C.M. No.5 of 2023: SHAMS MEHMOOD MIRZA, J. This is an application filed by respondent No.3 for placing on record order dated 28.11.2022 and HR Manual. This application is allowed subject to, all just and legal exceptions.
MAIN CASE:
2. This writ petition calls into question letter dated 01.12.2022 passed by respondent No.5 through which the petitioner was communicated about the decision of respondent No.3 for termination of his service.
3. The petitioner was recruited by Ravi Urban Development Authority (Authority) on 29.10.2020 as company secretary under a contract for a period of three years. He was subsequently appointed to the post of Executive Director (Legal) on 13.07.2021. Through the impugned order, the petitioner was informed about the decision of the Chief Executive Officer of the Authority/respondent No.3 regarding termination of his contract of employment. The copy of order dated 28.11.2022 passed by respondent No.3 has been placed on the record through C.M. No.5 of 2023.
4. Learned counsel in support of the grounds taken in the writ petition submits that respondent No.3 had no authority to terminate the contract bf employment of the petitioner in terms of section 4 of Ravi Urban Development Authority Act, 2020 (the Act). It is stated that the Board of the Authority under subsection (2) of section 4 of the Act exercises all powers and performs all functions of the Authority. According to the petitioner, subsection (6) of section 9 of the Act has circumscribed the powers of respondent No.3 which have been made subject to the general supervision and control of the Board. The Board, it is alleged, has not delegated any of its powers to respondent No.3. In this regard, section 12 of the Act is pressed into service, which according to learned counsel, has a non obstante clause and envisages two modes of termination i.e. retirement or removal from the service by the Authority and not by respondent No.3. The petitioner also submits that the impugned communication by respondent No.5 mentions Regulation 74 of Authority's Human Resource Regulations and Procedure Manual (HR Manual) 2020 which regulation does not relate to termination of petitioner's contract of employment. It is furthermore submitted that respondent No.3 opted not to file the parawise comments to this petition and as such the allegation of mala fide levelled by the petitioner stands admitted. The learned counsel also referred to some judgments that shall be discussed later in the judgment.
5. Learned counsel for respondent No.3 contends that the Rules and Regulations of the Authority are non-statutory and, therefore, this writ petition is not maintainable. He furthermore places reliance on the judgments reported as Pakistan Electric Power Company v. Syed Salahuddin and others 2022 SCMR 1991 and Sui Southern Gas Company Limited and others v. Saeed Ahmad Khoso and another 2022 SCMR 1256.
6. Arguments heard and record perused.
7. Section 9 (1) of the Act envisages the appointment of Chief Executive Officer of the Authority who is responsible for the management, administration and operations. Subsection (6) of section 9 states that: Subject to this Act and general supervision and control of the Board, the CEO may exercise all powers and perform all functions of the Authority and the Board.
Section 11 of the Act relates to the appointment of the employees by the Authority and stipulates that: The Authority may appoint such employees including advisors, experts and consultants as it considers necessary for the efficient performance of its functions on such terms and conditions as may be prescribed by the regulations.
Section 12 contemplates termination from service of the employees of the Authority. This provision reads as under: Notwithstanding anything contained in section 11 or any rules or regulations made or orders or instructions issued thereunder or contained in the terms and conditions of any person employed or serving under the Authority or any Agency, the Authority may, at any time, retire or remove from such service any person after informing him in writing of the grounds on which such action is proposed to be taken and giving him in writing of the grounds on which such action is proposed to be taken and giving him an opportunity of showing cause in writing within a period of fourteen days.
8. The first contention of the petitioner is that respondent No.3 has no authority under the Act to terminate his service contract. In the case of a statutory corporation the power and authority to do any particular thing is to be found in the language of the statute, in what it expressly provides and what it inferentially provides as a matter of necessary implication (see Kathleen Investments (Australia) Ltd. v. Australian Atomic Energy Commission [1977] HCA 55). Subsection (6) of section 9 contemplates delegation of all powers and functions of the Authority and The Board onto the Chief Executive Officer. This provision confers on the Chief Executive Officer the legal capacity to exercise the powers and functions of the Authority and its Board without there being the need for any formal instrument of delegation. Subsection (6) of section 9 is an express provision establishing the existence of a power to delegate. It is important to note the distinction between the authorization by the corporation to its officials to do certain acts and delegation of power under the terms of the statute. In the case of statutory delegation, the delegate exercises the powers and performs the functions delegated to him by acting in his own name as the delegation involves an authorization to act personally rather than as an agent. The nature of such a delegation was described in B (A Solicitor) v. Victorian Lawyers RPA Ltd. (2002) 6 VR 642 as under: A delegate acting is not an agent who exercises the [delegator's] powers but rather, as the new repository of the powers, exercises his own powers as a delegate.
In case where the Authority has not delegated its power but has only authorized a person or an employee to act in exercise of its power, the act is to be done in the name of the Authority (see London County Council v. Agricultural Food Products Ltd. [1955] 2 Q.B. 218 per Romer L.J. at p.224.). On the other hand, where a delegate is exercising the power delegated to him under a statute, he may validly exercise that power in his own name (see Owendale (Pvt.) Ltd. v. Anthony (1967) 117 CLR 539). Similarly, it is well established that when a power is so delegated, the delegate must exercise his own independent discretion in the exercise of the delegated power (see Northern Land Council v. Quall [20201 HCA 33). However, this principle is not absolute as it yields to any contrary indicator found in the language, scope or object of the statute. The words appearing in subsection (6) of section 9 "Subject to this Act and general supervision and control of the Board" do not in any manner whatsoever hamper or curtail the powers of respondent No.3 and/or make the approval of the Authority or Board, as the case may be, a condition precedent for the decisions taken by respondent No.3. Respondent No.3, therefore, can perform all powers and functions of the Authority for the purposes of the appointment and termination from service of the employees of the Authority.
9. The employment contract of the petitioner initially as Company Secretary and subsequently as Executive Director Legal was signed by respondent No.3. This power for appointment of petitioner was also exercised by respondent No.3 under section 11 of the Act by virtue of the delegation of powers and functions conferred on him under subsection (6) of section 9 of the Act. By the same token, respondent No.3 by recourse to subsection (6) of section 9 of the Act was empowered to pass the order for termination of the services of the petitioner.
10. Letter dated 01.12.2022 was addressed to the petitioner by respondent No.5 conveying the decision of respondent No.3 about termination of his service contract. It was this letter that was challenged in the writ petition on the ground that either respondent No.5 had no authority to issue such a letter or that respondent No.3 had no authority to terminate the service of the petitioner. As noted above, letter dated 01.12.2022 was a mere communication and that copy of order dated 28.11.2022 passed by respondent No.3 was placed on record during the proceedings of this case.
The petitioner opted not to amend the prayer clause of this petition for bringing under challenge order dated 28.11.2022 and instead argued the case on merits. In the opinion of the Court, this lapse makes no difference as the petitioner urged all possible grounds at hearing for making a challenge to order dated 28.11.2022.
11. A statutory corporation is an artificial legal construct which acts through its employees. As noted above, the statute can either expressly or impliedly assign the functions and powers to the employees/officers of the corporation. In the present case, the Act has assigned the powers and functions of the Authority and its Board to respondent No.3 who in exercise of that power terminated the service contract of the petitioner. This power under the scheme of the Act was validly exercised by respondent No.3 to which no exception can be taken. The petitioner relied on the case of House Building Finance Corporation v. Inayatullah Shaikh 1999 SCMR 311. In this case, the Managing Director of the corporation had been delegated full powers, inter alia, to terminate the services of the employees. The termination order was, however, passed by the General Manager and thus the High Court allowed the constitutional petition as the formal order by the Managing Director was not communicated to the petitioner. The Supreme Court also dismissed the appeal of the corporation on the ground that it failed to produce the order of Managing Director before it. In the present case, however, order dated 28.11.2022 has been produced before this Court and was made available to the petitioner. The precedent cited by the petitioner thus has no applicability to the facts of the present case.
12. Section 11 of the Act makes provision for the appointment of the employees of the Authority on such terms and conditions as may be prescribed by the regulations/HR Manual. The Act, however, does not make any distinction between the regular employees of the Authority and employees recruited on contract. The Authority has formulated HR Manual for regulating, inter alia, the terms and conditions for the appointment and dismissal of the employees of the Authority and termination of their services. Regulation 8 deals with various types of appointments of the employees including direct appointment, ad-hoc and temporary appointment, appointment on contract, daily wagers. Part II of the HR Manual concerns with the appointment, probation and transfers of the employees of the Authority. Regulations 10 to 12 prescribe separately the recruitment process and eligibility criteria for each type of appointment. Regulation 8(3) states that "Experts having professional qualifications and experience in the relevant field may be appointed on contract basis subject to such conditions as may be approved by the Appointing Authority." Part VII covers the conduct and dismissal of the regular employees of the Authority and lays down elaborate procedures to be followed for disciplinary actions and provides for the penalties to be imposed. It also provides that the provisions of Punjab Employees Efficiency, Discipline and Accountability Act, 2006 shall apply in case of any discrepancy and ambiguity in the procedure of HR Manual. Part VIII of the HR Manual deals specifically with termination of the employees working under contract as is manifest from Regulation 75. Regulation 76 touches upon termination simpliciter and termination in consequence of initiation and proof of misconduct and harassm ent.
13. As noted and explained above, the Act reserves with the Authority the power to determine the terms and conditions of the appointment and employment of the employees. The terms of the employment are regulated by the HR Manual, which is non-statutory in nature. The petitioner has not taken any position to the contrary. The employment contract of the petitioner has been perused which does not refer to any provision of the Act. It shall, therefore, be taken to have been made under the provisions of HR Manual dealing with contract employment. The contract explicitly states that the petitioner shall -have no right of regular appointment and that the contract employment shall not subsequently culminate into a regular service. Clause 23 of the contract reads as under: TERMINATION / RESIGNATION: After the probation period has ended, you contract appointment shall be liable to termination on one month's notice or on payment of one month's salary in lieu thereof, on either side, without assigning any reason.
The contract has freely been entered into by the petitioner with the Authority and he is thus bound by its terms and conditions. Absent the statutory underpinning, the rule of master and servant would govern the employment contract of the petitioner. The Supreme Court in judgment reported as Anwar Hussain v. Agricultural Development Bank of Pakistan PLD 1984 SC 194 made the following observations which are squarely applicable to the facts of the present case: Where a corporation is set up by a statute but the Government does not reserve to itself the power to regulate the conditions of service of the employees under the corporation and the statute itself also does not prescribe any condition but leaves the matter entirely in the discretion of the corporation who is given the power to frame rules and regulations in that regard so that the employee is left with no protection under the statute itself, then the corporation must be held to be the sole arbiter in the matter of prescribing the terms and conditions of its employees and competent to deal with them in accordance with the terms and conditions so prescribed by it. In such situation the employee cannot claim to be a person possessed of any legal character within the meaning of section 42 of the Specific Relief Act and in case of his wrongful dismissal or termination of service, the princip!e of master and servant will fully apply and he can only claim damages but not reinstatement to his post.
14. The petitioner contends that section 12 of the Act contains a non-obstante clause that excludes the operation of section 11 and that of the HR Manual. The implication being that termination simpliciter of the petitioner runs foul of section 12 of the Act. This reading of the provision in question by the petitioner is not correct. In the first place, section 12 envisages retirement or removal from service of an employee which has direct reference to the major penalties provided for in Regulation 60 of the HR Manual. Similarly, the issuance of show-cause notice and affording personal hearing to the accused official as prescribed by section 12 bears nexus to Regulation 65 of the HR Manual which provides for the procedure after holding of the inquiry and submission of the report from the inquiry officer or inquiry committee. The termination of the petitioner, however, did not take place on any allegation of misconduct warranting holding of a regular inquiry as provided for Part VII of the HR Manual. It is clear from the impugned communication and the order of respondent No.3 that the services of the petitioner were terminated in terms of clause 23 of his contract of employment read with clause 74 of HR Manual and not under section 12 of the Act. This was a case for termination simpliciter under the terms of the contract rather than statutory termination. Any reference to section 12 by the petitioner is, therefore, irrelevant. HR Manual has no statutory underpinning and, therefore, the judgments relied upon by the learned counsel for respondent No.3 are squarely applicable to facts and circumstances of the case.
15. Learned counsel for respondent No.3 submits that the latest HR Manual has been appended with C.M. No.5 of 2023 and that clause 74 thereof deals with determination of the services of employees of the Authority which clause was mentioned in the impugned letter and order dated 28.11.2022. It is accordingly contended that the impugned communication and orders of termination passed by respondent No.3 rightly mentioned clause 74 of HR Manual. In the opinion of this Court, clause 74 of the latest HR Manual and clause 76 of the HR Manual 2020 are identical in their terms. Sub-clause (c) of both the provisions state that the Authority may terminate the employment of an employee without assigning any reason. It, therefore, makes no difference if clause 74 was wrongly mentioned in the impugned communication and in order dated 28.11.2022 passed by respondent No.3 terminating the services of the petitioner.
16. This Court has not come across any allegation of mala fide in the petition warranting a reply by respondent No.3. Be that as it may, mala fide being a question of fact cannot be adjudicated by this Court in the exercise of its Constitutional jurisdiction.
17. For what has been stated above, the petitioner has failed to make out any case for interference in the impugned letter and order dated 28.11.2022 passed by respondent No.3. This writ petition is accordingly dismissed.