UNITED BANK LIMITED through President vs SHAHMIM AHMED KHAN and 41

1. ' SAIDUZZAMAN SIDDIQUI, J.---We intend to dispose of above-mentioned 42 civil appeals filed with the leave of this Court by a common judgment as the questions of law and facts raised in these appeals are identical dated 6-10-1998 and they also arise from the one and the same leave granting order.

2. The respondents in the above appeals were the employees of United Bank Limited (hereinafter to be referred to as 'the Bank.). On 9-10-1997 the bank enforced a compulsory retrenchment scheme to reduce the strength of staff which reacts as follows:-- "As you are aware, U.B.L. Is passing through the most critical period in its history. In order to turn around the Bank and eventually restore it to its former glory the management has decided to go through with the right sizing of its operations.

2. ' The Bank is overstaffed and without reducing the number of employees, long term health and survival of the bank cannot be attempted, muchless ensured. The management has, therefore, decided to reduce the number of officers and executives by following a uniform, nondiscriminatory criterion i,e, the junior most in each category are being asked to go.

3. ' The Bank has, therefore, reluctantly taken the painful decision, in exercise of its right under Rule 15(1) of the United Bank Limited (Staff) Service Rules, 1981, to retrench from service of the Bank all officers/executives (except those in the Computer Division) who came into their present grade on or after October 1, 1991. As a gesture of goodwill, and in lieu of notice period, in exercise of powers conferred by Rules 15, it has been decided to pay the retrenched employees, upon termination, the following benefits:

(1) An amount equal to three months Basic Pay for each completed year of service or one and a half months Basic Pay for each remaining month of service, whichever, is less, subject, however, to a maximum of 90 months' Basic Pay.

(2) An amount equal to ten years normal postretirement medical Annual Monetary limit presently available to retiring officers and executives, in lump sum, as final settlement in respect of medical facilities.

(3) An amount equal to the Benevolent Fund Grant for ten years, in lump sum, in advance at the time of settlement of dues, as final payment.

(4) Leave Encashment facility equivalent to 50% of leave balance, subject to a maximum of 180 days.

(5) (a) For officers and executives under the Old Retirement Benefits Option:--The employee's balance and the Bank's contribution towards his/her.

4. ' Provident Fund and profit thereon, plus Gratuity @a one month's Basic Pay for each completed year of service.

5. (b-1) For officers and executives under the New Retirement Benefits Option and who have competed 25 years of service.

6. ' Employees General Provident Fund contribution balance including profit thereon and 50% commutation of Gross Pension with mpnthly payment of remaining pension under the rules.

7. (b-2) For officers and executives under the New Retirement Benefits Option and who have not completed 25 years of service; ' Employee's General Provident Fund contribution balance including profit thereon and, as a special case and without creating a precedent payment of 50% Commutation of Gross Pension as a full and final settlement.

8. Option for those qualifying retirement: ' Staff members whose services have been terminated under this action and who have completed 25 years of service in the Bank, may at their discretion, opt for conversion of their retrenchment into early retirement under clause (18) of the Bank's Service Rules. Such staff members should forward their request, indicating that they waive their right to receive the above benefits and instead would like to avail of the normal retirement benefits of the Bank.

9. Conditions of eligibility: ' The executives/officers who have obtained unauthorized overdrafts or who are absent without leave for a period exceeding 90 days or against whom disciplinary action in respect of any act of misconduct involving theft, fraud, forgery, misappropriation, dishonesty, causing wilful loss to the bank, or embezzlement, is pending or is likely to be initiated within the next 30 days, shall not be entitled to the benefits under this Scheme. They shall be entitled only to the substantive pay for the period of notice as per Rules. They may, however, appeal to the President of the Bank within 40 days of the date of this Circular, submitting their explanation in respect of circumstances alleged against them. The competent Authority may, after taking into consideration the charges, the explanation and such other documentary record as he may deem relevant, absolve the employee of the charges and consequently allow him/her the benefits of this Scheme.

10. Residential Facilities ' Residential Facilities for six months after retrenchment, if provided, and sale of furniture already provided, shall also be allowed as a special case to all those executives, who are retrenched.

11. Income-tax Deduction ' As per C.B.R. Circular No,1 of 1965, termination benefit amounts shall be taxed as separate block or item of income at the average rate of tax applicable to each recipient during the three preceding years. If the salary of an employee was not taxable during the last three years, no tax would become payable by him/her on the said compensation. As per rules on the subject, income-tax will be deducted at source. It is, however, clarified that tax liability is responsibility of the employee.

12. Other terms and conditions:

(1) This scheme is applicable to all officers and executives including those on leave.

(2) While computing the length of service, the period exceeding six months will be treated as full year.

(3) The period of extraordinary leave without pay will not be counted for purpose of calculation of any benefit under this Scheme.

(4) For Home based officers and executives posted in overseas branches/offices benefits under this Scheme will be calculated on the basis of their Basic Pay, as admissible to them in Pakistan in Pak Rupees.

13. Payment of Benefits after adjustment of Employee Liabilities: ' All loans and other liabilities outstanding against the staff member would be liable to be adjusted prior to any disbursement under the above Scheme. These are being worked out and would be advised individually to the affected employees. In the meantime, all such officers and executives are advised to return the bank's assets in their possession, such as cars, equipment, etc. (excluding furniture and fixture items allowed at residence) to expedite their individual settlement. Because of embargo placed on the Bank by the Ministry of Finance on purchase of new cars, departing officers/executives are required to return all Bank cars with immediate effect. Excluded from the withdrawal are executives of the rank of Senior Vice-President and above who elect to take the retirement option and, thus, may exercise their option to purchase the car from the Bank as per existing rules.

14. Help Line for further information: ' Help Lines have been set up at Head Office to answer questions regarding this matter, and to provide information and clarifications.

15. ' Where questions cannot be answered immediately, for instance, when data has to be gathered from others sources, every attempt will be made to provide a response as soon as possible when calling the Help Line, please provide your full name, employee number, and designation and location of last assignment in the Bank. Employees may use the following channels of communication to reach the Help Line:-- By telephone:111-999-444 By fax: 111-329-825 By post: GPO Box No,4613, Karachi.

16. ' The decision to retrench valuable staff resources has been taken after detailed analyses of the present situation in the Bank. In the interest of its survival and future viability, the bank was left with no other option but to take this action. The Bank is conscious and appreciative of the services that retrenched employees have put in and would like to wish them success in their future endeavours.

17. (Sd.)

18. (ABDUL GHAFOOR), Executive Vice-President.

19. (Sd.)

20. (KHALID A. SHERVANI), Senior Executive Vice-President.

21. ' As a result of the above retrenchment scheme, services of 5416 employees of the Bank were terminated which included Senior Executive. Vice-Presidents, Executive Vice-Presidents, Senior Vice-Presidents, Vice-Presidents, Assistant Vice-Presidents and Officers of the Bank serving in Grade-I to Grade-Ill. Out of the total 5416 retrenched employees, 42 are respondents, in the above appeals before us, and we have been informed by the learned counsel for the respondents that about 1000 appeals filed by the retrenched employees are presently pending before various Benches of Service Tribunals throughout Pakistan. In order to understand the controversy arising in the above appeals in its true perspective, it necessary to refer here briefly the background of these cases.

3. United Bank Limited was established in the year 1968 as a corporate entity. It was nationalised on 1-1-1974. For the last several years, the Bank suffered continuous losses as would appear from the balance-sheets issued by the Bank. In the year 1995, the Bank suffered pre-tax losses of 510 millions, which were increased to 1523 millions in the year 1996. Among others, one of the reasons discovered for the above losses was overstaffing of the Bank. Accordingly, in July, 1996 the Bank appointed Nexus Group an independent management consultants to carry out the study for reorganisation of the Bank. As a result of the study carried out by the Nexus Group, about 8 thousand employees in the Bank were found in excess. However, in order to reduce and minimise the effect of retrenchment, the management decided to reduce the work strength of the staff in the Bank by 5416 employees only. The bank, accordingly, decided to retrench only those employees who joined the Bank service in each cadre on 1-10-1991 on the principle of 'last come first go'. To give effect to this decision of the Bank, the Retrenchment Scheme reproduced above, was circulated amongst all the employees of the Bank.

22. The respondents, whose services were terminated as a result of the above Retrenchment Scheme, challenged their termination from service before the Service Tribunal in appeals. The learned Service Tribunal, through a detailed judgment, declared the termination of the service of respondents as without lawful authority and directed their reinstatement in service. Leave was granted in the above appeals to examine the following questions of law arising in these cases:-- "In support of the above petitions Raja Muhammad Akram, learned counsel for the petitioner bank, has inter alia contended as under:--

(i) That in spite of the fact that the respondents were deemed to be civil servants for the purpose of the Act, they remained employees of a corporation and, therefore, in the absence of any statutory rules the relationship between the petitioner and the respondents was that of the master and servant. In this respect reliance has been placed on he cases of Raizuddin v. Chairman, Pakistan International Airlines Corporation and 2 others (PLD 1992 SC 531) and United Bank Limited v. Ahsan Akhtar and other (1998 SCM R 68).

(ii) That the petitioner bank was entitled to downsize the number of the staff in view of the economic stress. Reliance was placed on the case of K. Rajendran and others v. State of Tamil Nadu and others (AIR 1982 SC 1107, para. 35 at page 1120).

(iii) That the petitioner bank was entitled to re-organize its business in order to run it more efficiently and if in the above process some members of the staff have become redundant, it was entitled to terminate their services. Reliance was placed on the case of Zeal Pak Cement Factory Ltd., Hyderabad v. The Chairman, West Pakistan Industrial Court, Lahore and others (PLD 1965 SC 420).

(iv) That the learned Tribunal has enunciated various points of law in the impugned judgment contrary to the law enunciated by the superior Courts.

(v) That the Tribunal erred in ordering the reinstatement of the respondents in the above terms.

23. ' On the other hand Messrs Akram Sheikh, Abid Hassan Minto and Abdul Majeeb Pirzada counsel for the respondents have vehemently urged that though there may be some error on the )cart of the Tribunal in enunciating the legal position on the various points, but the conclusion, namely, that the Scheme was illegally applied to the respondents, was correct. According to them, the Scheme was inter alia violative of Article 25 of the Constitution and also was in breach of the principle of natural justice.

24. ' We are inclined to grant leave to consider as to whether the impugned judgment is in consonance with the law enunciated by this Court."

25. ' We have heard the learned counsel for the appellant as well as respondents at length.

4. The Hon'ble Service Tribunal set aside the termination of respondents from service on the following grounds:--

(i) That the termination of service of respondents was in violation of the principle of audi alteram partem as they were not issued any show-cause notice before termination of their service;

(ii) That while terminating the service of respondents, the principle of "last come first go" was not followed in strict manner inasmuch as the persons who were promoted to the higher cadre a few days before the enforcement of Retrenchment Scheme, were not allowed to continue or given option of reversion to the lower cadre from which they were promoted while applying the above principle of retrenchment;

(iii) that as a result of introduction of section 2-A, in the Service Tribunals Act, 1973 (hereinafter to be referred as 'the Act') the employees of the Bank were to be considered as persons in the service of Federation Who will be governed by the provisions of Civil Servants Act and other service laws applicable to such employees instead of application of the principle of Master and Servant;

(iv) That the losses suffered by the Bank were not on account of overstaffing but were mainly attributable to non-recovery of the loans and that the employment of consultants by the Bank, after the termination of services of 5416 employees, on inflated salaries goes to show that the action of the Bank was not in good spirit.

5. The learned counsel for the appellant in support of the above appeals has contended that in view of the continuous losses suffered by the Bank and the fact that in order to save the Bank from a total collapse, Federal Government had to inject a huge amount, the Retrenchment Scheme introduced by the Bank was fully justified. It is contended that the Bank being a commercial organisation and a corporate entity had the right to run it on commercial consideration and to give effect to it, it was entitled to reorganise its working including retrenchment of the overstaffed employees. It is also contended that as the termination of service of respondents did not carry any stigma, no show-cause notice was necessary to terminate their services. In the alternative, it is contended that under the Service Rules of the Bank, the management had the right to terminate the services of employees by giving them either 3 months' notice or pay in lieu of that period and as such the question of giving any notice to the respondents before termination of their employment or hold an enquiry, was totally irrelevant. It is lastly contended by the learned counsel that by virtue of introduction of section 2-A in the Act only a right of appeal became available to an aggrieved employee before the Service Tribunal. This, however, did not mean that the terms and conditions of service of the employees of the Bank ceased to be operative and provision contained in the Civil Servants Act and other Service Rules applicable to State employees generally extended to them automatically. It is contended by the learned counsel that in spite of the fact that the employees of the Bank were declared civil servants by virtue of insertion of section 2-A in the Act, they continued to be governed by the terms and conditions of their service framed by the Board of Directors of the Bank and, therefore, the relationship of Master and Servant continued to be applicable to them.

6. Mr. Abid Hassan Minto the learned counsel for respondents in Civil Appeals Nos.1506 to 1516 of 1998 has raised following contentions while supporting the impugned judgment of Service Tribunal:--

(i) That although section 2-A has been introduced in the Act, it has two distinct and separate parts.

26. First part of section 2-A relates to the declaration of service of employees of the Bank as Service of Pakistan while the second part relates to the conferment of right of appeal on the employees of the Bank before the Service Tribunal;

(ii) that the retrenchment of employees under the scheme framed by the appellant has no nexus with Rule 15 of United Bank Limited (Staff) Service Rules, 1981 (hereinafter to be referred as the Rules') which deals with individual termination of an employee. It is, accordingly, contended that rule 15 (ibid), had no application to the present cases;

(iii) that the retrenchment carried out by the appellant Bank in not covered by any statutory or other provision and, therefore, it could only be considered as having been done under the policy decision of the Government which was circulated on 12-8-1997;

(iv) that the retrenchment of the employees by the Bank being fully covered by the policy ,decision of the Government, dated 12-8-1997 it could only be on voluntary basis as laid down in the circular of the Government and, therefore, its compulsory application by the appellant was contrary to the policy laid down by the Government.

27. ' In addition to the above contention, Mr. Abid Hasan Minto, the learned counsel for the respondents, very vehemently contended that the case-law relied by the learned counsel for the appellants in support of his contention that by virtue of section 2-A (ibid), the respondents were to be treated in service of Pakistan only for the limited purpose of availing of the remedy of appeal before the Service Tribunal is not to be taken into consideration as in the cited cases, the contentions now raised by the appellant were not considered. It is also contended by the learned counsel that in view of the fact that the Bank employees. Were deemed to be in the service of Federation, by virtue of the provisions of section 2-A of the Act, the principle of Master and Servant would not be applicable in these cases. It is contended by Mr. Minto that if the intention of Legislature was only to confer right of appeal before the Service Tribunal, it could simply provide that the Bank employees will be deemed to be civil servants for the purposes of the Act instead of declaring them in the Service of Pakistan. The Federal Government having declared the service of respondents with the appellant as Service of Pakistan, the intention of Legislature was not limited only to treat them in the Service of Federation for the limited purpose of availing remedy of appeal before the Service Appeal.

28. ' Mr. Abdul Mujeeb Pirzada, the learned counsel for respondents in Civil Appeals Nos. 1487 to 1505 of 1998 while supporting the above contentions of Mr. Abid Hussan Minto, contended that the respondents were treated in a discriminatory manner by appellant inasmuch as while in the other Financial Institutions namely, Habib Bank Limited, National Bank of Pakistan, Investment Corporation of Pakistan and State Bank of Pakistan the employees were offered Golden Hand Shake Scheme on voluntary basis, the respondents were given no such option under the Scheme of Retrenchment enforced by the appellants. It is contended by Mr. Mujeeb Pirzada that the termination of services of respondents was in total disregard of principle of natural justice as no opportunity was given to the respondents to explain their position before terminating their services under the Retrenchment Scheme. It is also contended by Mr. Pirzada that while enforcing Retrenchment Scheme, the principle of Last in First go was not followed inasmuch, the date of appointment of respondents in the service was not kept in view while terminating their services.

29. The learned counsel contended that the principle of retrenchment could not be made applicable in the cases as no posts were abolished by the appellant while the respondents were thrown out of service. It is contended by the learned- counsel that the whole exercise of retrenchment of appellant was mala fide as only those employees were targeted who were employed by the previous Government.

30. ' Mr. Muhammad Akram Shaikh, the learned counsel for other appellants while adopting the contentions of the counsel who preceded him, contended that the relationship of Master and Servant was no more applicable after the introduction of section 2-A in the Act. It is contended by Mr. Shaikh that in view of the scope of sections 4 and 5 of the Act, the Service Tribunal was fully competent to order reinstatement of terminated employees into service and therefore, principle of Master and Servant could not be made applicable to the proceedings before the learned Tribunal.

31. Mr. Shaikh contended that the right to employment in a public sector undertaking is a fundamental right guaranteed under Article 9 of the Constitution and, therefore, while depriving a person employed in such an undertaking a very high standard of fairness and equity coupled with the principle of natural justice should have been followed. The learned counsel contended that the Service Tribunal recorded a finding that the employees of the Bank have been discriminated and this being the finding of fact, is not open to be gone into or scrutinized by this Court while hearing an appeal under Article 212 of the Constitution. The following cases were cited at the bar during the course of hearing of these appeals:-

(1) Pakistan Petroleum Workers' Federation v, Burma-Shell Oil Storage & Distributing Co. Of Pakistan Ltd. (PLD 1961 SC 479);

(2) N. Ramanatha v. State of Kerala (AIR 1973 SC 2641);

(3) K. Rajendran v. State of Tamil Nadu (AIR 1982 SC 1107);

(4) J. K. Iron and Steel Co, v. Mazdoor Union (AIR 1956 SC 231);

(5) Muir Mills Co, v. Suti Mills Mazdoor Union (MR 1955 SC 170);

(6) House Building Finance Corporation v. Inayat Ullah Shaikh (1999 SCM R 311);

(7) United Bank Ltd. And others v. Ahsan Akhtar 1998 SCM R 68;

(8) Muhammad Mahibullah v. Chaman Lal (1994 SCM R 222);

(9) Pakistan and others v.Public-at-Large (PLD 1987 SC 304);

(10) Raziuddin v, Chairman, P.1. A. Corporation (PLD 1992 SC 531);

(11) Establishment Secretary v. S.A.M. Wahidi (1998 SCM R 1985);

(12) Abdur Rahman v. Ghulam Rasul Tanvir (PLD 1987 SC 45): (131 WAPDA v. Muhammad Arshad Qureshi (1986 SCM R 18):

(14) Syed Aftab Ahmed v. K.E.S.C. (1999 SCM R 197);

(15) Pakistan v. General Public (PLD 1989 SC 6);

(16) 1.A. Sherwani v. Government of Pakistan (1991 SCM R 1041);

(17) lnamur Rehman v, Federation of Pakistan (1992 SCM R 563);

(18) Delhi Transport Corporation v. D.T.C. Mazdoor Congress (AIR 1991 SC 101).

(19) Mrs. M,N. Arshad v. Miss Naeema Khan (PLD 1990 SC 612);

(20) Walayat Ali Mir v. Pakistan International Airlines Corporation (1995 SCM R 650);

(21) Board of Trustees, Port of Bombay v. Dilipkumar (AIR 1983 SC 109);

(22) Olga Tellis v. Bombay Municipal Corporation (AIR 1986 SC 180);

(23) Federation of Pakistan v. Public-at-Large (PLD 1988 SC 202);

(24) Yick Wo v. Hopkins (1885) 118 US 356;

(25) Slaughter-House Cases (83 US 36);

(26) R.v. Civil Service Appeal Board, ex parte Bruce (1988) 3 AELR 686;

(27) Gunton v. London Barough of Richmond upon Thames (1980) 3 AELR 577;

(28) N.B.P. v. Punjab Labour Appellate Tribunal (1993 SCM R 105);

(29) State v. Qaim Ali Shah (1992 SCM R 2192);

(30) Government of Baluchistan v. Aziz Ullah Memon (pL,D 1993 SC 341);

(31) Federation of Pakistan v. Muhammad Nazir (1998 SCM R 1081);

(32) Mian Muhammad Nawaz Sharif v. President of Pakistan (PLD 1993 SC 473);

(33) Zeal Pak Cement Factory Ltd. v. Chairman, West Pakistan Industrial Court (PLD 1965 SC 420);

(34) Vrajlal M. & Co. v. State of M.P. (AIR 1970 SC 129) and

(35) Anisa Rehman v. P.I.A.C. (1994 SCM R 2232).

32. ' We will refer some of these cases during the course of our discussion at appropriate stage, which are relevant to the discussion.

7. The main controversy in the above appeals revolves around the interpretation of section 2-A, which has been introduced through an amendment in the Act. Section 2-A has been introduced through Service Tribunals (Amendment) Act XVII of 1997, dated 10-6-1997 and it reads as follows:-- "(2-A) Service under certain corporations, etc., to be service of Pakistan.---Service under any authority, corporation, body or organization established by or under a Federal Law or which is owned or controlled by the Federal Government or in which the Federal Government has a controlling share or interest is hereby declared to be service of Pakistan and every person holding a post under such authority, corporation body or organization shall be deemed to be a civil servant for the purposes of this Act."

33. A careful reading of the above section will show that this section, which has been introduced in the Act through amendment, declares the service of any authority, corporation, body or organization established by or under a Federal law and which is owned or controlled by the Federal Government or in which Federal Government has any share or interest, as the service of Pakistan and every person holding a post under such authority, corporation, body or organization, shall be deemed to be a civil servant for the purpose of the Act. The contention of the learned counsel for respondents in the above appeals jointly, is that the respondents shall be deemed to be in the service of Pakistan as defined in Article 260 of the Constitution. Further contention of learned counsel for the respondents is that the respondents having been declared to be in the service of Pakistan, their terms and conditions of service could only be regulated in accordance with Article 240 of the Constitution under an Act of Majlis-eShoora or through an Act of Provincial Assembly of a Province.

34. It is the contention of respondents jointly in the cases, that as no law has been formulated either by Majlis-e-Shoora or Provincial Assembly to regulate the terms and conditions of service of respondents, therefore, in the absence of any such law provisions contained in the Civil Servants Act, 1973, relating to the civil servants would govern the employment of respondents. It is accordingly, contended that till such time the appropriate Legislature provides the terms and conditions of employment of the employees of the Bank, the provisions contained in Civil Servants Act, 1973 and all other service laws and rules applicable to the employees of the Federal Government would apply to the employees of the Bank. We are unable to accept the above contention.

35. From reading of section 2-A, reproduced above, which has been introduced in the Act, the intention of the Legislature is quite manifest. The Legislature by introducing section 2-A, in the Act, only wanted to provide a right of appeal before the Service Tribunal to an aggrieved employee of a corporation, authority, body or organization established under a Federal Law or which is owned or controlled by the Federal Government or in which the Federal Government has a controlling share or interest. It is significant that while section 2-A, has been introduced in the Act which deals with the right of appeal of civil servants, no corresponding amendment has been made in the Civil Servants Act, which determines the terms and conditions of service of civil servants. If the Legislature intended to confer on the employees of Corporation controlled by the Federal Government, the status of a civil servant, they could have provided so by introducing appropriate amendments in the relevant service laws governing the Federal Government employees. In the absence of such amendments, the laws applicable to Federal Government employees could not automatically extend to the employees of the Bank. The contention of the learned counsel for the respondent that if the intention of Legislature was only to provide a remedy to an aggrieved employee of the hank before the Service Tribunal, it was not necessary to declare the service of the bank as the service of Pakistan as this purpose could be achieved by simply declaring such employees as civil servants for the purposes of the Act, in our view is misconceived. The .Establishment of Service Tribunals is contemplated under Article 212 of the Constitution which reads as follows:-- "(212).--(1) Notwithstanding anything hereinabove contained, the appropriate Legislature may by Act provide for the establishment of one or more Administrative Courts or Tribunals to exercise exclusive jurisdiction in respect of--

(a) matters relating to the terms and conditions of persons who are or have been in the service .Of Pakistan, including disciplinary matters;

(b) matters relating to claims arising from tortious acts of Government, or any person in the service of Pakistan, or of any local or other authority' empowered by law to levy any tax or cess and any servant of such authority acting in the discharge of his duties as such servant; or

(c) matters relating to the acquisition, administration and disposal of any property which is deemed to be enemy property under any law.

(2) Notwithstanding anything hereinabove contained, where any Administrative Court or Tribunal is established under clause (1), no other Court shall grant an injunction, make any order or entertain any proceedings, in respect of any matter to which the jurisdiction of such Administrative Court or Tribunal extends and all proceedings in respect of any such matter which may be pending before such other Court immediately before the establishment of the Administrative Court or Tribunal other than an appeal pending before the Supreme Court, shall abate on such establishment: ' Provided that the provisions of this clause shall not apply to an Administrative Court or Tribunal established under an Act of a Provincial Assembly unless, at the request of that Assembly made in the form of a resolution, Majlis-e-Shoora (Parliament)] by law extends the provisions to such a Court or Tribunal.

(3) An appeal to the Supreme Court from a judgment, decree, order or sentence of an Administrative Court of Tribunal shall lie only if the Supreme Court, being satisfied that the case involves a substantial question of law of public importance, grants leave to appeal."

36. The Service Tribunal established under Article 212 (ibid), through Act, of appropriate Legislature, has exclusive jurisdiction to take cognizance of matters relating to terms and conditions of persons who are or have been in the service of Pakistan including disciplinary matters. Therefore, in order to oust the jurisdiction of ordinary Court and to confer exclusive jurisdiction on the Service Tribunal in respect of matters relating to terms and conditions of service of Bank employees, it was necessary that the employment under the 'Bank be first declared to be the service of Pakistan. We are, therefore, of the view that the declaration in section 2-A, of the Act, to the effect that the service under an authority, corporation, body or organisation established by or under a Federal law or which is owned and controlled by the Federal Government or in which Federal Government has a controlling share or interest, shall be deemed to be the service of Pakistan and the persons holding any post in such authority, corporation or body were deemed to be civil servant for the purposes of the Act, was meant only for the limited purpose of conferring a right on the aggrieved employee of such organisation/Corporation to avail the remedy of appeal before the Service Tribunal.

37. Therefore, in our view insertion of section 2-A, in the Act did not change the status of the employees of the Bank into civil servant for any other purpose. The employees of the Bank notwithstanding the fact that they were deemed to be in the service of Pakistan and a civil servant for the purposes of the Act, to avail the remedy by way of appeal before the Tribunal in respect of their terms and conditions of service, continued to be governed by their existing terms and conditions of employment with the Bank. The change in the forum of remedy could not alter their terms and conditions of service. It may be mentioned here that in spite of above declaration by the Legislature under section 2-A of the Act that the employees will be deemed to be civil servant for the purpose of the Act, the corporate status of the bank was not affected or changed. It is not disputed before us that before the introduction of section 2-A, in the Act, the services of the respondents were governed under Rules, which were framed by the Board of Directors of the Bank under Articles 121 and 122(22) of Memorandum and Articles of Association of the Bank. It is, therefore, quite clear that the rules governing employment of the respondents with the bank had no statutory backing. In the case of Mst. Zaiba Mumtaz v. First Women Bank Ltd. (Civil Petition No,62-K of 1999) decided by a Bench of this Court consisting of Hon'ble Chief Justice, Nasir Aslam Zahid and Mamoon Kazi, JJ.) on 6-4-1999, the learned Judges of the Bench examined the question of applicability of the Rules, of the Bank after introduction of section 2-A, in the Service Tribunals Act. In that case the services of the petitioner, who was serving as Executive Vice-President, were terminated by giving her 3 months' salary in lieu of notice period. The petitioner after seeking review of the order of termination before the Bank Authority, approached the Federal Service Tribunal but his appeal was dismissed. In the petition for leave to appeal before this Court, it was contended that the services of the petitioner could not be terminated without notice but the contention was repelled as follows:-- "The respondent Bank has its own service rules but admittedly the same are not statutory rules and, in the circumstances, the Tribunal, accepting the plea on behalf of the respondent Bank took the view that the relationship between the respondent Bank and the petitioner was of master and servant. The Tribunal also referred to rule 11 of the Service Rules of the respondent Bank which is as follows:-

11. Termination of service,---Services of an employee in Category I may be terminated by the competent Authority on 3 months' notice or on payment of a sum equal to her substantive pay for three months in lieu thereof: ' Provided that the competent Authority may allow, at its sole discretion, all or any of the benefits ordinarily admissible on retirement from service to an employee in Category I whose services have been terminated under this sub-rule.'

38. ' The Tribunal was of the view that a plain reading of the letter of termination shows that it was a termination simpliciter. The appeal of the petitioner was dismissed by the Tribunal observing as follows:-- 'In view of the above, it is held that the appeal, filed by the appellant before this Tribunal, seeking reinstatement as Executive Vice-President in the respondent-Bank, is incompetent under the law as this Tribunal being a creation of statute cannot go beyond the codified law, meaning thereby that in the absence of statutory rules, the law declared does not permit reinstatement of the appellant and under the statutory law this Tribunal cannot award any damages. The other two objections, discussed above, also support the plea of the respondent bank that the appeal has no merit and is not competent under the law. The appeal is accordingly dismissed. Parties to bear their own costs who be informed '

(3) The Staff Service Rules of the respondent Bank not being statutory rules and there being no other statutory instrument shown to us according to which respondent Bank could not terminate the services in accordance with its own staff service rules; and order termination having been passed in accordance with the applicable rule of the Staff Service Rules of the respondent Bank, the Federal Service Tribunal came to the right conclusion in dismissing the appeal of the petitioner.

39. It may be observed here that this Court has consistently held that in the absence of any statutory rules, relationship between the employer and an employee of a corporation, where protection cannot be sought under the Labour Laws or any statutory instrument, is that of master and servant.

40. In this regard, in the case of Anisa Rehmiff v. P.I.A.C. (1994 SCM R 2232) reference was made to the following judgments:--

(i) Shahid Khalil v. P.I.A.C. (1971 SCM R 568);

(ii) A. George v. P.I.A.C. (PLD 1971 Lah. 784);

(iii) Muhammad Yousuf Shah v. P.I.A.C..(PLD 1981 SC 224);

(iv) Raziuddin v. Chairman, P.I.A.C. (PLD 1992 SC 531);

(v) Lt.-Col. Shujauddin Ahmed v. Oil and Gas Development Corporation (1971 SCM R 566);

(vi) Chairman of East Pakistan Development Corporation v. Rustam Ali (PLD 1996 SC 848);

(vii) Lahore Central Cooperative Bank Ltd. v. Pir Saifullah Shah (PLD 1959 SC 210); (viii)Zainul Abedin v. Multan Central Cooperative Bank Ltd. (PLD 1966 SC 445);

(ix) R.T.H. Janjua v. National Shipping Corporation (PLD 1974 SC 146);

(x) Evacuee Trust Property Board v. Muhammad Nawaz (1983 SCM R 1275);

(xi) Anwar Hussain v. Agricultural Development Bank of Pakistan (PLD 1984 SC 170);

(xii) Principal, Cadet College, Kohat v. Muhammad Shoab Quershi (PLD 1984 SC 170); (xiii)Nisar Ahmed v. The Director, Chiltan Ghee Milk(1987 SCM R 1836);

(xiv) National Bank of Pakistan v. Manzoorul Hasan (1989 SCM R 832);

(xv) Sindh Road Transport Corporation v. Muhammad Ali G. Khokhar (1990 SCM R 1404);

(xvi) K.D.A. v. Wali Ahmed Khan (1991 SCMR 2431);

(xvii) Anwar Hussain v. Agricultural Bank (1992 SCM R 1112) and (xviii) Agricultural Development Bank v. Muhammad Sharif (1988 SCM R 597).

(4) Learned counsel for the petitioner could not controvert the above legal position but referred to the following judgments in support of the proposition that petitioner could claim reinstatement on the ground that the order of termination was mala fide:--

(a) WAPDA v. Muhammad Arshad Qureshi (1986 SCM R 18);

(b) Karachi Development Authority v. Wali Ahmed Khan (1991 SCM R 2434);

(c) Chairman, Pakistan Broadcasting Corporation v.. Nasir Ahmad (1995 SCM R 1593);

(d) Aftab Ahmed v. K.E.S.C. (1999 SCM R 197); ' We have gone through the aforesaid judgments and we find that all of them are clearly distinguishable and do not advance the case of the petitioner that she could claim reinstatement in service. Learned counsel also referred to a decision of the Full Bench of the Federal Shariat Court, dated 18-11-1993 in Shariat Petition No,2-K of 1990 (Muhammad Sharif v. Federal Government and Pakistan National Shipping Corporation). We find that the said judgment is not relevant to the point in issue in this case.

(5) Respondent Bank may have had certain grievances against the petitioner but then a decision was taken to terminate the services of the petitioner under the said rule 11, of the Staff Service - Rules of the Bank and three months' pay was also received by the petitioner from the respondent Bank in lieu of three months' notice under the said rule. The finding of the Tribunal that, in the circumstances, the order terminating the services of the petitioner was a termination simpliciter does not call for interference."

41. ' In another case decided by the same Bench (Civil Petition No,604-K of 1998), on 5-4-1999 while considering the scope of section 2-A, introduced in the Act, the following were the observations made in that case:-- "(2) It has been noticed by us that the learned Tribunal while dismissing the appeal of the petitioner has proceeded on an assumption that section 4 of the Sindh Service Tribunals Act is applicable in the case of the petitioner. Although, it appears that the procedure, as provided by section 4, was not followed in this case by the petitioner as appeal before the Tribunal was not filed within the period of limitation as provided by the said section, but section 4 is applicable only to civil servants and not to persons who invoke jurisdiction of the Tribunal by virtue of a deeming clause inserted in Service Tribunals Act or similar Provincial enactments. The Tribunal appears to have failed to notice that such amendments whereby employees of a Corporation are to be deemed to be civil servants, have been made only in the Service Tribunals Act, both Federal as well as Provincial, but corresponding amendments have not been made in the Civil Servants Act. Therefore, the Legislature appears only to have intended to provide a remedy for redress of grievances to persons serving in Corporations owned or controlled by the Federal or a Provincial Government, but the other terms and conditions applicable to civil servants were not intended to be made applicable to such persons. Consequently, the period of limitation, as provided in section 4, which is applicable only to civil servants, cannot be made applicable to persons who have been declared as such by the said deeming provisions in the Service Tribunals Act as right of a departmental appeal may not be available to them as provided for in case of a civil servant. Reference in this regard may also be made to the case of Lt.-Col. (Retd) Muhammad Siddique v. Allama Iqbal Open University, Islamabad, Civil Petitions Nos.483 of 1998 and 685 of 1998, decided by this Court on 2-11- 1998 wherein under similar circumstances the case was remanded to the Service Tribunal for a fresh decision on the question of limitation."

42. The preceding discussion leaves us in no doubt that the introduction of section 2-A, in the Act, did not change the status of the employees of the Bank into civil servants in so far their terms and conditions of service were concerned. In spite of introduction of section 2-A, in the Act, they continue to be governed by the same terms and conditions of service which applied to them before introduction of section 2-A, in the Act. The only effect of introduction of section 2-A, in the Act was that instead of ordinary remedy available to an aggrieved employee of the bank, in respect of his terms and conditions of service, he became entitled to take his grievance before the Service Tribunal established under Article 212 of the Constitution which alone could determine it now.

8. Having determined the scope of section 2-A, of the Act, we now proceed to examine whether the termination of services of respondents was justified and could not be interfered with by the learned Service Tribunal. The learned counsel for the respondents jointly contended before us that the Retrenchment Scheme introduced by the Bank was discriminatory, violative of the policy decision of Federal Government and contravened the principles of natural justice. The learned counsel for the respondents jointly contended that similar schemes of Golden Hand Shake were introduced in Habib Bank Limited, National Bank of Pakistan, Investment Corporation of Pakistan and State Bank of Pakistan wherein employees were given an option to seek retirement on voluntary basis whereas under the Retrenchment Scheme introduced by the Bank no option was available to the employees which amounted to discrimination amongst the same class of employees, namely, the employees of Financial Institutions. It is also contended that Compulsory Retrenchment Scheme of the Bank was violative of the directions of Federal Government and as such it was not legally enforceable. It is lastly contended in this behalf that the termination of the service of respondents without affording them an opportunity of hearing was opposed to the principle of natural justice.

43. We do not find force in any of the above contentions of the learned counsel for th.. Respondents.

44. There is nothing on record before us to show that the Habib Bank Limited, National Bank Limited, Investment Corporation of Pakistan or State Bank of Pakistan had also suffered losses in the same way as suffered by the Bank. We also neither have before us the terms and conditions of service of the employees of other financial institutions with which the respondents are drawing comparison nor the employees of those institutions are parties before us. In the absence of these particulars, the question of discriminatory treatment to respondents cannot be determined. Apart from it, there is no reasonable basis for classifying the employees of all the financial institutions of the country into one category to determine their terms and conditions of service which may be based on divergent considerations. It is not disputed before us by the learned counsel for the respondents that the Bank from 1995 onward suffered continuous losses. In fact even in the impugned judgment this fact is not disputed that the Bank had suffered continuous losses but it was held that the losses suffered by the bank were not so much attributable to the overstaffing than to the non-recovery of the stuck up loans. It was contended before the Hon'ble Tribunal and also before us by the appellant Bank that before undertaking the exercise of retrenchment of the employees of the Bank, a study was made with the help of Nexus Group and in the light of the findings and recommendations of the study group, Board of Directors of the Bank decided to retrench 5416 employees of the Bank. It is contended by the Bank that to give effect to the scheme of .Retrenchment, the principle of Last Come First Go was strictly followed. These facts were sufficiently brought on record before the Hon'ble Tribunal and were not seriously in dispute. The Bank being a commercial organisation has to be run on commercial considerations. In view of the continuous losses suffered by the Bank for the last several years, it was open to its management to reorganise its working to improve its commercial viability which included the right to dispense with the services of the staff which was found in excess of necessity. In our view so long the action of retrenchment of employees by the Bank was not opposed to any statutory provisions or it came in conflict with any settled rule of law or it was held to be mala tide, it could not be objected to on the ground that the retrenchment could be avoided by some other alternative method by the Bank. In the case of Zeal Pak Cement Factory v. Chairman, West Pakistan Industrial Court (PLD 1965 SC 420), scope of right of reorganisation of a commercial organisation in relation to retrenchment of its staff, was examined by this Court as follows:-- "The question of the exercise of such power as against the general power of an enterprise to reorganize its operations for better management and, in a case like the present, to increase productivity, has been considered earlier by this Court, in several cases of which one, namely, the case of Pakistan Petroleum Workers' Federation v. Burmah-Shell Oil Storage and Distributing Co. Of Pakistan Ltd. PLD 1961 SC 479 may be mentioned. There, the provisions of section 33 of the Industrial Disputes Act, 1947, which in material respects are not different from those of section 30, of the Ordinance of 1959 were considered. At page 512 of the report will be found discussion of a case where the office transport service of three Companies had been reorganised so as to render a number of motor car drivers surplus to requirements, who were accordingly discharged by notice.

45. Three of them who were permanent drivers raised the contention that their dismissal was illegal as it had been made without the prior permission of the Tribunal during the pendency of the adjudication. And that the discharge was by way of victimisation. The Tribunal had opined against them on this ground, holding that the discharge was made in consequence of a bona tide reorganization inside the three Companies by which the redundancy was brought about. But the Tribunal had interfered in favour of two of the senior drivers, who had challenged the re- employment after the retrenchment of two of their juniors, and had directed that they should be employed instead, and this was the question for decision. The following observations made in the case are, however, relevant to the question before us:-- 'The redundancy was brought about by re-organization of a permanent nature, which is said to be still in existence. The Tribunal had found that the reorganization was not designed to affect any employee in particular, but was carried out bona fide. Yet, he found that the preferential ye- engagement of Ghulam Nabi and Habib Bux constituted a breach by the Company of the provision in section 33 of the Industrial Disputes Act that no employer shall during the pendency of an addiction, discharge, dismiss or otherwise punish any workman except for misconduct not connected with the dispute' :-- ' The order of the Tribunal requiring that Ghulam Nabi and Habib Bux should be replaced by Rafi Ahmad and Masoodul Hassan was set aside. But enough was said by the Court to indicate its approval of the Tribunal's finding that a bona fide re-organisation by which pendency results, and consequent notices of discharge were issued by the employer, was not a matter falling within section 33 of the Act of 1947.

46. ' In the present case, there is no manner of doubt that there was a reorganization carried out for a bona fide purpose of the industry, and the notices of discharge were given exclusively in relation to the redundancy which thus resulted and without any taint of victimization. There was nothing in the nature of punishment or vindictiveness involved. We consider that the action of the Factory in respect of the employees retrenched in this case as surplus to requirements being bona fide, it did not attract the control of the Industrial Court under section 30 of the Ordinance, and we accordingly allow this appeal and set aside the order of Chairman directing the reinstatement of these 19 workers. We make no order as to costs' ."

47. ' In the case of Parry & Co. v. Judge Second I.T., Calcutta (AIR 1970 SC 1334) the Indian Supreme Court considered the right of an employer to reorganise and arrange his business in these words:- -

14. It is well established that it is within the managerial discretion of an employer to organize and arrange his business in the manner he considers best. So long as that is done bona fide it is not competent of a Tribunal to question its propriety. If a scheme for such reorganization results in surplus age of employees no employer is expected to carry the burden of such economic dead- weight and retrenchment has to be accepted as inevitable, however, unfortunate it is. The Legislature realised this position and, therefore, provided by section 25-F compensation to soften the blow of hardship resulting from an employee being thrown out of employment through no fault of his. It is not the function of the Tribunal, therefore, to go into the question whether such a scheme is profitable or not and whether it should have been adopted by the employer. In the instant case, the Tribunal examined the propriety of reorganization and held that the company had not proved to its satisfaction that it was profitable. The Tribunal then held (a) that the scheme was not reasonable inasmuch as the number of agencies given up in Madras was less than that in Calcutta, (b) that though development of manufacturing activity was taken up in Madras, no such activity was undertaken in Kidderpore, and (c) that the company should have developed its manufacturing activity in Kidderpore simultaneously with the surrender of the agencies. It is obvious that while reorganising its business it is not incumbent on the company to develop its manufacturing side at the very place where it has surrendered its agencies, namely. Calcutta, nor to do so at the very same time. These considerations which the Tribunal took into account were totally extraneous to the issue before it and the Tribunal ought not to have allowed its mind to be influenced by such considerations and thereby disabling itself from viewing the issue from proper perspective. It was also beyond its competence to go into the question of propriety of the company's decisions to reorganize its business. Having come to the conclusion that the said policy was not actuated by any motive of victimization or unfair labour practice and therefore. Was bona fide, any consideration as to its reasonableness or propriety was clearly extraneous. Therefore, its finding that the company had failed to establish that it was profitable was incompetent. It is for the employer to decide whether a particular policy in running his business will be profitable, economic or convenient and we know of no provision in the industrial law which confers any power on the Tribunal to inquire into such a decision so long as it is not actuated by any consideration for victimisation or any such unfair labour practice."

48. (The underlining is by us to supply emphasis).

9. In view of the above-stated legal position, we are of the view that no exception could be taken to the retrenchment of the employees of the appellant Bank if such an action of the Bank was motivated by commercial considerations and for reasons to run the Bank on profitable lines. In our view such an action could only be brought under challenge by aggrieved employees if it could be shown that the action was not based on commercial consideration on which the Bank was being run, but was motivated by some extraneous consideration. There is nothing on record before us to conclude that the action taken by the appellant Bank was based on any mala fide consideration.

49. Mr. Abdul Mujeeb Pirzada, the learned counsel for respondents, has contended before us that the management deliberately decided to terminate the services of all these employees under the Retrenchment Scheme who were recruited after 1-10-1991 in the Bank as the management wanted to oust only those employees who were employed during the tenure of previous Government.

50. Besides the fact that this contention was not accepted by the learned Tribunal it is based on some misconception. The previous Government which came into power as a result of general elections held in November, 1988, remained in power up to 6-8-1990 when it was dismissed by the then President. Thereafter, the present Government came into power as a result of general elections of 1990 and remained in power up to 18-4-1993. The previous Government once again came as a result- of general election held in October, 1993 but was again dismissed on 6-11-1996. Since February, 1997 the present Government is now in power. It is, therefore, quite clear that for the major period, after 1-10-1991, up to the, announcement of Retrenchment Scheme by the Bank, the present Government remained in power. The contention of Mr. Mujeeb Pirzada that the decision of the management of the Bank to terminate the services of only those employees who were appointed after 1-10-1991, was a deliberate attempt to oust the employees appointed during the tenure of previous Government is without any basis and merit. It is also contended by the learned counsel for the respondents jointly that the principle Last in First Go was not strictly followed while terminating services of the employees of the Bank inasmuch the employees who were promoted a few days ago before enforcement of the scheme for retrenchment, were terminated from service without providing them an opportunity to exercise option of reversion to the lower grade from where they were promoted to the higher grade. Except for this argument, the learned counsel for the respondents are unable to point out that the appellant while giving effect to Retrenchment Scheme did not follow the principle of Last in First Go. There is nothing in the Service Rules, of the Bank to show that a person promoted to a higher post/grade continued to hold lien on the lower post and that he also had the right to revert to the lower post in event of retrenchment. In the absence of such a provision in the Service Rules, the argument that while retrenching the employees the appellant should have kept in view the right of reversion of employees who were recently promoted to the higher grade from the lower grade, was of no avail. A similar question was considered by this Court in the case of Utility Stores Corporation v. Punjab Labour Appellate Tribunal (PLD 1987 SC 447) but was repelled as follows:-- "The basis on which the Tribunals below have granted relief to the respondents was that if they were surplus as supervisors then they had a right to be reverted to their original posts. The High Court took basis to be 'just and proper' in the facts and circumstances of the case. Now the question as to whether they had the right to be reverted to the posts of Salesmen from which posts they were promoted to the posts of Supervisor depended on as to whether they retained their lien on the posts of Salesmen on being promoted as Supervisors.

51. ' Ordinarily the word 'lien' means the right of an officer to resume, on return to duty, a substantive or acting appointment from which he is relieved. Fundamental Rule 13 (Government of Pakistan 'Compilation of the Fundamental Rules and Supplementary Rules', Volume 1) lays down that a Government servant holding substantively a permanent post retains all lien on that post while performing the duties of that post or while on foreign service, or holding a temporary post, or officiating in another post. Such right is neither secured nor guaranteed to the respondents by or under any law. The learned counsel also was unable to point out to us any provision by which he could press the rule of lien to the rescue of the respondents. In that event, the respondents cannot have a grievance over their retrenchment which was on the principle 'last in first out' as contained in Standing Order No,13 of the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968.

52. ' It was feebly urged that the appellants could have been re-employed under section 14 of the (Standing Orders) Ordinance, 1968, but for that no proper basis was laid to determine whether the employer proposed to take into his employment any person within a period of one year from the date of such retrenchment in the category of supervisors. And if any situation had fallen vacant for a Salesman even then this provision was not applicable as it only covered the category from which the workman was retrenched.

53. ' The High Court without attending to the existence of a right of the respondents to be reverted to the posts of Salesmen on being retrenched held that order to be 'just and proper'. The words 'just' and 'proper' mean 'right or fair' and 'suitable' respectively. The word 'just' in subsection (5) of section 25-A of the Ordinance has been used as an adjective to mean 'according to law' and the word 'proper' to mean 'accurate'. (See Legal Thesaurus, Regular Edition, by William C. Burton at pages 304 and 415). Therefore, the order to be 'just and proper' conveys the eminent sense of the order being in accordance with law and to be proper. It involves all procession and procedural application of law and includes adequate application of substantive provisions thereof. Commonly stated it all takes in matters of legality, property and correctness of the order.

54. ' There is no dispute as to the ambit of the adjudicator process. The. Objection, however, was that the Tribunal which was cognizant of the grievance could not adjudicate upon it as there was not issue to be tried in regard to any violation of a right guaranteed or secured by or under any law.

55. This obviously reflects to the absence of this jurisdiction of the Tribunal which the High Court failed to take note of and branded the order as 'just and proper' which could not in the absence of a legal right having been violated."

56. ' It is next contended by the learned counsel for the respondents that after the nationalization of the Bank under Banks (Nationalization) Act, 1974, the management of the Bank could not take a decision contrary to the policy directive issued by the Government in view of section 11 of the Banks (Nationalization) Act, 1974. The contention of the learned counsel for the respondents does not appear to be correct. Firstly, there was no policy decision of the Government that the Bank could not introduce a retrenchment scheme otherwise warranted by the circumstances in which the Bank was placed. Secondly, section 11 (ibid), relied by the learned counsel for the respondents has been substantially changed in its scope and effect after it was introduced in the amended form in the Banks (Nationalization) Act, 1974, Act XV of 1991. Section 11 of the Banks (Nationalization) Act, 1974 reads as follows:-- "11. General provisions pertaining to management of banks.--(1) A bank shall have a Board of Directors consisting of the President and six other members to be nominated by the Federal Government.

(2) The general direction and superintendence of the affairs and business of a bank, and overall policy making in respect of its operations, shall vest in its Board which may exercise all such powers and do all such acts, deeds and things as the bank was competent, immediately before the commencing day, to exercise or do in a meeting of the Board of Directors.

(3) A bank shall have an Executive Committee consisting of the President and four other members being executive of the bank to be nominated by the Board; and the Executive Committee shall conduct the day-to-day affairs and business of the bank under the guidance and supervision of the Board.

(4) A bank shall have an Evaluation Committee consisting of the President and such member as may be appointed by the Board from amongst such of its members as are not executives of the bank; and the Evaluation Committee shall---

(a) recommend to the Board the criteria that should be laid down for different categories of employee for carrying out a fair assessment of the merit of the executives and other employees; and

(b) monitor and assess the performance of the employees of the bank, other than the President, and report its findings to the Board.

(5) The President shall be the Chief Executive of a bank and shall preside at the meetings of the Board, the Executive Committee and the Evaluation Committee and direct, manage and control the affairs of the bank.

(6) The Chairman and members of the Council, and the President and members of the Board shall be appointed by the Federal Government and shall hold office during the pleasure of the Federal Government on such terms and conditions as may be approved by it.

(7) No person shall be eligible for appointments as the Chairman or a member of the Council, or the President or a member of the Board or the Executive Committee, if---

(i) he is or has at any time been adjudged an insolvent or- has suspended payment or has compounded with his creditors; or

(ii) he is a minor or is found lunatic or of unsound mind; or

(iii) he is not a citizen of Pakistan; or

(iv) he was at any time in the service of the Federal Government or a Corporation or Board owned or controlled by any such Government or in the service of a Bank and was dismissed; or

(v) he is a person against whom any action has been taken or any proceedings are pending under section 412, of the Companies Ordinance, 1984 (XLVII of 1984), or section 83 of the Banking Companies Ordinance, 1962 (LVII of 1962); or

(vi) he is or has been convicted of any offence of tax evasion under any law for the time being in force: ' Provided that the Federal Government shall, before appointing any person, satisfy itself that the person will have no such financial or other interest as is likely to affect prejudicially the performance by him of the functions of the office to which he is being appointed.

(8) The Chairman and a member of a Council and the President and member of the Board and the Executive Committee shall be liable to such disciplinary action and penalties, to be awarded in such manner and by such authorities, as may be prescribed.

(9) In the discharge of their functions, the President and members of the Board and the members of the Executive Committee shall act on sound business principles and be guided by such directives in matter of policy involving the public interest as may be given to the bank by the Federal Government, which shall be sole Judge as to whether or not any matter is a matter of policy involving the public interest.

(10) In the exercise of their powers, the Board of Directors, the Executive Committee and the President of a bank incorporated by or under any special law shall not be subject to any restrictions which do not apply to the Board of Directors, the Executive Committee or the President of a Bank registered under the Companies Ordinance, 1984 (XLVII of 1984).

(11) The banks shall furnish to the council such information, returns or reports as may be required of them.

(12) Except as provided in subsection (3), of section 12, the Federal Government, the Council, 'the President, the Board or the Executive Committee, shall not issue any directive or take any decision in contravention of the provisions of the State Bank of Pakistan Act, 1956 (XXXIII of 1956), or the Banking Companies Ordinance, 1962.

(13) The Federal Government may constitute such consultative bodies at the Provincial and other levels as may, in its opinion, be necessary for gathering information from the public to identify areas of improvement in service and facilities to customers and the public, including measures for meeting regional credit requirements."

57. By virtue of clause (2) of section 11 (ibid), the general direction and superintendence of the affairs and business of the Bank and overall policy making in respect of its operations, now vest completely in its Board of Directors. It is not disputed before us that the compulsory retrenchment scheme which was introduced by the Bank, was approved by its Board of Directors. There is nothing on record before us to hold that the Board of Directors, while approving the above scheme for retrenchment acted on any extraneous consideration other than commercial consideration. It is neither open to allege nor possible to prove that the Board of Directors had any malice or maid fides consideration against the retrenched employees and specially the respondents, while approving the scheme for retrenchment of the Bank employees. The learned counsel for the, respondents have very vehemently relied on the decision f the Federal Government to contend that the downsizing policy circulated by the Cabinet Secretariat, Establishment Division, vide letter, dated 12-8-1997, provided downsizing in all public corporations owned and run by the Federal Government on purely voluntarily basis but this policy decision of the Government was totally violated by the Bank while framing compulsory scheme for retrenchment of its employees. The policy decision of the Federal Government for downsizing in the Federal Ministries and Corporations circulated through its letter, dated 12-8-1997 reads as follows:-- "Mr. Muhammad Afzal Establishment Secretary, 9212118Kahut, Tel:CABINET SECRETARIAT, ESTABLISHMENT DIVISION, GOVERNMENT OF PAKISTAN, ISLAMABAD.

58. No,35/2/1997- RW.III 12th August, 1997.

59. ' Subject: DOWNSIZING OF THE FEDERAL MINISTRIES/DIVISIONS, ATTACHED DEPARTMENT/OFFICERS, PUBLIC SECTOR CORPORATIONS AND AUTONOMOUS BODIES.

60. ' My dear Secretary, ' The Government is seriously concerned about considerable overstaffing in the Federal Government Ministries, Division, Departments, Corporations and Autonomous Bodies. This overstaffing has been magnified particularly during the last three years, when a large proportion of appointments were made without following the rules/regualations and the prescribed procedures.

61. Most of Public Sector Corporations are on verge of Financial collapse because of operational inefficiencies and heavy overstaffing.

(2) The Government continues to face severe resource constraints. Large portion of revenue expenditure and entire development expenditure is being financed through borrowings at high cost. This situation, you would appreciate, cannot be sustained.

(3) The Government has accordingly decided to introduce a Golden Hand Shake/Early Retirement Benefits Schemes for the Government servants and also for the employees of Public Sector Corporations/Autonomous/Semi-Autonomous Bodies on voluntary basis as under:--

(i) Golden Hand Shake may be offered to the employees with service up to '9 years equivalent to 3 months' basic salary for each completed year of service as per schedule given at Annexure I.

(ii) Early Retirement Benefits:

(a) Early retirement benefits may be offered to the employees with more than 10 years and up to 20 years of service equivalent to the pensionary benefits as admissible to employees with 25 years of service including the commutation be refits as per schedule given at Annexure II.

(b) More than 20 years and up to 25 years of service: ' The employees with more than 20 years and up to 25 years of service may be offered early pensionary benefits as admissible to the employees with 30 years of service including commutation benefits as per schedule given at Annexure III.

(c) More than 25 years of service: ' The employees with more than 25 years of service may be offered maximum pensionary benefits including the commutation benefits as per schedule given at Annexure IV.

(d) Transport and Housing.

62. ' The entitled officers may be allowed to purchase official cars at the depreciated value. The officials/officers seeking golden hand shake or early retirement benefits may be allowed to retain Government housing in their occupation for a period of one year.

(4) You are requested kindly to circulate the terms and conditions of the Golden Hand Shake/Early Retirements Benefits Scheme to each of the Government servants in the Federal Ministries, Division, Departments and offices under your control and to elicit their response on the enclosed pro forma (Annexure VII) within a period of two months of receipt of this letter and forward the same to the Establishment Division for further action. It is also requested that a package for each of the Corporations/Autonomous Bodies/Semi-Autonomous Bodies under your control may be worked out on the above lines subject to the prevailing pension rules of these organizations and a response elicited from the Corporations/Autonomous Bodies/Semi-Autonomous Bodies employees based on the respective package.

63. With regards.

64. ' Encl: Annexures Ito VII Your sincerely, (Sd.)

65. (MUHAMMAD AFZAL KAHUT)."

66. ' A careful reading of the above policy decision of the Government will show that the above downsizing scheme was circulated for the purpose of the guidance of the departments of Federal Government and in so far the Corporation, authority or organization run and controlled by the Federal Government were concerned, a package on the basis indicated in the letter was to be worked out subject to the prevailing rules of pension in the corporations. The above policy decision, in our view, did not place any restriction on the Corporation or Autonomous Bodies to frame any other similar scheme keeping in view the prevailing circumstances. Therefore, if the circumstances prevailing in a corporation/autonomous body justified for compulsory retrenchment of the staff in order to run it on commercial lines on profitable basis, such an action would not come in conflict with the directive of the Federal Government, dated ' 12-8-1997. A reference to the Compulsory Retrenchment Scheme introduced by the Bank would show that while terminating the services of employees, the Bank offered an amount equal to 3 months' basic salary for each completed year of service and 1-1/2 months basic pay for each remaining month of service whichever is less subject to a maximum of 90 months' basic pay. In addition to it, it also offered an amount equal to 10 years' normal post retirement medical annual monetary limit presently available to a retiring officer and executive in lump sum as final settlement in respect of medical facilities. An amount equal to Benevolent Fund Grant for 10 years in lump sum in advance at the time of settlement of dues was also offered. Leave encashment facility equivalent to 50% of leave balance subject to a maximum of 180 days was also offered to the retrenched employees. It is contended by the learned counsel for the appellant that in spite of the fact that under Rule 15 of the Bank Service Rules, the Bank Management was entitled to terminate the services of a bank employee after giving him 3 months' notice but instead of following that procedure it opted to extend the benefits to retrenched employees which were far in excess of the amount of notice pay provided under Rule 15 of the Rules. The learned counsel for the respondents on the other hand contended that the provisions of Rule 15 were not applicable in the present cases as it did not apply to retrenchment of workers. We are unable to accept the contention of learned counsel for the respondents. The termination of the service of an employee is one of the modes of retrenchment. There is no justification to read Rule 15 (ibid), in a way so as to restrict its application only to the case of termination of service of an individual employee. There being no specific rule in then United Bank Limited (Staff) Service Rules, 1981, dealing with the retrenchment, general provision for termination of service contained in Rule 15 was applicable. Mere fact that as a result of retrenchment, services of large number of employees were to be terminated, would not make rule 15 (ibid) inapplicable in such cases.

67. It has been very vehemently contended by the learned counsel for the respondents jointly that termination of services of respondents from the Bank was in utter disregard of the principles of natural justice as the respondents were not afforded any opportunity of hearing or to place their cases before the authority before they were terminated from the service. The contention of the learned counsel for the respondents has not impressed us at all. The termination of the services of respondents as a result of retrenchment carries no stigma. In fact, an employee terminated under the Retrenchment Scheme is eligible for future employment as and when such contingency arises.

68. As the termination of respondents from service did not carry any stigma, in our view, in terms of rule 15 of the Rules, they were not entitled to any notice of hearing before termination of their employment. Apart from it, the reasons for termination of their services were set out in detail in the retrenchment scheme which was circulated to all the employees of the Bank in advance and, therefore, the respondents could not plead that they were not informed of the reasons for termination of their services. We have already pointed out earlier that as there were no statutory rules applicable to the respondents, the terms and conditions contained in U.B.L. (Staff) Service Rules, 1981 were applicable to them. These rules continued to govern the service of the respondents notwithstanding the fact that under section 2-A (ibid), their services were declared to be one in the service of Pakistan and they were deemed to be civil servants for the purposes of Service Tribunals Act, 1973.

10. Mr. Akram Shaikh, the learned counsel for the respondents has relied on the case of Mrs. M.N.

69. Arshad v. Miss Naeema Khan (PLD 1990 SC 612) to contend that even non-statutory rules could be enforced through the Service Tribunal. The learned counsel relying on the above observations argued that the Service Tribunal having ordered reinstatement of respondents in service under the Rules, the order could not be interfered with by this Court. In advancing the above submission, the learned counsel totally overlooked the ratio laid down in Mrs. M.N. Arshad's case. This case related to a dispute between the teachers of the Islamabad Model College regarding promotion. This Court held that Board of Governors of the College which was created through a resolution of Ministry of Education, was neither a corporate body nor a jurisdictic person. The teachers of Model College were, accordingly, held to be 'civil servant'. It was also observed in this case that in so far employees of corporation were concerned, their relationship with the corporation was governed on the principle of 'Master and Servant'. The learned Service Tribunal in the case having found that the rules of promotion framed by the Board of Governors of the school were violated, set aside the promotion and directed reconsideration of the case of promotion in accordance with the rules. It was in this context that the contentions raised before this Court that the rules of promotion not being statutory, could not be enforced, that this Court observed that even non-statutory rules could be enforced through Service Tribunal. The learned counsel for the respondents have not been able to point out as to which of the Bank rule was violated by the management while terminating the services of the respondents.

70. ' Mr. Akram Shaikh, the learned counsel for some of the respondents has also relied on the case of Delhi Transport Corporation v. D.T.C. Mazdoor Congress (AIR 1991 SC 101) to contend that an employee of the Corporation which is controlled by the Government is not governed by the principle of Master and Servant. The learned counsel has specifically relied on the following passage in the judgment of Sharma, J. In the above case:-- "The employment under the public undertaking is a public employment and a public property. It is not only the undertaking but also the society which has a stake in their proper and efficient working. Both discipline and devotion are necessary for efficiency. Tb ensure both, the service conditions of those who work for them must be encouraging, certain and secured, and not vague and whimsical. With capricious service conditions, both discipline and devotion are endangered and efficiency is impaired.

71. ' The right to life includes right to the right to livelihood, therefore, cannot hang on to the fancies of individuals in authority. The employment is not a bounty from them nor its survival be at their mercy. Income is the foundation of many fundamental rights and when work is the sole source of income, the right to work becomes as much fundamental. Fundamental rights can ill-afford to be consigned to the limbo of undefined premises and uncertain applications. That will be a mockery of them."

72. ' From the report of the case, it appears that the service regulations in that case were statutory in nature having been framed in pursuance of a statutory provision. The Indian Supreme Court found these service regulations opposed to the provisions of Article 14 of the Indian Constitution. In the case before us, the U.B.L. (Staff) Service Rules, 1981, are not statutory in nature and it has not been shown as to how these rules come in conflict with the fundamental rights guaranteed under the Constitution. The case of Board of Trustees, Port of Bombay v. Dilipkumar (AIR 1983 SC 109) referred by Mr. Akram Shaikh in support of his contention that a notice was necessary before termination of services of the respondents, has no application in the facts and circumstances of the present cases as neither any proceedings were taken against the respondents before their termination from service nor any stigma was attached to the termination of the services of the respondents. Mr. Shaikh also referred to the observations in the case Federation of Pakistan v. Public-at-Large (PLD 1988 SC 202) to contend that an arbitrary or unbridled power is opposed to the Islamic concept of Adal-o-Ahsan. There can be no cavil with the proposition that unbridled power is against the Islamic concept of Adl-o-Ahsan but we are unable to understand as to how these principles are applicable in the present cases. Although rule 15 of the Rules vested the appellant with the power to dispense with the service of an employee of the Bank by serving him three months' notice or pay in lieu thereof, but the management did not resort to this rule while terminating the services of respondents. The managements in the Retrenchment Scheme allowed substantial benefit to the retrenched employees and, therefore, it cannot be said that the exercise of power by the management of Bank was opposed to the Islamic principles of Adal-o-Ahsan. Mr. Akram Shaikh has also invited our attention to the commentaries of Bachaya Dr. Durga Das Basu on Article 21 of the Indian Constitution but these commentaries in our view do not advance the case of respondents any further. The 2 American cases cited by the learned counsel reported as Yick Wo y.

73. Hopkins (118 US 356) and Slaughter House Cases (83 US 36) similarly have no application in the circumstances of the present cases.

11. As a result of the above discussion, we are of the view that the judgment of the Service Tribunal holding the termination of respondents from service as illegal and directing their reinstatement in service is not legally sustainable. We, accordingly, allow the above appeals, set aside order of the learned Tribunal but there will be no order as to costs in the circumstances of the cases.