' MUSHTAQ HUSSAIN, J.--Muhammad Nazir Khan was appointed Security Officer in the Batala Engineering Company (Pak.) Limited on 17-11-1956. By the Economic Reforms Order, 1972, the control and Management of the said Company was taken over by the Central Government, the Board of Directors was dissolved and Mr. Muhammad Humayun was appointed its Managing Director. The company was renamed as the Pakistan Engineering Company Limited.
' On 7-1-1972 a letter was issued to. Muhammad Nazir Khan informing him that his services were no longer required and he was consequently relieved of his duties with immediate effect. He was also informed that he could obtain one month's pay in lieu of notice on the following day from the Head Office. The letter was signed by someone on behalf of the Manager but a copy of it was endorsed to "Head Office, as per instructions of the Managing Director". It may be mentioned here that Muhammad Nazir received all the dues including one month's salary in lieu of notice and he duly signed a receipt, photostat of which appears as Annexure A/2. The relevant portion of which may be reproduced as under :- "Received from Messrs BECO Industries Limited, Lahore, a sum of Rs, 2,759'99 (Rupees two thousand seven hundred fifty-nine and paisa ninty-nine only) in cash, on account of salary for 7 days of January,, 1972, one month notice pay and 86 days privilege leave as detailed below in full and final settlement as services terminated.
' He, however, after having thus been relieved of his duties filed Writ Petition No, 39/S of 1972 challenging the termination of his services. The sum total of the grounds on which the challenge was thrown is that :-
(a) The petitioner enjoyed constitutional guarantees on account of his service since he was serving in connection with the affairs of the Centre, the Industry having been taken over by the Government of Pakistan ; (b) The removal of his service by order of the Minister for Finance was mala fide having been made at a public place and in a public speech ; (c) The petitioner was entitled to an opportunity to show cause against the charges and allegations made against him by interested people before any action could have been taken against him ; (d) The petitioner was entitled under Article 2 to be treated in accordance with law.
' The learned Judge in Chamber came to the conclusion reported as PLD 1974 Lah. 49 that-(1) The petitioner was entitled to an opportunity to show cause ; (2) That opportunity was denied to him ;
(3) That order of removal was thus in contravention with the mandatory provisions of Article 6 of the Economic Reforms Order, 1972, and (4) The petitioner could not claim to be a civil servant.
' The Economic Reforms Order, 1972, empowers the Central Government, if it considers necessary in the public interest so to do, by order to appoint a Managing Director in respect of an establishment for its. Management. Establishment has been defined as an undertaking pertaining to any of the categories set out in the Schedule to that Order, Item No, 3 of the Schedule lists Heavy Engineering Industries which the employer in the case admittedly is. By Article 4(2) of the Order, the administration of the affairs of an establishment shall vest in a Managing Director so appointed and all others having similar authority in relation to the management of the establishment shall cease to exercise or to have the, right to exercise such powers and functions. Sub-Article (5) of the Article gives this following powers to the Managing Director:- "(5) The Managing Director appointed under clause (1) in respect of an establishment shall exercise---(a) if such establishment is owned or controlled by a company, all the powers and functions of the Board of Directors ; (b) if such establishment is owned or controlled by an individual or a firm, all the powers and functions of that individual or firm ; and (c) if such establishment had a Managing Agent to manage its affairs, all the powers and functions of the Board of Directors. Article 6 of the Order which is relied upon by the learned Judge-in-Chamber runs as follows :- "6. Unless in any particular case the Managing Director otherwise directs, all persons employed in, by or for the purpose of the business of the establishment by whomsoever appointed or engaged, shall continue in their respective employments on the same remuneration and other conditions of service as were applicable to them immediately before the appointment of the Managing Director of that establishment."
' This Article gives to the Managing Director the power to direct that any person employed in such an establishment shall not continue in his employment or that his terms and conditions of service shall be varied. The learned Judge-in-Chamber has observed that Muhammad Nazir was admittedly not entitled to the protections granted to a Government Servant because he was not one. It is, therefore, not open to Muhammad Nazir to submit now that he is so entitled. That being the position he is governed by the law of master and servant. It was held in Abdur Razaq v. WAPDA
(1) that- "22. A question which has been often raised before this Court has been pressed vehemently before me also. In cases in which civil servants of the State are not involved, it has become reasonable to assert that the law of master and servant would invariably apply and no servant can be foisted on an unwilling master.
23. Let us now see what is the law of master and servant and to what extent the petitioner is governed by it. "The relationship of master and servant is expressed by a contract of service, express or implied between the master and servant. A contract of service is one in which a person undertakes to serve another and to obey his reasonable orders within the scope of the duty undertaken. Whether or not a particular contract is a contract of service is a question of fact depending upon the terms of the engagement, the method of remuneration and the power of controlling and dismissing the worker although none of these factors is by itself conclusive."
(Halsbury's Laws of England, Vol. XXV, p. 448 ; paragraph 872).
' Firstly, therefore, the relationship has to be the result of a contract.
' Secondly, the mere fact that it is the result of a contract would not necessarily mean that the relationship of master and servant exists between the employer and the employee. A rough and ready test for finding out the correct position has been given with remarkable clarity in the quotation from Haisbury above.
24. In the present case power of controlling and dismissing the worker, is governed by statutory rules and not by any so-called contract.
(1) PLD 1973 Lah. 188 ' The rules are known as the West Pakistan Water and Power Development Authority Employees (Efficiency and Discipline) Rules, 1966 and have been framed by the authority under power conferred upon it by section 18 of the West Pakistan Water and Power Development Authority Act, 1958.
25. There is no dispute that the petitioner is governed by these rules. The power of the master, therefore, to fire the employee at his sweet will is not available in the present case. And even if it is deemed to be a contract of service, the terms of engagement and the powers of controlling and dismissing the worker are so provided by statutory Rules that they should knock the bottom out of the applicability of the ordinary or general law of master and servant.
26. That this is not abnormal has been taken note of in paragraph 885 at page 457 of the same 'volume of Halsbury where it has been observed that: "The freedom of contract between master and servant has in many respects, been affected by statute." The mere fact, therefore that a person is not a civil servant of the State and is not entitled to Constitutional guarantees does not always lead to the result that he is governed by the ordinary and general law of master and servant. Wherever there are statutes or statutory rules governing the relationship between an employer and an employee, and there are restrictions placed in such provisions which are contrary to the concept of the ordinary law of master and servant it is those statutory provisions and rules, which shall apply and not the so-called general law of master and servant, in such cases the employer would have the power to terminate the employment only in the circumstances in which the statute or the rules clothe it with authority to do so."
' In the present case the statute which governs the relationship between the master and servant gives categorical power to the Managing Director to pass an order directing that an employee shall not continue in his employment. No restrictions whatsoever have been placed on this power under this Order nor has any rules been made which could fetter it. The conditions obtainin in Abdur Razaq's case are, therefore, significantly and totally absent in this case.
' The relationship of master and servant being untrammeled by statutory inhibitions in this case and not having been regulated by rules the power of the master to "fire" an employee is, therefore: unrestricted because such is the law of master and servant.
' It may be noted that in the present case the services have been terminated because they are no longer required. No stigma of any sort whatsoever has been attached neither Muhammad Nazir been dismissed or removed from service. The principle of audi alteram partem would, therefore, not be attracted to the facts of this ease.
' Respectfully disagreeing with the conclusions arrived at by the learned Judge-in-Chamber, we would accept the appeal and recall the Writ and declaration issued. The parties shall be left to bear their own costs.