' MUNIB AKHTAR, J.--- The plaintiffs, who are (according to them) or were (according to the defendant No,1) the permanent employees and officers of the said defendant (hereinafter referred to as "KESC") have filed the instant suits (which are the same in all material respects) seeking appropriate declaratory and injunctive relief against the notices dated 19-4-2010 whereby their services were terminated. The admitted position is that the case of the plaintiffs is not covered by any statutory rules or regulations; their cases fall within what is still known as the law of master and servant. The principal issue raised in the suits, and therefore posed by the present applications for interim relief, if reduced to its bare essentials, is simply this: where the relationship between the employer and employee is governed by the law of master and servant, can injunctive relief be granted and if so, on what basis? This question of course, needs to be dealt with on both the legal and factual planes. The recital of the relevant facts is however, being deferred to later in the order and I proceed at once to the submissions made by learned counsel for the parties.
2. Learned counsel for the plaintiffs accepted, in my view quite correctly, that the general rule is that if the contract of employment is governed simply by the law of master and servant, then the onus lies heavily on the plaintiff to show that he has a case for the grant of injunctive relief. Learned counsel submitted that since the services of the plaintiffs had been purportedly terminated, and they were being rendered unemployed, two of ,the ingredients for interim relief, i.e,, balance of convenience and irreparable loss and injury could easily be regarded as lying in their favour. He therefore directed his submissions towards establishing a prima facie case. Learned counsel relied on a number of decisions to which I will presently refer, but it would be more convenient at this stage to simply state his submissions as to the legal principles involved. Learned counsel submitted that the general rule that injunctive relief would not normally be given was a judicially evolved rule whereby the courts had chosen to fetter their own discretion, and there was nothing as such in law that would prevent the grant of such relief. Traditionally, according to him, the reason why courts refused to grant such relief stemmed from section 56(f) of the Specific Relief Act, r877, which provides that an injunction would be refused to prevent the breach of a contract the performance of which would not be specifically enforced. This provision was then read with section 21(b) of the said Act, and a contract of employment was regarded as falling within the ambit of the latter provision. It was for this reason, and also because neither an employee could be foisted on an unwilling employer nor could an employer be assisted to retain an unwilling employee that the court, in its discretion, refused to grant injunctive relief. Learned counsel submitted that nonetheless there were exceptions to the general rule and in certain categories of cases, interim relief was granted. The context in which such exceptions were developed was petitions filed under Article 199 of the Constitution. Learned counsel submitted that these exceptions fell in three categories: (a) where there were any statutory provisions applicable and the services were terminated in breach thereof; (b) the termination was mala fide; or (c) the termination created a stigma on the reputation of the employee which not merely affected him generally but could also possibly prevent him from obtaining other gainful employment. Learned counsel submitted that in the last mentioned category, the rules of natural justice had to be followed. Any claim that came within one of the foregoing exceptions could, in appropriate cases, warrant interference by the court.
3. Continuing his submissions, learned counsel submitted that if an employee's services were terminated, and he sought his remedy by way of a suit, injunctive relief could- be granted in the suit in the same circumstances in which such relief would be available under Article 199 of the Constitution. As is well known, a petition under Article 199 is maintainable only against a person carrying on functions in connection with the affairs of the Federation, or a Province or any local authority, i.e,, the State. Thus, the case put forward by learned counsel for the plaintiffs can be stated as follows. KESC is a person carrying on functions in connection with the affairs of the State.
Hence, any termination of services of its employees could, in an appropriate case, fall within one of the exceptions noted above and if so, then injunctive relief would be in order. Learned counsel submitted that the termination of the plaintiffs' services in the present cases was precisely of such a nature. He contented that the termination was both mala fide and carried such a stigma on the plaintiffs' reputation that they ought to have been granted an opportunity of personal hearing, which manifestly was not done. The relevant facts as to why, according to learned counsel, the termination was mala fide will be stated later. Insofar as the question whether KESC was carrying on functions in connection with the affairs of the State, 'learned counsel relied on a number of decisions, including those of the Supreme Court, and also certain American and Indian cases. The gist of the submissions on the basis of the case-law was that KESC performed essential State functions, which placed it in the position of a public functionary. Learned counsel submitted that KESC also, directly or indirectly, received a large subsidy from the State and such State benefits/aid. Brought it within the scope of Article 199. Learned counsel contended further that although KESC had been privatized, that did not mean that it therefore fell outside the scope of the said Article. He contended that since taxpayer money was being used to prop it up, KESC was a State entity. Since all of its functions and actions were those of the State, KESC had to be held to the same standards as applicable to other State entities and public sector corporations. He also submitted that KESC continued to remain partly owned by the State, to the extent of . 27% of its shareholding. He submitted that there was a clear nexus between the impugned action, i.e,, the termination of the plaintiffs' services, and the performance and discharge by KESC of its public functions, i.e,, the supply of electricity to the metropolis of Karachi. Since the employees were clearly both an integral and an essential factor in and component of KESC's ability to continue performing its functions, the plaintiffs could be regarded as being, and were, in the same position as employees of State entities. Since the latter would be entitled to suitable injunctive relief in terms of Article 199, the plaintiffs were also, in the present case, entitled to such relief by means of the present suits.
4. In support of his case on the basis of mala fides, learned counsel submitted that at the material time, the terms and conditions of the plaintiffs' employment were governed by the KESC Service Rules, 2002 (hereinafter referred to as "2002 Rules"). Learned counsel submitted that the relevant provisions of the 2002 Rules placed express fetters on the power of KESC to terminate the services of its employees. (These provisions are considered in detail below.) He contended that the KESC management surreptitiously purported to substitute the 2002 Rules with a new service policy or rules in 2010 (hereinafter referred to as the "2010 Policy"). It appears that on 15-4-2010, the senior management circulated the 2010 Policy amongst the departmental heads with a covering letter that directed them to keep the new policy as secret as possible and expressly prohibited any copying of the same, and directed that an employee could have access to it only if he submitted a specific request for any information or clarification. As presently relevant, it is to be noted that the termination provisions in the 2010 Policy were quite different from the 2002 Rules and according to learned counsel, biased and tilted heavily in favour of KESC. It was on the basis of the new policy that the impugned termination letters were issued. Learned, counsel questioned and challenged KESC's bona fides and submitted that if the new policy had been lawful and regular, then it should have been given effect in an open and transparent manner, by giving proper intimation and information to all the concerned employees since, after all, it was the terms and conditions of their employment that were being materially affected. The secrecy in which the new policy was cloaked, and the swift manner in which it was then executed to remove the 'plaintiffs from service spoke volumes about the bad faith with which KESC acted. Learned counsel also submitted in the context of mala fides that KESC had, in late 2009, approached NEPRA, the power sector regulator, for an increase in the tariff charged by it from customers. One of the justifications given for the proposed increase was the excessive burden being carried by KESC on account of its employees, including the plaintiffs. NEPRA awarded a tariff increase in December 2009. Learned counsel contended that once it had obtained this benefit, KESC then released the very employees whose retention had provided the excuse for the increase. This, according to him, clearly established the bad faith with which KESC had acted throughout.
5. Learned counsel also submitted that as a result of the termination of their services, the plaintiffs had suffered a huge stigma on their reputation, which had materially affected their chances of obtaining other gainful employment and this had been done without affording them an opportunity of hearing. Learned counsel submitted that many of the plaintiffs were nearing their retirement age and this was an additional factor that ought to be kept in mind while considering the application for injunctive relief. He submitted that for all the foregoing reasons, a proper case for interim injunctive relief had been made out.
6. Learned counsel for KESC strongly opposed the grant of any injunctive relief. He based his case squarely on the principle of master and servant and submitted that it was well settled that an unwanted servant could not be imposed on an unwilling master. In this context, learned counsel referred to the provisions of the Specific Relief Act noted above. Learned counsel contended that KESC, like any other employer in its position, was entitled to, and did have, a free choice in the matter of the appointment and discharge of its employees. He submitted that the law was ,well settled in this regard and, according to him, admitted to no exception in any context that could be relevant for present purposes. He strongly denied the allegations of mala fides against KESC or that the plaintiffs had suffered any loss or injury on account of any alleged stigma on their reputation.
Referring to certain provisions of the 2002 Rules (which will be considered in detail below), learned counsel contended that KESC's Board of Directors had ample power to amend, alter or even to entirely substitute the service rules from time to time, and it was in the exercise of this power, lawfully granted and available:, that the 2010 Policy had been formulated. It was only thereafter, i.e,, once the new policy was in place, that the plaintiffs were released from service in terms thereof by the issuance of the impugned termination notices. He submitted that all policies and rules framed from time to time by KESC were applied openly and without discrimination to, as appropriate, all the concerned employees. Thus, according to him the termination notices dated 19-4-2010 were entirely proper and lawful and could not be assailed by the plaintiffs. He also placed reliance on the share purchase agreement in terms of which KESC had been privatized and the management transferred to private hands. He referred to certain clauses from the said agreement to contend that as stated therein, there was only a certain period during which KESC could not release its employees, but that that period and obligation (which had been duly honored) had long since expired. Learned counsel also submitted that since the plaintiffs' services had been terminated, any interim relief would be tantamount to creating a new situation, which was impermissible. He contended that the plaintiffs had failed to make out any case for injunctive relief and therefore the present applications were liable to be dismissed. Like learned counsel for the plaintiffs, he relied on certain case-law, including decisions of the Supreme Court, which is considered below.
7. Both learned counsel also filed written submissions in which they further elaborated their respective cases.
8. I have heard learned counsel for the parties and have examined the record with their assistance and have considered the case-law relied upon by them. The submissions of learned counsel and the case-law relied on covered an extensive area and I intend no disrespect to their industry and efforts by not taking up each and every case cited by them. In my view, the submissions made by learned counsel for the plaintiffs may be regarded as constituting two distinct, though connected, limbs. Firstly, learned counsel contended that the plaintiffs were entitled to interim relief on the same grounds on which such relief would be available in appropriate cases by way of a petition under Article 199, i.e,, when the facts and circumstances of the case fell in one of the exceptions noted above. Secondly, learned counsel contended that even in terms of the law of master and servant, which operated purely on the contractual plane, the plaintiffs were entitled to relief in the present circumstances. It will be convenient to consider these submissions in the foregoing order.
9. The starting point for a consideration of the first limb of learned counsel's submissions must be whether KESC can be regarded as performing functions in connection with the affairs of the State within the meaning of Article 199. Learned counsel relied, on a number of decisions of the Supreme Court and some High Court decisions, as also on American and Indian case-law in support of his contentions. Principal reliance was placed on the well known decision of the Supreme Court reported as Salahuddin and others v. Frontier Sugar Mills and Distillery Ltd. And others PLD 1975 SC 244, which contains an elaborate discussion as to what constitute the functions of the State within the meaning of Article 199. Insofar as the foreign case-law is concerned, learned counsel cited extensively from a decision of the Supreme Court of India reported as Sukhdev Singh and others v.
Bhagatram Sardar Singh and another AIR 1975 SC 1331, and reference was also made in particular to two decisions of the US Supreme Court. In reply, learned counsel for KESC primarily placed reliance on Pakistan International Airline Corporation and others v. Tanweer-ur-Rehman and others PLD 2010 SC 676, where it has been held as follows:--- "12. Now let us see what is meant by expression 'performing functions in connection with the affairs of the Federation'. The expression clearly connotes governmental or State functions involving an element of exercise of public power. The functions may be the traditional police functions of the State, involving the maintenance of law and order or they may be functions concerning ,economic development, social welfare, education, public utility services and other State enterprises of an industrial or commercial nature. Generally, these functions are to be performed by persons or agencies directly appointed, controlled and financed by the State; either by Federation or a Provincial Government. On the other hand, private organizations or persons, as distinguished from Government or Semi-government agencies and functionaries, cannot be regarded as a person performing functions in connection with the affairs of the Federation of Province, simply for the reason their activities are regulated by laws made by the State. The primary test must always be:
(i) whether the functions entrusted to .Organization or person concerned are indeed functions of the State involving some exercise of sovereign or public power;
(ii) whether the control of the organization vest in a substantial manner in the hands of Government; and
(iii) whether the bulk of funds is provided by the State.
' If these conditions are fulfilled, then the person, including a body politic or body corporate, may indeed be regarded as a person performing functions in connection with the affairs of the Federation or a Province, otherwise not. [see Salahuddin v. Frontier Sugar Mills & Distillery Ltd. (PLD 1975 SC 244)]."
10. It is, of course, well established that a decision of the Supreme Court or a High Court constitutes "law". Article 189 of the Constitution provides that a principle of law enunciated in a decision of the Supreme Court is binding on all courts in the country, and Article 201 likewise provides that subject to Article 189, a decision of a High Court, which enunciates a principle of law, is binding on all courts subordinate to it. In my respectful view, it necessarily follows from the foregoing principles, which are of course of the highest constitutional importance, that if a decision of the Supreme Court contains an explication of a principle of law enunciated in an earlier Supreme Court decision, then such explication in the subsequent decision is itself the enunciation of a principle of law, and hence binding on all courts in Paicistan within the meaning of Article 189 (subject always to the rules regarding the precedence of Supreme Court decisions, as established by the jurisprudence of the Supreme Court itself). The reason is that the enunciation of a principle of law in a decision of a constitutional court is as much "law' as is, for example, a section of a statute. Now the interpretation of a statutory provision by the Supreme Court is an explanation of the correct legal meaning of a "law", and is binding in terms of Article 189. The explication in a decision of the Supreme Court of a principle of law enunciated in the Court's earlier decision is also an exposition of the correct legal meaning of a "law", namely the principle laid down in the earlier decision. The explanation given in the subsequent decision is therefore itself binding in terms of Article 189. The Calcutta High Court has expressed similar views in its recent decision in CIT v. Oberoi Hotels (P) Ltd., ITA 13 of 2001, decided on 17-3-2011 (available at the website of the High Court: www.Calcuttahihcourt.Nic.In). The High Court was there referred to the explanation given by the Indian Supreme Court in Union of India v. Azadi Bacho Andolan (2003) 263 ITR 706 of its earlier decision in McDowell and Company Ltd. v. Commercial Tax Officer [1985] 3 SCC 230. The High Court observed as follows (emphasis supplied):--- "Therefore, the first question that arises for determination in this appeal is whether we should follow the decision of the Supreme Court in the case of McDowell & Company Ltd. (supra) and ignore the subsequent decision of the Supreme Court explaining the said decision on the ground that the latter ones were delivered by a Bench consisting of two Judges.
' There is no dispute with the proposition of law that if there are conflict of opinions between the two Benches of the Supreme Court on a question of law, the one declared by the larger Bench would prevail over the one pronounced by the other Bench. But if a Bench consisting of a smaller number of judges interprets a decision of a larger Bench of the Supreme Court in a different way which may be apparently opposed to the one taken by the larger Bench, a subsequent. Co-ordinate Bench of the Supreme Court may refuse to follow the interpretation of the latter one on the ground that it proposed to follow the earlier view expressed by a larger Bench. But if the subsequent decision of the smaller Bench explaining the larger Bench is placed before a High Court, the latter is bound to follow the subsequent one by the smaller one which interprets the decisions of the larger Bench because that is the interpretation of the larger Bench by a Bench of Supreme Court and the High Court cannot make a different interpretation than the one made by the subsequent decision of the Supreme Court which is binding upon it... [pp. 9-10] ' In the case before us, the subsequent decision of a Smaller Bench in the case of Azadi Bacho Andolon (supra), has taken note of the earlier decision in the case of M/s. McDowell and Company Ltd. (supra), and has interpreted the same.... [p. 10] ' Mr. Saraf [learned counsel for the CIT] in this connection placed strong reliance upon a decision of Three-Judge-Bench in the case of Official Liquidator v. Dayanand and others reported in (2008) 10 SCC 1 in support of his contention that we should totally ignore Azadi Bachao Andolon (surpa).... [p.
10] ' In our opinion, so long the decision in the case of Azadi Bachao Andolon (supra) is not held to be per incuriam by a larger Bench decision of Supreme Court as done in the case of Official Liquidator v. Dayanand and others relied upon by Mr. Saraf, the High Courts should be bound by the explanation of that Bench given to the decision in the case of Messrs McDowell & Company Ltd.
(supra). [p. 12]"
' Although in the matter before the High Court, the subsequent decision that explained the earlier decision was of a smaller Bench, in my respectful view, the principle is one of general application.
The explanation would, for the reasons stated above, be just as binding even if the composition of the respective Benches was otherwise than in the case before the Calcutta High Court.,
11. I respectfully venture to suggest that two factors need to be kept in mind by a court that is referred to two Supreme Court decisions that stand in relation to each other in the foregoing manner. Firstly, the subsequent Supreme Court decision should expressly refer to the earlier decision. This is self-evident, and requires no elaboration. Secondly, and more importantly, the context in which the subsequent Supreme Court decision explicates the earlier decision is also relevant. The reason is that a principle of law enunciated by the Supreme Court may be a principle of broad or general application, which could apply in a number of different situations or contexts, or it could be a principle of narrower scope, which operates within a more restricted locus. It could therefore well be the case that in the subsequent decision, the Supreme Court intended to limit its explication of the earlier decision to the context or situation actually before it, leaving it to future decisions to provide guidance as to how a broadly enunciated principle of law in the earlier decision is to apply in other contexts or situations. The court before which the two decisions are cited must therefore, in my respectful view, carefully consider this aspect as well. If therefore, a decision of the Supreme Court expressly refers to, and explains, an earlier decision, and such explication is in a context or situation that is the same as, or is similar to, the one before the court referred to the two decisions, then in my respectful view, it would be inappropriate, and perhaps even impermissible, for that court to come to- its own understanding of the earlier Supreme Court decision. It must regard itself as bound by the explication given by the Supreme Court itself in the subsequent decision.
12. When the foregoing principles are applied in the present case, it will be seen that in the subsequent decision in the Tanweer-ur-Rehman case, the Supreme Court has expressly referred to the earlier decision in the Frontier Sugar Mill's case. Furthermore, the context in which the Supreme Court has explicated the earlier decision is precisely the same as the one at hand, namely, a consideration of the relationship of master and servant, where it is contended that the master or employer is an entity performing functions in connection with the affairs of the State. Accordingly, the explication given in the Tanveer-ur-Rehman case in the passage cited above, of the principles of law enunciated by the Supreme Court in the Frontier Sugar Mill's case, is itself the enunciation of a principle of law and hence binding as such. In these circumstances, it is not necessary to consider the American and Indian case-law cited by the learned counsel for the plaintiffs. It would also, in my respectful view, be inappropriate for me to myself consider, interpret and apply the principles of law enunciated in the Frontier Sugar Mill's case to the facts of the present case. The explanation of that decision given in the Tanveer-ur-Rehman case covers the point in the present context, and is binding and applicable as such.
13. As is clear from para 12 of the judgment in the Tanveer-ur-Rehman case (see para 9 supra), the primary test comprises of the three conditions specified therein. In my respectful view, these conditions appear to be cumulative or conjunctive, i.e,, it would seem that all three must exist before the entity concerned can be regarded as performing functions in connection with the affairs of the State. When KESC's position is considered in the light of these conditions, in my view, it does not come up to the tests laid down by the Supreme Court. This is- so because in the post- privatization scenario, the control of the organization does not vest in the Government but lies with private management. Furthermore, although learned counsel for the plaintiffs has stated that KESC enjoys a huge State subsidy, nothing material in this regard has been placed on the record as would show that the bulk of funds for KESC are still being provided by the State. While clearly the provision of electricity, especially in a large metropolis like Karachi, was once the exclusive domain of the State, it is now an open question whether that can still be regarded to be the position. In this context, it is to be noted that even WAPDA itself, which once constituted one integrated statutory entity performing generation, transmission and distribution functions, has been broken up into a number of companies, which are intended to be eventually privatized. A sizeable portion of the power generated in the country comes from private sector projects. As all too many Pakistanis are unfortunately well aware, persistent power outages of long duration can have a seriously debilitating effect on daily life, and such shortages can, from time to time, lead to an eruption of short-lived or prolonged law and order problems. But simply because the State has to cope with such unpleasant results of power shortages does not necessarily mean that an entity involved in the business of generating, distributing and supplying electricity becomes an instrumentality of the C State. I am therefore unable to accept the contention put forward by learned counsel for the plaintiffs that KESC is a person carrying on functions in connection with the affairs of the Federation or the Province.
14. Learned counsel for the plaintiffs also relied on Pakistan Telecommunication Company Limited and another v. Muhammad Zahid and others 2010 SCMR 253. It appears that in this case the respondents, who were deployed at the International Gateway Exchange of the appellant ("PTCL"), were aggrieved by the decision to treat them as employees of the Telecom Foundation, and not of PTCL. A writ petition was filed before the Lahore High Court. The petition was accepted, and the respondents were declared to be the employees of PTCL, which (after an intra-Court appeal that proved unsuccessful) appealed further to the Supreme Court, and leave was granted to consider whether the respondents were PTCL's employees or those of the foundation. After considering in detail the relevant statutory provisions, the Supreme Court was pleased to dismiss the appeal. It will be seen that the facts of this case were rather different from those at hand. The question was not whether the services of employees had been rightly, or wrongly, terminated, but rather whether the respondents were, on account of the relevant statutory provisions, the employees of the appellant. Much turned on the proper interpretation of the Pakistan Telecommunication (Re- Organization) Act, 1996 and predecessor legislation, the Industrial Relations Ordinance and even the Service Tribunals Act, 1973. All of these elements are of course, entirely missing in the present case. Of more direct relevance is the subsequent decision of the Supreme Court in Pakistan Telecommunication Company Limited v. Iqbal Nasir and others PLD 2011 SC 132, to which learned counsel for the plaintiffs quite properly drew my attention. This was a common judgment that disposed of a number of appeals from this Court, as well as the Peshawar and Lahore High Courts.
Some of the appeals had been brought by PTCL, while others were by employees. All the cases had originated as writ petitions in the High Courts. PTCI, sought to argue that it was not a person performing functions in connection with the affairs of the Federation. On the basis, inter alia, of the Muhammad-Zahid case, and also the fact that the Federal Government continued to retain the majority of its shares, the Supreme Court held that PTCL, was a person amenable to the exercise of jurisdiction under Article 199. But it then went on to hold, relying inter alia on the Tanweer-ur- Rehman case, that since the employment of none of the employees was covered by any statutory rules and regulations, but was governed only by the law of master and servant, the employees were not entitled to any relief under Article 199. The appeals filed by PTCL were therefore allowed, whereas the appeals filed by the employees were dismissed. I may note here that both in this case (at pg. 147) as also in the Tanweer-ur-Rehman case (at pg. 689), the Supreme Court expressly noted that while a writ petition was not maintainable where the relationship was governed by the law of master and servant, the aggrieved employee could nonetheless still persue his remedy, if any, before the civil courts of competent jurisdiction, i.e,, by way of a civil suit.
15. Learned counsel also referred to Huffaz Seamless Pipe Industries Ltd. v. Sui Northern Gas Pipelines Ltd. And others 1998 CLC 1890 (LHC; DB). In this case, it was held that the respondent, though a company registered under the Companies Ordinance, 1984, was nonetheless amenable to writ jurisdiction. This is of course not the point in issue in the present matter, which is a civil suit, and in any case, the factors that they appear to have persuaded the Lahore High Court to take this view included the substantial control exerted by the Federal Government over the respondent, which is also not the situation in the case at hand. It is also to be noted that this company had not then, and indeed has not yet, been privatized. The underlying facts relating to Sui Northern were therefore quite different at the material time as compared to KESC today. Learned counsel also referred to Muhammad Ashraf v. United Bank Limited 2009 CLD 1250 (LHC; SB). That case however turned on the interpretation and applicability of section 41 of the Banking Companies Ordinance, 1962 in respect of the rate of profit declared by the respondent bank, which was obviously under the control and directions of the State Bank of Pakistan in terms of the foregoing statute.
' Again, the facts of that case were, in my view, quite different and distinguishable from those at hand.
16. In respect of his case on mala fides, learned counsel relied on Karachi Development Authority and another v. Wali Ahmed Khan and others 1991 SCMR 2434, where it was held that if the impugned action was tainted with mala fides, then a writ petition was maintainable and, if appropriate, injunctive relief would be granted. The question before the Supreme Court was whether the respondent could be regarded as being the holder of a public office. This question was answered in the negative, i.e,, against the respondent. However, it was held that where a statutory corporation such as the appellant exercised a statutory power, then the exercise of such power must be bona fide, and not tainted with mala fides. This is of course well settled by the jurisprudence of the Supreme Court. The finding of the High Court that the impugned action was so tainted was upheld, and accordingly, the appellant's appeal was dismissed. It was observed as follows (emphasis supplied):--- "As has been laid down in several decisions of the Superior Courts a mala fide act is a fraud on statute and wholly void. Therefore, if an officer or an authority of a statutory body exercises power of removal mala fide, obviously such action cannot be deemed to be referable to the statutory body acting as the master terminating the service of the employee. It will be an act wholly alien to the objects and purposes for which such a statutory body has been brought into existence under the relevant legal dispensation. Thus, there will be hardly a question of the breach of the service contract by the master. In such circumstances I feel that if the statutory body is amenable to writ jurisdiction, as in the present case the K.D.A., is as, a local authority, the remedy under Article 199 would be available to challenge the mala fide exercise of statutory authority." (p. 2448)
' It will be seen that the Supreme Court drew a distinction between the exercise of a statutory power, and the breach of a service contract by the employer. In the present case of course, KESC admittedly does not have or exercise any statutory powers, and the matter lies wholly within the contractual realm. In my respectful view therefore, the cited decision does not advance the plaintiffs' case.
17. Learned counsel also referred to Pakistan State Oil Co. Ltd. v. Muhammad Tahir Khan and others 2001 PLC (C.S.) 591 (SC). That case involved questions relating to the services of the appellant's employees, which were held to be governed by the law of master and servant. One question was whether section 2-A of the Service Tribunals Act, 1973 applied or not. This question was answered in the affirmative. (This decision was of course, before the subsequent Supreme Court decisions on the vires of section 2-A.) The Supreme Court referred to the difference between a termination simpliciter (if such was permissible under the relevant contract of employment) and removal from service, and remanded the cases to the Service Tribunal for the necessary factual enquiry, an exercise that had not earlier been carried out.
18. Of more direct relevance to the plaintiffs' case is a single Bench decision, of this Court reported as Shahid Mahmood v. Karachi Electric Supply Corporation Ltd. 1997 CLC 1936. This was a suit filed by the plaintiff therein to challenge the termination of his service by KESC. Interim injunctive relief was sought,' and granted, if I may say so with respect and admiration, in a characteristic judgment by Sabihuddin Ahmed, J. (as his Lordship then was). His Lordship deftly sidestepped the whole issue of contractual employment and the law of master and servant, and held as follows:--- "In view of the above I am of the view that the duty to act fairly is to be performed as a matter of law and is an inherent limitation upon the discretion of all public functionaries whether performing statutory function or discharging obligation under contract. Such duty being imposed by law cannot be deviated from through a contract. When such functionaries are required to act honestly and fairly in relation to different kind of contracts I see no reason why this obligation could be dispensed with in respect of contracts of employment. As such I am of the view that the plaintiff has made out a prima facie case in support of the proposition that the defendants have failed to act reasonably and fairly. (pg 1952, emphasis supplied)
' Thus, a distinction was drawn between a duty ordained by law, and a contractual provision simpliciter. If a legal duty was involved, then it applied even if contractual provisions were involved.
But, and this is the crucial point, the case was decided on the basis that KESC was a "public functionary". Indeed, it is pertinent to note that it does not appear to have been seriously disputed by KESC that it was not a public functionary, whereas a specific plea in this regard was taken by the plaintiff (noted at pg. 1950). But (if I may put it so) that was then, and this is now. In 1997, KESC could easily be regarded as a public functionary. Now, the situation is rather different. Since I have already concluded that KESC is not (or at any rate, is no longer) a person carrying on functions in connection with the affairs of the State in terms of the tests laid down by the Supreme Court in the Tanweer-ur-Rehman case, it cannot be regarded as a public functionary, at least in the present context. The views expressed in the Shahid Mahmood case cannot therefore, with the utmost respect, be held applicable in the changed, i.e , present, circumstances.
19. Finally, note must be taken of a Division Bench decision of this Court cited by learned counsel, Arif Majeed Malik and others v. Board of Governors, Karachi Grammar School 2004 CLC 1029. This was in the context of the present plaintiffs being entitled to a hearing on account of the stigma that would otherwise be cast, on- their reputations. In the cited case, the children of the first appellant were removed from the school on account of an allegedly offensive and threatening email sent by the appellant to the school authorities. A suit was filed but the plaint was rejected. On appeal, the learned Division Bench restored the suit, and granted interim injunctive relief. It was observed as follows:--- "In any event even if the respondent's unfettered right to admit or expel a student from its rolls is acknowledged, a very important factor that apparently escaped the attention of the learned Single Judge needs to be highlighted. In the instant case the removal of the appellants Nos.2 to 4 from the school was effected not in the exercise of absolute discretion vesting 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. In this context we may refer to the pronouncement of the Honourable Supreme Court in Muhammad Siddiq Javaid, Government of West Pakistan PLD 1974 SC 393. In this case it was held that the services of a civil servant during the period of his probation could be dispensed with, without notice if his performance was found to be not satisfactory for the purpose of placing his appointment on a permanent footing. At the same time, however, it was held that when these, were allegations of corruption or misconduct creating stigma he was entitled to a show-cause notice. We are, therefore, of the view that since the removal in the instant case took place on the basis of specific allegations the appellants were entitled to proper opportunity of being heard and the allegations had to be proved. While we would not like to comment on the credibility of the allegations (lest it might prejudice a proper adjudication on merits) we cannot hold observing that they have to be considered in the totality of circumstances and the acknowledged correspondence requiring a serious appraisal of evidence. It also needs to be considered, assuming that the E-mail was sent by the appellant No, 1 or 2, as to how far the appellants Nos.3 and 4 could be penalized of such alleged misdeeds." (pp. 1039-40; emphasis supplied)
' In my respectful view, it is clear from this passage that the learned Division Bench did not hold that in every case a notice or opportunity of hearing must be given. It is only required in those cases where the impugned action is based on certain specific allegations, e.g., of misconduct, corruption or anything else that may, in the context of the relevant circumstances, be regarded as an imputation of moral turpitude. This however, is not the case at hand. The impugned letters purport to terminate the services of the plaintiffs simpliciter. No reason as such has been stated, nor have any allegations been made against them. Indeed, KESC has expressly disclaimed any such intent in its pleadings. The cited case therefore does not assist the plaintiffs.
20. In light of the foregoing discussion, I am of the view that the plaintiffs have failed to make out a case in terms of the first limb of the submissions by learned counsel (see para 8 supra). I turn therefore to consider whether, on the purely contractual plane, the plaintiffs are entitled to any injunctive relief,
21. The impugned termination letters have of course, been issued in purported exercise of powers available to KESC under the contracts of employment, which were identical in all the cases. The letters all say the same thing, with certain variations not presently relevant. It will suffice therefore to refer to only one such letter, which stated as follows:--- "You were appointed in the organization and now working as Manager in the management cadre.
' In terms of the clause 5.1 of the KESC Officer's Service Policy 2010; your services are hereby terminated with immediate effect on payment of one month's salary in lieu of notice, and you also stand relieved with immediate effect.
' You are requested to handover the charge to your supervisor, return all company property and settle your legal dues from the Accounts department on any working day." [Termination letter addressed to the plaintiff No, 1 in Suit 815 of 2010]
22. As already noted above, the 2010 Policy replaced the 2002 Rules. The relevant provisions of the 2002 Rules had stated as follows:--- 1.1 SHORT TITLE AND COMMENCEMENT.
1.2 These rules shall be called the KESC Officers Service Rules and shall be applicable to all regular officers of KESC shall come into force with immediate effect.
1.3 The Board of Directors may add/amend or repeal any of these rules.
1.4 In case of any controversy / ambiguity concerning interpretation of these rules or matters otherwise not explicitly provided for these rules the decision of the Board shall be final and binding on all concerned.
5.1 PERMANENT OFFICER.
' The services of a permanent officer shall not be terminated without assigning any reason.
However on abolition of post / on reduction of the number of posts in a cadre/grade, the services may be terminated with three months notice in writing with all retirement, benefits. The person whose services are terminated shall be the, person who is the most junior in that cadre/grade.
(a.) By 90 days notice on either side with valid reasons by payment of 90 days salary in lieu thereof or proportionate payment for the un-expired period of notice.
' As opposed to the foregoing, the relevant provisions of the 2010 Policy stated as follows: SHORT TITLE AND DEFINITION.
1.1 This policy shall be called the KESC Officers Service Policy ("Officers Policy") 2010 and shall be applicable to all regular employees in officers and management cadre of KESC and shall come into force with immediate effect.
1.2 The KESC Officers Service Rules, 2002 stand repealed in terms of power vested under Clause 1.2 of the said Rules, by the Board Human Resources Committee (BHRC) specially empowered by the Board of Directors in its meeting held on 25-2-2010.
' The Board of Directors may add/amend any of the provisions of this policy, or repeal the same. To remove any emerging operational difficulty the CEO may amend any of the policies, subject to the approval of the Board in its next meeting.
1.3 In case of any controversy/ambiguity concerning interpretation of this Policy or matters otherwise not explicitly provided for, the decision of the Board shall be final and binding on all concerned.
[CHAPTER-5: TERMINATION] REGULAR OFFICER ' The services of a regular officer are terminable from either side without assigning any reason on one month's notice or payment of salary in lieu thereof with all permissible benefits.
' However on abolition of one or more posts/cadre/grade/ category, the services of corresponding number of officers may be terminated assigning such reasons(s), with one months notice or payment of salary in lieu thereof for the un-expired period with the retirement benefits under the Policy. The person whose services are terminated in such fashion shall be the person who is the most junior in that cadre/grade/Category.
23. Since the matter must now be considered in the realm of contract law, it will be in order to preface the analysis with a recapitulation of certain well established legal principles. The first, and most obvious, point is the ascertainment of the contract itself. By this, I do not mean the permissible methods of proving the contract, which lie properly in the realm of evidence. Rather, I refer to the more basic question of what are the terms and conditions that comprise the contract itself. These are not normally in dispute. However, it is well established that if there is such a dispute, it is a mixed question of law and fact and is, in the end, a question to be decided by the court itself.
Secondly, if the terms of a contract have been ascertained or are not in dispute, then the interpretation thereof (i.e,, a determination of their true legal meaning) is also a question of law to be decided by the court. Thirdly, it is also well established that a contract cannot normally be unilaterally varied or altered by one of the parties thereto (although, as will be seen shortly, it is the precise application of this principle that is in dispute in the present case). Finally, the provisions of the contract are to be construed and interpreted objectively. This is absolutely fundamental. Thus, in Sirius International Insurance Co. v. FAI General Insurance Ltd. [2004] UKHL 54; [2005] 1 All ER 191, it was observed as follows:--- "The aim of the inquiry is not to probe the real intentions of the parties but to ascertain the contextual meaning of the relevant contractual language. The inquiry is objective: the question is what a reasonable person, circumstanced as the actual parties were, would have understood the parties to have meant by the use of specific language. The answer to that question is to be gathered from the text under consideration and its relevant contextual scene." (para 18, per Lord Steyn)
' This is of course, not the enunciation of any new principle, but rather the restatement, in modern terms, of a principle that forms part of the bedrock of contract law.
24. The first question that must be determined in the present case is as to what were the applicable terms and conditions of the contract between the parties. This question arises because KESC asserts that the terms are contained in the 2010 Policy (as noted above), whereas the plaintiffs' case is that the terms were, and continue to remain, contained in the 2002 Rules (as noted above). Now, there is no dispute that prior to the coming into force of the 2010 Policy (which took effect from around 15-4-2010), the relevant contractual terms were to be found in the 2002 Rules. What learned counsel for KESC contended was that the 2002 Rules themselves permitted their alteration, substitution and even complete replacement, and it was in the exercise of this power that the 2010 Policy was given effect, and thus became part of the plaintiffs' contracts of employment. It is the correctness of this submission that must now be considered.
25. The locus of the contractual power asserted by KESC is to be found, according to learned counsel, in clauses 1.2 and 1.3 of the 2002 Rules, which have been reproduced above. Clause 1.2 confers a contractual power on the Board of Directors of KESC to "add", "amend" or to "repeal" the 2002 Rules or any particular rule thereof. How is this power to be construed? The point can be put more generally: if two parties enter into a contract, whereby one is conferred with a power or discretion thereunder, how must such power be exercised? The (English) Court of Appeal gave the following answer in Abu Dhabi National Tanker Co v. Product Star Shipping Ltd. (The "Product Star")
(No 2) [1993] 1 Lloyd's Rep 397:--- "The essential question always is whether the relevant power has been abused. Where A and B contract with one another to confer a discretion on A, that does not render B subject to A's uninhibited whim. In my judgment, the authorities show that not only must the discretion be exercised honestly and in good faith, but, having regard to the provisions of the contract by which it must be conferred, it must not be exercised arbitrarily, capriciously, or unreasonably. . That entails a proper consideration of the matter after making any necessary enquiries. To these principles, little is added by the concept of fairness: it does no more than describe the result achieved by their application." (pg. 404; emphasis supplied; per Legatt, LI., with. Whom the rest of the Court agreed)
' Thus, the contractual power conferred on KESC by clause 1.2 is not untrammeled, nor can this power be exercised in such manner as KESC deems fit in its absolute, i.e,, subjective, discretion. It is pertinent to note that clause 1.2 itself does not contain any such language. Learned counsel for KESC sought to rely on clause 1.3 in support of a broad, almost untrammeled, interpretation of clause 1.2, but in my view, clause 1.3 does not have the meaning being ascribed to it. Firstly, clause 1.3 itself amounts to the conferment of a contractual power on KESC, and is therefore subject to the same limitations as noted above. Secondly, it is restricted to an "interpretation" of the rules in case of any "controversy/ ambiguity". This obviously means, and can only mean, a resolution of a dispute regarding the proper interpretation of the rules as they stand. Clause 1.2 on the other hand, does not apply to the rules as they stand; it confers a power on KESC to alter or amend the rules, which is a different thing altogether. Finally, even if the KESC Board were to exercise its powers under clause 1.3 in relation to any particular rule as it stood, the Board's determination would still remain subject to the ultimate. Jurisdiction of the court to authoritatively determine the true legal meaning of the provision. This is so since, as noted above, the determination of the legal meaning of a contractual term is a question of law, and such questions ultimately must fall within the domain of a court of law. Parties cannot, by their own unilateral act, purport to deny or curtail this judicial power. Clause 1.3 therefore, has no application to the issues at hand.
26. What then, is the extent and scope of the contractual power conferred by clause 1.2? How would a reasonable person, considering the provision objectively in the relevant contractual and contextual framework, consider the clause as applying? On one possible interpretation, the power conferred thereby should be strictly limited to what is expressly stated therein, i.e,, to "addition", "amendment" and "repeal"-but not to substitution of the rules in their entirety, since' repeal does not necessarily mean, include or require substitution. However, I accept that such a strict and literalist approach would not be appropriate. .A repeal of the essential terms and conditions of employment of an ongoing service contract, and certainly in relation to an organization like KESC, can only be in the context of replacing the "repealed" provisions with others. Now, each of the plaintiffs has his own contract of employment with KESC. Thus, legally speaking, the 2002 Rules were part of literally hundreds of separate contracts, i.e,, those between KESC and each of the concerned employees. Strictly speaking therefore, any change in, or of, the 2002 Rules would alter hundreds of different contracts. As noted above, normally a party cannot unilaterally alter the contractual terms. Without a provision like clause 1.2, KESC may well have found itself in the position of having to renegotiate hundreds of different contracts every time, it wished to alter any of the terms and conditions of service. Therefore, the purpose behind clause 1.2 is clear. Since the 2002 Rules were to apply to all employees, i.e,, formed part of their respective contracts with KESC, and any change in the 2002 Rules would simultaneously affect hundreds of different contracts in precisely the same manner, clause 1.2 was inserted to obviate the inconvenience that would be caused if KESC had to separately rewrite those contracts to achieve the same purpose. (I have used the term "hundreds", although the number of employees affected may well be much larger.)
27. Once the purpose behind clause 1.2 has been understood and established, a determination of its scope becomes much easier. Now, any alteration in, or of, the 2002 Rules may affect the employees either favourably or adversely. If the former, the employees could not reasonably be regarded as having any objection. Thus, the scope of clause 1.2 would be regarded by a reasonable person, considering the situation objectively, as extending to any change or alteration in the 2002 Rules that would be favourable to the employees. What however, of changes that may be adverse to the employees? Here, the situation must be regarded as being more nuanced. For example, some alterations may adversely affect all employees, while others may affect only some of the employees. Furthermore, the degree of the adverse affect may also be relevant: some changes may be adverse, but only marginally, while others may have a more substantial impact on the employees. Fortunately, these subtleties need not detain me in the present case. There is no doubt that in the present case, all the plaintiffs have been adversely affected by the substitution of the 2002 Rules with the 2010 Policy, and this effect has been substantial (to say the least). In my view, no reasonable person, considering the situation objectively, would regard clause 1.2 as empowering KESC to alter or replace the 2002 Rules in a manner that is substantially' adverse to the employees. At the risk of some repetition, it must be stated again that any change in, or of, the 2002 Rules amounts to a contractual alteration, i.e,, a variation of the employment contract between KESC and each of its affected employees. As noted above, it is an established principle of contract law that a party to a contract cannot unilaterally alter it. A power such as that conferred by clause 1.2 can be regarded as an exception to this rule. Like all such exceptions, it ought, in my view, to be strictly and narrowly construed. No reasonable person would conclude that an employee would empower the employer to unilaterally alter the terms and conditions of his service in a manner that is substantially adverse to him. This would be especially true of the termination clause. Would a reasonable person, considering the contract objectively, construe it as meaning that a rational employee would confer a unilateral power on his employer to alter the termination clause of the contract in a manner that is substantially adverse to the employee? This question can, in my view, admit to only one answer, and that is in the negative. Only the clearest possible language could, if at all, achieve such a result. A contractual power of this nature should also be construed contra proferentem, i.e,, any ambiguity or doubt in the scope of the power should be construed against the employer and in favour of the employee.
28. There can however, be certain situations where an employer has purported to exercise a power of the nature as conferred by clause 1.2 to alter the contract of employment in a manner substantially adverse to the employee, and the latter may be unable to obtain redress. The most obvious such situation would be where the employer is able to plead estoppel. There could also be acquiescence, or even laches. However, each case would turn on its own facts, and the employer would have to specifically plead and establish any such defence. In the present case, no such considerations can arise. The 2010 Policy came into effect from 15-4-2010. The power of termination was exercised on 19-4-2010. The present suits were filed in May and July, 2010. Thus, the plaintiffs have challenged the termination of their services from the beginning and have never accepted the purported change in the termination clause.
29. In my view therefore, insofar as the termination clause of the plaintiffs' contracts of employment is concerned, it continues to be governed by the relevant provisions of the 2002 Rules and not the 2010 Policy. This is so because the altered position under the 2010 Policy in this regard is quite obviously substantially adverse to the plaintiffs. Clause 1.2 of the 2002 Rules did not, and could not, empower KESC to make such a change in the employment contracts. These contracts must therefore be construed and applied in terms that the termination clause continues to remain as contained in the 2002 Rules. It is therefore necessary to consider that termination clause in some detail.
30. Before proceeding further, it would be appropriate to pause briefly to clarify certain points, which may otherwise cause confusion. It may be noted that I have not declared clause 1.2 of the 2002 Rules to be invalid, nor have I invalidated the 2010 Policy as such. Thus, for example, the latter will apply to contracts of employment entered into after 15-4-2010, as part of the terms and conditions of employment of freshly inducted employees. I have not even held that the 2010 Policy will not apply at all to the plaintiffs. As presently relevant, a contract of employment may be regarded as comprising several separable elements (e.g., the salary payable, promotion, transfers, leave entitlement, gratuity and provident matters, medical facilities, etc.). It may well he the case that in respect of some, or perhaps even most, of these elements, the exercise of contractual power by the KESC Board in terms of clause 1.2 was lawful (in the manner as explained above), and therefore, the plaintiffs' contracts of employment now, in respect of these elements, comprise the terms as set forth in the 2010 Policy. However, whether this is so or not is not the matter before me. I am only concerned with the termination clause and that, for the reasons already stated, must in law be regarded as still being that as set forth in the 2002 Rules and not the 2010 Policy.
31. Reverting to a consideration of the termination clause as applicable, i.e,, clause 5.1 of the 2002 Rules (reproduced in para 22 above), it will be seen that it comprised of two parts. In the first paragraph, a power was granted to KESC alone. In the second paragraph, a power was conferred on both KESC and the employee, and in the same terms. Thus, both the employer and the employee could take recourse to the second paragraph. The important point to note is that in neither case was the power unfettered. In the first paragraph, it was cast in expressly negative terms: KESC could not terminate the services of a permanent officer without assigning any reason.
In the second paragraph, the 90 days notice could be given by either party, but only with "valid reasons". In my view; the second paragraph also amounted to, or at least impliedly contained, a negative covenant: if the party giving the notice did not have valid reasons, the notice could not be given and if given, would be invalid. As to what would constitute "valid reasons", would depend on the facts and circumstances of each case, and also on a determination of the proper legal meaning of what, in the context of the contract of employment, ought .To be regarded as a "valid reason". The same would of course be true for the "reason" to be given for termination of sc vices by KESC in terms of the first paragraph.
32. In contrast to the foregoing, the relevant provisions of the 2010 Policy (also reproduced in para 22 above) substantially recast the termination clause. In terms thereof, it is now open to either party, i.e,, the employer or the employee, to terminate the contract without assigning any reason, by giving one month's notice, or payment in lieu thereof, with all permissible benefits. It is of course in purported exercise of this power that the impugned termination letters have been issued.
33. The question that now needs to be addressed is whether the plaintiffs are entitled to any injunctive relief in the foregoing legal and factual circumstances. As noted above, contracts of employment are generally regarded as falling within the class of contracts specified in section 21(b) of the Specific Relief Act, in respect of which specific performance will not be granted. This section is then read with section 56(f) to preclude any injunctive relief. However, in my view, that does not end the matter. Reference must also be made to section 57 of the Specific Relief Act, which provides as follows:-- "Notwithstanding section 56, clause (f), where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or implied, not to do a certain act, the circumstance that the Court is unable to compel specific performance of the affirmative agreement shall not preclude it from granting an injunction to perform the negative agreement: provided that the applicant has not failed to perform the contract so far as it is binding on him.
[illustrations omitted] ' In Nooruddin Hussain and another v. Diamond Vacuum Bottle Manufacturing Co. Ltd. And another PLD 1981 Kar. 720, a learned single Judge of this Court stated as follows (pp. 728-9):--- "A party who with open eyes an for valuable consideration has entered into a contract taking upon itself the burden to perform a negative covenant cannot possibly be lightly relieved from such covenant unless it brings the case within the four corners of section 57 of the Specific Relief Act.
Kerr on Injunction (pages 422 and 423) has summed up as follows:--- "If there is a negative covenant, the Court has, as a general rule, no discretion to exercise. If parties for valuable consideration, with their eyes open, contract that a particular thing shall not be done, all that a Court of equity has to do is to say by way of injunction that the thing shall not be done. In such a case the injunction does nothing more than give the sanction of the process of the Court to that which already is the contract between the parties. It is not then a question of the balance of convenience or inconvenience or of the amount of damage or injury: it is the specific personance (sic.) by the Court of that negative bargain which the parties have made with their eyes open between themselves unless the covenantee has, by his conduct or omissions, put himself in such an altered relation in the covenantor as to make it manifestly unjust for him to ask the Court to enforce the covenant by injunction, or the covenantee has suffered no damage by the breech of covenant and is offered an undertaking that will prevent any future damage by the continuing breach, and the granting of an injunction would inflict damage on the covenantor out of all proportion to the relief given to the covenantee."
' In the case of a contract containing both the positive and negative covenants, the Court can and will in a proper case restrain breach of the negative covenant with a view to enforce complete performance of the contract."
34. In my view, section 57 is applicable to the facts and circumstances of the present case. In the termination clause actually applicable to the contracts between the plaintiffs and KESC (i.e,, clause 5.1 of the 2002 Rules), the first paragraph contains an express negative covenant, and the second paragraph amounts to, or at least impliedly contains, a negative covenant. The present applications for interim relief are in fact directed towards these covenants, i.e,, that KESC cannot terminate the services of the plaintiffs without assigning any reason (the first paragraph) or without giving valid reasons on 90 days notice (the second paragraph). These covenants can, in my view, be enforced in terms of section 57 notwithstanding that the contract of employment itself may not be specifically enforceable.
35. KESC, on the other hand, has purported to issue the impugned notices under the termination clause of the 2010 Policy. However, since that provision does not apply, in my view, the purported act of termination is prima facie a nullity, since it is based on, and is an assertion and exercise of, a contractual power that is not part of the contracts at all. Learned counsel for KESC had strongly relied on a single Bench decision of this Court reported as Shahida Raza v. Oxford University Press 2003 PLC (C.S.) 11, where it was held that once the services had been terminated, the grant of injunctive relief would be tantamount to creating a "new situation", which was impermissible.
However, in that case, there did not appear to be any dispute as to the contractual power of termination; the only grievance was that that power had been wrongly exercised. In the present case, KESC has purported to exercise a contractual power that, prima facie, it does not have at all.
The termination letters may well therefore have no existence in the eyes of law, and for the reasons stated above, this would, at least prima-facie, appear to be the position. Inasmuch as KESC is seeking to give effect to the termination letters in a manner inconsistent with the negative covenants of the contractual clause actually applicable, it would seem that section 57 is applicable, and injunctive relief would be warranted.
36. One further point may be made in the context of the general principle that in the law of master and servant, an injunction will not issue to restore a servant to the service of an unwilling master, but that the servant's claim would sound only in damages. In the cases before me, the employer terminated the employee's services in exercise of a contractual power, and the dispute is whether that power lawfully existed or not. It is not the situation, which is usually the case, that the power is not in dispute, and the Only question is whether it was lawfully exercised or not. The principle of law stated above is invariably expressed in the context of the latter type of situations, and not the former. The distinction between the two is, in my view, fundamental, and therefore crucial to the proper resolution of the dispute before me. What KESC has purported to do is, prima facie, a nullity, an attempt to exercise a contractual power that simply does not exist in the relevant contracts.
Furthermore, what has purportedly been done appears, prima facie, to be inconsistent with express or implied negative covenants in the contracts. Now, these covenants are contained in the termination clause, which is a distinct and separable element of the contracts. The fact that other elements of the contracts may not be specifically enforceable is therefore no bar to the grant of injunctive relief in terms of section 57. There is however, another situation that could conceivably arise, and merits consideration: the employer simply repudiates the contract of employment.
However, no case that arose in such a factual matrix was cited before me, nor have been able to lay my hands on any such decision. It does not appear ever to have been the situation that the employer simply repudiated the contract of employment, admitted this position before the court, and stood ready to pay such damages as the court would deem fit to award. In all cases, the employer has defended his position as being contractually and legally valid. In the present case also, KESC's stand is not that it has simply repudiated the contracts of employment. It has carefully attempted to alter the terms and conditions of service, and then purported to exercise a contractual power in terms of the varied contracts. In other words, it recognized, at least implicitly, that if the contractual terms and conditions were governed by the 2002 Rules that could well constitute an insuperable impediment in the way of releasing the plaintiffs from employment. In this context, the allegations of mala fides as to the manner in which the 2010 Policy was brought about carry weight, and are an additional factor to be kept in mind while considering the question, of interim relief. Prima facie, it does appear that the 2010 Policy was enforced in a less than transparent manner, and once it was (at least according to KESC) in the field even in relation to the existing contracts with the plaintiffs, was immediately implemented against them. In my view, this prima facie raises a serious question about the bona fides of KESC, and also whether the contractual power conferred by clause 1.2 of the 2002 Rules was invoked in good faith and honestly, or was a mala fide exercise of the power conferred.
37. Learned counsel for KESC also relied on the share purchase agreement, whereby KESC was privatized, and in terms of which there was only a specified period stipulated during which the services of the employees could not be terminated. However, any such agreement cannot obviously affect the contracts of employment between KESC and its employees, which contracts are governed on their own terms, and certainly cannot be varied or altered as a result of a third party agreement (even if KESC was a party thereto).
38. Needless to say, the foregoing observations and analysis are of a tentative nature, and made only for purposes of the present applications for interim relief. The suits shall on the merits be heard and decided completely uninfluenced by what has been stated herein above, and strictly on the basis of the evidence led by the parties at the trial.
39. Before parting with this order, I would like to place on record my appreciation of the skilful and attractive manner in which both Mr. Salahuddin Ahmed, learned counsel for the plaintiffs, and Mr. Abdul Sattar Pirzada, learned counsel for KESC, presented their respective cases and the valuable assistance that they rendered to the Court.
40. In view of the foregoing discussion and analysis, I am of the view that the plaintiffs have been able to make out a case for interim injunctive relief. Accordingly, the applications are allowed, and the impugned 'termination letters are suspended, with consequential relief that any arrears of salaries and other emoluments, if not already dealt with in terms of previous orders, shall be paid in full within a period of 15 days.