1. SHAFIUR RAHMAN, J.-Leave to appeal was granted to the Genera Manager, Canteen Stores Department, Karachi, to examine the following questions of law arising out of the judgment of the High Court of Sind & Baluchistan, dated 25-8-1971 whereby the Constitutional Petition filed by the respondent, employee was allowed and the order of termination of his services was held to be without lawful authority and of no legal effect
(i) Whether Canteen Stores Department is a Government Department so as to make the respondent a Government employee, and
(ii) Whether respondent No. 1 is entitled to protection under Article 177 of the Constitution of 1962.
2. The respondent No. 1 was appointed as Assistant in the clearing Department, of the Canteen Stores Department Government of Pakistan on 18-9-1948 and after a month's probation was confirmed in the appoint--ment on 1-12-1948 after which his service was made terminable on one month's notice on either side. The respondent was later appointed In. Charge Claims Section Head Office Canteen Stores Department, Karachi with effect from 9-5-1963. On 20th January, 1965 he was appointed a member of the Board of Inquiry by the General Manager of the Canteen Stores Department to enquire into certain losses. While so acting accord--ing to him, he incurred the displeasure of certain elements so much so that when an incident of theft of a cheque and wrongful withdrawal of Rs. 30,000 from the bank out of Canteen funds took place, the respon--dent was implicated in the case and arrested by the Police on 18-2-1965. He was suspended from service. The criminal case against him could not proceed and was dropped. Nevertheless by an order dated 8th January, 1968-
(i) his services were terminated with immediate effect "as per terms and conditions vide para. (c) of your appointment".
(ii) he was held not "entitled to full pay and allowances" for the period 18-2-1965 to 8-1-1968 the period of his suspension.
3. After exhausting the departmental remedies the respondent filed a constitutional petition on 31-8- 1968 challenging the termination of his services. His case in short was that his service, was "non- defence civilian service under the control of Ministry of Defence" and he was not a "defence personnel." He claimed that the condition of his service making it terminable on one month's notice on either side, was illegal and unconstitutional. He claimed constitutional protection for his service.
4. He made a representation to the General Manager of the Canteen Stores Department and then preferred an appeal to the Quarter Master-General Headquarter, Rawalpindi but without any success. He sought the following reliefs :-
(a) "declaration that the order terminating the services of the petitioner is illegal, void invalid, and unenforceable ab initio ;
(b) That the petitioner continues to be a permanent member of the staff of the Canteen Stores Department as if he has not been suspended from service and is entitled to his due position, pay allowance incre--ments, promotions and all other rights and privileges appurtenant thereto, and
(c) direct the respondent, to re-instate the petitioner into his due position to which the petitioner would have been entitled if not suspended and removed from service ;
(d) any other relief to which the petitioner is found entitled;
(e) costs of the proceedings."
5. The High Court called for parawise comments of the appellant on the Constitutional petition. The appellant took up the pier that "Canteen Stores Department is not a Government Department and the petitioner was not an employee of the Government of Pakistan as alleged in the petition". The terms and conditions of his appointment, authorized the appellant to dispense with his services on one month's notice and in case of gross misconduct with--out notice. It was stated that the writ petitioner was involved in the theft of cheque and fraudulent withdrawal of Rs. 39,000 one of Canteen funds. The termination of his service was strictly in accordance with the terms of his employment. In the written statement filed by the appellant, apart from the position taken up in the parawise comments, it was also urged that the employment of the writ petitioner was in connection with defend and consequently his service was at pleasure, and he enjoyed none of the Constitu--tional protections.
6. The High Court examined in detail the legal status of the Canteen Stores Department, and noted the changes that took place with regard to it from time to time and ultimately found that the respondent writ peti--tioner was recruited and employed as a Government servant. Drawing support from the decision of this Court in Fayyaz A.I Khan v. Government of West Pakistan (1971- SCMR 454) it was held that the respondent continued to be, till the termination of his employment, a Government servant. As regards the objection that the respondent was serving in connection with defence the High Court held as follows:- "Thus the main question is whether the petitioner was holding a post connected with the defence or he was holding civil post in connection with the affairs of the Centre, as the two categories of posts are exclusive of each other and the guarantee provided by Article 177 of the Constitution does not extend to the defence service but the safeguard against summary dismissal from service is provided in case of latter post. On consideration of .The nature of department and the duties performed by the petitioner we are of the view that the petitioner did not hold any post connected with Defence. Of course the Canteen service was mainly intended for the Defence Personnel and was controlled by the Ministry of Defence but it does not mean that the service of the petitioner was connected with the Defence. Admittedly it is a non-- Government organisation and it is neither financed by the Government nor any provision about its expenditure etc. Is made in the defence budget. It has not been contended that Army Act is applicable to the petitioner or b5 the staff employed by the Canteen Stores Depart--ment. Even in the comments which were offered no plea was taken that the services of the petitioner was connected with the defence. It was only in the written statement for the first time that this plea was taken". .
7. Thereafter the High Court had no difficulty in holding that termination of service of the respondent without affording him an opportunity to show cause amounted to denial of constitutional protection. The following obser--vations were made on this point :- "The petitioner was a permanent Government servant and therefore under Article 177 (I) (h) of the Constitution of 1962 he could not be dismissed or removed from service unless he had been given a reason--able opportunity of showing cause against the action proposed to be taken with respect to him------.Thus the contravention of Article 177 renders removal of the petitioner from service illegal and ultra vires."
8. The plea of the appellant that the services of the writ petitioner were terminated in accordance with the terms of contract was rejected by reference to decision of this Court in Ghulam Sarwar v.
9. Pakistan (PLD 1962 SC 142). The respondent writ petitioner was therefore granted substantial relief.
10. The learned counsel for the appellant contended that no doubt the Canteen service of Pakistan was started in 1948 under orders of the Governor---General-in-Council, as a purely Government undertaking, but in 1959 a transformation had taken place and its character as a Government under--taking was changed into a private Commercial Organisation. All the employees then in service were duly informed of the change and their terms and conditions of service were revised and each one, including the respon--dent writ petitioner was informed of it and in token of his acceptance of these revised terms and conditions of service, he had signed the circular. In this manner, even if he were a Government servant initially, by mutual agreement he ceased to be so from 21.2-1959 and thereafter the relationship between him and the appellant being that of master and servants there was no question of any constitutional guarantee being available to him. In the alternative, the argument is that when recruited and after the canteen service was reorganized, all through the respondent writ petitioner re--mained employed in connection with defence, under Ministry of Defence. As he did not belong to an All Pakistan Civil Service nor ever held a civil post in connection with the affairs of the Federation or Province he could not lay claim to constitutional guarantees available to civil servants.
11. The learned counsel for the appellant has, in the end relied on a judgment of the Lahore High Court in Writ Petition No. 332/63 (Niaz Muhammad Khan v. Quarter Master-General, G. H. Q.), decided on 15-1-1970 which supports both the grounds taken up by him.
12. The High Court quite correctly proceeded to determine at first the legal character of the appointment offered to and accepted by the respondent writ petitioner in 1948. It was held to be an appointment to Government service. Their Lordships, however, speaking with utmost respect, did not examine with reference to that date, whether his appointment was on a civil post of the Federation or on a post connected with defence. Instead, this question was examined, as appears from the following observations of the High Court, in the context of altered position of the C. S. D. As from 1959: "Admittedly, it is a non-Government organisation and it is neither financed by the Government nor any provision about its expenditure etc. Is made in the defence budget."
13. Such admittedly was not the position when the writ petitioner was recruited to the service or even during the period 1948-1958. A reference to Canteen Services Pakistan, Manual of Instructions and Procedure published under the authority of Q. M. G.'s Cr. On 14-12-1965 (hereinafter referred to as the Manual)- fully bears it out as would appear from the following introductory note:- "The Army Canteen Board was the first venture initiated after World War I for the purpose of catering primarily for the British Forces in the Indian Sub-continent.
14. Following the liquidation of the Army Canteen Board in 1927-28 the Canteen Contractors Syndicate Ltd. Was formed on the basis of shares assessed on the strength of each unit stationed in India ......
15. The Articles of Association drawn up and signed between the Secretary of State for India and the Government of India with refe--rence to the Canteen Contractors Syndicate' underlined the proviso that, in the event of war, the Canteen Contractors Syndicate would be taken over by Government-lock, stock and barrel.
16. This contingency did eventuate with World War If. Thus in 1942 the Canteen Contractors Syndicate Ltd. Became the "Canteen Stores Department-Government of India." After World War II, from profit accrued the Government of India in 1947 returned to all canteen contractors on the Share Register their share capital investment with the agreed final dividend on the shares held by each individual canteen contractor.
17. With the Partition of India, the entire assets of the C. S. D. (India) were divided in the agreed proportion of 2/5 and 3/5 respectively between Pakistan and India.
18. Thus emerged the Canteen Stores Department of Pakistan, catering for the Armed Forces of Pakistan under. The aegis of the Ministry of Defence."
19. The first official document on the subject after Independence .Is the sanction conveyed by the Government of. Pakistan, Ministry of Defence on 7th February 1948 to Quarter Master-General in the following words:- Canteen Service (Pakistan)
20. "I am directed to convey the sanction of the Governor-General-in-- Council to the inauguration of the above service as a Government undertaking w. e. f. 1st January 1948.
2. The Service will comprise.
(i) Canteen Service (Pakistan) Board of Control.
(ii) Canteen Stores Department.
(3) The duties and functions of the bodies mentioned above will be as shown in the Annexure to this letter.
21. The duties of the Canteen Stores Department were listed-and included, inter alla, the following :- "The purchase through the Ministry of Commerce, Industries and Works (Supply Division) or from Suppliers direct as may be suitable; of all canteen stores including beer and cigarettes, required for canteen service (Pakistan) and to the extent considered practicable by the Q M G for contractors operating institutes and C. B. I. L.'s etc. In peace or war areas and for other bodies authorized to deal with the Canteen Stores Department as approved by the A M G's Branch."
22. The very opening words of Chapter I of the Manual .Provides as follows:- "l. Mission-The mission of C. S. D. Is-
(a) to provide entitled personnel with standard quality items of day to day use at reasonable rates;
(b) to form the basis of an efficient Supply Organisation in War."
23. At page 35 of the Manual the following entries exist: "Managerial staff.-These are Class I and Class II Gazetted appoint--ments.
24. For Class I appointments only ex-Service Officers are eligible.
25. For Class II exh-Service Officer and J C O's are eligible. They are governed by Code of Discipline, Government Servants Conduct Rules and C. S. R."
26. It is common ground that no organizational change, no alteration in legal character of C. S. D. Took place up to 1958.
27. It is clear from these references that the C. S. D. In 1948 was entirely a Government undertaking under the Ministry of Defence. The Officers employed in the higher echelon were organized into All- Pakistan Class 1 and Class II service and were governed in the matter of Discipline etc. By Civil Service Rules. This establishment was connected with defence for an important reason for its very existence was to "form the basis of an efficient supply organisation in war."
28. The next question requiring examination in the case is whether, the sub--sequent organizational changes, affected the legal character and status of the respondent writ petitioner. This change was brought about by way of revision of Government policy as would clearly appear from the following recital in the letter dated 21st February, 1959:- "I am directed to say that in this Ministry's letter No. 302/100/Q (CAN) dated 7th February 1948 orders were issued declaring the Canteen Services (Pakistan) as a Government undertaking. The position has since been revised and it has been decided that, as this service was inaugurated from non-public funds the canteen stores department (Pakistan) should be treated as a non- Government Commercial concern under the control of Ministry of Defence for the welfare of the Armed Forces Personnel. Accordingly neither the transactions of this organisation will pass through government accounts nor will its trade results be exhibited in ,the Commercial Appendices of the Defence Services. Its accounts will, however, continue to be audited by the Military Accounts Department half-yearly against payment of Rs. 1,200 (Rupees one thousand two hundred only) per annum as audit fee."
29. Such an organisational change left unaffected the employees. Even government servants could be made to serve on Statutory, autonomous or private undertakings, without in the least detracting from their being government servants. The terms and conditions of service circulated to the employees on 4-7-1957 are a reproduction of those contained in the Manual. These cannot stand up to constitutional guarantees, and if the constitutional guarantees are themselves wanting the writ jurisdiction of the High Court could not be available for enforcing any other interest.
30. The state of law in September 1948 when the petitioner entered service was that Government of India Act 1935 as amended was in force. Part X Chapter I dealt with Defence Services and its section 238 having the title provisions as to certain civilian personnel enacted as follows :- "The provisions of the three last preceding sections shall apply in relation to persons who, not being members of His Majesty's forces hold, or have held posts in India connected with the equipment or administration of those forces or otherwise connected with defence, as they apply in relation to persons who are, or have been, members of those forces."
31. On the finding of the High Court that "of course the canteen service was mainly intended for the Defences Personnel and was controlled by the Ministry of Defence" the writ petitioner would fall within the category prescribed by section 238 and as such excluded from protection afforded by section 240 to member of a Civil Service or to a holder of a civil post.
32. The termination of the service of the writ petitioner took place on 8th January 1968. At that time the constitution of 1962 was in force. Clause (1) or Article 234 of that Constitution provided, as follows: "Subject to this Constitution and the law, any person who, immediately before the commencing - day, was in the service of Pakistan shall, as from that day, continue in the service of Pakistan on the same terms and conditions as were applicable to him immediately before that day."
33. "A person who is a member of All-Pakistan Service, or any of the Defence Services of Pakistan or of a civil service of the Centre, or who holds a post connected with defence or a civil post in connection with the affairs of the centre, shall hold office during the pleasure of the President."
34. Protection against dismissal, removal and reduction in rank was then guaranteed by clause (1) of Article 177 to "a person who is a member of an All Pakistan service or of a civil service of the centre or of a Province, or who holds a civil post in connection with the affairs of the centre or of a province."
35. One of the first cases involving interpretation and application of sec--tions 235, 238 and 240 of Government of India Act, 1935 coming to the Supreme Court is that of Ghairat Hayat v. Federatiolt (PLD 1960 SC 227). Ghairat Hayat was a clerk, a civilian, employed in the Central Ordinance Depot.
36. He was dismissed from service w.e.f. 15-12-19:4 by an order passed on 22-10-1955. His challenge to the order failed on the ground that he was neither a member of a civil service nor holding a civil post under the Crown and for that reason the protection given under subsection (3) of section 240, Government of India Act was not available to him.
37. The same point again came up in the case of Government of Pakistan v. Bokhary (PLD 1961 SC 605). Mr. Bokhary was an Assistant Stores Officer in Central Medical Stores Depot, Nowshera, but bad the distinction of belonging to Central Service Class Il (Gazetted) established by notification dated 14-10-1955. It was held that :- "Difficulties of this character could be avoided by interpreting the two Articles 180 and l8l of the late Constitution so as to protect persons who occupy civil posts or belong to a civil service under the State, even though that post they hold for the time being may be connected with defence. Article 181 qualifies the pre-emptory pro--visions of Article 180. There is no difficulty in assuming that a compe--tent authority may include certain posts of a civilian nature albeit con--nected with defence in Civil Service of the Federation, by a notification under rule 17 of the classification Rules.
38. The incumbents of posts covered by such a notification would the answer the description "member of a civil service of the Federation" within the meaning 6f Article 181 and to that extent the effect of Article 180 which makes their service terminable at pleasure because of their posts being connected with defence, would be modified by the requirements of Article 181."
39. On this statement of law Mr. Bakhary was afforded Constitutional protection for the sole reason that he belonged to a classified Class II service.
40. This very exposition of law was also applied in the case of Abdul Majid Sheikh v. Mushafe Ahmad etc. (PL-D 1965SC208), Pakistan v. Ayub Khan (PLD 1965SC661) and Republic of Pakistan v. Amjad A.I Mirza (PLD 1977 SC 182).