TRUSTEES OF PORT OF KARACHI Versus ZAFFAR ZAID AHMAH

ZAFFAR HUSSAIN MIRZA. J.‑‑ This appeal by the Trustees of the Port of Karachi and Chairman, Karachi Port Trust to whom we shall refer for convenience as the "K.P.T." arises out of the judgment of Sind High Court, dated 5th August, 1985, allowing a constitutional petition filed by Zaffar Zaid Ahmed, respondent herein, and in result granting a declaration that the orders of respondent's retirement from service are without lawful authority.

2. The facts are that the respondent was initially appointed as a temporary general out‑door clerk in K.P.T. on 28th May, 1957 and was confirmed in that appointment on 28th November, 1957. Subsequently he was appointed as a Traffic Supervisor Grade If and eventually he was promoted as Traffic Supervisor Grade 11 in the scale of Rs.600‑40‑100/50‑1300 in which office he was confirmed with effect from 23rd February. 1981.

3. Some time before completion of 25 years service the case of respondent was taken up for determination of his further retention in service under rule 52(3), Chapter IX, Part I of 'he K.P.T. Establishment Code. The case of the respondent was reviewers by the Advisory Committee comprising the Chairman of the K.P.T. and two heads of department which after hearing the respondent and examining the record recommended the retirement of the respondent on completion of 25 years of service vide recommendation of the Advisory Committee dated 28th November, 1981. The respondent was informed about the action taken by means of letter dated "3rd December, 1981, which reads as follows:‑

Karachi Port Trust,

Traffic Department.

No. T /Estt /9588,

Dated 4‑1‑1982.

Mr. Zafar Zaid Ahmed,

Traffic Inspector 2nd Grade,

D.T.M (West) Section.

Subject : Retirement from K.P.T. Service on completion of 25 years service.

This is to inform you that the Advisory Committee met to determine your further usefulness for retention in K.P.T. Service on completion of 25 years service. The Committee carefully examined your service record and decided to retire you from K.P.T. Service on completion of 25 years service with full retirement benefits as admissible under the K.P.T. rules w.e.f. 28‑5‑1982. The competent authority has already sanctioned your retirement.

You have been allowed to proceed on 365 days leave preparatory to retirement w:e.f. 28‑5‑1982.

Sd/‑ Personnel Officer."

4. It is an admitted position on the part of the K.P.T. that the recommendation of the Advisory Committee to retire the respondent was sanctioned by the Chairman on behalf of the Board of Trustees on 23rd December, 1981. A representation filed by the respondent in anticipation of his retirement, addressed to the Chairman, K.P.T. was considered by the Board of Trustees and ride their Resolution No.78 dated 5th May, 1982, his retirement on completion of 25 years of service with full retirement benefits was approved and the action of the Chairman in sanctioning the retirement of the respondent was confirmed. On receiving information that his representation was rejected the respondent moved an application under section 25‑A, of the Industrial Relations Ordinance, 1969, before the National Industrial Relations Commission, seeking to challenge the orders of his retirement on the basis that he was a workman, but the aforesaid application was dismissed on the view that the respondent was not a workman within the meaning of section 2(xxviii) of the Industrial Relations Ordinance, 1969, and hence the application was not maintainable.

5. Having failed to obtain relief from the National Industrial Relations Commission, the respondent challenged the orders of his retirement in a constitutional petition before the Sind High Court, which was accepted by a Division Bench of the High Court vide judgment dated 5th August, 1985, by which it was held that the orders, of respondent's retirement were made without lawful authority, as he was an 'officer' drawing pay of more than Rs.1,100 at the time of his retirement and, therefore, could be retired only with the prior approval of the Federal Government under rule 1(c) of Appendix "E" of the Digest of Pay, Allowances and Leave Rules of the K.P.T.

6. Being aggrieved by the judgment of the High Court the K.P.T. filed a petition for leave to appeal and leave was granted by this Court in order to examine the correctness of the view taken by the Division Bench of the High Court in the light of the provisions of sections 23 and 24 of the Karachi Port Trust Act, 1886, (hereinafter referred to as "the Act").

7. As already stated the procedure for determining the retention of K.P.T.'s employees in service after completion of 25 years of service is regulated by rules contained in Appendix "E" of the Establishment Code. These rules as they stood at the time of the orders passed regarding the retirement of the respondent were as follows:---‑

APPENDIX "E"

Rules laying down the procedure to determine retention of Karachi Port Trust employees after 25 years of service.

1. The competent authority means :‑

(a) Chairman in case of employees whose maximum grade of pay does not exceed Rs.500.

(b) Board in case of employees the maximum of whose grade of pay exceeds Rs.500 but is less than Rs.1,100.

(c) The Board (with the approval of the Government) in case of all Heads of Departments and Officers the maximum of whose grade is not less than 1,100.

2. The retention will be determined at least 6 months before such person completes 25 years of service.

3. The case will be reviewed by an Advisory Committee constituted as under:‑

(i) For employees within the competence of the Chairman, the Committee will consist of three Officers appointed by the Chairman from time to time.

(ii) For Officers who come within the competence of the Board, the Committee will consist of Chairman and two other Heads of Departments nominated by the Chairman.

(iii) For Officers who fall within the purview of Government under section 24 of the Karachi Port Trust Act, the Committee will consist of Chairman and two Trustees appointed by the Board.

4. The retirement at 60 years of age would be the rule.

5. The Committee shall make its recommendation in writing as to whether the employee should be retired at the end of 25 years of service.

6. The recommendation of the Committee shall be considered by the competent authority for deciding whether the officer/ employee concerned should be retained or not.

7. An order of retirement shall be communicated to the employee concerned at least three months before the date of completion of 25 years of service and will be operative on completion thereof.

8. A person retired under these rules shall be entitled to such benefits of Contributory Provident Fund as would have been admissible under the rules applicable to the person on the abolition of his permanent post.

The main argument of the respondent which prevailed with the learned Judges of the Division Bench was that as he was drawing pay of more than Rs.1,100, he was an officer falling under category "C" of Rule I, and as such the competent authority to decide with regard to his retirement was the Board with the approval of the Government, whereas he was treated as an employee within the competence of the Board to decide about his retirement as provided by clause (b) . The learned Judges of the Division Bench accepted the objection of the respondent for the reasons that appear in the following passage of the judgment:‑

"Of course, the Act, i.e. the Karachi Port Trust Act 1886, does categorise the staff as officers and servants, as provided under section 21 thereof, but the schedule of the staff sanctioned and prepared by the Board has not been produced for determination of the rank of the petitioner in the staff of the Port. However, it appears from the Rules laying down the procedure for determining retention of Karachi Port Trust employees in service after 25 years of service, already reproduced above, that those rules relate to all the employees of the Port including the officers. The Rules have divided all the employees for the purpose of their retention in service of 25 years of service, in the three categories on the basis of their grades of pay as mentioned above. The first category of the employees comprises of those employees whose maximum grade of pay does not exceed Rs.500. The second category of the employees comprises the employees whose maximum grade of pay exceeds Rs.500 but is less than Rs.1,100. The 3rd category of the employees comprises those employees whose maximum grade of pay is not less than Rs.1,100 of course, it is mentioned that the 3rd category of the employees comprises Heads of departments and officers. But the Rules do not contemplate any other category of employees to stand in between the second category and the 3rd category of the employees. The petitioner was holding the job of Traffic Inspector, grade‑2, when his services were dispensed with on his completing the service of 25 years and he was drawing pay in the grade of Rs.600‑40‑1000/50‑1300 as indicated in the order of his confirmation dated 20‑2‑1982. Earlier to this, he was holding the same post in acting capacity vide order dated 23‑1‑1981. Since he was holding the post, the maximum grade pay of which was more than Rs.1,100, his case does not fall within the first two categories of the employees envisaged under the aforesaid Rules for determining retention in service on completion of 25 years of service. Accordingly, the petitioner's case was to be considered in category 3 of the employees as provided in the Rules. The services of the employees falling in category 3 could not be dispensed with on completion of 25 years of service without the approval of the Government as laid down in the Rules. It is an admitted position that approval of the Government was not obtained for dispensing with the service of the petitioner on his completing 25 years of service."

8. The main question that falls for determination in this case, therefore is whether prior approval of the Federal Government was necessary in the case of retirement of the respondent. The main thrust of the argument advanced in support of this appeal by Mr.Ali Ahmed Fazeel, learned counsel for the K.P.T. is that the respondent was holding a post at the relevant time which falls within the category of "servants" and not "officers" and, therefore, by virtue of the provisions of the Act no sanction of the Federal Government was necessary in his case. It seems that a lacuna was found in the rules as reproduced above and, therefore, Rules 1 and 3 were amended on 3rd April, 1985, and after amendment these Rules read as under:‑

"(i) The Competent Authority means:‑‑

(a) Chairman in case of employees whose maximum grade of pay does not exceed Rs.500.

(b) Board in case of employees the maximum of whose grade of pay exceeds Rs.500.

(c) The Board (with the approval of the Government) in the case of all Officers.

(iii) The case will be reviewed by an Advisory Committee constituted as under:‑

(a) For employees within the competence of the Chairman the Committee will consist of three officers appointed by the Chairman for time to time.

(b) For employees who come within the competence of the Board the Committee will consist of Chairman, General Manager (A) and Head of the Department concerned.

(c) For Officers who fall within the purview of i3overnment under section 24 of the Karachi Port Trust .Act, the Committee will consist of Chairman and two Trustees appointed by the Board."

However, as statutory rules are subordinate legislation in accordance with the well settled proposition, they cannot be given retrospective operation, therefore, the amended rules are not relevant for deciding the present controversy. We, will, therefore, have to take into consideration the rule as reproduced above as they stood on the date when the orders of retirement in question were passed i.e. 4th January, 1982. The important words used in various relevant provisions of the Act which came under discussion and which required interpretation are "officers" and "servants". Part III of the .Act deals with the Officers and Servants of the Board meaning the Board of Trustees, which according to section 4 is a body corporate having perpetual succession and a common seal. Section 21 provides for preparation and sanction of a schedule of "the Staff of Officers and Servants" which the Board deems necessary to maintain. The Board has been vested under section 22 with the power to frame regulations, with the prior sanction of the Federal Government, inter alia, for regulating the period of service of all such officers and servants and also the terms and conditions of their service. The two sections that follow are material for appreciating the argument advanced in support of this appeal and may, therefore be set out in extenso:

"Section 23 (1) . Subject to the provisions of the regulation made under section 22 and of the schedule of officers and servants for the time being in force, all administrative powers including those of appointing, promoting, suspending and punishing the officers and servants of the Board and of grant of leave to them shall be exercised by the Chairman in the ease of persons drawing pay in the scale of which the maximum does not exceed five hundred rupees and in every other case by the Board:

Provided that the Chairman may by order in writing delegate all or any of his powers under this subsection to the respective Heads of Departments or such other officer as he may think fit.

(2) In the case of an order passed by a Head of the Department or other officer in exercise of the powers delegated to him under subsection (1) an appeal shall lie to the Chairman and in the case of any other order under that subsection to the Federal Government and the orders of the Chairman or Federal Government, as the case may be, in such appeal shall be final.

(3) An appointment made in this section shall not be deemed to be a contract or agreement within the meaning of section 18.

Section 24. Every order or regulation made by the Board in respect of Heads of Departments, or in respect of officers holding posts in the scale of which the maximum is not less than eleven hundred rupees shall be subject to the previous approval of the Federal Government."

It was pointed out by Mr. Ali Ahmed Fazeel that all administrative powers in respect of officers and servants of the Board have been vested under section 23 with the Chairman in respect of persons drawing pay in the scale of which the maximum does not exceed Rs.500 and in the case of officers and servants other than those, with the Board. In other words administrative powers relating to Officers and servants drawing pay in the scale of which the maximum exceeded Rs.500 were exercisable by the Board. This according to him is the general rule envisaged in section 23 and section 24 incorporates an exception to that general rule in the case of Heads of Departments and officers holding posts in pay scales the maximum of which is not less than Rs.1,100, in whose case every order passed shall be subject to the previous approval of the Federal Government. It was pointed out that this special protection extended by section 24 is reserved only in respect of heads of departments and officer holding posts in the scale mentioned and does not, therefore, extend to servants of the Board. Learned counsel argued that if an employee falls within the category of "servants" then irrespective of the fact that he may hold a post in the scale of which maximum is not less than Rs.1,100 will nevertheless not enjoy the protection of previous approval of the Federal Government in respect of orders passed in regard to him. He then referred to Chapter II of the K.P.T. Manual in which the functions of officers have been laid down. With reference to the posts included in this Chapter he pointed out that the post of Traffic Inspector Grade II has not been included in this Chapter as the post of an officer. According to the learned counsel that post falls under Chapter III which is entitled as supervisory Staff. He further fortified his submission by submitting that even the appointment of the respondent as Traffic Inspector Grade II was made by the Board without the prior sanction of the Federal Government. He also referred us to the K.P.T. Schedule of staff in order to demonstrate that sanction for appointment of officers in higher grade over and above the post held by the respondent was accorded by the Government. However, he conceded that on account of revision of pay scales some cases were by mistake referred to the Government for sanction in regard to the posts in the category of servants. But the Board realised this mistake and in its meeting held on 22nd March, 1980, resolved that under section 24 sanction of the Government is not required in the case of employees of the K . P. T . who were neither Heads of Departments nor officers holding posts in the scale the maximum of which is Rs.1,100 or above. According to the submission of the learned counsel the criterion for the two categories of employees is the nature of the duties attached to the posts held by them and in this connection he further explained that posts in grade 2 to 15‑A are in the category of servants and the remaining posts in grade 16 to 22 are in the category of officers. This he supported with the resolution of the Board separately sanctioning revision of pay scales of various grades of K.P.T. officers and employees.

9. On the other hand the respondent, who appeared in person reiterated his argument that he was an officer, not a servant of the K.P.T. at the relevant time. With reference to the rules he argued that his case falls under rule 1(c) and was, therefore, to be examined by review committee constituted in accordance with the rule (iii), according to which the Committee was to consist of the Chairman and two Trustees appointed by the Board. The case of the respondent was, however, reviewed by a Committee headed by the Chairman, with the Acting Traffic Manager as a Head of Department and General Manager Administration as members which according to the respondent was against the provisions of the rules. As regards the K.P.T. Manual he submits that the same has been prepared by the Board and does not have statutory force. He further submitted that he was an officer incharge of Wharf and not a servant as was asserted by the appellants. Referring to the minutes of the meeting of the review Committee held on 28th November, 1981 (page 31 of the printed record) the respondent pointed out that the Committee itself ordered his retirement which was in contravention of rule 5 of Appendix "E" according to which the‑ Committee was only empowered to make recommendations and the decision as to retirement lay within the power of the competent authority as envisaged by rule 6. As to the interpretation of section 24 of the Act he submitted that the said provision of law makes no distinction between officers and other employees and the only criterion was the pay scale of the employees so that all employees in the scale the maximum of which is not less than Rs.1,100 were provided the protection of prior approval of the Government in respect of orders passed against them.

10. In reply Mr. Ali Ahmed Fazeel submitted that the unamended rules to the extent of their repugnancy to section 24 of the .act were in operative and ultra vires so that section 24 would prevail and sanction of the Government would be necessary only in case of officers. Learned counsel also challenged the maintainability of the constitutional petition against the K.P.T. in the High Court.

11. We have carefully considered the contentions of the parties. We find that although the various provisions of the Act have used the words "Officers" and "Servants" to be maintained by the K.P.T., these two terms have not been defined anywhere in the Act or the Rules framed thereunder. The distinction for determining whether an employee is an officer or a servant of the Board as canvassed on behalf of the appellant is not satisfactory and furnishes no assistance in interpreting these terms, with the consequence that may adversely affect the rights of the employees. Besides, these are not sure tests and have no basis on any statutory instrument. Be that as it may in the view that we have taken. it is not necessary for resolving the present controversy to go into that question. The reason is simple and may be stated at once. It is common ground that the rules regarding the procedure for determination of the question of retention in service of the employees after 25 years service, contained in Appendix "E" as reproduced above are statutory rules having the force of law. It is also an admitted position that the orders of the respondent's retirement were passed without obtaining the prior sanction of the Federal Government. The important point to note, in this context, is that these rules make no distinction between employees who are officers or servants. Apparently the rules were intended to regulate the procedure for retirement of all employees of the K.P.T. and as the rules stood on the relevant date, before their amendment, the case of the respondent did not fall within clauses (a) and (b) of rule, 1, because he was neither an employee whose maximum grade of pay did not exceed Rs.500 nor an employee whose maximum grade of pay exceeded Rs.500 but was less than Rs.1,100. The maximum of the grade in which the respondent held the post of Traffic Inspector Grade II was Rs.1,300. It is, therefore, clear that his case could not be dealt with by the Board as competent authority under clause (b) of rule 1 and by the Advisory Committee as constituted in accordance with clause (ii) of rule 3. Having regard to the fact that the rules were obviously intended to cover all the employees, it follows that the remaining clause (c) of rule 1 and clause (iii) of rule 3 were intended to apply in case of employees of his grade. If it is assumed for the sake of argument that the respondent was not an officer as envisaged in section 24 and clause (c) rule 1 then an obvious anomaly would arise that the rules do not contemplate the retirement of servants in the grade the maximum of which is not less than Rs.1,100. In either case, on the position of the rules as they stood at the relevant time, the action taken against the respondent was not in accordance with the statutory rules and was, therefore, without lawful authority. There seems to be no escape from this conclusion in the circumstances of this case. The High Court on analysing the rule came to the same conclusion and we are unable to find fault with the same. With regard to the contention that the rules prior to their amendment were repugnant to section 24 of the Act, it may be stated that we are unable to see any repugnancy in the operation of the‑same. Even if section 24 enjoins the obtaining of prior sanction in regard to orders passed lit respect of heads of department and officers, it does not prohibit the giving of such protection to other employees if the rule making authority in its wisdom deems it necessary to do so in regard to some category of employees. In absence of a positive bar in the statute it would be perfectly legal for the rule making authority to frame such a rule in accordance with the procedure laid down in the Act as provided by section 22. We are, therefore, unable to find force in the argument that the rules, prior to their amendment, were ultra vires having no legal effect. The question of maintainability of the constitutional petition cannot be allowed to be raised at this stage as no such objection was taken in the High Court.

12. In the result we find no force in this appeal and would accordingly dismiss the same with costs.

M.Y.H./T‑21/S Appeal dismissed.