Judgment Sheet

IN THE LAHORE HIGH COURT,LAHORE

JUDICIAL DEPARTMENT

Writ PetitionNo.16223/2014

JUDGMENT

Hassan Javed and another Vs. Punjab Education

Foundation and 4
others.

Date of Hearing: - 09.10.2017

Petitioners by: - M/s. Waqqas Ahmad Mir, Mian

Wajhat Ali, Hassan Niazi and Miss
Noor Bano, Advocates

Respondents by:- Mr. Mahmood Ahmad Qazi & Malik

Muhammad Usman Awan, Advocates
and Jari Ullah Khan.
Mr. Shan Gull, Additional Advocate-
General and Ashfaq Ahmed Kharal,
Asst. AG.

JAWAD HASSAN, J:- Through this Judgment, this Court

intends to decide the following writ petitions, in which common
questions of laws and facts are raised and vires of same laws
have been challenged:
1. Tanveer Ahmed Zaffar vs. Punjab Education Foundation
and others, Writ Petition No.13664/2014 (the “First
Petition”);

2. Hassan Javed and Mohsin Rasheed Gillani vs. Punjab

Education Foundation and others, Writ Petition No.
16223/2014 (the “Second Petition”); and

3. Usman Ali Jarral vs. Punjab Education Foundation and

others, Writ Petition No.13669/2014 (the “Third
Petition”).

2. By virtue of these Petitions, filed under Article 199 of

the Constitution of the Islamic Republic of Pakistan, 1973 (the
“Constitution”), the Petitioners have assailed and challenged
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the letters dated 5 May 2014 (the “Impugned Letter(s)”)

whereby the service contracts of all the Petitioners were
terminated by the Respondents/Punjab Education Foundation
(the “Foundation”). The Petitioners have also challenged the
decision of the Board of Directors of the Foundation (the
“Board”) dated 9 December 2013 (the “Impugned Decision”).
A. Essential Facts of the First Petition:

3. For the sake of clarity, the facts leading to institution of

the First Petition are that the Managing Director of the
Foundation (the “MD”) issued a notification on the 7
September 2009, whereby the Petitioner was appointed as the
Deputy Managing Director (Operations) on contract basis for a
period of three (3) years with a condition to remain on
probation for a period of three (3) months. This decision was
made after selection by the Recruitment Committee for Senior
Professionals headed by the Chairman of Board of Directors on
5 September 2009. It was specifically provided that his services
will be governed under the Punjab Education Foundation
(Contract Appointment) Rules 2005 (the “Contract
Appointment Rules”) and Punjab Education Foundation
Regulations, 2006 (the “2006 Regulations”). On the 12
September 2009, consequent upon selection and appointment of
the Petitioner by above Notification, MD intimated the terms
and conditions of employment, approved by the Board, to the
Petitioner. Clause 7 specifically provided that the “appointment
will be on contract basis for a period of 3 years subject to
satisfactory performance”. The Petitioner continued to work in
the Foundation and on 30 March 2013, the Director Human
Resource Management (“HRM”), with approval of the
Competent Authority, extended the contract of the Petitioner
from the 7 September 2012 till 6 September 2013. Similarly, on
the 22 October 2013, the Deputy Director, HRM, with approval
of the Competent Authority, informed the Petitioner for
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extension in contract for further period of six (6) months with

effect from the 7 September 2013 to the 6 March 2014. It was
specifically mentioned that the services of the Petitioner shall
be governed under the Contract Appointment Rules and the
Punjab Education Foundation Regulations, 2010 (the “2010
Regulations”). However, on 30 October 2013, the letter dated
22 October 2013 was withdrawn by the Deputy Director, HRM,
with approval of the Competent Authority, without providing
any justification or reason. Even after expiry of the service
period of the Petitioner on the 6 September 2013, the Petitioner
prolonged to work in the Foundation with salary and other
benefits under the terms and conditions of the employment
contract. On the 5 May 2014, the Impugned Letter was issued
for and on behalf of the Competent Authority for termination of
the service contract of the Petitioner as the Deputy Managing
Director (Operations), and to relieve the Petitioner from
services of the Foundation with immediate effect with one (1)
month salary in lieu of notice period. It was informed in the
letter that the contract of the Petitioner was expired on the 6
September 2013, and keeping in view the office exigencies, he
was allowed to continue his job. Therefore, the Petitioner has
mainly prayed to declare the Impugned Letter dated 5 May
2014 pertaining to his termination as illegal; to regularize
employment of the Petitioner, or alternatively refer the matter
of regularization to the Scrutiny Committee; and to declare the
decision of the Board of Directors of the Foundation dated 9
December 2013 as illegal. The prayers made in the First
Petition are reproduced verbatim:
(i) Declare Impugned Letter dated 05.05.2014
and Petitioner’s termination as illegal, void and
without legal effect and reinstate the Petitioner to
his office; till final decision of this petition, the
Impugned Order’s effect and operation may also
kindly be suspended:
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(ii) Declare Petitioner as regularized employees

of PEF keeping in view the facts and
circumstances of the case. In the alternative this
Honourable Court may kindly be pleased to
reinstate the Petitioner and direct PEF to refer the
matter of regularization to the Scrutiny Committee
as per the government of Punjab’s Notification.
(iii) Declare PEF’s Board decision dated
09.12.2013 as illegal, without jurisdiction and
without lawful authority.
(iv) Restrain Respondents No.1 to 3 from
harassing the Petitioner and his family and to
allow access to his personal belongings.

4. It is pertinent to mention here that on the 23 January

2014, the MD issued a warning letter to the Petitioner, with
reference to earlier directions dated 22 January 2014 and 23
January 2014, to improve his efficiency and not to engage in
habitual delaying tactics, having negative impact on the
Foundation‟s performance in Chief Minister‟s Education
Roadmap and to comply with directions of seniors in letter and
spirit. On the 23 January 2014, MD also wrote for displeasure
on inappropriate behavior of the Petitioner in office of MD on
the 23 January 2014. It was written that the Petitioner was
given clear instructions to submit urgent information in a high
priority matter but he left the meeting on a defiant and arrogant
manner. He was warned to improve professional behavior,
observe office decorum, failing which he would entail strict
disciplinary action. On the 27 January 2014, the MD called for
explanation from the Petitioner, within two (2) working days, in
reference to directions of the MD on the 24 January 2014 to
attend the Working Group Meeting of the District Education
Authorities on 25 January 2014. It was alleged that the
Petitioner was deputed to represent MD in meeting but despite
clear instructions, failed to attend the meeting and deputed a
junior officer for same. On the 31 January 2014, the MD called
for explanation from the Petitioner for not submitting the „Job
Descriptions of NSP and the IT department‟ for over a year,
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despite clear direction to complete pending Job Descriptions by

16 January 2014 for audit meeting on 10 January 2014. The
Petitioner was directed to ensure compliance and send the Job
Descriptions to the Deputy Managing Director, HRM,
immediately. On the 3 February 2014, the MD again called for
explanation from the Petitioner for non-compliance to MD‟s
instructions as conveyed through the minutes of the
Coordination Meeting held on 18 November 2013. The
Petitioner was not present in the meeting and was required to
submit reply justifying his absence from the same. On the 6
February 2014, the MD again asked for explanation from the
Petitioner in reference to direction given by the MD during
Steering Committee Meeting on the 29 January 2014 to share
tentative list of all shortlisted/selected NSP schools. The MD
informed that not observing deadlines and reluctance to share
NSP information is adversely affecting work and performance
in the CM‟s meetings, and such habitual delays reflect poor
management and inefficiency on his part, in violation of
decorum and discipline. On the 7 February 2014, the Petitioner
was again called for explanation by the Deputy MD (HRM) to
explain unprofessional behavior and non-compliance of orders,
within two (2) days, for his failure to attend the Pre Stock Take
meeting on 5 February 2014. On the 6 March 2014, the
Petitioner was issued a warning letter by the MD, for his
reluctance to share information about NSP, position of the
Petitioner for past three (3) months and unprofessional behavior
on his part, which placed senior management in an awkward
position in high level meetings. He was advised to comply with
orders and instructions as and when given, and to improve
professional behavior and maintain office discipline in future.
He was also warned to be careful in his correspondence with
senior management, failing which disciplinary action would be
initiated against such irresponsible behavior. On the 11 March
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2014, the Petitioner sent a reply in reference to letter of the MD

dated 6 March 2014, explaining change of reporting line of
FAS and EVS Department, information about NSP Program,
latest progress of NSP Department, comments on hiring
process, synopsis of his performance since 2009, and process of
victimization. The Petitioner requested for withdrawal of the
above letter of the MD.

B. Essential Facts of the Second Petition:

5. The facts succinctly revealed from the Second Petitioner

that the Petitioner No.1, Mr. Hassan Javed, was employed in
the August 2007 by the Respondent No. 1 as a Project Officer
on contract basis, which was subsequently extended till the 9
August 2013. The Petitioner No. 1 in the Second Petition was
being governed under the Contract Appointment Rules. Even
after expiration of his contract, he continued his service for a
long period without any express/written extension in contract
by the Foundation. However, the services of the Petitioner No.1
were terminated on the 5 May 2014 through the Impugned
Letter when he was working as the Deputy Director/Program
Incharge (New Schools Program) at the Foundation. Similarly,
the Petitioner No.2, Mr. Mohsin Rashid, was employed in
December 2009 as a Project Officer (Education Voucher
Schemes) for a period of one (1) year, which was subsequently
extended on the 30 November 2010 and 8 May 2013. The
Petitioner No. 2 in the Second Petition was being governed
under the Contract Appointment Rules. Ultimately, after the
expiry of the purported contract, the Petitioner No.2 was
retained as an employee till his termination on 5 May 2014
through the Impugned Letter. Earlier, the Petitioners in the
Second Petition filed a petition titled Mohsin Rasheed Gillani
etc vs. GoP and others, Writ Petition No. 19154 of 2013,
seeking their regularization in which a direction was issued to
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the Foundation on the 31 July 2013 by the Lahore High Court

to decide the representation of the petitioners, if pending,
strictly in accordance with law after affording opportunity of
hearing to all concerned and through well-reasoned speaking
order as expeditiously as possible. On the 9 December 2013,
the Chairman of Board of Directors unanimously decided, in
compliance of the order of this Court dated 31 July 2013 in
Mohsin Rasheed Gillani etc vs. GoP and others, Writ Petition
No. 19154 of 2013, that the request of regularization of contract
employees of the Foundation could not be acceded to. For the
sake of clarity, the Petitioners in the Second Petition have
mainly prayed to declare the Impugned Letters dated 5 May
2014 pertaining to termination of the Petitioners as illegal; to
regularize employment of the Petitioner, or alternatively refer
the matter of regularization to the Scrutiny Committee; to
declare the decision of the Board of Directors of the Foundation
dated 9 December 2013 as illegal; to declare the Rule 6(2)(b) of
the Contract Appointment Rules and Regulation 7 of the Punjab
Education Foundation Employees Service Amended
Regulations, 2010 void; and to declare the actions of the
Foundation as ultra vires. The prayers made in the Second
Petition are reproduced verbatim:

(i) Declare Impugned Letter dated 05.05.2014

and Petitioner’s termination as illegal, void and
without legal effect and reinstate the Petitioners to
their offices; till final decision of this petition, the
Impugned Order’s effect and operation may also
kindly be suspended:
(ii) Declare Petitioners as regularized
employees of PEF keeping in view the facts and
circumstances of the case. In the alternative this
Honourable Court may kindly be pleased to
reinstate the Petitioners and direct PEF to refer
the matter of regularization to the Scrutiny
Committee as per the government of Punjab’s
Notification.
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(iii) Declare PEF’s Board decision dated

09.12.2013 as illegal, without jurisdiction and
without lawful authority.
(iv) Declare Rule 6(2)(b) of PEF Contract
Appointment Rules to be violative of Article 4, 9,
14, 18 & 25 of the Constitution as well as violative
of PEF Act, 2004 and therefore void and without
legal effect;
(v) Restrain Respondents No.1 to 3 from
harassing the Petitioner and his family and to
allow access to his personal belongings.
(vi) Declare Regulation 7 of the Punjab
Education Foundation Employees Service
Amended Regulations, 2010 to be ultra vires the
PEF Act, 2004 and Contract Rules 2005.
(vii) Declare the Actions of the Respondents as
ultra vires the Recruitment Policy, 2004.

C. Essential Facts of the Third Petition:

6. The facts giving rise to the Third Petition are that the
Petitioner, Mr. Usman Ali Jarral, was employed by the
Foundation in November 2009 on contract basis vide letter
dated 29 September 2009 for a period of one (1) year, which
was extended vide letter dated 19 January 2012 till 11
December 2012. Despite of the written extension in the service
contract, the Petitioner continued to work in the Foundation
with salary and other benefits under the terms and conditions of
the service contract, and kept performing his duties. The
Petitioner in the Third Petition was being governed under the
Contract Appointment Rules. However, the services of the
Petitioner were terminated on the 5 May 2014 through
Impugned Letter when he was serving as Director (Information
Technology). For the sake of clarity, the Petitioner in the Third
Petition has mainly prayed to declare the Impugned Letter dated
5 May 2014 pertaining to his termination as illegal; to reinstate
the Petitioner to his office; and to declare the decision of the
Board of Directors of the Foundation dated 9 December 2013
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as illegal. The prayers made in the Third Petition are

reproduced verbatim:
(i) Declare Impugned Letter dated 05.05.2014
and Petitioner’s termination as illegal, void and
without legal effect and reinstate the Petitioner to
his office; till final decision of this petition, the
Impugned Order’s effect and operation may also
kindly be suspended:
(ii) Declare order dated 09.12.2013 to be
illegal.

D. Relevant Facts for all the Petitions:

7. The Foundation issued a newspaper clipping inviting

persons for several posts listed in the newspaper, specifically
highlighting that “the appointments will be on contract basis,
extendable on the basis of performance. The post carries
competitive market based remuneration packages…” It is
pertinent to note that all the appointments of the Petitioners
were made pursuant to this newspaper clipping. On the 28
February 2012, the Secretary (Regulations), Services & General
Administration Department (“S&GAD”) issued a Notification,
informing that the Chief Minister has constituted a Committee
to determine the eligibility and suitability of contract employees
in BS-16 and above working in the Autonomous Bodies in
Punjab for their appointment on regular basis. It was informed
that the contract employee appointed prior to 10 November
2010 may be considered by the Committee keeping in view
conditions mentioned herein. After scrutiny of the cases, the
recommendations of the Committee were to be sent to
respective Appointing Authority in the concerned Autonomous
Body for appointment on regular basis. On the 2 March 2013,
Secretary (Regulations), S&GAD issued another notification,
informing that the CM has, on the 28 February 2012,
constituted a Committee to determine the eligibility and
suitability of contract employees in BS-16 and above working
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in the Autonomous Bodies in Punjab for their appointment on

regular basis. The contract employee appointed prior to the 1
March 2013 were to be considered by the Committee keeping
in view conditions mentioned therein. On the 9 December 2013,
the Chairman of Board of Directors unanimously decided, in
compliance of the order of the Lahore High Court dated 13 July
2013, that the request of regularization of the contract
employees of the Foundation could not be acceded to [the
“Impugned Decision”]. On the 2 January 2014, the MD issued
a Notification in respect of Extension in Contract Employment,
which was substituted by a Notification issued on 3 January
2014. MD directed the HRM Department in Notification dated
3 January 2014 to finalize the matter of contract renewal of all
such employees who are not involved in any case of corruption,
departmental inquiry, audit paras, irregular, recruitment,
judicial proceedings etc. within and outside te Foundation
without any further delay for the period as per past practice,
excluding the pending duration, if any, till the 31 December
2013. On the 19 June 2014, the Member, the Chief Minister
Inquiry Team (“CMIT”), moved a summary to the CM
regarding termination of service contracts and the CM, vide
Order dated 21 May 2014, desired to enquire into complaint
made by Mr. Mohsin Rashid Gillani, that the Petitioners in all
these Petitions were terminated because allegedly, they had
pointed out some wrong doings in the administration of the
Foundation. It was recommended in the summary after
analyzing all the issues in detail, among others, that the
Foundation may be directed to adopt zero percent (0%)
tolerance across the board against wrong doings of all and the
termination of four (4) officers is in accordance with the
Contract Employment Rules. On the 20 June 2014, the
Chairman CMIT informed the Chief Minister, the crux of the
enquiry conducted by Member CMIT and fully supported the
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recommendations of Member CMIT in Summary dated 19 June

2014, and also suggested a special audit of the Foundation. On
the 28 August 2014, the Secretary to the CM, Punjab informed
that recommendations contained in Summary dated 19 June
2014 are approved, and the CM is desirous that an enquiry may
be initiated against the delinquent officers involved in
irregularity and may be proceeded under relevant rules of Anti-
Corruption and the PEEDA Act, 2006. Therefore, the
termination of all four (4) Petitioners in all the Petitions was
approved by the CM. On the 4 September 2014, Section Officer
of the Schools Education Department directed the MD to take
necessary action for implementation of recommendations
mentioned in the Summary to the CM, as approved by the CM.

E. Submissions of the Petitioners:

8. To plead the Petitions, it has been inter alia submitted
by the learned counsel for the Petitioners that the Impugned
Letters are against law and facts as no inquiry prior to
termination of the Petitioners has been conducted by the
Respondents; that the Petitioners have not been afforded any
opportunity of personal hearing which is clear-cut violation of
principle of audi alteram partum; that the Impugned Letters
have been issued without any lawful authority because the
Board has not signed the Impugned Letters and the MD has
never been given any such power; that the vires of Rule 6(2)(b)
of the Contract Appointment Rules through which the MD has
allegedly been bestowed powers, has been challenged to be
ultra vires the Act; that since the term of the Directors of the
Board as well as Chairman of the Board has expired on the 18
March 2014, as such the current Board and the Chairman
cannot make any decision or validate any decision of the MD,
therefore, the actions against the Petitioners are clearly void,
without jurisdiction and without lawful authority; that Rules
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6(2)(b) of the Contract Appointment Rules is unconstitutional

and violative of the Petitioners‟ rights under Articles 3, 4, 9, 10-
A, 14, 18 and 25 of the Constitution; that allowing the
Petitioners to continue their work by the Foundation without
any extension after the expiry of their contract period
tantamounts to regularization of Petitioners‟ services; that the
decision dated 9 December 2013 made by the Board of the
Foundation is also illegal as the Board was not mandated to
decide the case of regularization of the Petitioners rather it was
the Scrutiny Committee which has to look into the matter; that
the Respondents have never referred the case of the Petitioners
for regularization to the Scrutiny Committee as per the
Government Regularization Policy; that as per the Punjab
Education Foundation Service Rules, 2006 all the employees
who were recruited in the Foundation after 2006 including the
Petitioners were to be considered as regular employees; that
similarly placed persons have been regularized but the
Petitioners have been deprived of the same, hence a
discriminatory attitude has been adopted towards the Petitioners
which is also a violation of the Article 25 of the Constitution;
and that the act of termination of Petitioners‟ services is based
on mala fide as such liable to be set aside.
9. The learned counsel for the Petitioners has placed
reliance on the case titled Samina Kanwal v. Director Punjab
Forestry Research Institute Faisalabad (PLD 2011 Lahore
563 (D.B), Marathwada University v. Seshrao Balwant Rao
Chavan (AIR 1989 S.C. 1582 (1989) 3 SCC 132), National
Bank of Pakistan v. Iftikhar Rasool Anjum and others (2017
PLC C.S. 453= PLJ 2017 Lahore 313), Dewan Salman Fiber
Pvt. Ltd. v. Federation of Pakistan and others (2015 PTD
2304), Shafique Ahmad Khan and others v. NESCOM and
others (PLD 2016 S.C. 377), Muhammad Zaman v.
Government of Pakistan etc. (2017 SCMR 571), Muhammad
W.P No.16223/2014 13
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Tariq Badar and another v. Natioal Bank of Pakistan and

others (2013 SCMR 314), State Bank of Pakistan v.
Muhammad Shafi (2010 SCMR 1994), Pakistan Red
Crescent Society v. Syed Nazir Gillani(PLD 2010 S.C. 806),
Walayat Ali Mir v. Pakistan International Airlines
Corporation through its Chairman (1995 SCMR 650),
Burhannudin Sheikh v. Natioal Bank of Pakistan(1985 CLC
2003 Karachi), Halsbury Laws of India (2015); Delegated
Legislation [005.009]OG.32, Sukhdev Singh & others v.
Bagatram Sardar Singh (AIR 1975 S.C. 1331, 1975 SCR
(3)619) and Maharashtra State Board v. Paritosh Bhupesh
Kumar Seth etc. (AIR 1984 S.C. 1543 SCR (1) 29).

F. Submissions of the Respondents:

10. On the contrary, in reply to these petitions, the

Respondents filed report and parawise comments raising certain
preliminary objections regarding the maintainability of the
Petitions as well as on merits. The learned counsels for the
Respondents vehemently controverted the arguments advanced
by the learned counsel for the Petitioners and prayed for
dismissal of these Petitions on the grounds that the Foundation,
being an autonomous body, recruits its employees under the
Contract Appointment Rules on purely contract basis from the
market and pays them market based salaries as approved by the
Board of Directors; that the Petitioners have no vested right to
be regularized as Rule 6(2)(a) of the Rules clearly mentioned
that “such appointment shall not confer any right for regular
appointment”; that the Petitioners have never been given
gesture that their services would be regularized; that the order
dated 9 December 2013 was passed by the Board of the
Foundation in pursuance of the Order of the Lahore High Court
dated 31 July 2013 in Writ Petition No. 19154 of 2013 and the
contempt petition filed subsequently was dismissed by the
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Lahore High Court vide Order dated 21 January 2014; that the
services of the Petitioners have been terminated in accordance
with relevant laws and terms of the employment contract; that
no irregularity has been committed while issuing the Impugned
Letters as all the procedure and laws have been observed; that
the Petitioners were enjoying extension in their contract period
by the letters not issued under the signatures of the MD rather
some of them under the signature of the HR Department, as
such at this stage they cannot assert that the Impugned Letters
have been issued by the incompetent authority; that the Board
of Directors of the Foundation was reconstituted vide
notification dated 22 December 2014 and hence, was
functioning at the time of passing the Impugned Letters; that
the Foundation is an autonomous body having its own Act and
the directions of the CM cannot have precedence over the Rules
made under the Act; that all the positions in the Foundation are
purely on contract basis and for the last 26 years no permanent
position in the Foundation was ever created; that it is settled
law that in contract employments an unwilling employee cannot
be imposed upon an employer; that the MD has never sub-
delegated any powers to the Deputy Managing Director; and
that the contract employees have no vested rights to be
reinstatement in service or to be regularized through
constitutional petition.
11. The learned counsels for the Respondents have placed
reliance on the case titled Mukhtar Ahmad and 37 others v.
Government of West Pakistan through the Secretary Food
and Agriculture, Civil Secretariat Lahore and another (PLD
1971 Supreme Court 846), Jahangir Mirza, Senior
Superintendent of Police, Lahore and another v. Government
of Pakistan through Secretary, Establishment Division and
others (PLD 1990 Supreme Court 1013), Federation Of
Pakistan vs. Muhammad Azam Chattha (2013 SCMR 120),
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Waseem Ali vs. Chief Administrator Auqaf, Punjab and 2

others(2011 PLC (CS) 1630), Lt. Commander (R) Naeem
Javed vs. University of Punjab, (2014 PLC (C.S) 29
Lahore), Attaullah Khan vs. Samiullah, (2007 SCMR 298)
&Government Of Pakistan through DG, Ministry of
Interior, Islamabad vs. Farheen Rashid, (2011 SCMR 1).

G. Nub of the Matter/Moot Points:

12. In order to render/pass judgment upon the above

mentioned facts, circumstances and arguments urged by the
counsels for the parties at length, following moot points were
framed and considered for determination of this Court, arising
out of these Petitions:

a. Whether the Impugned Letters dated 5 May

2014 were issued by the competent authority
functioning under the Act?

b. Whether the Board of the Foundation was

duly constituted at the time of passing the
Impugned Letters?

c. Whether the Foundation which is the

attached Department of the School
Education Department, was bound under
the Rules of Business to following the
instructions of the Chief Minister?

d. Whether all the positions of the Foundation

are purely on contract basis, if not can
Petitioners’ case be sent to the Scrutiny
Committee for regularization?

e. Whether the Rule 6(2)(b) of the Contract

Appointment Rules is volatile of the
Constitution and the Act?

f. Whether Regulation 7 of the 2010

Regulations is ultra vires to the Act and
Contract Appointment Rules?
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13. However, having considered the submissions made by

learned counsels for the Parties to the present Petitions; the
precedents/case-law cited at the bar; and the conflict of opinion
recited by the Petitioners and the Respondents, the questions
which crop up for consideration broadly have been
reconstructed and summarized for rendering decision in these
Petitions, as follows:

i. Whether the instant Writ Petitions are

maintainable against the Foundation?

ii. Whether the Impugned Letters are issued

contrary to the Act and the Contract
Appointment Rules?

iii. Whether contractual employees of the

Foundation are entitled to
regularization/extension of their contract
under the facts and circumstances of the
case?

iv. Whether the Petitioners were entitled to a

right of hearing before their dismissal?

14. This Court has given anxious considerations to the

contentions of the learned counsels for the Parties and has gone
through the record annexed therewith.

H. The Punjab Education Foundation:

15. Before addressing the questions of termination and

regularization of the Petitioners in order to resolve the
controversy, to deal with the issues raised, and to better
appreciate the question mooted above for dilating any
determination, it would be of relevance to give a brief overview
of the law, structure and functions of the Foundation.
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16. Importantly, the Foundation was established under the

Punjab Education Foundation Act, 1991 as an autonomous
statutory body to encourage and promote education on non-
commercial/non-profit basis. The Foundation was restructured
under the Punjab Education Foundation Act, 2004 [the “Act”]
for the promotion of education, especially encouraging and
supporting the efforts of the private sector in providing
education to the poor, through public private partnership, and
matters ancillary thereto.
17. The Foundation, therefore, is a statutory body created
under the Act, and is listed at Entry 35 of the First Schedule of
the Punjab Government Rules of Business, 2011, as an
autonomous body working/attached with the School Education
Department. The Second Schedule of the Punjab Government
Rules of Business, 2011 provides distribution of business
among departments of the Government and entrusts the School
Education Department with responsibility to promote quality
education through public–private partnership through the
Foundation, and to administer the Act of the Foundation.
18. Section 3 of the Act establishes the Foundation, a body
corporate having perpetual succession and a common seal.
Section 4 of the Act carries functions of the Foundation, which
include:
“(i) provide financial assistance for the
establishment, expansion, improvement, and
management of educational institutions and allied
projects;
(ii) provide incentives to students, teachers, and
Educational Institutions;
(iii) promote public-private partnerships relating
to education;
(iv) provide technical assistance to Educational
Institutions for testing policy interventions and
innovative programmes for replication;
(v) rank private educational institutions based on
educational standards;
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(vi) raise funds through donations, grants,

contributions, subscriptions etc.;
(vii) assist Educational Institutions in capacity
building, including training of teachers; and
(viii) undertake any other function as may be
assigned to it by the Board with the approval of
the Government.”

19. Under Section 5 of the Act, the executive and managing

authority of the Foundation lies with its Board of Directors,
who also has powers to appoint the employees and other
functionaries of the Foundation and determine the terms and
conditions of their employment. Section 5 specifically provides:

“5. Board of Directors:

…
(8) The Board shall appoint the employees and
other functionaries of the Foundation and
determine the terms and conditions of their
employment.
(9) No act or proceedings of the Board shall be
invalid merely on the ground of the existence of
any vacancy or any defect in the constitution of
the Board.
(10) The Board may delegate any of its powers to
the Managing Director to enable him to carry out
its functions.
(11) The Board shall establish an effective
system for monitoring, supervision and control of
the discharge of functions under the Act.”

20. The Managing Director/Chief Executive Officer [the

“MD”] of the Foundation is appointed under Section 6 of the
Act, and has all such powers and can do all such acts and things
as are authorized by the Board. Section 11 empowers the Board
to constitute financial, technical, advisory and other committees
for carrying out the purposes of the Act. Under Section 13 of
the Act, the Government is authorized to make rules for
carrying out the purposes of the Act. Under Section 14 of the
Act, the Board may, with the previous approval of the
Government, make regulations as may be necessary to carry out
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the purposes of the Act. Under Section 13A of the Act, the
Foundation is required to be bound by and shall give effect to
the directions of the Government in the performance of its
functions.
21. It follows from the abovementioned Sections of the Act
that the executive and managing authority of the Foundation
lies with its Board of Directors, who also has powers to appoint
the employees and other functionaries of the Foundation and
determine the terms and conditions of their employment.
Further, MD can exercise all such powers and can do all such
acts and things as are authorized by the Board. Therefore, all
functions and powers of the Board and MD have elements of
public authority.

I. The Punjab Education Foundation (Contract

Appointment) Rules, 2005:

22. Under Section 13 of the Act, the Punjab Government has

made the Punjab Education Foundation (Contract Appointment)
Rules, 2005 [the “Contract Appointment Rules”]. Rule 2(b),
(d) and (h) respectively defines Appointing Authority, Contract
Appointment and Selection Committee, as follows:

“(b) “Appointing Authority” means Managing

Director of the Foundation; …
(d) “Contract Appointment” means appointment
made under specific agreement for a fixed period;
…
(h) “Selection Committee” means a committee to
be constituted by the Board for recruitment under
these rules;”

23. Rule 3 of the Contract Appointment Rules authorizes the

Foundation to employ persons on contract basis:
“3. Employment on Contract Basis:-
(a)The Foundation may employ on contract such
persons who are otherwise eligible for the post
through an open and transparent selection
process.
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(b) Such employment will be made through the

Selection Committee. “

24. Rule 5 of the Contract Appointment Rules provides

method of appointment in accordance with the Rules, on merit
based, and by Selection Committee on invitation through
newspapers:
“5. Method of Recruitment:-
(1) All contract appointments will be made
(a) In accordance with the provisions of
these rules; and
(b) On the basis of merit. For this purpose,
Selection Committee will invite
applications through newspaper for
appointment under these rules.
(2) When a post is created by the Board or the
Managing Director, the Appointing Authority will
forward a requisition to the Selection Committee.
(3) Subject to the approval of the Board, the
Appointing Authority may extend the contract and
re-negotiate new terms and conditions of the
contractual appointment.
(4) In case a government servant applies for any
such appointment and is selected, the Foundation
may request the Government for borrowing the
services of such servant. The terms and
conditions of such contract employees will be
settled by the Board.” (emphasis added)

25. Rule 6 of the Contract Appointment Rules provides terms

and conditions of contract appointment:
“6. Terms and Conditions of Contract
Appointment:-
(1) The terms and conditions of contract
appointment will be settled by the Appointing
Authority.
(2) Without prejudice to the generality of above
said:-
(a) Such appointment will not confer any
right for regular appointment;
(b) The Appointing Authority may, without
assigning any reason, terminate services of
the contract employee on one month’s
notice or one month’s pay in lieu thereof;
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(c) The contract employee may resign from

the service by giving one month’s notice or
one month’s salary in lieu thereof;
(d) The appointment will be non-
pensionable; and
(e) All contract employees will be governed
by the rules and regulations of the
Foundation.
(3) The contract appointment will be post
specific. The appointee may not claim any right
for transfer from one post to another. He may,
however, be transferred anywhere in the province
of Punjab.
(4) Contract employees shall have to undergo
essential training programs, if deemed necessary.
(5) In case a loss is caused to the Foundation by
any act of the contract employee, the contract
may be liable to be terminated by the Foundation
and the loss so caused may be recovered from
such employee as arrears of land revenue.”

26. Rule 9 of the Contract Appointment Rules provides

performance evaluation of the contract employees:
“9. Performance Evaluation:-
The performance and evaluation of the contract
employee will be assessed on the basis of
attitudes, work output, efficiency, conduct,
dedication, and service delivery and the
performance by the management.”

27. The abovementioned Contract Appointment Rules

empowers the Foundation to employ any person on contract
basis in accordance with the Rules through the Selection
Committee, constituted by the Board for recruitment under the
Contract Appointment Rules. The contractual appointments are
made on the basis of merit after inviting applications through
newspaper. The MD is also authorized to settle terms and
conditions of the contract, which does not confer any right for
regular appointment to the contractual employees. The MD has
also been authorized to terminate the services of the contract
employees without assigning any reason or without the
approval of the Board or the Provincial Government. However,
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the MD can only extend the contract and re-negotiate new terms
and conditions of the contractual appointment with the approval
of the Board.

J. The Punjab Education Foundation (Conduct of Business)

Rules, 2005:

28. Under Section 13 of the Act, the Government has also

made the Punjab Education Foundation (Conduct of' Business)
Rules, 2005 (the “Conduct of Business Rules”). Rule 3 of the
Conduct of Business Rules provides powers and duties of the
Board of Directors of the Foundation:
“3. Powers and Duties of the Board of
Directors.- (1) The Board may:-
(a) Determine the direction and scope of the
activities of the Foundation; …
(e) Delegate any of its powers to the Managing
Director;
(f) Determine human resource requirements,
salary structure and incentives for the employees
of the Foundation;
(g) Recruit, dismiss, appoint, transfer and
promote employee of the Foundation; …
(3) In case the Board becomes non-existent or
non-functional for any reason, the Managing
Director may, with the approval of the
Government, perform functions of the Board.”

29. Rule 5 of the Conduct of Business Rules provides

responsibilities of MD:
“5. Responsibilities of the Managing Director.-
The Managing Director shall:-
(a) be the Chief Executive of the Foundation and
shall cause the orders and decisions of the Board
to be carried out; …
(e) act as Secretary and record the minutes of the
meeting of the Board, maintain the records of the
proceedings of the Board and keep the minutes
open for inspection by any member during office
hours;
(f) exercise all the executives, financial and
administrative powers delegated by the Board; …
(h) carry out all duties as assigned to him from
time to time by the Board;”
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30. It generally follows from the above mentioned Rules that

the Conduct of Business Rules empowers the Board to recruit,
dismiss, appoint, transfer and promote employee of the
Foundation. However, the MD is empowered to exercise all
such functions and powers delegated by the Board and has
powers to perform the functions of the Board, with the approval
of the Government, in case the Board becomes non-existent or
non-functional for any reason.

K. The Punjab Education Foundation Service Rules, 2006:

31. The Governor of the Punjab has also made the Punjab
Education Foundation Service Rules, 2006 (the “Service
Rules”) which provides provisions pertaining to Seniority (Rule
3), Termination of Services (Rule 4), Retirement (Rule 5),
Transfer (Rule 6), Leave (Rule 7), Medical Facilities (Rule 8),
General Provident Fund (Rule 9), Pension Fund (Rule 10),
Salary (Rule 11), Benevolent Fund (Rule 12), and Welfare
Fund (Rule 13).
32. The Service Rules recognize the „Contract Appointment‟,
i.e. “appointment made under a specific agreement for a fixed
period”. However, it does not contain any specific provision for
the contractual appointments. The Service Rules contains a
„Saving‟ clause which states that: “The existing employees of
the Foundation, who are otherwise eligible, shall be deemed to
have been regularized from the date of their appointment
/absorption in the Foundation.”

L. The Punjab Education Foundation Employees Service

Regulations (Amended), 2010

33. Under Section 14 of the Act, in consonance with the

permission granted by the Education Department, Government
of the Punjab dated 14 April 2010, the Competent Authority has
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made the Punjab Education Foundation Employees Service

Regulations (Amended), 2010 [the “2010 Regulations”]. These
2010 Regulations has repealed the Punjab Education
Foundation Regulations 2006. Under Regulation 1(2)(b) of the
2010 Regulations, the Regulations apply to “a person who is
employed against a sanctioned post or on temporary basis as
and when required for a specific period on specific terms and
conditions”.
34. Regulation 3 of the 2010 Regulations provides
Recruitment Procedure:
“3. Recruitment Procedure.- The appointments
shall be made through Board or Selection
Committee(s) notified by the Board on its behalf.
All appointments shall be made as per the Human
Resource Policies of the Foundation.”

35. Regulation 4 of the 2010 Regulations provides Terms

and Conditions of Employment:
“4. Terms and Conditions of Employment.- The
terms and conditions of an employee shall be the
same as per the Human Resource Policies of the
Foundation.”

36. Regulation 5 of the 2010 Regulations provides ending of

employment:
“5. Ending of Employment.- Notwithstanding
what is stated here in above, Foundation reserves
the absolute right to terminate the employment of
any member of staff at any time in accordance
with the terms and conditions of employment. At
the ending of employment an employee shall be
governed as per Human Resource Policies of the
Foundation whereas in case employees recruited
before the restructuring of the Foundation in
2004, shall be governed as per applicable rules
notified by the Government time to time.”

37. Regulation 16 of the 2010 Regulations provides Conduct

and Procedure for Disciplinary Action:
“16. Conduct & Procedure for Disciplinary.-
Every employee shall confirm to and abide by the
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Foundation's Regulations, and shall observe,

comply with and abide by all orders, which may
from time to time be given by any person under
whose control he/she may for the time being be
placed. Whereas an employee recruited before
the restructuring of Foundation in 2004, shall be
governed as per applicable rules notified by the
Government from time to time. The procedure for
disciplinary action is as per Human Resource
Policies of the Foundation.”

38. The above-mentioned 2010 Regulations apply to a person

who is employed against a sanctioned post or on temporary
basis for a specific period on specific terms and conditions.
These Regulations empowers the Board or the Selection
Committee of the Board to appoint employees on terms and
conditions mentioned in the Human Resource Policies. Under
the 2010 Regulations, the Foundation has further absolute right
to terminate the contract in accordance with the terms and
conditions of the contract.

M. Determination:

39. Having mentioned all the relevant provisions of the Act,

the Contract Appointment Rules, the Conduct of Business
Rules, the Service Rules and the 2010 Regulations, now I
would like to thrash out the moot points culled out of the
Petitions, mentioned above as under:
(i) Whether the instant Writ Petitions are maintainable
against the Foundation?

40. The legal question which eminently calls for the

resolution of the above-mentioned moot point, is that whether
the employment of the Petitioners was governed under the
statutory rules or not.
(a) What constitutes rules to be statutory:

41. To determine this question, I intend first to see the test

and criteria laid down by the Honourable Supreme Court and
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the High Court(s) in various judgments in this regard and then

find out whether the said test and criteria is applicable to the
case of the Petitioners.
42. It was held in the case titled Masood Ahmed Bhatti vs.
Federation of Pakistan and others (2012 SCMR 152) in para
9 by the Honourable Supreme Court that the rules adopted by
reference in the statute itself applicable to and binding on a
statutory body are statutory rules:
“whatever rules were in place governing the
employment of the appellants in the T&T
Department, were adopted by reference in the
statute itself and were made applicable to and
binding on the Corporation. There can be little
doubt that by virtue of section 9, ibid such rules
acquired statutory status having been sanctified
by the PTC Act itself. We can, therefore, conclude
without difficulty that the rules of employment
which were applicable to the appellants during
their service with the Corporation were statutory
rules.”

43. However, in a recent judgment, Muhammad Zaman v.

Government of Pakistan etc. (2017 SCMR 571), the
Honourable Supreme Court has elaborated the criteria for the
rules to be statutory, and has laid down that “the test of whether
rules/regulations are statutory or otherwise is not solely
whether their framing requires the approval of the Federal
Government or not, rather it is the nature and efficacy of such
rules/regulations. It has to be seen whether the
rules/regulations in question deal with instructions for internal
control or management, or they are broader than and are
complementary to the parent statute in matters of crucial
importance. The former are non-statutory whereas the latter
are statutory. … A perusal of the Regulations suggests that they
relate to pension and gratuity matters of the employees of SBP
and therefore it can be said that the ambit of such Regulations
is not broader but narrower than the parent statute, i.e. the Act.
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Thus the conclusion of the above discussion is that the

Regulations are basically instructions for the internal control
or management of SBP and are therefore non-statutory. Hence
the appellants could not invoke the constitutional jurisdiction of
the learned High Court which was correct in dismissing their
writ petition.” (emphasis added).
44. Similarly, in another case titled Shafique Ahmad Khan
and others v. NESCOM and others (PLD 2016 S.C. 377), the
Honourable Supreme Court has held that:
“12. … Under Section 26 of the Ordinance, the
Federal Government was empowered to make
Rules for carrying out the purposes of the
Ordinance, while under Section 27 of the
Ordinance, the Authority was empowered to make
Regulations to provide for the matters for which
provision is necessary or expedient for carrying
out the purposes of the Ordinance. … The Rules
made under Section 26, in view of their nature,
were given statutory status while the Regulations
made under Section 27 of the Act, in view of their
nature, were treated as non-statutory. …
… But a survey of all these judgments would
reveal that it is not the sole criterion which makes
them statutory or otherwise. It is indeed their
nature and area of efficacy which are
determinative of their status. Rules dealing with
instructions for internal control or management
are treated as non-statutory while those whose
area of efficacy is broader and are
complementary to the parent statute in the
matters of crucial importance are statutory. …
13. … An Authority which has been established
for higher objectives as is provided in the
preamble and other provisions of the Act, cannot
thrive and flourish, if its rules are not abided by
or enforced on being violated. What good would
they bring to the Authority when they are
ornamental rather than statutory? What purpose
would they serve when whim of anybody at the
higher pedestal could replace them with
impunity? Unaccounted exercise of unfettered
powers is dangerous and even devastating for an
institution of this type. Whether it is exercise of
powers or exercise of discretion, better and more
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uniform results in long term could only be

achieved when it is structured and streamlined.
Autonomy, independence and efficacy of the
Authority are better attained with statutory rather
non-statutory Rules. … Employees whose terms
and conditions of service are regulated by non-
statutory rules are more exposed to mischief than
those whose terms and conditions of service are
regulated by statutory rules. It would rather be
naive and even myopic to equate the rules dealing
with the matters of crucial importance having so
wide a scope and area of efficacy with the
instructions meant for internal management and
thereby deprive them of their statutory status. We,
thus, hold that the Rules made by the Authority
under Sections 7, 9 and 15 of the Act cannot be
confused or even compared with the Rules and
Regulations framed under other enactments
without the approval of the Federal Government.
… It thus follows that the rules framed under
Sections 7, 9 and 15 of the Act are statutory on
all accounts and by every attribute. They are thus
declared as such…” (emphasis added)

(b) Writ Petition not maintainable against non-statutory

rules:

45. It has been held in numerous judgments that if the

employment of employees is contractual in nature governed
under non-statutory rules and their services were terminated as
per their contractual terms and conditions of service, then on
such account the constitutional petitions before the High Court
are incompetent and had to fail. (see generally, Muhammad
Zaman v. Government of Pakistan etc. (2017 SCMR 571),
IPC vs. Arbab Altaf Hussain, (2014 SCMR 1573),
Muhammad Qamar vs. Oil and Gas Regulatory Authority,
(2016 PLC (CS) 1066 [Lahore]), Qazi Tehmid Ahmed vs.
Secretary Ministry of Petroleum, (2015 PLC(CS) 449
[Lahore]), Rehan Ali vs. Ministry of Technical Professional,
(2014 CLC 503 [Islamabad]), Hyderabad Electric Supply
Company vs. Mushtaq Ali Brohi (2010 PSC 1392),
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Muhammad Naseer Khan vs. General Manager, Sui Northen

Gas Pipe Lines Ltd, 2013 PLC(CS) 698 [Peshawar], Usman
Ghani vs. Islmia University, (2012 PLC(CS) 830 [Lahore]),
Chairman PIA vs. Tayyab Husnain, (2012 PLC(CS) 696
[Islamabad]), Rizwan Ahmad Bhatti vs. Federation of
Pakistan, (2012 PLC(CS) 681 [Islamabad]), Abdur Razaq vs.
District Council, Peshawar and another, (1994 C L C 1733
[Peshawar]) andMunir Hussain vs. PIA, (2007 PLC(CS) 405
[Lahore])).
46. The Honourable Supreme Court, in the case of Abdul
Wahab vs. Habib Bank Ltd., (2014 PLC(CS) SC 393), has
elaborated the principle that the cases where the
employment/service(s) were not regulated by any law, but by
non-statutory rules or contractual stipulations, and no specific
forum was designated for the resolution of such service issues,
an infringement of any condition of such a contract shall at the
most entitle and clothe the employees to avail his ordinary
remedy for the breach of contract and wrongful action against
him, before the court of plenary jurisdiction. In such a situation,
it could not be urged that the fundamental right(s) of the
employee had been violated conferring upon him a right to
enforce the same in terms of Article 199 of the Constitution.
47. In some other cases, the law has been settled that the
relationship between any corporation having no statutory rules
and contractual employee governed under non-statutory rules is
of "master and servant", and the constitutional petition in such
cases is not maintainable. His remedy against wrong dismissal
or termination is only to claim damages (see generally,
Executive Council, Allama Iqbal Open University vs. M.
Tufail Hashmi, (2010 SCMR 1484) Pakistan International
Airline vs. Tanweer-ur-Rehman, (PLD 2010 SC 676),
Guiasuddin Sheikh vs. Federation of Pakistan,(2007
PLC(CS) SC 140), Pakistan International Airline vs. Noreen
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Naz Butt, (2017 PLC(CS) 923 [Lahore]), Lt. Col. Retd.

Sultan Zeb Khan vs. Board of Governors, Fazle Haq College,
(2015 PLC(CS) 1385 [Peshawar]), Shaukar Ali vs. Managing
Director KTWMA, (2015 PLC(CS) 782 [Lahore]), Noor
Badshah vs. United Bank Limited, (2015 PLC(CS) 468
[Lahore]), Amir Shahzad Chaudhry vs. Chairman, Bank of
Punjab, (2015 PLC(CS) 423 [Lahore]), Kamran Ahmad vs.
WAPDA, (2014 PLC(CS) 332 [Lahore]), Zulfiqar Cheema vs.
Technical Education and Vocational Training Authority,
(2011 PLC(CS) 914 [Lahore]), Naweed Akhtar Cheema vs.
Chairperson, TEVTA, (2011 PLC(CS) 803 [Lahore]), Bashir
Ahmad Sheikh vs. SME Bank Ltd, (2008 PLC(CS) 1179
[Islamabad]), andAli Gohar vs. Managing Director Sui
Northern Gas Pipe Lines Ltd., (1998 PLC(CS) 828
[Peshawar])).
48. Similarly, the Lahore High Court, in the case of Kamran
Ahmad vs. WAPDA,(2014 PLC(CS) 332 [Lahore]), relying on
the case of the Honourable Supreme Court titled Anwar
Hussain vs. Agricultural Development Bank of Pakistan(PLD
1984 SC 194), has reproduced the relevant extract and principle
established by the august Supreme Court:
"The test of the employer/employee relation is the
right of the employer to exercise control of the
details and method of performing the work. It
follows that if the relationship is the result of a
contract freely entered into by the contracting
parties, then the principle of Master and Servant
will apply. The Principle, however, will not apply
if some law or statutory rule intervenes and
places fetters upon the freedom of the parties in
the matter of the terms of the contract. It is on
this principle that a civil servant for whom there
are constitutional safeguards, is not governed by
the principle of Master and Servant; for he is
possessed of a legal character for the
enforcement of which he can bring an action.
Even where the employee is not a civil servant but
there are statutory safeguards governing his
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relationship with the employer and placing

restrictions on the freedom of the parties to act,
the general law of Master and Servant will not
apply. In such cases the employer would be
bound to follow the procedure provided for in the
statute or the statutory rules before terminating
the service of the employee and in the absence of
conformity to such procedure, the termination of
service would not be clothed with validity and the
employee will be entitled to an action for his
reinstatement."

(c) Writ Petition maintainable against statutory rules:

49. The Honourable Sindh High Court in the case of
Burhannudin Sheikh vs. National Bank of Pakistan(1985
CLC 2003 Karachi), has held that:
“There is no substantial difference between rule,
regulation and bye-law inasmuch as these are
subordinate by delegation under powers
conferred by the statute. A rule framed under a
statute applies uniform treatment to everyone or
to all members of some group or class. The
respondent No. 1 is required by the statute to
frame bye-laws and rules inter alia for the
purpose of the duties and conduct and conditions
of service of officers and other employees. These
rules and bye-laws impose obligation on the
statutory authority. The statutory authority
cannot deviate from the conditions of service. Any
deviation will be enforced by legal sanction of
declaration by Courts to invalidate action in
violation of rules, regulations and bye-laws. The
existence of rules, regulations and bye-laws
under the statute is to ensure regular conduct
with a distinctive attitude to that conduct of a
standard. The statutory rules and bye-laws in this
case under consideration give the employees a
statutory status and impose restriction on the
employer and the employee with no option to vary
the conditions. An ordinary individual in a case
of master and servant contractual relationship
enforces breach of contractual terms. The remedy
in such contractual relationship of master and
servant is damages because personal service is
not capable of enforcement. In cases of statutory
bodies there is no personal element whatsoever
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because of the impersonal character of statutory

bodies. In the case of statutory bodies it has been
said that the element of public employment of
service and the support of statute requires
observance of rules, regulations and bye-laws.
Failure to observe requirements by statutory
bodies is enforced by Courts by declaring action
in violation of rules and regulations to be without
lawful authority and would be subject to the
supervisory jurisdiction of this Court. …
For the foregoing reasons, we hold that rules
framed by the respondent No. 1 have the force of
law. The employees of the Bank have a statutory
status and they are entitled to declaration of
being in employment when their dismissal or
removal or action is taken in contravention of
statutory provision and would be subject to the
supervisory jurisdiction of this Court.” (emphasis
added)

50. The Lahore High Court in the Kamran Ahmad case

supra, in para 23, has established that:
“23. … the larger Bench of august Supreme
Court deduced and summarized the following
principles of law:---
(i) Violation of Service Rules or Regulations
framed by the Statutory bodies under the powers
derived from Statutes in absence of any adequate
or efficacious remedy can be enforced through
writ jurisdiction.
(ii) Where conditions of service of employees
of a statutory body are not regulated by
Rules/Regulations framed under the Statute but
only Rules or Instructions issued for its internal
use, any violation thereof, cannot normally be
enforced through writ jurisdiction and they would
be governed by the principle of 'Master and
Servant'.
(iii) In all the public employments created by
the Statutory bodies and governed by the
Statutory Rules/Regulations and unless those
appointments are purely contractual, the
principles of natural justice cannot be dispensed
with in disciplinary proceedings.
(iv) Where the action of a statutory authority
in a service matter is in disregard of the
procedural requirements and is violative of the
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principles of natural justice, it can be interfered

with in writ jurisdiction…”

51. In the case of Nemat Ullah vs. Chairman Governing

Body, Worker Welfare Board,(2017 PLC SC 1), it has been
held in para 19 that:
“19. For what has been discussed above,
from constitutional, and all legal angles we are of
the considered view that the services of the
appellants are fully protected by the statutory
rules, referred to above in the earlier para of the
judgment and any invasion on their service
benefits and rights by the authorities entitle them
to approach the High Court through Constitution
Petition ...”

52. In another case, Dr. Ishaque Muhammad Shah vs.

President, National Bank of Pakistan,(2010 PLC(CS) 748
[Karachi]), the Honourable Sindh High Court has held that in
order to maintain a petition, petitioner has to demonstrate that
he was governed by statutory rules of service and that while
terminating or separating him from the service, the employer
has violated such rules and if such fact of violation is
established, the Court will exercise its constitutional
jurisdiction and come to rescue the employee who has been
wronged.
53. Same principle was enunciated by the Honourable
Supreme Court in the case titled PTCL vs. Iqbal Nasir,(2011
PLC(CS) SC 623) which is as under:
“24. However, this Court, in the case of Principal
Cadet Collage Kohat v. Mohammad Shoaib
Qureshi (PLD 1984 SC 170), while dealing with
the question, as to whether in absence of any
breach of statutory provision the employees of a
corporation can maintain an action for
reinstatement, held that where the conditions of
service of an employee of a statutory body were
governed by statutory rules, any action
prejudicial taken against him in derogation or in
violation of the said rules could be set aside by a
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writ petition; however, where his terms and

conditions were not governed by statutory rules
but only by regulations, instructions or
directions, which the institution or body, in which
he was employed, had issued for its internal use,
any violation thereof would not, normally, be
enforced through a writ petition.” (emphasis
added)

54. It is an established principle that constitutional petition is

maintainable against a statutory body, having statutory rules
governing the terms and conditions of employment of its
employees. (Masood Ahmed Bhatti vs. Federation Of
Pakistan, (2012 SCMR 152); and Syed Azam Raza vs. Sindh
Agriculture University, 2014 PLC(CS) 1177 [Sindh]).
55. Now coming to the facts of the present Petitions, it stands
established that under Section 13 of the Act, the Government
has been given absolute power to make rules for carrying out
the purposes of the Act through a notification. The Act does not
specifically allow the Board, the Foundation or the Federal
Government to appoint any employee on contractual basis. It is
evident, however, that the Provincial Government made the
Rules through Notification No. S.O. (S-VII)1-33/2004 dated 26
October 2005 to allow the Foundation to engage personnel on
contractual basis and to govern the terms and conditions of their
service contracts. While doing so, the Provincial Government
has exercised its statutory powers under Section 13 of the Act,
which generally allows the Provincial Government to make
rules through notification. The Rules, therefore, are exclusively
within the domain of the Provincial Government for the
employment in the Foundation and unless the Rules are
amended, repealed, modified or re-enacted under the Act, the
same have a binding statutory force. Section 13 of the Act does
not provide that the recruitment rules are to be made in any
particular manner, nor does it prescribe the special method for
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appointment of candidates to the posts. Therefore, the Contract

Appointment Rules fulfills the only criteria mentioned in the
Act, and it is an admitted position that the Contract
Appointment Rules have been framed as per the mandate of law
ibid.
56. Further, the Contract Appointment Rules, having been
sanctified by the Government, were applicable to the
Petitioners during their service with the Foundation, and were
adopted by reference in the statute itself and were made
applicable to and binding on the Foundation. Although the
power of contractual appointment has not been specifically
given in the Act itself, but the Government has notified in a
legal manner the Contract Appointment Rules in matters of
crucial importance. They are not instructions for internal
control or management, and area of efficacy of the Contract
Appointment Rules is broader. These Contract Appointment
Rules framed under a statute, applies uniform treatment to
everyone contractually employed in the Foundation, and
impose obligation and restrictions on the statutory authority,
which cannot deviate from the Contract Appointment Rules.
57. Therefore, the Contract Appointment Rules made under
Section 13 of the Act, in view of their nature discussed above,
have statutory status, and any deviation from the same can be
enforced by legal sanction of declaration by a competent courts
of jurisdiction to invalidate action in violation of the Contract
Appointment Rules. The existence of the Contract
Appointment Rules under the statute is to ensure regular
conduct of the Foundation and its contractual employees with a
distinctive attitude to that conduct of a standard. An Authority
which has been established for higher objectives as is provided
in the preamble and other provisions of the Act, cannot thrive
and flourish, if its rules are not abided by or enforced on being
violated.
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58. The Petitioners were, admittedly, employees of the

Foundation who accepted employment on the basis of their
service contracts and had agreed to be governed by the
Contract Appointment Rules and the 2006 Regulations,
repealed by the 2010 Regulations. The Petitioners were
employed by the Foundation as a result of a statutory process
of the Foundation and they were taken into employment on
their unequivocal acceptance of the terms and conditions of
employment. Therefore, the services of the employees of the
Foundation, including services of the Petitioners under their
respective terms and conditions of the service contracts, are
squarely and undoubtedly regulated by the binding Contract
Appointment Rules, which do not lack statutory protection.
59. In view of the above principles laid down by the
Honourable Courts in Pakistan, the Petitioners have established
that they were governed by statutory rules of service. Being
amenable to the constitution jurisdiction of a person/statutory
body is one thing and to enforce the terms and conditions of
service through constitutional jurisdiction is altogether a
different thing. However, it is yet to be seen by this Court that
the Foundation has violated such statutory rules and if such
fact of violation is established, the Court will exercise its
constitutional jurisdiction and come to rescue the Petitioners
because when services are protected by statutory rules, any
invasion on their service benefits and rights by the authorities
entitle them to approach the High Court through Constitution
Petition.
60. Now since it has been established that the Rules are
statutory in nature and writ petition can be filed for any
violation of the statutory rules, it remains to be seen that the
whether any rule has been violated or any invasion on their
service benefits and rights by the authorities have been done?
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(ii) Whether the Impugned Letters are issued contrary to

the Act and the Contract Appointment Rules?

61. I now turn to the issue that whether any violation of the
statutory Contract Appointment Rules or the Act has been
committed by the Foundation or not. For dilating decision on
this question, reference to the documents produced by the
parties in the present Petitions is necessary.
62. In compliance of Rule 5(1)(b) of the Contract
Appointment Rules, the Foundation issued a news clipping
specifically highlighting that “the appointments will be on
contract basis, extendable on the basis of performance. The
post carries competitive market based remuneration
packages.” Therefore, the Petitioners were aware at the very
beginning that their appointments are being made on
contractual basis and on market-based salary, which was
different from the other regular employees, if any. The
Petitioners applied for their respective posts and were awarded
their respective positions on contractual basis. It is of
paramount importance to note here that it was specifically
mentioned in the terms and conditions of the appointments of
the Petitioners that they were governed by the Contract
Appointment Rules, which have statutory backing.
63. Although Section 5(8) of the Act empowers the Board to
appoint the employees and other functionaries of the
Foundation and determine the terms and conditions of their
employment. However, such powers have been delegated
through a statutory instrument, the Contract Appointment
Rules, to the MD. Rules 6 of the Contract Appointment Rules
empowers the Appointing Authority, the MD, to settle terms
and conditions of the contract appointment, who could also
terminate the services of the contract employees on one
month‟s salary in lieu thereof without assigning any reason or
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without approval of the Board or the Government. However,

the Appointing Authority, the MD, can only extend the
contract re-negotiate new terms and conditions of the
contractual appointment of the Petitioners with approval of the
Board under Rule 5(3) of the Contract Appointment Rules.
64. The Petitioners were intimated for non-renewal of their
contract or termination on the 5 May 2014 through Impugned
Letters issued for and on behalf of the Competent Authority,
which is not defined in the Contract Appointment Rules or the
Act. Therefore, it is to be seen that whether the MD, the
Appointing Authority, under the Contract Appointment Rules
have made such orders or not.
65. Admittedly, the order of MD dated 5 May 2014 has been
annexed (Annexure G) in the CMA No. 7/2017, whereby the
MD has noted that the contracts of the Petitioners have been
expired and the MD has ordered the termination of the services
of the Petitioners. Therefore, it prima facie is clear that the
order was passed by the MD for termination of the contracts of
the Petitioners and therefore, the Petitioners were intimated of
the same vide the Impugned Letters. There does not seem any
ambiguity that the order was passed by the competent authority
having powers under the applicable law, as discussed above.
As detailed above, the Impugned Letter were issued in
compliance with the directions of the MD. Apparently, no
violation of contract of employment or the statutory Contract
Appointment Rules was made by the Foundation.
66. Even otherwise, the Petitioners were enjoying
extensions in their respective contracts through letters none of
which were signed by MD, but the HR Department which was
not Appointing Authority. They had not raised any objection
for such matters, and only raised such objection in case of their
termination.
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67. Further, it is to be noted that on the 19 June 2014,

Member, CMIT, had moved a summary to CM regarding
termination of service contracts, in which it was recommended
after analyzing all the issues in detail, among others, that the
termination of four (4) officers, being the Petitioners, is in
accordance with the Contract Employment Rules. The
recommendations in this summary were supported by the
Chairman CMIT on the 20 June 2014, and on the 28 August
2014, Secretary to CM, Punjab informed that recommendations
contained in Summary dated 19 June 2014 were approved.
Therefore, the termination of all four (4) Petitioners in all the
Petitions was also approved by the CM.
68. It is clear that the decision and action of the Foundation
to employ the Petitioners, as well as other contractual
employees under the Contract Appointment Rules, was
primarily on market based salaries, founded upon commercial,
business, administrative wisdom, and for the better interest of
the Foundation, which might involve and be based upon the
ability, efficiency and skills of the employees required for
specific period. Therefore, it is for the Foundation to decide
about the usefulness of the employees or otherwise. Obviously,
it had to be the evaluation of the Foundation as to who was the
employee(s) worthy of serving the best interest of the
Foundation, and as to who was more suitable, so as to be
retained and those who should retire after their expiration of
contract.
69. Impugned decisions for not extending the contracts by
the Foundation had been made seemingly pursuant to
deliberations and approval of the MD and the CM, therefore,
the question of arbitrariness or illegality had no relevance to
the matter.
70. The counsel for the Petitioners has not cited any
statutory rule or provision of the Act which may have been
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violated by the Foundation for terminating the employment of

the Petitioners. Therefore, the Petitioners‟ appointment being
purely temporary on contract basis, their services in terms of
his employment contract could be terminated in the absence of
any alleged violation of provision of law/statutory rules. They
would be entitled to one month's notice or salary in lieu
thereof, as permissible to them under the terms and conditions
of the contract.
71. Such decisions cannot justifiably be interfered by this
Court under its constitutional jurisdiction. The Petitioners have
failed to point out any contravention of their fundamental rights
by the Foundation to satisfy the conditions warranting
interference by this Court in its constitutional jurisdiction.
Consequently, the present Constitutional Petitions are held to be
not maintainable in such circumstances and are accordingly
dismissed.

(iii) Whether contractual employees of the Foundation are

entitled to regularization/extension of their contract under
the facts and circumstances of the case?

72. In the case of Federation of Pakistan vs. Muhammad

Azam Chattha (2013 SCMR 120), the contract employee was
appointed as Presiding Officer of Banking Tribunal for a period
of three (3) years but his contractual appointment was
terminated by the competent authority after about two years. It
was held that the contract employee instead of pressing for his
reinstatement to serve for the leftover period can at best claim
damages to the extent of unexpired period of his service. It was
held in the case of Waseem Ali vs. Chief Administrator Auqaf,
Punjab and 2 others (2011 PLC (CS) 1630 [Lahore]) that on
the basis of contractual employment, the competent authority
was neither required nor bound to extend the contract period of
the petitioner or to regularize his services. Similarly, in the case
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of Sajid Ali Shah vs. WAPDA, (2013 PLC (C.S.) 715

[Peshawar]), it was held that the employer was always to be
held so arbiter to deal with the employee in accordance with the
terms of his contract. If the service of a temporary employee
was terminated in conformity with the terms and conditions of
his agreement, he would have no cause of action. Moreover, in
the case of Malik Mazharul Haq vs. Chairman, PIA,(2010
PLC(CS) 1472 [Lahore]), it was held at para 10 that the
Honourable Supreme Court of Pakistan in Habib Bank Ltd. v.
Syed Zia-ul-Hasan Kazmi 1998 SCMR 60 and Pakistan Red
Crescent Society v. Nazir Gillani PLD 2005 SC 806 has also
held that an employee of a Corporation in the absence of
violation of law or any statutory rule could not press into
service the Constitutional jurisdiction or civil jurisdiction for
seeking relief of reinstatement in service, his remedy against
wrongful dismissal or termination is to claim damages.
73. It was further held in the case of PTCL vs. Iqbal Nasir,
(2011 PLC(CS) SC 623), that all the employees having entered
into contracts of service on the same or similar terms and
conditions have no vested right to seek regularization of their
employment, which is discretionary with the employer. The
employer is well within his rights to retain or dispense with the
services of an employee on the basis of satisfactory or
otherwise performance. Further, in the case of Muhammad
Azam Khan vs. Government of NWFP,(1998 PLC (C.S.) 29
[Peshawar]), it was held at para 8 and 9 that in the
circumstances we are of the view that the petitioners are not
legally clothed with a right to enforce a right not vested in them
nor can they compel the performance of a right not yet born on
the premises which do not exist either in point of fact or law.
The petitioners stand bereft of such a right from its inception.
Be that as it may, not statutory duty is involved nor any legal
right is being enforced nor indeed performance of a public duty
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is being claimed, therefore, in our opinion, a writ of Mandamus

cannot be issued. This writ petition being devoid of
merit/substance is, therefore, dismissed in limine along-with the
Civil Miscellaneous.
74. It was held in the case of Chairman, WAPDA vs. Syed
Jamil Ahmed, 1993 SCMR 346, in para 9 that:
“9. The legal position obtaining in respect of
employees of the statutory corporations seems to
be that where the Government while setting up a
corporation does not reserve to itself the power to
regulate the terms of service of the corporation's
employees under the relevant statute and does not
prescribe any condition, but leaves it to the
discretion of the corporation by empowering it to
frame rules or regulations in respect thereof
without the Government's intervention, then the
corporation will be the sole arbiter in the matter
of prescribing the terms and conditions of its
employees and will be competent to deal with
them in accordance with the terms and conditions
prescribed by it. In such a case neither a suit nor
a writ petition for the relief of re-instatement will
be competent and the remedy of an employee, for
wrongful dismissal from or of termination of
service will be a suit for damages as the principle
of master and servant will be applicable.
However, where the terms and conditions of
service of an employee of a statutory corporation
is regulated by a statute or statutory rules, any
action prejudicial taken against him in
derogation or in violation of the statute and/or
the statutory rules will give him a cause of action
to file a suit or a writ petition for the relief of re-
instatement, as the power of the corporation will
be fettered with the statutory provisions and the
principle of master and servant will not be
applicable. For the purpose of deciding the
factum, whether the rules or the regulations of a
corporation have the statutory force, the
determining factor will not be their form or name,
but the source under which they have been
framed.”

75. In the cases where rules applicable are not statutory,

which is not subject matter of the present Petitions, the
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established principle is that services governed by a contract

would not confer a guaranteed right on the employee to
continue in the employment and to seek reinstatement on being
illegally dismissed or terminated. The affected persons could
not approach Court of law for seeking appointment even if they
were refused employment illegally or in contravention of the
service contract or non-statutory rules/regulations. Servant,
against termination of service by master, could claim damages
for illegal or wrongful decision refusing the employment (See,
Asadullah Mangi vs. Pakistan International Airlines, (2002
PLC (C.S.) 592 [Karachi]); Tilat Hussain vs. Chairman, PIA
and others, (2002 PLC (C. S.) 1 [Karachi]); Mushtaq Ahmad
vs. Pakistan Cricket Board and 2 others, (1997 PLC (C.S.)
921 [Lahore]); Chairman, WAPDA vs. Syed Jamil Ahmed,
(1993 SCMR 346); and Rehan Ali vs. Ministry of Technical
Professional, (2014 CLC 503 [Islamabad])).
76. It remains established that the contracts of the Petitioners
were expired before the Impugned Letters and they are seeking
their re-instatement and/or extension through these Petitions,
which cannot be allowed in constitutional jurisdiction of this
Court in absence of any statutory provision conferring such
right to the Petitioners. The Petitioners have failed to point out
any statutory provision conferring right for regular appointment
on the Petitioners in the Foundation. Further, there is no case
law which allows such extension or regularization of a contract
without any vested right in statutory provisions, under the
constitutional jurisdiction of this Court.
77. On the 9 December 2013, the Chairman of Board of
Directors unanimously decided, in compliance of the order of
this Court dated 13 July 2013, that the request of regularization
of the contract employees of the Foundation could not be
acceded to [the “Impugned Decision”]. Therefore, the
termination of the Petitioners was also approved by the Board
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in a detailed order mentioning the grounds for such decision

pursuant to the order of this Court. In absence of any violation
of the statutory provision, such order can also not be set aside in
constitutional jurisdiction of this Court.
78. The Foundation is an autonomous body constituted
under the Act which defines as per Section 5(1) that the
Executive Authority and managing of the foundation shall vest
in the Board. The directions of the CM cannot have precedence
over the Contract Appointment Rules of the Foundation under
the Act.
(iv) Whether the Petitioners were entitled to a right of
hearing before their dismissal?

79. It was held in the case of Lt. Col. Retd. Sultan Zeb Khan
vs. Board of Governors, Fazle Haq College, (2015 PLC(CS)
1385 [Peshawar]), at para 8 that the contention of the petitioner
that before termination of the remaining period of contract, the
respondents were under legal obligations to provide an
opportunity of hearing to the petitioner, is un persuasive and
not convincing for the reason that the contract of service, under
which the petitioner was appointed, specifically provides that
his service shall be liable to termination on one month notice or
one month salary in lieu thereof, without assigning any reason.
Such a contract, in our view does not create any vested right in
the appointee so as to make him entitled to be served with
notice before termination of contract of his service. The learned
counsel for petitioner has relied on some case-law of the apex
Court, in support of his contention, careful reading of which
reveals that in the referred cases the services of the petitioners
therein were terminated on the basis of certain allegations but
in the instant case the contract of the petitioner was terminated
without stigmatizing him. He was given a very safe and
Honourable exit from service, without levelling any allegation
against him. We may observe that there is a marked distinction
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between the simpliciter termination of service in accordance

with terms and conditions of appointment and the termination
of service on the ground of misconduct. No doubt if a person is
employee on contract basis and the terms of employment
provides the manner of termination of his service, the same can
be terminated in terms thereof. However, if a person is to be
condemned for misconduct, in that event, even if he is a
contract employee, would be entitled to a fair opportunity to
clear his position. It means that in case of stigmatize
termination there must be a regular inquiry in terms of
Efficiency and Disciplinary Rules. In the instant case as
discussed above the contract appointment of the petitioner has
been simply terminated without any allegation of misconduct.
The cited judgments of the apex Court having no relevance with
case of petitioner, thus of no consequence for him.”
80. In another case titled Mst. Shazia Sarwar vs. Chancellor,
University Of The Punjab, Lahore, (2013 PLC (C.S.) 234
[Lahore]), it was held at para 19 that the contract employees
are entitled for hearing if termination of their contract of service
is on the basis of any allegation.
81. Therefore, since the Foundation has not raised any
allegation on the Petitioners, the right of hearing was not
mandatory to be provided to the Petitioners.
N. Other Arguments:

82. The case cited by the counsel of the Petitioner, titled

State Bank of Pakistan v. Muhammad Shafi (2010 SCMR
1994) is distinguished from the present circumstances of the
Petitions because it was held that the rules framed by Central
Board of Directors did not require approval of Government,
therefore, State Bank of Pakistan Regulations, 1999 could be
termed as internal instructions or domestic rules/regulations
having no status of statutory rules/regulations.
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83. As far as the dictum of the Honourable Supreme Court in

Muhammad Tariq Badar and another v. National Bank of
Pakistan and others (2013 SCMR 314) is concerned, the
august Supreme Court of Pakistan in fact was not dealing with
the specific question involved in these Petitions, rather the
Court on peculiar facts of the case was considering the issue
that whether non-statutory rules have, and/or can repeal, rescind
or displace the statutory rules. It may also be noted that it was
held in the Tariq Badar case Supra that National Bank of
Pakistan (Staff Services) Rules, 1980, at best could be termed
as guidelines or domestic instructions of the bank and do not
enjoy the status of a statutory instrument because the said Rules
were neither made by the Federal Government nor published in
the official gazette, and said rules were formulated by the Board
of the Bank pursuant to its authority in the nature of
management/superintendence of the affairs of the Bank and/or
policy making power. However, these Petitions do not have
such legal question as existed in the aforesaid judgment. The
Honourable Supreme Court has further observed that:
“8. … it is not only the legal position, but has
also been conceded by the counsel for both the
sides that, if the rules of a statutory
establishment/body are statutory in nature, the
employees (who are covered by the rules) of such
organization may invoke the constitutional
jurisdiction of the High Court for the redressal of
their service grievance…”
84. The Petitioners have also not provided for comparison,
any dates or material or the particulars of other persons, who
were equally placed as them and have been retained. Provisions
of Article 25 of the Constitution did not help the cause of
the Petitioner and no case of discrimination in terms of
said Article had been made out.
85. Upon the above discussion, I am satisfied beyond any
doubt that the Petitioners have failed to satisfy with regard to
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the maintainability of these Constitutional petitions and have

also failed to establish that they are entitled to the reliefs sought
for by them in the aforesaid Constitutional petitions.
Accordingly, these Constitutional Petitions stand dismissed
alongwith all the miscellaneous applications pending therein.

(JAWAD HASSAN)
JUDGE

Announced in open Court on the _____ day of November 2017

Approved for reporting

JUDGE
*M.NAVEED*