WAPDA through Chairman, Punjab Versus IFTIKHAR ALI
ORDER
YAHYA AFRIDI, CJ.--- The petitioner, Water and Power Development Authority ( WAPDA or the Authority ) has assailed the judgment dated 11.09.2024 rendered by the Federal Service Tribunal, whereby the service appeal filed by the respondents was allowed and arrears of pay and allowances on account of pro forma promotion were granted.
Factual Background:
2. The respondents are employees of WAPDA. Prior to the year 1992, ten power generation units at Tarbela were operational under the administrative control of the Chief Engineer, Tarbela Power Station I ( TPS I ). In July 1992, four additional generating units commenced operation at Tarbela under the administrative control of a separate Chief Engineer designated as Tarbela Power Station II ( TPS II ). Consequent thereto, the seniority of employees posted at TPS I and TPS II came to be maintained separately, and selection grade and promotions were granted on the basis of such segregated seniority lists.
3. The maintenance of separate seniority lists led to a series of service disputes. In the first round of litigation, four employees challenged the segregation and sought promotion and selection grade on the basis of a combined seniority. The matter ultimately reached the Supreme Court, which remanded the case to the Federal Service Tribunal for fresh determination. Henceforth, a combined seniority list of employees of TPS I and TPS II was eventually prepared. This, however, gave rise to a second round of litigation concerning the consequential service benefits flowing from the revised seniority. The Federal Service Tribunal held that all concerned employees were entitled to service benefits, including selection grade and promotion, strictly in accordance with the combined seniority so determined.
4. In implementation of the said determinations, the respondents were granted retrospective pro forma promotion on account of refixation of seniority. Thereafter, through a formal application dated 05.01.2022, they sought payment of arrears of pay and allowances attached to the higher post in terms of FR 17(1). The said claim was declined by WAPDA vide order dated 02.03.2022 on the basis of Office Memo No. AD (EIB)07012/24021980 dated 13.04.1987 (the Office Memorandum ), issued in consultation with the Ministry of Water and Power under Section 18 of the WAPDA Act, 1958 (the WAPDA Act ), which denies arrears for the retrospective period in the following terms:
The question as to whether the employees who are granted proforma promotion from retrospective date in consequence of re-fixation of seniority, are also entitled pay of the higher post, was under consideration for some time past. The Authority has now decided, in consultation with the Ministry of Water and Power, Government of Pakistan, that the concerned employees will be entitled to benefit of re-fixation of pay on account of revision of seniority by the competent authority from a back date but would not be entitled to arrears of pay and allowances of the higher post.
(emphasis provided)
5. Aggrieved thereby, the respondents approached the Federal Service Tribunal, which granted relief in accordance with Fundamental Rule 17 ( FR 17 ) and declined to give effect to the Office Memorandum. The present proceedings arise from that determination.
Contentions of the Petitioner:
6. Learned counsel for WAPDA has advanced the following submissions:
First, it is contended that the Office Memorandum under challenge was not issued arbitrarily but pursuant to express directions of the Ministry of Water and Power and in exercise of the authority granted to WAPDA under Section 18 of the WAPDA Act. It is argued that Section 18 empowers the Authority to prescribe procedures and regulate the terms and conditions of service of its employees, and that office memoranda, issued in furtherance of such power, constitute a lawful mode of internal governance within the Authority.
Second, learned counsel submits that WAPDA maintains its own service framework and that it is a settled internal policy that the Fundamental Rules and other general service laws apply only in areas not otherwise covered by the rules or instructions issued by the Authority itself. Reliance in this regard is placed on its Resolution No. 396 dated 07.06.1978, wherein it was resolved: that in all matters not covered by the Rules framed by the Authority, or where the Rules are silent, the Fundamental Rules or Supplementary Rules framed by the Federal Government shall be applicable.
In this regard, the learned counsel for the petitioner also placed reliance on Office Memo No. GM(A)/D(Rules) /63/3/1I/2152-2282 dated 13.03.2006, wherein the following is stated:
I. It has been noted that Federal Government Rules/Instructions are quoted for disposal of cases despite availability of sufficient WAPDA Rules/Instructions on the subject. Federal Government Rules and Instructions can only be consulted for guidance. However, their adoption in WAPDA shall need Authority s prior approval.
II. All concerned are, therefore, advised to follow WAPDA rules in normal course of action in letter and spirit. The argument of the petitioner is, therefore, that the subject of refixation of pay on account of retrospective pro forma promotion stands expressly governed by the impugned Office Memorandum, and therefore the recourse to FR 17 is not valid in light of the internal governance mechanisms issued by WAPDA already in place.
Third, it is argued that even if FR 17 were otherwise applicable, the legal landscape has materially changed by virtue of S.R.O. (I)/2022 dated 20.05.2022 (the "2022 SRO" ), whereby, through amendment, the proviso to sub-rule (1) of Rule 17 of the Fundamental Rules has been omitted with immediate effect. Learned counsel submits that the omission of the proviso removes the statutory basis for claiming arrears of pay and allowances on account of retrospective pro forma promotion, and that any reliance on the erstwhile proviso is now legally unsustainable. It is urged that the Federal Service Tribunal failed to take notice of this statutory development, rendering its decision erroneous in law.
Lastly, it is submitted that the Federal Service Tribunal exceeded its jurisdiction in holding the Office Memorandum to be ineffective and redundant to the extent of the respondents, as it was not expressly challenged before it. According to learned counsel, the issuance of such memoranda is exclusively in the policy domain of the WAPDA Act and not subject to judicial scrutiny.
Issues for Determination
7. The core issue of law requiring determination of this Court is: whether the present respondents while serving as WAPDA employees, were entitled to arrears of pay and allowances on being granted pro forma promotion under FR 17, notwithstanding the Office Memorandum issued under Section 18 of the WAPDA Act.
Legal Framework
8. The legal framework governing the service conditions of the respondent WAPDA employees relevant for determining the present controversy, primarily revolves around FR 17(1) of the Fundamental Rules and Section 18 of the WAPDA Act. FR 17 of the Fundamental Rules, originally stated as under:
F. R. 17. (1) Subject to any exceptions specifically made in these rules and to the provisions of sub-rule (2), an officer shall begin to draw the pay and allowances attached to his tenure of a post with effect from the date when he assumes the duties of me that post and shall cease to draw them as soon as he ceases to discharge those duties.
[Provided that the appointing authority may, if satisfied that a civil servant who was entitled to be promoted from a particular date was, for no fault of his own, wrongfully prevented from rendering service to the Federation in the higher post, direct that such civil servant shall be paid the arrears of pay and allowances of such higher post through proforma promotion or up-gradation arising from the antedated fixation of his seniority.]
Given the above, we note that by the virtue of the proviso to FR 17(1), a limited but well-defined exception is carved out to the general principle that pay and allowances follow the actual discharge of duties. Where a civil servant was otherwise entitled to promotion from an earlier date but was, for reasons not attributable to him, wrongfully prevented from serving in the higher post, the appointing authority is to grant pro forma promotion with consequential payment of arrears of pay and allowances. In essence, the provision clearly intends to ensure that an employee should not be made to suffer on account of administrative delay, error, or illegality.
9. It is also worth mentioning that the legal character of the Fundamental Rules flows from Section 25 of the Civil Servants Act, 1973 (the Civil Servants Act ) provides:
25. Rules.- (I) The President or any person authorized by the President in this behalf, may make such rules as appear to him to be necessary or expedient for carrying out the purposes of this Act.
(2) Any rules, orders or instructions in respect of any terms and conditions of service of civil servants duly made or issued by an authority competent to make them and in force immediately before the commencement of this Act shall, in so far as such rules, orders or instructions are not inconsistent with the provisions of this Act, be deemed to be rules made under this Act
As such, Section 25 of the Civil Servants Act expressly mandates the continuance of all rules, orders, and instructions governing terms and conditions of service that were in force prior to the enactment of the Act, insofar as they are not inconsistent with it, and deems them to be rules made under the Act. This includes the Fundamental Rules, as laid down by the Supreme Court in Maryam Younis v. Director of Education Cantt, GHQ (PLD 1990 SC 666) , wherein it was expressly held that the statutory existence of Fundamental Rules flows from Section 25 of the Civil Servants Act. Thus, it is well-established that the Fundamental Rules possess statutory existence, and form part of the governing law regulating the terms and conditions of service of civil servants.
10. At this juncture, it is also appropriate to bring into view the 2022 SRO, which is reproduced below verbatim for ease of reference:
S.R.O(I)/2022 In exercise of the powers conferred by sub-section (1) of section 25 of the Civil Servants Act, 1973 (LXXI of 1973), read with Notification No. S.R.O 120(I)//98, dated the 27 of February, 1998, the Prime Minister is pleased to direct that the following further amendment shall be made in the Fundamental Rules, namely:-
In the aforesaid Rules, in rule 17, in sub-rule (1), the proviso shall stand omitted with immediate effect.
It is important to note that the 2022 SRO by virtue of the which the proviso of FR17(1) has now been omitted, is accompanied by Office Memo. No. F.No.2 (1) FR-17/2021 dated 20.05.2022 ( 2022 SRO-II ), which governs the dissolution of FR 17(1) committees and as such, contains instructions that clarify how the amendment omitting the proviso to FR 17(1) is to be dispensed. Relevant for our purposes is serial No. iii therein, which states that: iii. The cases (complete working papers with Certificate of PAO) which have been received by this Division prior to 20.05.2022 shall continue to be processed in accordance with the Guidelines for FR-17(1) Committee(s) (existing prior to 20.05.2022). Incomplete cases and/or cases received in Finance Division after 20.05.2022 will not be entertained.
Although the scope, operation, and legal consequences of the said omission shall be examined and discussed later, but for the moment, suffice it to note that the bare language of 2022 SRO-II, suggests prospective application, and there is no express or necessarily implied indication that accrued or vested rights were intended to be divested.
11. With the above-described dispensation of FR 17 in mind, we must now consider Section 18 of the WAPDA Act, which reads:
18. Recruitment and conditions of service and disciplinary powers.- The Authority shall prescribe the procedure for appointment, and terms and conditions of service of its officers and servants, and shall be competent to take disciplinary action against its officers and servants.
As such, Section 18 of the WAPDA Act authorises the Authority to issue directions and administrative instructions for the internal management of its affairs, including matters relating to service administration. The power conferred by Section 18 prima facie enables the Authority to regulate day-to-day functioning and to issue office orders, circulars, and memoranda. At the same time, the precise contours of this power, and its interaction with statutory service rules such as the Fundamental Rules, must be examined in order to determine its lawful reach in the present controversy.
Analysis
12. In order to determine the principal issue framed, namely whether, notwithstanding the Office Memorandum issued under section 18 of the WAPDA Act denying arrears of pay and allowances on retrospective pro forma promotion, FR 17 and its proviso continue to apply to WAPDA employees, it is necessary to examine each of the following issues :
What is the legal effect of S.R.O. (I)/2022 omitting the proviso to FR 17(1), and whether such omission extinguishes claims for arrears arising from retrospective pro forma promotion granted prior to its issuance.
13. This aspect of the matter is readily addressed by reference to the factual chronology of the case. The record shows that the respondents approached the petitioner-Authority through a formal application dated 05.01.2022 , seeking grant of monetary benefits flowing from their retrospective pro forma promotion under FR 17(1). This request was considered and rejected by WAPDA vide order dated 02.03.2022 , i.e., well before the issuance of 2022 SRO on 20.05.2022 . Aggrieved thereby, the respondents invoked the jurisdiction of the Federal Service Tribunal, which ultimately allowed their appeals through a consolidated judgment dated 11.09.2024 . It is, therefore, evident that the cause of action, the assertion of entitlement, and the departmental adjudication of the claim had all taken place prior to the omission of the proviso to FR 17(1).
14. The legal consequence of this sequence is decisive. Rights under FR 17(1), as it stood prior to 20.05.2022, had already accrued and crystallised when the claim of the respondents was rejected by the department. The subsequent amendment omitting the proviso cannot retrospectively validate an earlier denial nor extinguish a claim that had already entered the adjudicatory stream.
15. This conclusion is reinforced by the contemporaneous Office Memorandum 2022 SRO-II dated 20.05.2022, which expressly provides that cases received prior to the cut-off date i.e. 20.05.2022 shall continue to be processed under the pre-existing regime. Although the claim of the respondents was denied at the departmental level prior to that date, the matter had undeniably commenced and was pending adjudication when the amendment came into force. The Office Memorandum 2022 SRO-II dated 20.05.2022, thus, clearly manifests an intention to preserve pending and already-initiated claims.
16. Accordingly, S.R.O. (I)/2022 has no adverse effect on the claim of the respondents, which had been initiated, processed, and subjected to departmental rejection prior to 20.05.2022, and was therefore rightly adjudicated by the Federal Service Tribunal under the unamended FR 17(1). Therefore, the rest of this analysis will proceed to consider the issues before us under the unamended FR 17(1).
Whether WAPDA employees fall within the regulatory ambit of the Fundamental Rules, including FR 17.
17. The question of whether WAPDA employees fall within the regulatory ambit of the Fundamental Rules, including FR 17 turns on whether such employees are to be regarded as civil servants governed by federal service law, or whether they fall within a distinct statutory category to which the Fundamental Rules do not apply.
18. Section 17(1-B) of the WAPDA Act provides:
17 (1-B). Service under the Authority is hereby declared to be service of Pakistan, and every person holding a post under the Authority, not being a person who is on deputation to the Authority from any Province, shall be deemed to be a civil servant for the purposes of the Service Tribunals Act, 1973
For present purposes, it is sufficient to note that, by virtue of Section 17(1-B) of the WAPDA Act and the settled view of this Court that WAPDA employees are deemed as civil servants for service matters and fall within the ambit of service laws applicable to all civil servants 1 .
19. It must also be recalled that the Fundamental Rules, including FR 17, derive statutory force from Section 25 of the Civil Servants Act, which forms part of the governing law regulating the terms and conditions of service of civil servants - including WAPDA employees.
20. Consequently, once WAPDA employees are deemed to be civil servants for purposes of service adjudication, their rights and liabilities relating to promotion and its consequences necessarily fall to be examined within the framework of the applicable federal service law. It is, therefore, established that the Fundamental Rules, including FR 17, govern the case of the respondents, being WAPDA employees.
What is the scope of Section 18 of the WAPDA Act, and whether Office Memoranda issued thereunder constitute statutory service rules or merely administrative instructions.
21. The petitioner has invoked Section 18 of the WAPDA Act to assert before us a broad and autonomous power to regulate its service matters, including the authority to issue binding instructions capable of displacing the application of the Fundamental Rules. This contention, however, is not res integra and stands settled by the Supreme Court.
22. In Chairman, WAPDA v. Jamil Ahmad (1993 SCMR 346) , the Supreme Court held as follows:
7. A perusal of the above section [section 18] indicates that it provides that the Authority shall prescribe procedure for appointment and terms and conditions of service of its officers and servants, and it shall be competent to take disciplinary action against its officers and servants. The above section does not contemplate framing of any statutory rules nor it contemplates that the prescribed procedure for the matters referred to therein is to be framed with the approval of the Government. .....
10. Since we have held that the Rules framed under section 18 of the Act do not have the statutory force, the violation of the same would not have entitled the respondent to seek the relief of re-instatement.
(emphasis provided)
A plain reading of the above extract leaves no manner of doubt that Section 18 of the WAPDA Act does not contemplate the framing of statutory service rules. The Supreme Court expressly held that the provision merely empowers the Authority to prescribe procedures relating to appointment, terms and conditions of service, and disciplinary control, without requiring governmental approval and without conferring statutory force on such prescriptions. The judgment further makes it abundantly clear that the source of power under which an instrument is issued is determinative of its legal character.
As held by the Supreme Court, neither the form nor the nomenclature of an instrument is decisive. Unless it is framed under section 29 of the WAPDA Act, with the approval of the Government, it cannot attain statutory status. The distinction drawn by the Supreme Court between Section 18 and Section 29 is central. Whereas Section 18 authorizes internal governance, Section 29 alone provides the mechanism for framing regulations having statutory force. Instruments issued under Section 18 were, therefore, categorically held to be administrative in nature.
23. It is not disputed that the Office Memorandum was issued by invoking Section 18 of the WAPDA Act. It is also not the case of the petitioner that it was framed as a regulation under Section 29, approved by the Federal Government, or notified as subordinate legislation. The fact that the Office Memorandum was issued in consultation with, or pursuant to the views of, the Ministry of Water and Power does not alter its character. As is evident from the reasoning of the Supreme Court in Jamil Ahmed case (supra), mere consultation cannot substitute the statutory requirement of Government approval under Section 29, nor can it confer statutory force upon an administrative instruction.
24. The petitioner s reliance on Resolution No. 396 dated 07.06.1978 and Office Memorandum dated 16.03.2006, also does not assist its case. At best, these instruments can at best regulate internal administration. They cannot, by their own force, override Statutory service rules or exclude the application of the Fundamental Rules. Indeed, Resolution No. 396 itself recognizes that the Fundamental Rules shall apply in matters not covered by rules framed by the Authority. It is by now settled that, instruments framed under Section 29 can qualify as statutory rules, while instructions issued under Section 18, being administrative, are devoid of necessary statutory force.
25. Since the impugned Office Memorandum was not framed under Section 29 of the WAPDA Act, it lacks statutory force and cannot override, qualify, or displace the application of Fundamental Rule 17. The invocation of Section 18, when tested against the settled law, thus fails to advance the case of the petitioner.
26. It is also appropriate to mention that even otherwise, the Office Memorandum suffers from an inherent internal inconsistency in its treatment of pro forma promotion. The very nature of a pro forma promotion is that it is a corrective device employed to undo the legal consequences of an unlawful denial of promotion by placing the employee, for all service purposes, in the position they would have occupied but for the illegality. Refixation of pay from the retrospective date is the financial expression of that corrected status. To permit refixation from a back date, while simultaneously denying the consequential pay and arrears for the same period is, in substance, to recognise the right but deny its operative effect. Such a bifurcation is legally untenable and defeats the very rationale of pro forma promotion. This reasoning, adopted by the Federal Service Tribunal, is fully consonant with settled service jurisprudence that pro forma promotion from a date in retrospect operates to entitle a civil servant to claim pay of the period that he was improperly denied his legal right of promotion, and once it has been granted, it cannot be used to withhold arrears of salary 2 .
Whether the Federal Service Tribunal was competent to disregard or set aside the impugned Office Memorandum, where resolution of the service dispute necessarily depended upon its legal status, even in the absence of an express challenge to its vires.
27. Although the Office Memorandum was not specifically prayed to be struck down, the substantive relief claimed by the respondents, namely, arrears of pay and allowances flowing from retrospective pro forma promotion, could not have been adjudicated without examining the vires of the very instrument. The determination of its legal status and applicability was therefore incidental to, and inseparable from, the adjudication of the service dispute itself. A tribunal cannot be compelled to mechanically apply an executive instruction if such instruction is found to be inconsistent with the governing statute or statutory rules. To hold otherwise would render the adjudicatory function illusory and subordinate to executive policy.
28. The learned Tribunal, it bears emphasis, did not strike down the Office Memorandum in rem , nor did it exercise any abstract power of judicial review. It merely declined to give effect to the Office Memorandum to the extent of the present respondents upon finding that it conflicted with FR 17, which governed the field. Such an exercise of authority falls squarely within its jurisdiction to decide service matters according to law. As such, we find the objection of the petitioner on this score misconceived.
Conclusion:
29. For the reasons recorded above, it is held that, notwithstanding the Office Memorandum issued under Section 18 of the WAPDA Act denying arrears of pay and allowances on retrospective pro forma promotion, FR 17, as it stood prior to 20.05.2022, governed the entitlement of the respondents in the present case.
30. The omission of the proviso to FR 17(1) by virtue of S.R.O. (I)/2022 does not operate retrospectively, so as to extinguish claims that had already accrued, been asserted, and entered adjudication prior to its issuance. The respondents entitlement arose and crystallised under the unamended rule, and the subsequent amendment neither expressly nor by necessary implication divests such vested rights.
31. It is further held that WAPDA employees are deemed civil servants for purposes of service adjudication and fall within the regulatory ambit of the Fundamental Rules, including FR 17. In the absence of any statutory exclusion, their service rights, including entitlement to monetary benefits flowing from retrospective pro forma promotion, are required to be examined under the applicable federal service law.
32. The reliance placed by the petitioner on Section 18 of the WAPDA Act is, therefore, misconceived. As instruments issued under Section 18 are administrative in character and do not possess statutory force. The impugned Office Memorandum, not having been framed under Section 29 of the WAPDA Act with the approval of the Federal Government, cannot override, restrict, or qualify rights flowing from a statutory service rule and must yield to FR 17.
33. The Federal Service Tribunal was fully competent to examine the legal effect of the Office Memorandum, insofar as it bore upon the adjudication of the service dispute of the respondents. In declining to give effect to an executive instruction found to be inconsistent with the governing statutory rule, and that too expressly only to the extent of the present respondents, learned the Tribunal acted squarely within its jurisdiction and in accordance with settled principles of service jurisprudence.
34. In view of the foregoing, no illegality, jurisdictional error, or misreading of law has been shown in the impugned judgment of the Federal Service Tribunal. The present petitions being devoid of merit are accordingly dismissed and leave to appeal is refused.
MH/W-2/SC Petitions dismissed.
1 Managing Director (Power), WAPDA and others v. Muhammad Luqman (PLD 2003 Supreme Court 175); Chief Engineer Hydel (North) and Project Director, WAPDA v. Zafrullah Shah (2003 SCMR 686) and Chairman, WAPDA v. Abdul Hafeez Khan (2000 PLC (C.S.) 1326).
2 Aqila Asghar Ali v. Khalida Khatoon Malik (PLD 1991 SC 1118).