance was allowed to be computed towards the calculation of pensionary emoluments. Appellant then cited FST's judgment in Appeal No,222(R)(C.S.) of 2001 and others wherein it was held that Personal Allowance was to be treated as emoluments for the purpose of calculation of pensionary benefits. The relevant part of the judgment reads as under:--- "(17) After hearing the arguments of the petitioners and respondents, perusing all the relevant orders and various decisions of the Supreme Court, we are of the opinion that Article 38(c) of the C.S.R. Was in force and valid till it was amended by the Finance Division vide its O.M. Dated 23 May 1996 whereby Personal Allowance was deleted for computing pensionable emoluments. Hence, till 23 May 1996, Personal Allowance was to be treated as part of 'substantive pay' for the purpose of computing pensionable emoluments of all those employees who were in receipt of Personal Allowance and retired prior to 23 May, 1996. This facility is also apparently protected under section 2 of the said Ordinance of 2000. The force of the above referred judgment of the Supreme Court dated 20 February, 2001 can be easily termed as 'directory' in nature as it very clearly indicates that the appellants' case should be reconsidered by the Finance Division on the principle decided in Asghar Mehmood's case i,e, to reckon the Personal Allowance as part of pensionable emoluments.

Finance Division should have followed the direction of the Supreme Court which made it almost obligatory for it to accede to the request of the appellants but did not do so. Law Division while examining the Supreme Court's decision in Asghar Mahmood's case also opined that the Supreme Court's judgment was of a binding nature and that the appellants need to be given the benefits, which they had requested. The argument that the Supreme Court's judgment is personem in nature is not really tenable because the said judgment has laid down a principle which gives it a character of judgment in rem. Here it would be relevant to quote Supreme Court's judgment in the case of Hamid Akhtar Niazi v. Secretary Finance reported in 1996 SCMR 1185 wherein the Honourable Judge observed: ".. That the Tribunal or this court decides a point of law relating to the terms of service of a civil servant which covers not only the case of civil servant who litigated, but also of other civil servants, who may have not taken any legal proceedings, in such a case, the dictates of justice and rule of good governance demand that the benefit of the above judgment be extended to other civil servants, who may not be parties to the above litigation instead of compelling them to approach the Tribunal or any other legal forum."

' Irrespective of the financial effect we feel that the Finance Division has not acted in accordance with the directions of the Supreme Court of Pakistan."

' This judgment of the FST cited by the appellant was upheld by the Honourable Supreme Court in Civil Petitions Nos.350 to 359 of 2002 in the case of Asghar Ali v. Federation of Pakistan and their Lordships in the said judgment held as under:--- "It is a well-settled proposition of law that a Notification cannot operate retrospectively if it is to affect adversely interest of any person. In this regard reference may be made to the case of M/s Army Welfare Sugar Mills Ltd., and others v. Federation of Pakistan and others 1992 SCMR 1652 and Hashwani Hotels Ltd. v. Federation of Pakistan PLD 1997 SC 315.

' In this view of the matter, the above Notification dated 29-5-1996 cannot be enforced retrospectively. In consequence whereof, the appellants who were in Grade-17 or above and retired during the period prior to 23-5-1996 would be entitled to get the Personal Allowance payable to them at the time of their retirement included for the purpose of calculating the pension amount.

' The non-mentioning of the Personal Allowance in para.468 CSR as an item for computing pension amount is of no consequence, as the same has been mentioned in CSR 38."

' The ruling of Honourable Supreme Court in Civil Petition No,37 of 2003 relied upon by the respondents is distinguishable as it dealt with the issue of conversion of Secretariat Allowance drawn by the respondents before it was abolished and converted into Personal Allowance vide Notification dated 15-6-1994. Respondent in that case had retired with effect from 30-3-1994 and their Lordships rightly held that "respondent has retired much prior to the target date, therefore, no benefit of the said judgment can be extended to him."

8. The upshot of the historical backdrop of Secretariat/Personal Allowance, the relevant provisions of CSR 38(c)(1) and the rulings of the Honourable Supreme Court clearly indicate that Secretariat Allowance and Personal Pay could not be computed towards calculation of pensionary benefits.

However, personal Allowance was to be treated as part of the emoluments for the purpose of calculation of pensionary emolumets as long as it remained part of CSR 38(c)(1) and, as such, any civil servant who retired before' 23-5-1996 and was drawing Personal Allowance had to count the Personal Allowance so drawn towards his pensionary emoluments. This principle was enunciated in the ruling of FST in Appeal No,222(R)CS of 2001 which was upheld as stated earlier by the Honourable Supreme Court in its judgments in the case of Federation of Pakistan v. Asghar Ali and many others. The operative part of the said judgment has been quoted above. This principle was also reiterated by the FST in another judgment in Appeal No,161(R)CS/2003, M.M. Alam Qazi and others v. Secretary. Finance Division. In this judgment which was announced on 27-2-2004 the relevant para of the said judgment is as under:--- "(15) The contention of the respondents that the above two judgments of the apex Court were specific and covered only those Government servants who had retired during the period from 16- 6-1994 to 23-5-1996 has been found to be misconceived. The case of the 32 appellants now being dealt with was not before the Honourable Supreme Court of Pakistan at that time. They were only dealing with the specific cases of those Government employees who had retired during the - period from 16-6-1994 to 23-5-1996. Hence, the benefit had been allowed to the said appellants specifically. However, as already pointed out above, the Honourable Supreme Court of Pakistan had laid down clearly that Personal Allowance was a reckonable emolument for calculation of pension under CSR 38(C)(i) and that its deletion from the said CSR 38(C)(i) could not be applied retrospectively. In the light of this ruling of the apex Court the 32 appellants referred to above who had also been receiving Personal Allowance at the time of their retirement prior to 18-9-1993 were fully eligible to reckon the same for calculation of their pension as CSR 38(C)(i) containing Personal Allowance as a reckonable component for calculation of pension was fully in existence and had not yet been amended in the manner referred to in the preceding lines/paragraphs."

' We are also fortified by the ruling of the apex Court in C.A. No,2006 of 1998 in the case of Muhammad Yayha Qureshi. The record indicates that appellant, Abdul Haq, Appeal No, 1287(R)

(C.S.) of 2003, Fateh Ali, Appeal No,1288(R)(C.S.) of 2003, Muhammad Sharif, Appeal No,1289(R)(C.S.) of 2003 and Mushtaq Ahmed, Appeal No,139(R)(C.S.) of 2004 were in receipt of Personal Allowance at the time of their reaching the age of superannuation. These four appellants were drawing Personal Allowance before the target date i,e, 23-5-1996 when CSR 38(c)(1) was amended and thereafter the Personal Allowance ceased to be an emolument reckonable for the purpose of calculation of pension. These four appellants will, thus, be entitled to compute their Personal Allowance towards calculation of their pensionary benefits notwithstanding the said Ordinance which came on 30-3-2000 as it cannot be applied retrospectively.

9. Appellant, M. Yaqub, Appeal No,1315(R)(C.S.) of 2003 was drawing Secretariat Allowance when he attained the age of superannuation on 4-11-1993 and, as such, Secretariat Allowance drawn by him cannot be counted towards calculation of pensionary benefits.

10. In view of the above discussion, the appeals of appellants, Abdul Haq, Fateh Ali, Muhammad Sharif and Mushtaq Ahmed are accepted and respondents are directed to recalculate their pensionary benefits after taking into account the Personal Allowance drawn at the time of their retirement. The appeal of appellant M. Yaqub is, however, dismissed as not maintainable.

11. No order as to costs. Parties be informed accordingly.

Order accordingly. THE END Muhammad Amin Goraya for Petitioner.

Naeem Masood, Asstt. A.-G. Punjab for Respondents.

ORDER

' HAFIZ TARIQ NASIM, J.--- The petitioner has filed writ petition with the prayer that the case of pro forma promotion be ordered to be placed before the appropriate Departmental Promotion Committee for consideration on merits.

2. The petitioner who was a Librarian in the Government College of Science, Faisalabad, was expecting his promotion but with no fault of him he was singled out without any justification whatsoever.

3. Aggrieved of this, he filed a representation and even invoked the jurisdiction of Punjab Service Tribunal in Appeal No.2359 of 2003 which was disposed of with the direction to the respondent to decide the petitioner's representation through a speaking order, after hearing him.

4. The learned counsel submits that despite the directions of the Service Tribunal the respondents kept waiting for the superannuation of the petitioner and did not decide the long outstanding grievance and ultimately the petitioner attained the age of superannuation and was retired but simultaneously his grievance for the grant of promotion did not advert to.

5. The learned Assistant Advocate-General submits that as per new provisions of law and policy, the petitioner cannot ask for pro forma promotion due to his retirement, which is the sufficient ground for dismissal of his writ petition.

6. Arguments heard. Available record perused.

7. It is not denied by the learned Assistant Advocate-General, after consulting the relevant record that the petitioner was eligible for promotion before his superannuation and it was also not denied that the said benefit was not granted due to any fault of the petitioner. However, the stance taken by the departmental representative as well as the learned Assistant Advocate-General does not seem to be justified, particularly when a legitimate expectant for promotion was admittedly an eligible person , the post was available in the petitioner's quota for promotion and only on extraneous consideration the employee is victimized.

8. It is well-settled law laid down by the Honourable Supreme Court of Pakistan reported as Dr. Syed Sabir Ali v. Government of the Punjab 2007 PLC (S.C.) 957, wherein it is held:-- "The entitlement of the appellant for promotion was not denied rather the process of promotion was withheld on the excuse of above referred order of Tribunal. We having considered the matter, have found that the appellant was wrongly prevented to get next promotion and discharge the higher responsibilities as a result of which he was not only deprived of the legitimate right of promotion but was also caused permanent loss of pensionary benefit of the higher grade. In view of the above, we direct that Departmental Authority should proceed to consider the case of appellant for pro forma promotion as per his entitlement in accordance with law and complete, the process within three months."

9. Taking strength from the law laid down supra, which of course relates to a retired employee, I hold that the action of the departmental authorities for withholding the petitioner's promotion with effect from the date of his eligibility and the occurrence of vacancy in his quota is unlawful, violative of all norms of justice and it is directed that following the judgment of the Honourable Supreme Court of Pakistan referred above, the petitioner's pro forma promotion case be placed before the Departmental Promotion Committee within one month positively.

10. The Departmental Promotion Committee is directed to complete this process fairly, justly and without getting influenced from any extraneous matter. The result thereof be conveyed to the petitioner under intimation to the Deputy Registrar (Judicial) of this Court.

' Writ petition is allowed in the above terms.

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