This petition under Article 199 of the Constitution of Islamic Republic of Pakistan seeks redress against the orders of the Chairman, Federal Chemicals and Ceramics Corporation, respondent No. 2, terminating petitioner's service from Ittehad Chemicals, Kala Shah Kaku with effect from 2-11- 1985.
2. The Federal Chemicals and Ceramics Corporation Limited (hereinafter mentioned as FCCCL) was established by the Government of Pakistan in pursuance of clause (1) of Article 7-E of the Economic (Reforms) Order, 1972. It has a number of constituent nationalized industrial units. Valika Chemical Industries, a private enterprise, was also nationalized and included by the Government in the FCCCL under the name and style of Synthetic Chemicals, Karachi. The petitioner who is a duly qualified Chemical Engineer started his professional career as Manager (Technical Services) in the Synthetic Chemicals. In that capacity, he served various units of FCCCL and with the passage of time was promoted as General Manager (Technical). At the time of termination of his services, the petitioner was posted as OSD in the Ittehad Chemical Industries which also is a component unit of the FCCCL.
3. Against his termination, the petitioner filed a representation before the Government but no heed was paid to it. He then approached the Federal Services Tribunal but the desired relief was refused on the ground that he was not a "civil servant" within the meaning of section 2(a) of the Service Tribunals Act, 1973. The petitioner then approached this Court under Article 199 of the Constitution.
4. According to the petitioner, the termination of his services was unwarranted, mala fide and unlawful. Explaining the bad faith of the respondents, the petitioner stated that the administration developed aversion against him because he had continuously been pointing out the mis-- management and glaring irregularities committed by various officers in the FCCCL especially in respect of local purchase made through fictitious bidders and imports as well as over-invoicing in the cases of purchase of machinery from abroad. As a result of it, he was made a rolling stone being transferred from place to place on short intervals, he added.
5. Besides giving the factual details of what became the cause of the termination of his services, the petitioner has vehemently contended that respondent No. 2, namely, Chairman FCCCL was not competent to pass the impugned order. It has-been contended that under Article 7-F of the Economic (Reforms) Order, 1972, the management of Ittehad Chemicals stood transferred to the Board of Directors of FCCCL and respondent No. 2 had passed the impugned order illegally, without jurisdiction and lawful authority. It is alleged that the order was passed without observing the rules of natural justice which demand that the authority passing the order must' be free from bias and the right to a fair hearing should be allowed to the persons who are to be affected by its decisions.
The petitioner further stated that the impugned order being tainted with mala fide could not be justified even under the terms of appointment.
6. The petitioner thus sought a declaration that the impugned order of termination of his services dated 2-11-1985 passed by respondent No. 2 is without lawful authority and of no legal effect. He also requested for a mandamus directing the respondents to reinstate him with all the back benefits including salary and allowances.
7. The petition has been contested by the respondents on all fours. They denied the allegations of mala fide and maintained that the petitioner had been indulging in extraneous matters beyond his official mandate at the cost of his own duty and efficiency. They stated that the services of the petitioner were terminated in good faith as per terms of the contract of employment.
8. On legal plane, the respondents raised a preliminary objection that the FCCCL is a private limited company incorporated under the Companies Act as distinguished from statutory corporation established under a statute: The terms of the employment of the employees of the FCCCL are not governed by statutory rules or regulations and the relationship is based upon a service contract governed by the principle of master and servant ousting the extraordinary Constitutional jurisdiction of this Court.
9. The respondents also denied that there was any violation of law and stated that the impugned order was passed by the competent authority i.e. Respondent No. 2 with the approval of the Minister for Production. They added that the enterprises of FCCCL are subject to ultimate control of the Government while adequate powers have been delegated to the Corporation and the Board of Directors to ensure smooth functioning. According to them, the Corporation had to follow the directions given to it by the Ministry and as such the Minister incharge was competent to give approval for the action proposed against the petitioner.
10. It is an admitted fact that Valika Chemical Limited was nationalised under the Economic Reforms Order, 1972 (P.O. No. 1 of 1972) which then acquired the name and style of Synthetic Chemicals, Karachi. In pursuance of Article 7-E of the said Order, the Federal Government made an order on 12-7-1974 whereby management of various establishments and the shares or proprietary rights acquired therein by the Federal Government were transferred to the Corporation specified in the order. Seven industrial concerns including Synthetic Chemicals and Ittehad Chemicals were grouped into a Corporation named Federal Chemicals and Ceramics Corporation Limited (FCCCL).
11. The FCCCL, though incorporated as a private limited company, was operating under the superintendence and control of the Federal Government and its component industries had the character of nationalized units by virtue of the Economic Reforms Order, 1972. In 1978, Article 7-F was added in the Order which inter alia provided that where the Federal Government has acquired under Article 7-B the whole or a majority portion of the shares of a managed establishment which is a company and is of the opinion that in the interest of the shareholders of the managed establishment, it is necessary to do so, the Federal Government may, by order in writing, direct that a Board of Directors consisting of a Managing Director and such number of other Directors as may be specified in the order be constituted in such managed establishment. Thus, the position that emerges is that despite being a private limited company FCCCL owes its subjugation to the provisions of Article 7-F ibid.
12. In the light of these factual and legal details, we can now proceed to examine the validity of the impugned order especially with reference to the competency of respondent No. 2 to pass the same.
13. According to the petitioner, the affairs of the FCCCL and its employees are to be governed in accordance with the provisions of Article 7-F by virtue of which a. Board of Directory was constituted in respect of the FCCCL and, as provided in clause (b) of sub-Article (5), the management of the establishment stood transferred to the Board of Directors. It is thus contended that the Managing Director despite being the Chief Executive was not the sole authority in respect of the affairs of the establishment or management of FCCCL. This legal position has been controverted by the respondents on the ground that the FCCCL being a private limited company, the termination order was passed by respondent No. 2 competently as its Chairman. In the same breath they, however, made another improvement to the effect that the impugned order was passed by respondent No.2 with the approval of the Minister for Production. Explaining the role of the Minister, they stated that the Government have invested huge sums of public money in these industrial concerns which have, therefore, to be subject to the ultimate control of the Government and that as such the Minister Incharge was competent to give approval for the termination of the petitioner's services.
14. On the basis of respective contentions of the parties, there are thus two aspects of the matter:--
(1) The affairs of the FCCCL are governed by Article 7-F of the Economic Reforms Order, 1972 and the services of the petitioner could be terminated only by or under the orders of the Board of Directors constituted under Article 7-F (5); or
(2) As alleged by the respondents, the FCCCL being a private limited company under the control of the Federal Government, the respondent No. 2 as its Chairman and with the approval of the concerned Minister could pass the impugned order.
15. In the former case only the Board of Directors was competent to take any decision in respect of the services of the petitioner. There is no dispute to the fact that the impugned order has not been passed by or under the orders of the Board of Directors. It was passed by respondent No. 2 in his capacity as Chairman FCCCL whereas under the law i.e. Article 7-F of the Economic Reforms Ordinance, 1972 he had no authority to do so.
16. The position remains the same even if the FCCCL is treated as a private limited company because in that situation too the authority of respondent No. 2 would be amenable to the Companies Ordinance, 1984. The memorandum and Articles of Association of the FCCCL coupled with the provisions of the Companies Ordinance shows that an order regarding the services of the petitioner could not be passed of his own by respondent No. 2 as management of the company vested in the Board of Directors. There is nothing on record to show that respondent No. 2 was directed or authorized by the Board of Directors to terminate the services of the petitioner.
17. In fact the respondents have made it clear by their own averments that the impugned order was not passed by or under the orders of any Board of Directors. They had no hesitation in saying that respondent No. 2 terminated the services of the petitioner simply with the approval of the "Minister Incharge". This alone is enough to invalidate the impugned order. Whether it be a case of Article 7-F of the Economic Reforms Order, 1972 or management of a private limited Company under the Companies Ordinance, 1984, the Minister had no role whatsoever in the management of the FCCCL.
18. There is still another aspect of this issue. Even if it be assumed for the sake of arguments that as Managing Director or Chairman respondent No. 2 had the authority to terminate the service contract of the petitioner, the action taken by him is not sustainable in law for the simple reason that the impugned order is not based on his independent judgment.
19. This order is result of the intervention or, in the words of the respondents, approval of the Minister Incharge. It is an established proposition of law that where an authority making the order has acted on the instructions or intervention of a foreign authority and has desisted from applying its independent mind, the order made or action taken in pursuance of such intervention is not maintainable. The impugned order is, therefore, liable to be struck down on this sole ground especially when the "Minister Incharge" does' not figure any where in the Economic Reforms Order, 1972, the Companies Ordinance, 1984 or the Memorandum and Articles of Association of the FCCCL.
20. Now, a word about the preliminary objection of the respondents against the jurisdiction of this Court. According to the respondents, the FCCCL being a private limited company the terms of the employment of the employees of the Corporation are subject to the contract freely entered into by the parties and the employment is governed by the principle of master and servant. It has thus, been argued that no Constitutional or legal right of the petitioner had been infringed entitling him to invoke the extraordinary jurisdiction of this Court.
21. The plea of the respondents is self-contradictory. They have themselves vehemently contended that as the Government had invested huge public amount in the FCCCL, the industries included in it were under the control and superintendence of the Federal Government. The Ittehad Chemicals, a concern of the FCCCL, is also a managed establishment within the meaning of Article 2(aa) of the Economic Reforms Ordinance, 1972 and is owned, managed and controlled by the Federal Government. Respondents Nos. 1 and 2 are appointed by the Federal Government under Article 4 of the aforementioned Order and for discharging their function are subject to the orders and directions of the Federal Government as contemplated by Article 4 (3) ibid. They are performing functions in connection with the affairs of the Federation of Pakistan and as such are amenable to the jurisdiction of this Court under Article 199 of the Constitution of Islamic Republic of Pakistan.
Moreover, Corporation under the control of the Federal Government is included in the definition of person in Article 199.
22. In this view of the matter, the management of FCCCL cannot deal with the affairs of the Corporation in the manner it deemed fit. The discretion of the respondents as employers is also not arbitrary. It is essentially subject to the law and within the ambit of Article 199 of the Constitution.
The principles of natural justice would also be attracted. Strict compliance with the provisions of law as also the rules of the Corporation is a legal obligation of the respondents. The performance of functions by them can, therefore, be judicially reviewed by the superior Courts in exercise of their Constitutional jurisdiction. The objection raised by the respondents in this behalf has no force and the petition is fully competent.
23. For what has been stated above, the impugned order cannot be maintained. It is declared to be without lawful authority and of no legal effect. The petition is accordingly allowed with all the back benefits admissible to the petitioner under the terms of his employment. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.