Hafiz Muhammad Ashfaq VS Government of Pakistan etc

JUDGMENT SHEET

IN THE ISLAMABAD HIGH COURT, ISLAMABAD

JUDICIAL DEPARTMENT

W.P. No.1155 of 2017 Hafiz Muhammad Ashfaq Versus.

Secretary, Finance Division and others

Date of Hearing: 14.12.2017 Petitioner by: Mr. Misbah Ullah Khan, Advocate. Respondents by: Mr. Mushtaq Hussain Bhatti, Advocate for respondents No.1 to 6 and 9.

MIANGUL HASSAN AURANGZEB, J:- Through the instant writ petition, the petitioner, Hafiz Muhammad Ashfaq, impugns the decision of the Board of Directors of SME Bank Ltd. (respondents No.2 to 5) not to promote the petitioner as Executive Vice President of the said Bank, and to promote officers who were junior to the petitioner.

2.Learned counsel for the petitioner submitted that in the year 2015, the management of the SME Bank Ltd. had initiated the process of promotion of Senior Vice Presidents as Executive Vice Presidents; that the petitioner was at serial No.2 of the seniority list; that the petitioner’s educational qualifications were better than the other Senior Vice Presidents; that on 12.09.2015, the petitioner was called for an interview to be considered for promotion as Executive Vice President; that the Human Resource Division of the SME Bank Ltd. awarded 63.5 pre-interview marks to the petitioner; that the said marks were the higher amongst the candidates for promotion to the posts of Executive Vice President; that the interview marks awarded to the petitioner by the Human Resource Committee of the Board of SME Bank Ltd., were only 10 (i.e. the lowest amongst the said candidates); that earlier, the said Committee had found the petitioner fit for promotion as Executive Vice President, but left the matter for the Board to decide; that the promotion policy approved by the Board of Directors of the SME Bank Ltd. on 18.06.2002 provided that all promotions were to be made on merit, and no employee could

claim promotion by virtue of his seniority alone; that the said promotion policy provided that 70% marks must be obtained for promotion; that even though the petitioner obtained 73.5 marks, he was not promoted by respondents No.2 to 5; and that no reasons were given for not selecting the petitioner for promotion.

3.Learned counsel for the petitioner further submitted that on 24.02.2016, the petitioner submitted a representation for the reconsideration of the decision not to promote him; that the petitioner made additions to the grounds of his representation, vide letter dated 06.04.2016; that vide impugned letter dated 25.11.2016, the Board Promotion Review Committee constituted by the Board of Directors of SME Bank Ltd., after considering the petitioner’s representation and affording him an opportunity of personal hearing, rejected the petitioner’s representation; that the respondents’ decision not to promote the petitioner is due to favourtism and nepotism shown in favour of the promoted officers; and that the impugned decision is in violation of paragraph No.8 of the promotion policy, which provides that an officer under consideration for promotion should attain a minimum of 70% marks. Learned counsel for the petitioner prayed for a direction to the respondents to promote the petitioner with effect from the date when his juniors were promoted, and to maintain his seniority. In making his submissions, learned counsel for the petitioner placed reliance on the judgment dated 09.06.2015, passed by the Division Bench of this Court in intra Court appeal No.338-W of 2012, titled “Waseem Ahmed Siddiqui Vs. The S.M.E. Bank Limited, etc.”

4.On the other hand, learned counsel for respondents No.1 to 6 and 9 submitted that the instant writ petition was not maintainable because the petitioner was seeking the enforcement of the promotion policy dated 01.04.2002, which was not statutory in nature; that the said promotion policy was made by the Board of Directors of the SME Bank Ltd., and not under any statute; that although the SME Bank Ltd. came into

existence as a result of the amalgamation of Regional Development Finance Corporation and Small Business Finance Corporation through Ordinance No.LVI of 2001; that under Section 7 of the said Ordinance, all the permanent employees of Regional Development Finance Corporation (“R.D.F.C.”) and Small Business Finance Corporation (“S.B.F.C.”) became employees of SME Bank Ltd. on the same terms and conditions, and were to be subjected to the same rules and regulations as were applicable to them before their transfer to the said Bank; that in the instant writ petition, the petitioner is not seeking the enforcement of any of the rules and regulations as were applicable to him before his transfer to SME Bank Ltd., but of the promotion policy which was made by the Board of Directors of the said Bank in the year 2002; and that since the said policy was non-statutory, the instant writ petition was liable to be dismissed.

5.Learned counsel for respondents No.1 to 6 and 9 further submitted that this Court cannot substitute its opinion with that of the Committee which considered the petitioner for promotion; that the Committee constituted to consider officers for promotion was the only competent forum to gauge the fitness of an employee for promotion; that as per the promotion policy in question, no employee could claim promotion to a higher post by virtue of his seniority alone; that since three Senior Vice Presidents secured more than 75% marks, they were promoted by the Board of Directors of the said Bank; and that the employer had the right to enhance the qualification required for promotion in order to maintain efficiency in service. Learned counsel for the said respondents prayed for the writ petition to be dismissed.

6.I have heard the contentions of the learned counsel for the contesting parties, and have perused the record with their able assistance.

7.In the writ, the petitioner has pleaded that he was appointed on 24.01.1990 in the SME Bank Limited. The petitioner has not brought any document on the record to show

as to whether he was appointed in R.D.F.C. or S.B.F.C. prior to the amalgamation of the said two entities. I shall proceed on the assumption that the petitioner was appointed on 24.01.1990 as a permanent employee by one of the said entities. By virtue of the Regional Development Finance Corporation and Small Business Finance Corporation (Amalgamation and Conversion) Ordinance, 2001 (“Ordinance No.LVI of 2001”) the said two entities were amalgamated into a company i.e. SME Bank Ltd., which was incorporated under the provisions of the Companies Ordinance, 1984. Section 7(1) of Ordinance No.LVI of 2001 is reproduced herein below:- “7. Continuation of service in the company.- (1) All permanent employees of the RDFC and SBFC, who were continuously in the service of the RDFC or, as the case may be. SBFC for a period of one year immediately before the effective date shall stand transferred to and become the employees of the company as of the effective date on the same terms and conditions and shall be subject to the same rules and regulations as were applicable to them before the effective date.” (emphasis added)

8.By dint of Section 7(1) ibid the petitioner stood transferred as an employee of SME Bank Ltd. on the same terms and conditions on which he was serving in one of the two amalgamated entities. The petitioner was to be given protection of the same rules and regulations as were applicable to him prior to his transfer to SME Bank Ltd. It is an admitted position that in the instant writ petition, the petitioner is not seeking the protection of any of the rules or regulations as were applicable to him before his transfer to SME Bank Ltd. The petitioner, in his writ petition has taken the ground that the promotion policy made by the Board of Directors of SME Bank Ltd. had provided that an officer must attain 70% marks in order to be promoted. The petitioner’s grievance was that even though he had attained 73.5 marks, he was denied promotion by respondents No.2 to 5. The vital question that needs to be determined is whether the petitioner could institute a writ petition for the enforcement of the provisions of a policy, which was admittedly not statutory, and which was admittedly not made prior to the petitioner’s transfer to the SME Bank Ltd.

9.As regards the judgment in the case of “Waseem Ahmed Siddiqui Vs. The S.M.E. Bank Limited, etc” relied upon by the petitioner, the petitioner in the said case did not claim to be governed by the service regulations made by the SME Bank Ltd., but the service regulations made by the defunct R.D.F.C. By virtue of Section 7(1) of Ordinance No.LVI of 2001, the service regulations made by the defunct R.D.F.C. continued to apply to a permanent employee of the said entity transferred to SME Bank Ltd. Such a transferred employee could institute a writ petition for the enforcement of his rights under the rules and regulations of such a defunct entity. Had the promotion policy (the enforcement whereof the petitioner has sought) been made by the petitioner’s employer, be it R.D.F.C. or S.B.F.C., prior to the promulgation of Ordinance No.LVI of 2001, the instant writ petition would have been maintainable. Law to this effect has been laid down by the Hon'ble Supreme Court in the case of Zarai Taraqiati Bank Ltd. Vs. Said Rehman (2013 SCMR 1205). The case in hand, however, is distinguishable. The petitioner in the instant petition is not seeking the protection or the enforcement of any of the rules or regulations that were applicable to him before his transfer to SME Bank Ltd. by operation of the provisions of Ordinance No.LVI of 2001. Even in his representations dated 24.02.2016 and 06.04.2016, the petitioner did not seek the protection or the enforcement of any of the rules or regulations that were applicable to him prior to his transfer to SME Bank Ltd. The petitioner is seeking the protection of a promotion policy made by the Board of Directors of the SME Bank Ltd. in the year 2002. The said policy was made after the petitioner’s transfer to SME Bank Ltd., and the same is clearly not statutory. In the case reported as Executive Council, Allama Iqbal Open University, Islamabad Vs. Muhammad Tufail Hashmi (2010 SCMR 1484), it has been held inter-alia that the employees of SME Bank Ltd. who had approached the Service Tribunal for the redressal of their grievance were not enjoying the protection of statutory rules. Furthermore, it was held that

such employees would be governed by the principal of master and servant.

10.Since the petitioner was considered for promotion under the promotion policy of 2002, and since the said policy was clearly not statutory having being made by the Board of Directors of SME Bank Ltd. in accordance with the Memorandum and Articles of Association of the said Bank, I find this petition not to be maintainable. Having held the petition not to be maintainable, I do not deem it appropriate to delve into the merits of the case. The petitioner is at liberty to agitate his grievance before the appropriate forum. Consequently, this petition is dismissed with no order as to costs.

(MIANGUL HASSAN AURANGZEB)

JUDGE

ANNOUNCED IN AN OPEN COURT ON ____________/2017

(JUDGE)

Ahtesham*

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