' ASAD MUNIR, J.--- By means of this constitutional petition, the petitioner, Muhammad Iqbal Khattak, seeks the issuance of a. Writ of quo warranto against respondent No,6 Mr. Muhammad Zaka Ashraf, who was appointed as President, Zarai Taraqiati Bank Limited (hereinafter referred to as "ZTBL") vide Notification No,F.9(1)IF-I/2005 dated 30-8-2008, issued by the Government of Pakistan, Finance Division (Internal Finance Wing), whereafter his appointment as President, ZTBL, was confirmed by the Board of Directors of ZTBL on 30-9-2008.
2. The legality of the appointment of respondent No,6 as President, ZTBL, has been called into question primarily on the grounds that respondent No,6, having no banking experience at all, was not cleared for appointment as President, ZTBL, by the State Bank of Pakistan as he did not meet the criteria of the prescribed Fit and Proper Test and that his appointment was also made in contravention of the provisions of section 11(3)(a) of the Banks (Nationalization) Act, 1974, which stipulates that "the Chairman, the President, and the other member of the Board shall be appointed by the Federal Government in consultation with the State Bank, for a term of three years, on such terms and conditions as may be fixed by the General. Meeting of the bank provided that the Chairman and the President shall be appointed from amongst professional bankers whose names are included in a panel of bankers qualified to be the Chairman or the President, which panel shall be determined, maintained and varied, from time to time, by the State Bank".
3. Respondent No,4, the State Bank of Pakistan, in its parawise comments as well as through its counsel has submitted that the Finance Division, Government of the Pakistan, sent a reference to the State Bank of Pakistan for clearance of respondent No,6 for appointment as President, ZTBL, but the State Bank did not give its clearance because respondent No,6 did not meet the Fitness and Proper Test criteria as he did not have any banking experience at all.
4. On behalf of respondent No,6, it has been, inter alia, contended that ZTBL is neither a banking company under the Banking Companies Ordinance, 1962 nor is it engaged in banking nor is it a scheduled bank ' under section 37 of the State Bank of Pakistan Act, 1956, wherefor neither the State Bank's Fit and Proper Test was applicable to the appointment of respondent No,6 as President, ZTBL, nor was the prior permission or consultation of the State Bank required for his appointment.
5. I have given due consideration to the contentions of the learned counsel for the parties, who have forcefully expressed their respective viewpoints with the support of case-law.
6. The main issue that needs to be resolved is as to whether respondent No,6 could be appointed as the President of ZTBL without prior clearance or consultation by the State Bank of Pakistan or whether the Fit and Proper Test prescribed by the State Bank could be bypassed while appointing respondent No,6 as President, ZTBL. According to the learned counsel for respondent No,6, respondent No,7 and respondent No,8, the State Bank had no role to play in the appointment of respondent No,6 as President, ZTBL, as ZTBL is neither a banking company in terms of the Banking Companies Ordinance, 1962, nor is it a scheduled bank envisaged under the provisions of State Bank of Pakistan Act, 1956. In support of this argument, reliance has been placed on the provisions of ADBP (Reorganization and Conversion) Ordinance, 2002, to contend that after its conversion from ADBP, ZTBL has ceased to be a banking company and therefore, it is not subject to the provisions of the Banking Companies Ordinance, 1962, the Banks (Nationalization) Act, 1974, or the State Bank of Pakistan Act, 1956.
7. Such an argument is ex facie untenable for the simple reason that the word "Bank" is an integral part of the name Zarai Taraqiati Bank Limited ("ZTBL") and it was not so the word "Bank" would have been absent. Reference may also be made to the mandatory provisions of section 8 of the Banking Companies Ordinance, 1962, which provides that "Every company carrying on the business of banking in Pakistan shall use the word "Bank" or any of its derivatives as part of its name and no company other than a banking company shall use in its name any word calculated to indicate that it is a banking company". The plea that ZTBL is not a banking company is also negated by the objects clause of ZTBL's Memorandum of Association, contained in this para III, sub-clause 20 whereof provides that:- "To carry on the functions and as a "Zarai Taraqiati Bank Limited" under the Banking Companies Ordinance, 1962, or any successive legislation and/or re-enactment thereof, for the provision of rural finance services and to do, engage in and perform such activities, matters, deeds and things as are directly or indirectly, prerequisite, related or consequential thereto and in respect thereof, subject to the conditions of the licence issued by the State Bank of Pakistan ("State Bank") and/or rules and regulations issued by S.B.P. Under the Banking Companies Ordinance and/or directives issued by the State Bank, render assistance and rural finance service to the customers of the company".
' Thus, the plea that ZTBL is not a banking company is also in defiance with the afore-quoted provision of ZTBL's Memorandum of Association which not only declares ZTBL to be functioning under the Banking Companies Ordinance, 1962, but also subject to the rules, regulations and directive issued by the State Bank of Pakistan.
8. There is also no merit in the stand that ZTBL is not a "scheduled bank" as envisaged under the State Bank of Pakistan Act, 1956, section 2(m) whereof,defines a scheduled bank as a bank for the time being included in the list of scheduled banks maintained by the State Bank under section 37(1) of the said Act which authorizes the State Bank to declare any bank as a scheduled bank which has a paid-up capital and reserve of an aggregate value of not less than five lakhs of rupees". In exercise of its powers under section 37(1) of the Act, the State Bank from time to time issues a list of scheduled banks. In this regard, one may refer to State Bank's BPD Circular letter No,6 dated 25-2- 2003 which is the latest list of scheduled banks declared as such by the State Bank under various headings like Nationalized Scheduled Banks, Denationalized Scheduled Banks, Specialized Scheduled Banks and Private Scheduled Banks. The said circular includes ZTBL as a Scheduled Bank in its category of Specialized Scheduled Banks. As such, there is no doubt that ZTBL has been declared as a scheduled bank by the State Bank of Pakistan under section 37 of the State Bank of Pakistan Act, 1956 and as a result, ZTBL is subject to the control and supervision by the State Bank of Pakistan pursuant to the provisions of the State Bank of Pakistan Act, 1956.
9. Besides, the State Bank of Pakistan is also empowered under section 41 of the Banking Companies Ordinance, 1962, to issue directions to the banking companies generally or to a banking company in particular. Section 41 is reproduced below:-- "Power of the State Bank to give direction.--(1) Where the State Bank is satisfied that--
(a) In the public interest;
(b) To prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interest of the banking company; or
(c) To secure the proper management of any banking company generally, it is necessary to issue directions to banking companies generally or to any banking company in particular, it may, from time to time, issue directions as it deems fit, and the banking companies or the banking company, as the case may be, shall be bound to comply with such directions.
(2) The State Bank may, on representation made to it or on its own motion, modify or cancel any direction issued under subsection (1), and in so modifying or canceling any direction may impose such conditions as it thinks fit, subject to which the modification or cancellation shall have effect".
10. In the exercise of its power as a regulator, the State Bank of Pakistan has been issuing regulations, circulars and notifications to the banking companies in the public interest. Reference may be made to State Bank's Prudential Regulations for Corporate/Commercial Banking, Regulation G-1 whereof, being relevant, is reproduced hereunder:-- "Regulation G-1 ' Corporate Governance/Board ' of Directors and Management ' The following guidelines are required to be followed by banks/DFIs incorporated in Pakistan. They will also follow 'Code of Corporate Governance' issued by the Securities and Exchange Commission of Pakistan (SECP) so long as any provision thereof does not conflict with any provision of the Banking Companies Ordinance, 1962, Prudential Regulations and the instructions/guidelines issued by the State Bank of Pakistan. Foreign banks are required to adhere to these guidelines wherever feasible and applicable. However, they need not necessarily seek approval of their Board of Directors, as stipulated below in the case of local banks/DFIs.
A. Fit and Proper Test: ' The banks/DFIs will provide information about the appointment of proposed President/Chief Executive and Director on the Board on pro forma (Annexure "VI-A") for obtaining necessary clearance. Besides, the candidates for the post of President/Chief Executive and Directors of Board will be required to meet the Fit and Proper Test (FPT) laid down in Annexure "VII-A"."
' Annexure VII sets out the criteria of Integrity, Honesty and Reputation, Track Record, Solvency and Financial Integrity. Qualifications and Experience and Conflict of Interest to assess the fitness and propriety of a candidate for appointment as President/Chief Executive Officer. As regards the qualification and experience, the Fit and Proper Test prescribes that the President/Chief Executive Officer of a bank:-- "(a) Must be a career banker having at least 5 years of experience at senior level as EV? And above or equivalent i.e, Group Head of Financial/Business-Line a bank and possess expertise and skill set to undertake responsibilities of the position effectively and prudently.
(b) Should be between 40 to 70 years of age.
(c) Should have minimum qualification of graduation or equivalent in the discipline of banking, finance, economics, business administration and related fields. CEO of the Islamic Bank should preferably be having experience/training in Islamic Banking".
' To the same effect is State Bank's BPRD Circular No,4 of 2007 dated 23rd April, 2007, which prescribes an identical Fit and Proper Test for sound corporate governance and also provides that the Chief Executive Officer of a bank shall not be appointed without approval in writing by State Bank of Pakistan. The pro forma described as Annexure-1 and Annexure-2 have been prescribed whereby the required information is to be submitted for assessment of the fitness of a candidate for appointment to the post of President or Chief Executive of a bank.
11. It, thus, necessarily follows that the President or a Chief Executive Officer of a bank cannot be appointed without approval of. The State Bank of Pakistan. Such a requirement is also in harmony and consistent with section 11(3)(a) of the Banks (Nationalization) Act, 1974, which provides that the President or Chairman or Chief Executive of ,a bank shall not be appointed without the prior consultation of the State Bank of Pakistan and shall also be appointed from amongst the professional bankers included in a panel of bankers maintained by the State Bank. It has been urged by the learned counsel for respondent No,6 that the provisions of section 11(3)(a) of the Banks (Nationalization) Act, 1974, are not applicable to ZTBL as the same are applicable only to a nationalized bank. The plea of the learned counsel is not tenable in view of the definition of a bank given in section 3(1)(a) of the Act. Being a company registered under the Companies Ordinance, 1984, and being engaged in the business of banking as defined in clause 5(b) of the Banking Companies Ordinance, 1962, there should be no controversy that ZTBL is a bank in terms of section 3(1)(a) of the Act. It is also to Be noted that ZTBL is the successor-in-interest of Agricultural.
Development Bank of Pakistan ("ADBP") as it has come into being on 14-12-2004 following the restructuring and conversion of the ADBP which is expressly stated to be a bank by section 3(1)(15) of the Act. There is no provision in the ADBP (Reorganization and Conversion) Ordinance, 2002, as would suggest that after its conversion from ADBP, ZTBL ceased to be a bank and became free from being subject to the provisions of the Banking Companies Ordinance, 1962, the Banks (Nationalization) Act, 1974 or the State Bank of Pakistan Act, 1956. On the contrary, the transitional provisions of section 5(1) and section 5(2) of the ADBP (Reorganization and Conversion) Ordinance, 2002, not only allow ZTBL to continue the banking business of ADBP but also to use the word "bank" as part of its name. There is also no force in the plea that ZTBL cannot be treated as a bank or a banking company in the absence of any banking licence having been granted to it by the State Bank as ZTBL is admittedly engaged in the banking business 'and has been declared as a scheduled bank by the State Bank where its application for banking licence is said to be pending. It may be stated that ZTBL is able to carry on its business of banking without a licence by virtue of the transitional provisions of section 5(1) of the ADBP (Reorganization and Conversion) Ordinance, 2002, which allow it to do so without prejudice to its right to obtain the banking licee. In other words, ZTBL can continue its banking business till State Bank issues it the requisite banking licence. At the present time, in view of section 5(1) of the ADBP (Reorganization and Conversion) Ordinance, 2002, the status of ZTBL appears to be at par with its precursor, the Agricultural Development Bank of Pakistan, who also operated as a banking company and was declared as a scheduled bank by the State Bank without a banking licence.
12. Admittedly, the respondent No,6 has had no experience whatsoever in banking and had never held the position of a banker in any capacity. His experience is confined to the sugar industry where he is regarded as an expert analyst and an authority on the subject and has also been the Chairman of the Pakistan Sugar Mills Association (Punjab Zone) since October, 2006. There is also no assertion on behalf of respondent No,6 that he has obtained any degree in banking, finance, economics or business administration. There is, thus, no doubt that the respondent No,6 does not by any means meet the Fit and Proper Test in terms of the qualification and experience laid down by the State Bank of Pakistan which also explains the refusal of the State Bank of Pakistan to clear or approve his appointment as President of ZTBL.
13. The aforesaid discussion leads me to the conclusion that the appointment of respondent No,6 as President, ZTBL, is unlawful for having been made in clear violation of the provisions of section 41 of the Banking Companies Ordinance, 1962, State Bank's Prudential Regulations for Corporate/Commercial Banking and section 11(3)(a) of the Banks (Nationalization) Act, 1974, as neither the approval or clearance was given by the State Bank of Pakistan nor was respondent No,6 otherwise qualified to be appointed as President, ZTBL, as he was sans any banking experience.
14. It has also been argued by the learned counsel for the respondents Nos.6, 7 and 8 that a writ of quo warranto under Article 199(1)(b)(ii) of the Constitution is not maintainable against respondent No,6 as he is not the holder of a public office but is only the Chief Executive of a limited company which is by no means a department of the Government or an authority or body created under a statute.
' Although the expression holder of a "public office", is used in Article 199(1)(b)(ii) of the Constitution but it is not defined therein or anywhere else except in the National Accountability Bureau Ordinance, 1999 (No, XVIII of 1999), section 5(m)(iv) whereof provides that; "Holder of Public Office" means a person who is holding, or has held, an office or post in the service of Pakistan, or any service in connection with the affairs of the Federation, or of a Province, or of a local council constituted under any Federal or Provincial law relating to the constitution of local councils, or in the management of corporations, banks, financial institutions, firms, concerns, undertakings or any other institution or organization established, controlled or administered by or under the Federal Government or a Provincial Government, other than a person who is a member of any of the Armed Forces of Pakistan, or for the time being is subject to any law relating to any of the said forces, except a person who is, or has been a member of the said forces and is holding, or has held, a post or office in any public corporation, bank, financial institution, undertaking or other organization established, controlled or administered by or under the Federal Government or a Provincial Government."
' It is evident from the above definition that the holder of a public office, inter alia, includes all those who are engaged in the management of corporations, institutions or organizations established controlled or administered by the Federal Government. One may also refer to Hotel Metropole Ltd. v. Government of Sindh PLD 1982 Kar. 810 where it is observed that "generally in order to make an office public one, the pay must be given out of National and not out of Local funds and the office must be public in the strict sense of the term. A public officer must be said to be one who discharges duties, in which the public are interested and if a person is paid out of fund provided by the public, he is clearly a person holding such office."
15. Admittedly, ZTBL has inherited all the assets of the erstwhile ADBP, a statutory corporation, which was restructured and converted into ZTBL which is also owned, funded and controlled by the Government of Pakistan and whose assets, according to its website, are worth 84 billion rupees as of 31-12-2005. Applying the definition of public office given above, respondent No,6, who holds the top management position in a company owned, funded and controlled by the Government, can only be described as the holder of a public office.
16. Of course, a post or office created or funded by the State I a public office but there is another dominant criterion, public interest, in the presence of which an office may be regarded as a public office even though it is not created or funded by the State. Reference may be made to Maqbool Elahi v. Khan Abdul Rehman PLD 1960 SC 266 and Salahuddin v. Frontier Sugar Mills PLD 1975 SC 244 where while dealing with the issue of writ of quo warranto it was held that the office of a director in a public limited company must be regarded as a public office inasmuch as it involves performance of public duties which are of the greatest importance to the public interest. It may be noted that the writs of quo warranto sought in the afore-mentioned two cases were in respect of directors of public limited companies which were neither owned nor controlled by the Government.
In Salahuddin v. Frontier Sugar Mills, the honourable Supreme Court went so far as to observe that a director of a public company holds a public office even though his company cannot be regarded as person performing functions in connection with the affairs of the Federation or the Province.
17. In view of the aforesaid discussion, I find that respondent No,6, who is the President of ZTBL, is the holder of a public office, wherefor a writ of quo warranto is maintainable against him as all the conditions mentioned in Article 199(1)(b)(ii) of the Constitution do appear to be present.
18. Relying on Muhammad Rafique and 2 others v. Muhammad Pervaiz and 2 others 2005 SCMR 1829, it has been urged that the writ of quo warranto is barred by laches as it is being sought one year after the appointment of respondent No,6. I do not think that this case 'is of any help to respondent No,6 as his appointment as President, ZTBL, has been found to be unlawful. Unlike the present case, it is only after finding that there was no defect or irregularity in the appointments in question that the honourable Supreme Court held the writ petition was barred by gross laches as, it was filed 5 years after the confirmation of the impugned appointments.
19. It has been emphasized that conduct and motive of the petitioner disentitles him to seek the writ of quo warranto as he only wants get even with respondent No,6 who dismissed the petitioner from service in July, 2009. In support, reference has been made to Azizur Rahman Chowdhary v. M.
Nasiruddin and others PLD 1965 SC 236, Dr. Kamal Hussain and 7 others v. Muhammad Sirajul Islam and others PLD 1969 SC 42, Dr. Azim ur Rehman Khan Meo v. Government of Sindh and another 2004 PLC (C.S.) 1142, Muhammad Liaquat Munir Rao v. Shams ud Din and others 2004 PLC (C.S.) 1328 which lay down that a writ of quo warranto cannot be issued as a matter of course on sheer technicalities on a doctrinaire approach and that the Court is entitled to look into the conduct of the petitioner to see if he has approached the court with clean hands.'However, in none of these cases, it was found that the impugned appointment was unlawful. In my view, the aforesaid authorities are not applicable as the issue of the conduct alone or in isolation is not crucial but assumes importance only when an impugned appointment is also not found to be unlawful.
20. The present case is distinguishable as it has been found that respondent No,6, having no banking experience at all, has been unlawfully appointed as head of a premier financial institution in violation of the mandatory requirement of prior permission of the State Bank of Pakistan as has been discussed above. Considering the scale and size of the violation, the conduct of the petitioner pales into insignificance and has no relevance at all. In any case, the removal of the respondent No,6 as President, ZTBL, will bring no relief to the petitioner as it will not mean his reinstatement in service. I may refer to the case of Pakistan Tobacco Board and another v. Tahir Raza and others 2007 SCMR 97, wherein it was held that a writ of quo warranto "is primarily inquisitorial and not adversarial for the reason that a relator need not be a person aggrieved but also that while a person is holding a public office without any legal warrant, he is taxing public exchequer besides causing injury to others who may be entitled to the said office. Therefore, keeping in view the nature of such proceedings the learned High Court can undertake such an inquiry as it may deem necessary in the facts and circumstances of a particular case including examination of the entire relevant record and this exercise can be done suo motu even if its attention is not drawn by the parties concerned".
21. A writ of quo warranto is more in the nature of a public interest litigation where the undoing of a wrong or vindication of a right is sought by an individual not for himself but pro bono publico. In the present case also, the petitioner seeks no. Relief for himself as his writ petition is only directed at the appointment of respondent No,6's which he regards as unlawful. In Hafiz Hammadullah versus Saif Ullah Khan and others PLD 2007 SC 52, it was observed by the honourable Supreme Court that:-- "Where a person prays for a writ of quo warranto the court would be under an obligation to enquire whether the incumbent is holding the office under the orders of a competent authority and also to examine wheher he would be legally qualified to hold the office or to remain in the office. For issuance of a writ of quo warranto the person invoking the jurisdiction of the High Court under Article 199 of the Constitution is not required to fulfil the stringent conditions required to bringing himself within the meaning of an aggrieved person. Any person can move the High Court to challenge the usurpation or unauthorized occupation of a public office by the incumbent of that office and he is not required to establish his locus stanch to invoke the constitutional jurisdiction under Article 199 of the Constitution in a manner as generally required by the said Article. This court in the case of MUA Khan v. Rana Muhammad Sultan and another PLD 1974 SC 228 categorically pronounced that a civil petition for issuance of a writ of quo warranto can be moved by a person who may not even be an aggrieved party".
22. In the light of the aforesaid discussion, I have no hesitation in declaring that the appointment of respondent No,6 to the post of President, Zarai Taraqiati Bank Limited has been made unlawfully and cannot be sustained. Consequently, I have no option but to hold that respondent No,6 has been unable to show the authority of law under which he holds the post of President, Zarai Taraqiati Bank Limited, and as such, hi., appointment made vide Notification dated 30th August, 2008, issued by the Government of Pakistan, Finance Division (Internal Finance Wing) and subsequently confirmed by the Board of Directors of ZTBL, is also without lawful authority and of no legal effect.
Accordingly, the writ petition is allowed with no order as to costs.