Through this single order I proposed to decide Writ Petition No. 13387/2010 and W.P. No. 1695/2010.
2. Briefly stated the facts of these petitions are that petitioners in response to advertisement in daily "Dawn" applied for the posts of Management Trainee Officers to Respondent No. 1. The petitioners appeared in written test and after that they were interviewed and were finally selected but due to ban imposed by Federal Government, the matter was not finalized and the Respondent No. 1 changed the terms of appointment and petitioners were appointed on contract basis for a period of 2 years in violation of Staff Rules 2005 of Respondent No. 1 promulgated in 2007. The petitioners joined the duties, they were provided training by spending Rs. 60 million and after that they were posted in different branches of Bank. They started to work according to the terms of their service.
On expiry of contract period it was ,extended on 26.5.2010 up to 31.12.2010. The petitioners asserts that they applied to respondents in terms of their advertisement being permanent employee and completed all tests and interview but letter issued to them was on contract basis which is against the respondent's rules and regulations. The petitioners further assert that they are entitled for regularization of their services, the respondents have no authority to refuse them from regularization against permanent posts. They relied on Pakistan Telecommunication Company Limited through General. Manager and another V. Muhammad Zahid and 29 others (2010 SCMR 253, and Ikram Bari and 524 others V National Bank of Pakistan (2005 SCMR 100).
3. Notices were issued to respondents who submitted report and parawise comments and raised preliminary objections against the maintainability of petitions on the ground that service rules of Respondent No. 1 are non-statutory and as such writ petitions are riot maintainable. The petitioners have accepted the terms and conditions of the contract and as such they are not entitled fur any extension or regularization. An alternate remedy is available to them in the shape of departmental appeal/ representation and as such writ petition is not maintainable. It was further argued that this Court has no jurisdiction to entertain and decide the writ petitions as the dispute falls within the jurisdiction of Islamabad High Court.
4. Heard. Record perused.
5. The petitioners claim is that Respondent No. 1 called applications for permanent employment but subsequently they were recruited on contract basis and as such this act of respondents is malafide and of no legal effect. The petitioners are permanent employees as they completed their training and working as full-fledged Bank Officers with the respondents and they were given the authority to negotiate financing and to execute charge. documents of security and to issue undertakings on behalf of respondent/Bank. The petitioners relied on Muhammad Asim's case, Muhammad Asim and others V. Telecommunication and others (1997 PLC (CS) 1131), but in this case it was laid down by the Hon'ble Supreme Court of Pakistan that who ever completed 189 days including the artificial break, (shall be permanent Workman) but this case has no relevance with the petitioner's case as their' contract of service was in the first instance for specific period of two years. The Hon'ble Supreme Court of Pakistan dilated upon the identical :ssue in Naz!r A/wtad Panhwar V. Government of Sindh through Chief ieeretary, Sindh and others (2009 PLC 161) and Municipal Committee, Arifwala and others V. Muhammad Ramzan and 5 others (2005 SCMR 1721) and held that where there is a violation of principle of natural justice- writ petition is competent even if dispute involving is of contractual obligation. The Hon'ble Supreme Court of Pakistan in Ikram Bari and 524 others V. National Bank of Pakistan (2005 SCMR 100) decided the issue of contractual employment. In this case the bank employed Muqadam for securing the pledged stock (the security of finance) the employees claimed that they are the employees of bank and after the expiry of specific period as per law, they became the permanent employee of bank, the bank objected that the petitioners are the employee of contractor and as such they could not be treated the employee of Bank, but factually the Bank was debiting the salary of those employees to customer account being the part of finance in terms of finance. The Hon'ble Supreme Court of Pakistan held as under:-- 'An Islamic Welfare State is under an obligation to establish n society which is free from exploitation wherein social and ec.noinic justice is guaranteed to its citizens. The temporary Godown staff and the daily wages employees were continued in service of the Bank on payment of meager emoluments fixed by the Bank. In most of the case of these employees, there were artificial breaks in their service so as to circumvent the provisions of the Labour Laws and the Rules of the Bank and to Jen). them the salaries and other service benefits of regular employees. In some cases, the Bank did not issue formal letters-of appointment or termination to the employees - so as to preclude them to have access to Justice. There was no equilibrium of bargaining strength between the employer and the employees. The manner in which they had been dealt with by the Bank was a fraud on the statue.
The question of contract employee also came up before the Hon'ble Supreme Court of Pakistan in Dr.: Anwar Ali Sahto and others V. Federation of Pakistan and others (PLD 2002 SC 101) and was decided in the above said terms.
6. The question in the present case is whether the contract between the parties enable the petitioners to claim right of permanent employment and the other question whether the contract between the parties is with free consents and knowledge. The precise argument of learned counsel for the petitioners is that they are the employees of Respondent No. 1 and their appointment was in terms of the Respondent No. l's rules and Regulations 2005 as a permanent employee. For ascertaining the true interpretation of contract of petitioners the contract is reproduced as under: "(i) Our offer for training is for a period of two years with effect from the date of joining.
(ii)You will receive a stipend of Rs. 16,000/-- (Rupees Sixteen Thousand only) per month for the training.
(iii)Tax on your income shall be deducted at source by the Employer, (iv)You will be entitled to 30 working days Annual Leave if a year ( non-cumulative, non- encashable).
(v)Your training in the Bank will -count from the date you actually join the Bunk.
(vi)The training is upon your satisfaction passing physical examination given by the physician containing the detail of the tests i.e Blood complete examination (Hb%, CBC), with E.S.it, Urine R/E, L.F.T &X-ray Chest/ view.
The said training will not in any manner constitute employee/employer relationship between you and The Bank in that training. for all intent and purpose is only designed to provide you an opportunity to gather gainful knowledge and experience. Your training will therefore, not in any way be regulated by the terms and conditions of employment applicable to regular employees of the Bank, nor will you be entitled to any benefits admissible to any such employees.
(vii) You will throughout the term of your training, perform, observe and conform to such duties and instructions as may from time to time be assigned or communicated to you by the Bank.
During the training period the Bank reserves the right to terminate your contract at any time by giving you 30 days notice-without assigning any reason. The Bank can also extend training period beyond two years.
(x) In case you wish to discontinue the training you will give the Bank 30 days notice in writing. Your release before the expiry of the notice period will be at the sole discretion of the Bank. If such request is made by you and agreed by the Bank, you will pay the Bank an amount equivalent to the stipend, for the notice period not served.
(xi) The training does not offer any guarantee of regular employment and there is no obligation or commitment on the part of the Bank to offer you regular employment.
(xii) Other conditions.
(a) Before joining duties, you will provide Bon of Fidelity & Secrecy on the attached proforma.
You will be governed by the Rules, Regulations and orders issued by the Bank from time to time in all matters in respect of your contract, not specifically mentioned in this offer.
(,c) Job title, assignment and location of posting may be changed by the Management at its sole discretion.
(d) The terms & conditions of your contract shall at all times be governed by staff Regulations 2005 as amended from tune to tune.
2. Finally, it is understood that by your acceptance of this offer of training you will not, ispo facto, engage in any other business or occupation while under training.
3. If the above terms and conditions are acceptable to you then please sign the duplicate of this letter in token of your acceptance of this offer and submit the same alongwith joining report within 07 days of the receipt of this letter to Zonal Chief, ZTBL. Vehari. Please note that this offer will lapse if you fail to join us on the above mentioned date. Yours Sincerely, (Ijaz Akhtar Rao) Senior Vice President (HROD)
I, Muhammad Asim Rafiq confirm that the above terms and conditions are acceptable to me and that my date of joining with Zarai Taraqiati Bank Limited is 15-05-2008."
7. Under Clause VII of the Contract of Service. the argument of learned counsel for Respondent No. 1 is that petitioners after reading and accepting the said condition signed the contract and as such at, the time of its acceptance. the petitioners were aware of fact. that. they are not the employee of hank and by signing this agreement they will gain the knowledge of banking and nothing more, hut the said clause is in negation of clause (xii) (b) (d), these two clauses provide that terms and conditions of the contract shall at, all times he governed by staff Regulation 2005 as amended from time to time and ,,,de Clause-B the petitioners were to be governed by the Rules and Regulations and orders issued by the bank from time to time in all matters in respect of contract not specifically mentioned in this offer. Bank Staff Regulations 2005, provides as under:-- "2(ii). Persons employed in the service of the Bank. with whatever designation, on contract basis shall he governed by the terms and conditions as laid down in their respective employment contracts: Provided, however, that persons employed on contract for any specific assignment shall not exercise financial and administrative powers.
Provided further that a person serving the Bank on contract basis, shall not be eligible for deputation to any other institution.
7. (i) All appointments in the service of the Bank shall be made by direct recruitment and by a promotion from lower cadre or grade.
(ii) No person shall be appointed by the Bank as a regular employee who has completed sixtieth years of age.
(iii)The Bank may, however, employ a person on contract basis for a specific job for a duration not exceeding three years in aggregate on such terms & conditions as may be determined by the competent authority. provided however that such a person had not been retired or relieved from the service of the Bank under the terms of a Golden Handshake Scheme. an early retirement scheme or terminated in terms of staff regulations."
8. The above regulations only provides the contractual employ under Rule 6 ibid which provides that a contract employ can appointed only for a specific job for a duration not acceding 3 years in aggregate and such terms and conditions as determined by the competent authority and the clog for grant of contract service is only that the person had not been retired or relieved from the service of Bank under the terms of Golden Handshake Scheme, an early retirement scheme and terminated in Staff Regulations. The concept of Management Trainee is not available in the staff Rules. The contract employee is also not permitted under the staff Regulation, 2005 except in special circumstances. In the petitioner's case a new concept was introduced by the drafter of contract only to avoid the application of staff Rules 2005 and other laws. If we minutely examine the Clause-Vii of the appointment letter as vehemently relied upon by learned counsel for Respondent No. 1, the natural result of said clause is that the Bank, a financial institution whose 51% share-holding is with the Federal Government and remaining is with other Federal and Provincial institutions by investing a huge amount, is producing the Bank officers for rendering the services to other financial institutions. Admittedly Respondent No. 1 is doing banking business for a specific purpose i.e agricultural financing. No sane banker or management of Bank can utilize the public funds for the benefit of others or its competitors. If this is the case then the Management of Respondent No. 1 be taken to task why they have spent Rs. 60 Million 'for providing training to Management Trainees for a specific financing i.e agricultural financing but are not utilizing their expertise for its own bank. Respondent No. 1 is the manager of public money and as such management of said bank is responsible to render the accounts to public. It is not understandable that the management of Respondent No. 1 is utilizing the public money for the training of bank officers, the services of whose will be available to other Banks working mostly in private sector.
Respondent No. 1 is financial institution and is custodian of public funds and is not a charitable institution. Clause-vii if read with clause XII B & D the natural conclusion is that later part of appointment letter will prevail upon the upper part of the document. If this contract is regulate able by the rules and regulations of the bank where the Management Trainee is find mention then it is clear that the petitioner's contract is the contract of probationary officer of Bank.
9. From the above said discussion it is manifest that management of Respondent No. 1 decided to offer employment to newly qualified M.B.As or holding. professional degrees recognized by the Higher Education Commission for boosting their specific portfolio i.e agriculture financing but for avoiding their permanent employment they designed the appointment letter under the name and style of Management Trainee.
10.There is no denial on the part of Respondent No. 1 that petitioners were performing duties towards sanction of loan, negotiating of financial facilities with the customers, evaluating the securities and were also recovering the finances allowed to the customers. Some of the petitioners were posted in branches as Second Officers and even the managers. The petitioners negotiated all terms of finances on behalf of Respondents No. 1. This means Respondent No. 1 under the garb of word training was utilizing their expertise as Bank Officers.
11.The argument of learned counsel for respondent hat the contract employees are not enjoying the benefit of service rules and relies on judgment of Hodble Supreme Court. of Pakistan in Civil Appeals Nos. 468, 471-474, 632-633, 852-859. 883-892. 899-901. 950 & 974 of 2010 Pakistan Telecommunication Co. Itrd V Iqbal Nasir and others. The judgment relied upon by learned coons& for Respondent No 1 is with reference to Pakistan Telecommunication Co. Ltd. The portion of its management is managed and owned by a private person. Further. the agreement, examined by the Hon'ble Supreme Court of Pakistan is absolutely on different parameters. The said agreement does not, provide the application of service rules of P.T.C.L. There is only one clause which regulates the terms of contract i.e termination clause and that is the reason the Hon'ble Supreme Court of Pakistan has held that the contractual employees of PTCL are governed under the doctrine of Master and Servant. But in the present case there is specific mention of the application of service rules of Respondent No. 1. Further the business of Respondent No. 1 is entirely different from the PT.C.L. The P.T.C.L is providing services to its customers whereas Respondent No. 1 is providing financing for meeting the requirement of agriculturist and as such the circumstances or environment of P.T.C.L and Respondent No. 1 has no similarity and as such in my humble view the contract of petitioners is basically a contract of probationary officer as provided in the regulations of the Bank and ratio of probationary officer is applicable on the petitioners. The argument of learned counsel for the respondent that the petitioners have accepted the contract of service after knowing its contents and with free consent. This issue was dilated upon by the Hon'ble Supreme Court of Pakistan in Pakistan and others V. Public at Large and others (PLD 1987 Supreme Court 304) and it was held as under:-- "It was also argued that the impugned provisions of law amount to a contract between the Government and the civil servant and thus they involve his consent: in fact. it is not in the nature of a free consent between free agents. On the one hand. state power is projected in the form the statue and on the other, the civil servant has no choice of a bargain on these provisions when joining the service, lie cannot get it changed. In this sense it is distinguishable from a true "contract appointment". By the Government which. of course, would be dealt with differently. This assumption is supported by the language of the provision. The retirement has to be in "public interest. This element needs determination of a factual nature in each case. There is no question of consent by the affected person that his retirement would in fact be in public interest. In this behalf. there is no difference between retirement due to misconduct and retirement due to public interest. In either case, there has to he a determination and finding of fact. If in one there cannot be assumed any consent, it cannot be assumed in the other also. Thus, if the law provides safeguards against unjust retirements, it will not he the negation of the Queanic provision on contract and consent."
12.Reliance may also he plated on Hahibullah V. Government of the Punjab and 5 others (PLD 1980 Lahore 37' wherein it was held that the employer being placed in a position of authority and strength could always coerce employees to waive their legal protection and accept contractual terms at the pains of losing his job. Case of Ikram Bari and 524 others V National Bank of Pakistan (2005 SCMR 100) has also taken care of the contract of employment as referred to above and the Hon'ble Supreme Court of Pakistan has held that this type of contract is fraud on the statute.
13.The other argument of learned counsel for Respondent No. is that as the petitioners are contractual employees and as such writ petition is not maintainable. Hon'ble Supreme Court of Pakistan in a case of Dr. Anwar Ali Sahto and others V. Federation of Pakistan and others (PLD 2002 Supreme Court 101) held that even a contract employee could be reinstated in service in appropriated case if such employment become permanent by efflux of time. Reliance is also placed on Abdul Sattar and another V. Sui Northern Gas Pipelines Limited and others (2001 SCMR 1935). This issue came up before the Hon'ble Supreme Court of Pakistan in Pakistan International Airline Corporation and others V. Tanweer-ur-Rehman and others (PLD 2010 Supreme Court 676) and the Hon'ble Supreme Court of Pakistan has held that main touch stone for ascertaining the constitutional jurisdiction of this Court it has to be seen whether respondent is performing function in connection with the affairs of federation. In this case the P.I.A. was respondent in which 50% share holding is with the Federal. Government and Hon'ble Supreme Court of Pakistan has held as under: "In the preceding paragraphs, the purpose and functions for the establishment of the appellant- Corporation has been quoted with reference to Sections 3 and 4 of the Act, 1956, which provides that appellant-Corporation shall provide and further develop safe, efficient, adequate, economical and properly coordinated air-transport service within and outside the country. At this juncture, reference to Federal Legislative List Par-I of Fourth Schedule (Item No. 24), would not be out of context, whereby the carriage of persons and goods by sea or air has been made the legislative subject of the Parliament. Similarly, under Schedule-II. Item 5(2). Rules of Business, 1973, the appellant-Corporation has been included within the domain of Defence Division, Government of Pakistan. It is also apparent from the Act, 1956 that nine Directors of the appellant-Corporation, out of eleven, including the Chairman are to be appointed by the Federal Government. Although, the Government has no direct control in the appellant-Corporation as its affairs are to be managed by the Board of Directors tinder Section 5 of the Act, 1956, but the fact remains that the Federal Government has power to issue directives to the Corporation on matters of policy if, it considers necessary and such directives are binding on the Corporation. More so, the power to appoint Chairman and Directors remains with the Government and in addition to it the Government also holds the controlling shares of more than 50%. Further, the appellant-Corporation is providing carriage of persons and goods, which is one of the functions of the State, as mentioned in Federal Legislative List and its affairs are indirectly controlled by the Defence Division of the Federal Government, therefore, the above test stands fully satisfied and we are persuaded to hold that the appellant-Corporation is performing its functions in connection with the affairs of the Federation."
14.In the present case the entire share-holding is with the Federal Government and Provincial Government or the Government own corporation. Respondent No. 1 is the manager of public funds which the Federal Government provides them to boost up the Agricultural sector of the country and as such it is safely said that Respondent No. 1 is performing functions in connection with the affairs of Federation. Hence, the argument of learned counsel for respondent is repelled.
15.Last argument of learned counsel for respondent is that as the Federation of Pakistan is party in the petition and as such Islamabad High Court has exclusive jurisdiction to decide the petition.
Section 4 of the Act VII of 2010, Islamabad High Court, provides as under:-- "4. Jurisdiction--Islamabad High Court shall have, in respect of the Islamabad Capital Territory, original, appellate, revisional and other jurisdiction, as under the Constitution or the laws in force immediately before the commencement of this Act, is exercisable in respect of the said territory by the Lahore high Court."
16. Perusal of Section 4 shows that. jurisdiction of Islamabad High Court is restricted to the Islamabad Capital Territory only. No doubt registered office of respondent is at Islamabad but Respondent No. 1 is corporation and is carrying its business all over the Pakistan 1) including Multan and as such case of petitioner is covered under Section 20 CPC Explanation 2. In this case cause of action arose within the Jurisdiction of this Court Multan. Bench and as such this Court has the jurisdiction to entertain and decide these petitions. This argument is thus answered in negative.
17. The upshot of the above discussion is that these writ petitions succeed and are allowed and the petitioners will be dealt as the probationary officers in terms of Z.T.B.L Staff regulations- 2005 Clause 11(i), (ii).