Sikandar Hayat Vs Government of Khyber Pakhtunkhwa and others

v (Judicial Department)

W.P.No.714 -E/2025

Sikandar Hayat Versus

Government of Khyber Pakhtunkhwa and others

JUDGMENT

Date of hearing: 05.11.2025.

For petitioners: IWS Bashir Khan Wazir (on video link) Yasir Rauf Wazir and Mtrhammad Riaz Khattak advocates

For respondents: Muhammad Asghar Khan Alwradzai Addl: A.G.

For respondent: Sawal Nazir Khan advocate.

( MUIAMI,AD TARIO AFRIDIT f,- The petitioner has invoked the constitutional jurisdiction of this Court under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973, seeking the following relief:

"It is most humbly prayed that thts Hon'ble Court may gtaciously be pleased to:-

A. Declare that the notifrcation dated 06,10.2025 issued by the SecretarY, Local govetnment, elections & rurol Development Department, assigning th e charge of CEO WSSC Bannu to Mr.

(Imar Khan Kiundi, is illegal, void ab- initio, and without lawful authority;

B. Declorc thol the Resolution of the Board of Directors dated 08.10.2025, whereby the petltioner Mr. Sikandar Hayat Khan, os Chalrman ofthe Board, was assigned the acting charge of CEO, is lawful, valid, ond binding ln accordance wlth the Companies Act, 2017, ond Corporate govemance Rules,

C. Dlrecl the rcspondents lo lmplead and gtve effect lo lhe said Board Resolation dated 08.10.2025 and to rcsfialn the respondents lrom giving

f efiect to or actlng rqon lhe lmpugned notlficdiott dated 06. I 0.2 02 5 ;

D, Grunt aaY olher rcliel deemed iust and propo under the cbcumstonces of the case.

2.The undisputed facts are that the petitioner was appointed as Chairman of the Board of Directors (BoD) of the Water and Sanitation Services Company, Bannu ("WSSC Bannu") vide notification dated 19.08.2025, issued by Respondent No. 2 /Secretary, Local Government, Elections & Rural Development Departr€nt (LG&E&RDD). The post of Chief Executive Officer (CEO), WSSC Bannu, was held by Mr. Muhammad Imran Khan, (PMS BS'18)' Upon his transfer vide order dated 04.08.2025, the offrce of CEO fell vacant. Thereafter, Respondent No. 2 issued the impugrred Notification No. SO(C&D) LGH303/WSSC-General/Bannu/ 2024 diled 06.10.2025, assigning the additional charge of

J

CEO, WSSC Bannu, to Mr. Umar Khan Kundi, Regional Municipal Officer, Bannu. The petitioner contends that under the Companies Act,2017, and the Public Sector Companies (Corporate Governance) Rules, 2013, the appointment, evaluation, and removal of the CEO is the exclusive domain of the Board of Directors, and that the Secretary to local Govemment, Elections & Rural Development Department has no stetutory authority or power to unilaterally make or alter such appointnents, assign the charge of CEO or otherwise, interfere in the affairs ofa company duly incorporated under the Companies 1984. That the impugned

notification, having been issued without consultation with or approval of the BoD, is therefore, illegal, void ab-initio and without lawful authority. The Board of Directors of WSSC Bannu convened a meeting on 07,10.2025, wherein the Board, by a majority decision, resolved to assigr the acting charge of CEO to the petitioner' In pursuance of this resolution, the Company Secretary issued Offrce Order/ Notification No. 5340-4/ CEO/ COIW Secretary/ 2025 dated 0?.10.2025, formally assigning the acting charge of Chief Executive Officer to the petitioner' The petitioner now challenges the notification dated 06.10'2025 as being ultra vires, illegal, and issued without lawfrrl authority, and seeks enforcement ofthe BoD Resolution dated 07.10.2025 through the instant writ Petition'

3 Arguments heard and record perused.

4.The primary question for determination is whether the Secretary, LG&E&RDD, possessed lawful authority to assign the additional charge of CEO, WSSC Bannu, bypassing the Board of Directors. The Water and Sanitation Services Companies in Khyber Patlrtunkhwa are public sector entities incorporated under the Companies Act, 2017. These entities, though funded and overseen by the Govemment, they maintain a distinct legal and corporate identity, govemed by the Companies Act and the Public Sector Companies (Corporate Govemance) Rules, 2013.

5.Rule 5(2Xa) of the said Rules explicitly provides that "the Board shall be responsible for the appointment, evahution, comPensation, and remwal of the Chief Exeanive Ofiicer." Similarly, Section 192 of the Companies Act"2017 vests such powers in the Board and not in the administrative department of the Govemment. Once the company stands incorporated and its Board duly constituted, the administative department cannot usurp or override the statutory powers vested in the Board under corporate law' Furthermore, Section 187(l) of the Companies Act,2017' stipulates that vithin fowteen days from either the date of election of directors under section 159 or the occwrence ofa v(rcancy in the ffice of the chief executive, the Board shall appoint any Wrson, who may be an elected dtrector, as the Chief Executive; however, such appointment shall not be for a period exceeding tbee years from tlu date of appointment'

Furtlrermore, Section 187(4) provides that thc Goverwnent shall hove the power to noninate the Chief Executive of a company only where the majority of directors are nominated by the Government, in such manner alt may be specified.

6.Reading these provisions it is clear that the primary authority to consider and nominate percons for appointment as CEO vests in the Board of Directors, while the Governm€Nrt may appoint a person only from among the nominees proposed by the Board where it holds majority confiol. In the present case, the impugned '/)\l notification dated 06.10.2025 was issued without any consultation, recommendation, or consent of the Board;

hence, it is in clear violation of Section 187 and contavenes the mandate of the Companies Act, 2017. T\e Board, in exercise of its lawful authority, passed a resolution on 07.10.2025 assigning the acting charge of CEO to the petitioner, which was duly implemented through the Company Secnetary's notification ofeven date. That decision, having been made by the competent forum, carries legal effect and must prevail over the unilateral adminisfiative act ofRespondent No. 2.

7,, Moreover, the respondents have failed to produce any notification, order, or proceeding suspending, annulling or setting aside the BoD's Resolution dated 07.10.2025 or the corresponding notification of even date.

Neither has the said resolution been impugned before this

court, nor the respondents have also been able to point out any procedural defect, irregularity or legal infirmity in the passage of the BoD's resolution or in

notification.

8.In view of the above discussion, this Court holds without hesitation that the Secretary, LG&E&RDD, lacked lawful authority under the Companies Act, 2017, to assign the additional charge of CEO, WSSC Bannu, through administative notification. Consequently the Notification No. SO(C&D) LGE/303AVSSC-GeneraU Bannu/ 2024 dated 06.10-2025 is declared ultra vires, illegal, and without lawful authority. The Board of Directors'Resolution dated 07.10.2025, assigning the acting charge ofCEO to the petitioner, was passed by the competent forum and is valid in law

9.In consequence, this writ petition is admitted and allowed, the impugned notification dated 06.10.2025 is hereby declared illegal, void ab initio, and without lawful authority. The respondents are directed to give full effect to the Board of Directors' Resolution dated 07.10-2025, whereby the acting charge of CEO, WSSC Bannu, was assigned to the petitioner. However, the petitioner shall act as the Chief Executive Officer (CEO) of WSSC, Bannu, for a period of three months from the date of receip of the attested (officially verified) copy of this judgrnent. During this three- month period, the petitioner shall convene a meeting of the

v Board of Directors (BoD) of WSSC, Bannu and initiate the process for the appointment of a full-time CEO for a term of three years. This process shall be canied out strictly in accordance with the law, applicable rules, and the provincial government's approved policy framework and guidelines.

The entire exercise from convening the meeting to finalizing the appointment of the full-time CEO, shall be completed within the stipulated three-month period. During the petitioner's interim incumbency, he shall exercise authority only to the extent necessary for managing the day-to-day affairs of the organization.

Announced. w{, \z:utr,(.\

bo"d

JUDGE

(D.B)

Hon'ble Mr. Iustice Muhammad Tariq Afridi and Hon'ble Mr. Justice Abdul Fayaz

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