Muhammad Sadiq Vs Govt of KP

JUDGMENT SHEET

PESHAWAR HIGH COURT, MINGORA BENCH

(DAR-UL-QAZA), SWAT

(Judicial Department)

W.P No. 1081-M/2022

Muhammad Sadiq and 01 other —Versus— The Government of Khyber Pakhtunkhwa through Secretary Education and others

PRESENT:

Syed Abdul Haq, ASC for petitioners.

Mr. Haq Nawaz Khan, Additional A.G. for respondents.

Date of hearing: 24.12.2025

JUDGMENT

QAZI JAWAD EHSANULLAH, J.- The petitioners have filed this petition under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973, seeking the following reliefs:

“It is, therefore, humbly prayed on acceptance of this writ petition, this hon'ble court may graciously issue: i. direction to the respondent No.4 to refund the amount already deducted/recovered from petitioner No.1 and also retain the annual increments already granted to them on the strength of letter dated 13.01.2000.

ii. that the respondent No.4 be restrained to deduct/recover the amount Rs. 3, 37,723/- from petitioner No.2 on the strength of alleged letter dated 06.11.2001.

iii. it is further prayed the letter dated 06.11.2001 be declared illegal, against the right of petitioners and be cancelled.”

Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

2.The present petitioners are retired employees of the Education Department. The particulars relating to their appointments, promotions, and retirement are as under:

S. Name Date of Promotion Promotion Date of No. appointment retirement

1 Muhammad 29.6.82 17.7.99 17.03.2016 03.1.2022 Sadiq as SV to SST to SS

2 Ghani Ur 10.12.85 17.8.2006 to 13.1.2022 Rahman as CT to SS BPS-18

The petitioner No.1 was awarded selection grade with effect from 01.08.1998 and his pay was accordingly fixed in BPS-15. He, however, opted for refixation of his pay with effect from 01.12.1998 instead of 01.08.1998, in terms of letter No. FD(SR-I)16-1/98 dated 13.01.20001 issued by the provincial Finance, Excise and Taxation Department, which option was duly recommended by the competent authority on 17.05.2000. Subsequently, the District Accounts Officer, Dir Lower (respondent No.4), released arrears of pay and allowances on account of grant of selection grade from BPS-14 to BPS-15 with effect from 01.08.1998. Likewise, petitioner No.1, on the basis of the ibid letter, continued to draw annual increments and admissible allowances from 1998 till 01.12.2021. It is Page 55 of the writ petition Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

further averred that respondent No.4, purportedly relying upon letter No. FD(SR-I)16-1/98 dated 06.11.2001, deducted/recovered an amount of Rs. 347,723/- from petitioner No.1, representing the benefits earlier extended to him pursuant to letter dated 13.01.2000. The case of petitioner No.2 is stated to be identical in all material respects. Being aggrieved by the aforesaid deductions/recoveries, the petitioners have approached this Court through the instant writ petition.

3.Respondents No. 3 & 4 have filed their para- wise comments resisting the claim of petitioners. They contend that the petitioners were never lawfully entitled to refixation of pay on the basis of option exercised under Finance Department letter dated 13.01.2000, as the said letter was subsequently withdrawn with immediate effect vide Finance Department letter No. FD(SR-I)16-1/98 dated 06.11.2001. It is asserted that any arrears or increments paid pursuant to the earlier letter were merely provisional in nature. It is further stated that upon the petitioners’ superannuation, the District Accounts Officer, in accordance with established practice, rechecked the entire service record, including pay fixation and service verification, from initial appointment till retirement.

During this scrutiny, the increments and refixation Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

allowed on the basis of the withdrawn policy were found to be wrong and illegal. The respondents rely upon clarification issued by the Auditor General of Pakistan, endorsed by the Accountant General Pakistan Revenues, to the effect that no option for refixation of pay was permissible in such cases and that earlier cases, where such option had been allowed, were liable to review and rectification. Consequently, the overpayments were calculated and recovered from the pension and commutation amounts of the petitioners strictly in accordance with the applicable rules. It is maintained that similar action was taken in respect of petitioner No.2, whose pay was also refixed after retirement and excess payment recovered. The respondents conclude that they have acted within the scope of their lawful authority and were bound to implement the rules and instructions issued by the Provincial Government of Khyber Pakhtunkhwa from time to time.

4.It is pertinent to mention that, at an earlier stage, the present petition, insofar as it related to petitioner No.1, was converted into an appeal vide order dated 26.11.2024 to the extent of petitioner No.1 and transmitted to the Khyber Pakhtunkhwa Service Tribunal for adjudication in accordance with law. As regards petitioner No.2, the Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

petition was dismissed as not pressed on the understanding that no recovery was being effected from him by the respondents. Subsequently, a review of the said order was sought, which was allowed on 26.03.2025, whereupon the writ petition was restored to the extent of petitioner No.2 Ghani Ur Rahman. For facility of reference, the relevant portion of the order is reproduced herein below:

“5. In view of the above, this review petition is allowed. Resultantly, the impugned order of this Court dated 26.11.2024 passed in W.P No.1081-M/2022 is hereby set aside but only to the extent of the present applicant (petitioner No.2 of the writ petition) whereas, it is kept intact to the extent of petitioner No.1 namely Muhammad Sadiq. Accordingly, the office is directed to restore W.P No.1081-M/2022 to the extent of the applicant/ petitioner No.2 Ghani Rahman on its original number. The Court was informed that the original writ petition has already been sent to the Khyber Pakhtunkhwa Services Tribunal in compliance of the aforesaid order of this Court dated 26.11.2024, therefore, the office is directed to prepare a hard copy of the writ petition from the database of this Court for further proceedings in the case.”

Thus, only the case of petitioner No.2 Ghani Ur Rahman remains before this Court for adjudication.

5.Learned counsel for the petitioner contends that petitioner No.2, Ghani-ur-Rahman, was accorded Selection Grade of BPS-15 with effect from 13.07.1999 on the basis of an endorsement dated 11.09.20022 and retired from service with effect from 13.01.2021 vide Page 44 Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

Notification No. AO/E&SE/6-11/LPR/Dir (Lower) dated 14.02.20223. It is further urged that the Selection Grade conferred upon him was granted pursuant to the policy notified by the Provincial Government through Notification No. FD(SR-I)16-1/98 dated 13.01.2000, which policy was subsequently withdrawn through Notification No. FD(SR-I)16-1/98 dated 06.11.2001 with immediate effect. On the basis of this later notification, the authorities have sought to recover emoluments and other pensionary benefits already drawn by the petitioner on account of the Selection Grade so granted. According to learned counsel, such retrospective application of policy cannot adversely affect Selection Grade that had already been validly conferred, particularly in cases like the present where the petitioner continued in service and ultimately retired while the benefit remained operative.

On these premises, learned counsel seeks the indulgence of this Court.

6.Conversely, learned Additional Advocate General contended that the controversy raised in the present petition squarely pertains to the terms and conditions of service of the petitioner and, as such, is not amenable to the constitutional jurisdiction of this Court in Page 31 Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

view of the bar contained in Article 212 of the Constitution.

7.In order to rebut the preliminary objection raised by the learned Additional Advocate General regarding the maintainability of the instant petition, learned counsel for the petitioner contends that the bar contained in Article 212 of the Constitution is attracted only where the impugned action emanates from a competent authority. In the present case, the competent authority, namely the District Education Officer, has never passed any order withdrawing the Selection Grades granted to the petitioners. Learned counsel further refers to section 4 of the Khyber Pakhtunkhwa Service Tribunal Act, 1974, which envisages that the jurisdiction of the Service Tribunal is attracted only upon the passing of a final order by the departmental or appellate authority. Since no such final order has been made in the present matter, he maintains that the constitutional jurisdiction of this Court is not barred and that the writ petition is, therefore, maintainable.

8.Arguments heard and record perused.

9.The objection relating to the bar contained in Article 212 of the Constitution is taken first. This objection so raised by the learned A.A.G is misconceived Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

in the peculiar facts of the present case. The record clearly reflects that no final order withdrawing the Selection Grades of the petitioner was ever passed by the competent authority, namely the District Education Officer. The impugned deductions were unilaterally effected by the Accounts Office without any antecedent departmental decision determining the rights of the petitioner. Section 4 of the Khyber Pakhtunkhwa Service Tribunal Act, 1974 is attracted only where a final order of a departmental or appellate authority exists. In the absence of such an order, the jurisdiction of the Service Tribunal does not come into play. Consequently, the jurisdiction of this Court under Article 199 of the Constitution remains intact, particularly where recovery from pensionary benefits is being effected without lawful authority and in violation of settled principles of law. Reliance is placed on Dr. Ahmad Salman Waris, Assistant Professor, Services Hospital, Lahore V. Dr. Naeem Akhtar and 05 others4 wherein it has been ruled:

“11. ..... Therefore, in order to make a matter exclusively cognizable by a Tribunal under the Act, and to create an ouster of jurisdiction of all other Courts and Tribunals under Article 212 of the Constitution, it must be shown that the matter is agitated by a civil servant as defined under the Act, it has arisen from a final ~. order of a departmental authority whether original or appellate, it concerns the ` terms and conditions of the aggrieved civil servant and that it is not covered by the exceptions

PLD 1997 S.C 382

Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

mentioned in proviso b(i) and (ii) of section 4 of the Act. If any of the conditions mentioned above are non-existent in a case then, the bar contained in Article 212 of the Constitution will not be operative.”

In view of the foregoing, the objection raised by the A.A.G fails, and the present writ petition is held to be maintainable and entertainable before this Court under Article 199 of the Constitution.

10.The pivotal controversy requiring determination in the present case relates to the legality of recovery effected by the respondents on the basis of a policy which admittedly stood withdrawn subsequent to the grant of Selection Grade to the petitioner. The issue, therefore, squarely revolves around the permissibility of giving retrospective effect to such withdrawal and the corresponding duty cast upon the respondents under the law. It is an undisputed position that the petitioner before us was granted Selection Grade of BPS-15 w.e.f 13.07.19995 during the subsistence of Finance Department Notification No. FD(SR-I)16-1/98 dated 13.01.2000. His pay was fixed accordingly, annual increments were released, and the benefits continued uninterrupted for several years until his retirement. The subsequent Notification dated 06.11.2001 merely withdrew the earlier policy; however, it neither expressly nor impliedly Page 44 Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

annulled the Selection Grades already granted nor directed recovery of benefits lawfully drawn thereunder. It is a settled principle of service jurisprudence that, unless a withdrawal notification is expressly made retrospective, it operates prospectively and cannot divest vested or accrued rights. Likewise, it is trite law that a notification and/or executive order operates prospectively and not retrospectively in the absence of any express or implied intention to the contrary. Guidance in this regard is drawn from Senior Member, BOR and others v. Sardar Bakhsh Bhutta and another 6, wherein it has been held:

“4......It,. is by now a well settled principle of statutory interpretation that the insertion or deletion of any provision in the rules or the law, if merely procedural in nature would apply retrospectively but not if it effects substantial rights, which already stood accrued at the time when the un-amended rule or provision was in vogue.”

With specific reference to notification and/or executive order, the apex Court quoted a previous precedent in Hashwani Hotels Limited V. Federation of Pakistan and others reported as PLD 1997 S.C 315, the relevant paragraph of the pronouncement referred to in the judgment, is reproduced below for the sake of clarity.

"Reverting to the question, whether such a direction can affect the loan agreements which were already concluded prior to such direction, it tray be observed that it is a well-settled principle of interpretation of a notification and/or an executive order that the same can operate

2012 SCMR 864

Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

prospectively and not retrospectively. This principle is equally applicable to a statute in the absence of any express or implied intendment contrary to it."

This principle has recently been reiterated and reaffirmed by the apex Court in Government of Pakistan through Secretary, Establishment Division, Islamabad v.

Muhammad Ismail and another 7.

11.Benefits which stood crystallized during the operative period of a valid policy cannot be recalled at a later stage merely because the policy itself has been withdrawn. Any other interpretation would offend the doctrines of legal certainty, fairness, and legitimate expectation. Thus, it is abundantly clear that there was no fault on the petitioner rather his bona fide is established from the available record. This Court, in Hussain Muhammad V. Vice-Chancellor, Islamia College, Peshawar and 4 others 8, while dealing with the issue of retrospective application of a policy withdrawing accrued right to person held that:

“22. In the present case, it is clear that the petitioner by applying in pursuance of the advertisement and thereafter taking steps, which were recognized and accepted by the respondent-University and was thus awarded the final scholarship, had gained valuable rights to be considered for the said scholarship in accordance with policy then prevailing. Moreover, the rights so acquired by the petitioner could not be taken away from him by the respondent-University, unless there was any fraud,

2023 PLC (C.S.) 740

2015 CLC 500

Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

misrepresentation or illegality committed by him in applying or obtaining the said scholarship. The respondent-University, however, categorically made it clear that neither the petitioner committed any misrepresentation or fraud in applying for the advertisement scholarship nor did he attempt or abuse the process of selection leading to the award of the scholarship.

23.As far as the authority of the respondent-University to recall its earlier order in applying the principle of 'locus Poenitentiae', the facts and the circumstances of the present case reveals that the `valuable rights' had accrued in favour of the petitioner and steps had been taken by the petitioner, hence the same could not be withdrawn. “22. In the present case, it is clear that the petitioner by applying in pursuance of the advertisement and thereafter taking steps, which were recognized and accepted by the respondent-University and was thus awarded the final scholarship, had gained valuable rights to be considered for the said scholarship in accordance with policy then prevailing. Moreover, the rights so acquired by the petitioner could not be taken away from him by the respondent-University, unless there was any fraud, misrepresentation or illegality committed by him in applying or obtaining the said scholarship. The respondent-University, however, categorically made it clear that neither the petitioner committed any misrepresentation or fraud in applying for the advertisement scholarship nor did he attempt or abuse the process of selection leading to the award of the scholarship.

23.As far as the authority of the respondent-University to recall its earlier order in applying the principle of 'locus Poenitentiae', the facts and the circumstances of the present case reveals that the `valuable rights' had accrued in favour of the petitioner and steps had been taken by the petitioner, hence the same could not be withdrawn.

In light of the case-law referred to above, it stands conclusively established that where a valuable right accrues to an individual under a policy validly in force and such right is acted upon with the approval and Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

recognition of the competent authority, the same cannot be withdrawn with retrospective effect. In the absence of any allegation or proof of fraud, misrepresentation or patent illegality, a subsequent change or withdrawal of policy does not authorize the respondents to unsettle finalized matters or divest accrued rights. Any attempt to apply such withdrawal retrospectively is barred by the doctrine of locus poenitentiae and is inconsistent with the settled principles of fairness, legal certainty, and protection of vested rights governing administrative actions. Applying these principles to the present case, the subsequent withdrawal of the policy could not lawfully affect the selection grades already granted to the petitioners, nor justify recovery of benefits accrued thereunder. Consequently, the impugned recoveries are devoid of lawful authority and cannot be sustained.

12.The action of the respondents, particularly respondent No.4, in reopening finalized pay fixation after the retirement of the petitioner and effecting recovery from pensionary benefits, lacks lawful sanction. Pension and gratuity are not bounties but rights earned by an employee after long years of service. Recovery from such benefits, in the absence of fraud, misrepresentation or a specific statutory mandate, is impermissible. No such Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

allegation has even been suggested against the petitioners.

The respondents were under a legal obligation to respect the finality attached to the service record, pay fixation, and increments granted by the competent authorities during service. The mere issuance of internal audit observations or post-retirement scrutiny cannot override vested rights, particularly when the alleged overpayment arose due to the respondents’ own interpretation and implementation of the governing policy at the relevant time regarding which the petitioners were never informed.

13.It is not disputed that the petitioner was granted Selection Grade strictly in accordance with the policy of the Provincial Government then in force. In these circumstances, the subsequent action of the respondents in recovering the benefits drawn by the petitioner, particularly after his retirement, was neither justified nor sustainable in law. Such action runs against the well- established doctrine of locus poenitentiae, which postulates that an authority may withdraw, alter or rescind its earlier decision only so long as no vested right has accrued to any person and no final or irreversible step has been taken in pursuance thereof. Once rights stand crystallized, they cannot be taken away through mere administrative rethinking or post facto scrutiny. In the Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

present case, the Selection Grade was conferred upon the petitioner by a competent authority during the course of his service and remained operative throughout, culminating in his retirement. In the absence of any allegation or finding that the grant of Selection Grade was ex facie illegal, the respondents were precluded from withdrawing the same after his superannuation. The withdrawal of an accrued benefit at such a belated stage, without lawful justification, is impermissible under settled principles of law. This legal position has been consistently affirmed by the superior courts. In Pakistan Railways through Chief Executive Officer/Senior General Manager Lahore and another v.

Muhammad Aslam9, the Honourable Supreme Court of Pakistan held as under:

“4. A survey of the impugned judgment depicts that the respondent filed an appeal under Section 4 of the Service Tribunals Act, 1973 to challenge the departmental order dated 02.08.2018. The respondent was absorbed as Guard Grade-I vide Notice dated 06.08.2012, but, after a lapse of six years, he was denied the absorption vide Notice dated 02.08.2018 when certain valuable rights had already accrued in his favour which could not be denied keeping in mind the principle of locus poenitentiae. It is a well settled exposition of law that the power of rescission remains with the relevant authorities to undo the action till a decisive step is taken or as long as certain rights are not created or the action was found to be patently illegal. The record reflects that the department before the learned Service Tribunal failed to justify the action of rescinding the earlier order issued in favour of respondent, therefore, the learned Tribunal reached to the conclusion that the respondent was discriminated and the action taken

2024 SCMR 97

Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

against him was illegal and as a consequence thereof, the service appeal was allowed.”

14.In almost identical situation in Shams Ur Rehman V. Military Accountant General, Rawalpindi and another10, the apex Court held that where a Selection Grade or higher post is granted by the department itself without any misrepresentation or fault on the part of the employee, and the employee serves thereagainst for a considerable period, the department cannot subsequently withdraw the benefit or recover emoluments on the plea of its own mistake. Once a valuable right has accrued and been acted upon, the doctrine of locus poenitentiae bars retrospective recall, and the principle of estoppel operates against recovery, even if the original grant is later found to be irregular but not patently illegal. The Court observed:

“4. ......... It is not in dispute that the selection grade BPS-15 was granted to the petitioner by the department itself and the petitioner apparently had no role in obtaining the post of selection grade BPS-15 for that no such allegation whatsoever is made against him. The respondents have merely pleaded mistake, as only 25% of posts from BPS-11 were required to be filled in the selection grade BPS-15 and it was subsequently realized by the department itself that the petitioner did not fall within the 25% quota and thus was recalled from the post of selection grade BPS-15 and reverted him back to the post of BPS-11. For 9 years the petitioner performed the work of a higher post of selection grade BPS-15 and thus on the principle of locus poenitentiae the benefits paid to him, could not be recovered from him for that such

2020 SCMR 188

Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

principle would not apply. Further, in our view the principle of estoppel will also be applicable as against the department from recovering the emoluments and benefits of BPS-15 from the petitioner. In the case cited by the learned counsel for the petitioner, this Court has observed as follows:

"Locus poenitentiae is the power of receding till a decisive step is taken. But it is not a principle of law that order once passed becomes irrevocable and it is past and closed transaction. If the order is illegal then perpetual rights cannot be gained on the basis of an illegal order. The appellants when came to know that on the basis of incorrect letter, the respondent was granted Grade-11, they withdrew the said letter. The principle of locus poenitentiae would not apply in this case. However, as the respondent had received the amount on the bona fide belief the appellant is not entitled to recover the amount drawn by the respondent during the period when the latter remained in the field."

Further in a similar case of Mst. Sajida Javed v. Director of Secondary Education, Lahore Division and others (2007 PLC (C.S.) 364), this Court held as follows: "Appointment of the petitioner to the post of Senior School Teacher in BS-16 vide office order dated 11.03.1996 is not disputed. It is also not disputed that she actually served against this post in different Girls Middle Schools wherever posted. The fact that the department realized its mistake after about four years would show that petitioner herself was not at fault in procuring the appointment or her posting in different schools in Sheikhupura District by unfair means. By accepting the offer validly made to her by the Department on the basis of her qualification and training in the relevant field, a valuable right had accrued to the petitioner and she could not be made to suffer for the mistake or error of the officials of respondent-Department. Indeed, the offer had been accepted and actually acted upon for almost four years. The case would, thus, be governed by the principle of locus poenitentiae and, in our view, the Department cannot retrace the steps already taken and lawfully acted upon by the petitioner."

Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

The above authoritative pronouncements are fully attracted to the facts of the present case. Once the Selection Grade had been lawfully granted by the competent authority and remained undisturbed until the petitioner’s retirement, the respondents were legally barred from rescinding or modifying that decision with retrospective effect, save in cases of patent illegality, which has neither been pleaded nor established.

Consequently, the post-retirement withdrawal of Selection Grade and the recovery of benefits drawn thereunder were legally indefensible and clearly hit by the doctrine of locus poenitentiae.

15.Forgoing in view, this writ petition is allowed.

The respondents are directed to immediately stop any further recovery on account of Selection Grade benefits from the petitioner Ghani Ur Rahman. They are further directed to refund/reimburse the amounts already deducted or recovered from him on account of the impugned action, within a period of sixty (60) days from the date of receipt of this judgment and to treat the Selection Grade granted to the petitioner as valid for all intents and purposes, including fixation of pension and other post-retirement benefits. The impugned action of recovery, based on Finance Department letter dated Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

06.11.2001, to the extent it is sought to be applied retrospectively against the petitioners, is declared unlawful and of no legal effect.

Announced Dt:24.12.2025 Sd/-

JUDGE

Sd/-

JUDGE

Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah