' A.
0. RAZIUR RAHMAN (MEMBER). -The appellant, a permanent employee of the Pakistan Ordnance Factories, was posted as Managing Director of the Wah Industries Limited, Wah Cantt., a subsidiary of the Pakistan Ordnance Factories, which was responsible for the marketing of Pakistan Ordnance Factories products, other than arms and ammunition. The order of the P.O.F. Approving the transfer is contained in Memo. No, 4119/902/O.F.-1/B-492/Secy., dated 8th May, 1975 the relevant portions of which are reproduced below : " I am directed to convey sanction of the P.O.F. Board to the transfer of Mr. C. M. Sharif, Chief Supdt.
(Grade-19) as Managing Director, W.I.L, with effect from 16th September, 1974 on the terms and conditions of service specified in the Annexure to this letter. {{TABLE TEXT}} (Sd.)
(A. R. Sheikh)
Secretary, P.O.F. Board.
Annexure to P.
0. F. Board Letter No, 4119190210E-1/B/492-Secy., dated 8th May, 1975. {{TABLE TEXT}}
(1) Pay and Allowances In the scale of Rs, 2,300-100- 2,600 (N.P.S. No, 20)
(2) Insurance against accident/1 death etc.
(3) Participation in the Bene- I volent Fund.
(4) Provident Fund and Pension }. Rules.
(5) Medical-Free for self and family members. T.A./D.A. Same as applicable to the officers in P.O.Fs.
(7) Leave Salary and Pension contributions. These will be made by W.I.L. And accounted for by the C.O.F.A."
' The appellant served as Managing Director upto 16th February, 1982 on which date, by an office order bearing No, 4119/4799/0E-1/6 (P), issued over the signature of the Chief Administrative Officer, P.O.F. Board, the appellant was transferred from the post of Managing Director, W.I.L. To the post of Dy. P.T.E./E1. Since the officer had put in about 8 years of service as Managing Director in Grade-20 and the post to which he was transferred on reversion from the Wah Industries Limited was a Grade-19 post, he felt aggrieved that he was being sent back to a lower post without justification and, therefore, he preferred a representation to the departmental appellate authority, namely, the Secretary, Defence Production Division, in which he prayed for reconsideration of the matter and appointment to a suitable Grade-20 post, with effect from the date of his relinquishment of charge as Managing Director, W.I.L. This representation was submitted by him on 14th March, 1982 but, since no decision was given on this representation for more than 90 days, he came up before us in appeal under section 4 of the Service Tribunals Act, 1973, by an application, dated 10th July, 1982.
After preliminary hearing on 28th July, 1982, it was admitted for regular hearing by order passed on the same date. Subsequently, by an application, dated 2nd February, 1983 the appellant prayed for an early hearing of the case, on the ground that, as he was due for retirement shortly and was proceeding on L. P. R. With effect from 19th July, 1983 his appeal may be heard and decided "out of turn" on compassionate grounds, in order to enable him to get his personal accounts and pension problems adjusted before actual retirement. On this application, the Chairman passed the following order : " Fix in March as appellant is retiring in July.
(Sd.)
Chairman 3-2.1983"
' Thereafter, the matter came up before us for hearing on 6th March, 1983, when both the parties were heard at length, as a sequel to which the present order is being passed.
2. The main grounds on which the appeal has been preferred before us have been enumerated in the petition of appeal and were also verbally pressed by the learned counsel for the appellant during the hearing. These are briefly listed below :
(i) The impugned order of posting/transfer from the post of Managing Director, W.I.L. To that of Deputy P.T.E./EI, is actually reduction in rank from Grade-20 to 19.
(ii) Such reduction in rank amounts to a major penalty, which could be inflicted only after following the detailed procedure prescribed in this behalf in the E &:D Rules, 1973.
(iii) Although W.I.L. Was a registered company, it was completely under the control of the P.O.F.
Board, which also functioned as the Board of Directors of W.I.L. And controlled its working. W.I.L. Was thus a part and parcel and virtually a department or, at best, an extension of the P.O.F. His transfer, from P.O.F. To W.I.L. And back was, therefore, for all practical purposes, a domestic arrangement, under which transfer from a higher to a lower .Post amounted to reduction in rank.
(iv) Since the posting of the appellant as Managing Director, W.I.L. Was on a regular basis and he held this appointment for about 7 years and a half, he had acquired a vested right in the higher appointment, which could not be taken away from him, unless some flaw in his work or conduct had been detected and action taken against him under the rules.
(v) If, however, for administrative reasons, it was considered necessary to shift him from the post of Managing Director, W.I.L. He could have been transferred to a post carrying the same grade which he had been holding for so many years.
(vi) By virtue of his seniority in Grade-19, he was eligible for promotion to the next higher grade in the normal course and, since he had been found fit to hold a post in Grade-20 for more than 7 years, there was no reason why he should be demoted.
(vii) The impugned order was not only going to cause him immediate financial loss but also have the long range effect of reducing his prospective pension.
(viii) The impugned order was mala fide having been passed in colourable exercise of powers.
3. During the course of the hearing, it was pointed out by the learned counsel for the appellant, as well as the appellant himself, that the appellant had been declared fit for promotion by the Departmental Promotion Committee meetings held in the years 1978 and 1980. Later, through an application, dated 7th March, 1983 the appellant clarified that there was a slight inaccuracy in the statement and that actually the Departmental Promotion Committee meetings referred to were held in 1979 and January, 1981. These details were furnished by the appellant to refute the statement made on behalf of the respondents, vide paragraph 6(6), Part II of their written statement, in which it was stated as under : " The appellant was considered by the Departmental Promotion Committee in its meeting held on 10th November, 1981 and was adjudged as unfit for promotion to Grade-20 in P.O.F."
4. The case of the respondents, in a nutshell, is that the posting of the appellant as Managing Director of W.I.L. In 1947 was actually deputation to foreign service and was not one of transfer from one job to another within the same organization. For this reason, it was argued, it could not be claimed that the appellant had been promoted to Grade-20 and that therefore, his posting back to P.O.F. In Grade-19 amounted to reduction in rank. It was stated that the grade and salary allowed to the appellant on his posting to W.I.L. Were only for the period he rematined on deputation there and not as a permanent arrangement. It was also argued that, even before he was reverted to his parent department, he had been considered by the said department in the meeting of the D.P.C.
Held on 10th November, 1981 and adjudged as unfit for promotion to Grade-20 in the P.O.F.
5. After having heard both the parties at length and perused the relevant departmental records, including the minutes of the meetings of the Boards of Directors of the P.O.F. And the W.I.L. As well as of the Departmental Promotion Committee of the P.O.E. And the notings made and the decision taken on the file, in connection with the posting of the appellant to W.I.L. And afterwards back to P.O.F. We cannot resist the impression that the inter-organizational relationship of P.O.F. And W.I.L.
Have been conducted all these years in rather unorthodox manner. The P.O.F. Is a purely Government organization, whereas W.I.L. Is Public Company, registered and incorporated as such under the Com-panies Act, 1913. The Company was registered by the Registrar of Joint Stock Companies, West Pakistan (Lahore), under Certificate of Incorporation No, 74-I.R. Of 1958-59, dated 7th November, 1958. Although W.I.L. Has a distinct identity separate from that of P.O.F., it appears that, because of the overlapping membership of the Boards of Directors of the two organizations, W.I.L. Functioned more or less as an adjunct to, or branch of, P.O.F. And that, the Chairmanship of the two organizations being vested in the same officer of Government, the decisions which affected both the organizations were taken by the common Chairman of the Boards of Directors. In fact, so far as the appointment of the Managing Director of W.I.L. Is concerned, this was treated as a purely domestic affair of P.O.F. And the posting of the Managing Director took place without any reference to the Government or without observing the requirements of the Government rules and instructions pertaining to the deputation of Government servants from one department to another.
Although W.I.L. Came into being in 1958, the Director of Industrial and Commercial Relations of P.O.F., who had originally been entrusted with the marketing of P.O.F. Products, continued to work in this capacity and at the same time, to hold charge as General Manager of W.I.L. (later designated as Managing Director) right upto 18th December, 1973. Therefore, when the appellant was appointed as Managing Director, W.I.L. With effect from 16th September, 1974, the formal sanction, issued by the P.O.F. Board in this behalf, notified him as having been "transferred" with effect from the said date. This order, which has already been reproduced above, clearly indicates that the P.O.F. Board treated the posting of the appellant as Managing Director of W.I.L. As a purely domestic matter of the said Board. The case was not, as required under the rules pertaining to deputation on foreign service, routed through the concerned Ministry and the Establishment Division, but was both decided upon and implemented at the level by the common Chairman of the P.O.F. Board and W.I.L.
6. During the course of the hearing, it was pointed out, on behalf of the appellant, that deputations from P.O.F. To the Pakistan Atomic Energy Commission, the Pakistan Steel Mills Ltd. And other Autonomous Organizations, had been made through, and with the approval of the Ministry of Defence Production and the Establishment. Division, but, in the case of appointment of the Managing Director of W.I.L. No such procedure was followed and that, from 1958 to 1973, one of the Directors of P.O.F. Was also the General Manager/Managing Director of W.I.L. These facts were not denied by the respondents and one cannot help reaching the conclusion that, in spite of the fact that legally the two organizations were entirely separate and distinct, in actual practice, they were treated as parts of one and the same set up, with the same Chairman working as head of both and with almost the same set of Directors, other than the Managing Director, to assist him in his work. It would, therefore, be wrong for us to assume that, in spite of the fact that the Chairman of P.O.F., who was also the Chairman of W.I.L. Selected the appellant for appointment as Managing Director, W.I.L. And kept him in that post for about 8 years, having given him a higher Grade-20 as against his original Grade of 19, he did so without considering him as fit for promotion to Grade-20.
7. In this connection, it was pointed out, on behalf of the appellant, that, in 1979 and again in 1981, he was declared fit for promotion to Grade-20 by the Departmental Promotion Board. From the actua minutes of the two Selection Board meetings, we find that, whereas, in the first meeting, the Selection Board considered him fit for promotion to Grade-20, in the Subsidiary Industries of P.O.F.
Only, in the second meeting, it was decided that he was fit for promotion in W.I.L., subject to upgradation of the post of Managing Director, W.I.L. The relevant extracts of the minutes are reproduced below :
3. "The Selection Board considered the cases of Grade-19 Officers shown in the statement placed below and following decisions were arrived at {{TABLE TEXT}}
(a) Mr. C. M. Sheriff, The Selection Board took cognizance Managing Director, of the fact that due to inadequate pro- W.I.L. Fessional qualifications i. e. Being a diploma holder in Civil Engineering only his circulation value in P.O.Fs. Is limited. In view of his good performance as M.D. W.I.L., the Board considered him fit for promotion to Grade-20. He will, however, be absorbed in the Subsidiary Industries of P.O.Fs.
Only."
"5. The Selection Board considered the cases of following Grade-19 officers and took decisions as noted against their names :
(a) Mr. C. M. Shariff, In view of his good performance as M.D./W.I.L. M.D. W.I.L., the Board considered him dt for promotion to Grade-20 in W.I.L. Subject to the upgradation of the post of M.D./W.I.L."
8. From the foregoing, it would appear that, when the appellan was promoted to Grade-20 and posted in W.I.L. The said posting was treated as a transfer from one part of the same set up to another. The decisions taken respectively with regard to his absorption in the subsidiary industries of P.O.F. And his suitability for promotion to Grade-20, subject to upgradation of the post of M.D., W.I.L. Also indicates that the P.O.F.
' Board was competent to deal with the posting and promotion of the appellant in the set up of W.I.L., In the circumstances, we have no other option but to hold that, when the appellant was promoted and transferred to W.I.L. He was promoted unconditionally and, since he had continued in the promotion for over 7 years, his reversion to a lower post, whether in P.O.F. Or W.I.L., amounted to demotion, which could not be made arbitrarily. It has been alleged that this reversion took place after the change in the incumbency of the office of the common Chairman of P.O.F. And W.I.L. And that it was the result of subjective considerations on the part of the new Chairman rather than an objective approach to the question of the appellant's continuance in the post. Since the actual reversion of the officer to his former post in P.O.F. Took place after a decision of the Departmental Selection Board's meeting held on 10th November, 1981 adjudging him as unfit for promotion, when he had actually been earlier twice found fit for promotion, the indications are that the decision to revert him may not have been based on entirely objective considerations, although a definite finding as to the alleged mala fide cannot be given without more positive evidence.
9. Regardless, however, of the question whether there was any mala fide in the decision of the concerned authorities to revert the appellant to the P.O.F. There can be no escaping the fact that the decision of the Departmental Selection Board's meeting on 10th November, 1981 finding him as unfit for promotion, was a complete negation of the earlier decision taken in 1979 and January, 1981 which were to the effect that he was fit for promotion to Grade-20, though in the subsidiary industries in P.O.F. Only. In the light of these two decisions, particularly that of the second meeting, in which he was considered fit for promotion to Grade-20B in the post of Managing Director, W.I.L., it is difficult to find adequate justification for the posting back of the appellant to the P.O.F., since, it amounted to.Reduction in rank, which could be made only for adequat reasons.
10. We, accordingly, set aside the order reverting him to P.O.F. And order that he should be treated as having continued on the strength of W.I.L. Since be is due for retirement and has expressed his desire before us to go on L.P.R. We direct that he may be allowed to do so with effect from 10th July, 1983 after treating him to have continued in Grade-20 in W.I.L. Financial implications should be resolved by creating a supernumerary post in W.I.L. With effect from the date of his reversion.
11. With the above orders, the appeal is allowed.
12. No order as to costs.
' MUHAMMAD IRSHAD KHAN (MEMBER).-With greatest respect I find it difficult to agree with the order proposed to be passed and reasoning given therefore by my learned colleague Mr. A.
0. Raziur Rahman.
2. The appellant then a Chief Superintendent in Grade-19, was transferred from his parent establishment and deputed w,e,f, 16th September, 1974 to perform the functions of the Managing Director, W.I.L. Which post was subsequently placed in N.P.S.-20. The appellant had rightly been enjoying the pay and other benefits sanctioned for the post of the Managing Director during the period he remained posted as such. It is, however, an undisputed position that the appellant was never formally promoted to Grade-20 in his parent establishment. He was appointed as a Managing Director, W.I.L. Merely on deputation. Such appointment did not at all create an enforceable right for the appellant to remain permanently in Grade-20. Rather, he was liable to reversion to his original post in his parent establishment, at any time and without any notice. Such reversion is not, by any stretch of imagination or law, reduction in rank. The impugned order, in my humble view, is; therefore, unexceptionable and does not call for any interference.
3. Another noticeable aspect of the matter is that if the relief sought for by the appellant is granted by us it would in effect amount to promote him to Grade-20 on regular basis or to appoint him as Managing Direc- W.I.L. On permanent basis while he was never so promoted or appointed by the competent departmental authority. That being the position, the present appeal is barred by proviso (b) to subsection (1) of section 4 of the Service Tribunals Act, 1973, which excludes the question of promotion and appointment from the purview of the Service Tribunal.
4. In my view, therefore, the appeal, having no merits as well as being incompetent, is liable to be dismissed.
' JUSTICE SHAH ABDUR RASHID (CHAIRMAN).-This appeal has come up before me on difference of opinion between Mr. A.
0. Raziur Rahman and Mr. Muhammad Irshad Khan, the learned Members of the Tribunal. The facts are given in detail in the order passed by Mr. A.
0. Raziur Rahman and 1 need not reiterate them. After hearing the learned counsel for the parties, I have formed somewhat different view. No doubt, P.O.F. And W.I.L. Are managed by the same Chairman and the same Directors, nevertheless, the latter being a company incorporated under the Companies Act, is distinct from the Federation and the appellant cannot claim that his service with the W.I.L. Was service with the Federal Government. The service with the W.I.L. Is a foreign service in Pakistan under the Fundamental Rules and the terms and conditions of the Civil Servant deputed on foreign service are to be regulated in accordance with the rules made in this behalf.
2. The Ministry of Finance's Office Memorandum No, F. 19(3)RI/72, dated the lst August, 1973 as amended from time to time has laid down the terms and conditions of persons transferred to foreign service in Pakistan. According to this Office Memorandum, a Civil Servant deputed to foreign service is entitled to his salary as admissible to him in the Government service with an addition of deputation allowance which should be 20% of the pay. The same Memorandum provides that where a Government Servant is transferred on deputation to foreign service immediately on promotion without having worked on the post of category of posts to which he has been promoted, he will not be entitled to any deputation pay. The terms and conditions of the appellant as laid down in the order of 8th May, 1975 do not provide for any deputation allowance.
This fact itself shows that the appellant was promoted in the P.O.F. And then immediately went to W.I.L. On deputation. It may be pointed out that the order of 8th May, 1975 is an order of the P.O.F.
And not of the W.I.L. This shows that the appellant was promoted in the P.O.F. To Grade- 20 and then went immediately to W.I.L. For appointment in that Grade. Having once been promoted in P.O.F. As a Civil Servant the appellant could not be reverted without giving him opportunity of being heard. I am, however, not in agreement with Mr. A. o. Raziur Rahman Grade-20 and then went immediately to W.I.L. For appointment in that Grade. Having once been promoted in P.O.F. As a Civil Servant, the appellant could not be reverted without giving him opportunity of being that the appellant should be re-posted in W.I.L. In Grade-20. The itself, unless the P.O.F. Wants him to send to the W.I.L. And the latter tion. He shall have to be provided post in Grade-20 in the P.O.F. Appellant has no right to remain in W.I.L. Where he was sent on deputa agrees to taken him. It is ordered accordingly.
' ORDER OF THE TRIBUNAL ' The order of Mr. A. o. Raziur Rahman, as modified by the Chairman shall be the order of the Tribunal.