3540 C.P. 565 2014

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IN THE SUPREME COURT OF PAKISTAN

(Appellate Jurisdiction)

Present:

Mr. Justice Nasir-ul-Mulk, CJ

Mr. Justice Gulzar Ahmed

Mr. Justice Mushir Alam

CIVIL PETITIONS No.565-568 & 582-584 OF 2014

[

On appeal against common Judgement dated 17.03.2014, pass

ed by

the Islamabad High Court, Islamabad, in ICA No.8 of 2012]

CIVIL PETITIONS No.1596-1597, 1602, 1643 & 2064-2067 OF 2014

[

On appeal against common Judgement dated 03.07.2014 passed by

the Peshawar High Court, Peshawar, in W.P.No.2657 of 2012]

CRIMINAL PETITION No.214 OF 2014

[

On appeal against common Judgment dated 17.03.2014, passed by

the Islamabad High Court, Islamabad, in ICA No.8 of 2012]

AND

CMA No.3540 OF 2014 in C.P.No.565 OF 2014

[

For impleadment of Telecom Pensioners Association as

Respondent

]

Pakistan Telecommunication Employees Trust

(PTET) through its M.D., Islamabad.

(in CPs.565

568, 2064

2067,

Crl.P.214 & CMA.3540)

Pakistan Telecommunication Company Limited.

(in CPs.582

584,1602)

The President, PTCL, & another.

(in CPs.

1596

1597 & 1643)

Petitioner(s)

VERSUS

Muhammad Arif & others.

(in CP.565)

Fazil Malik & others.

(in CPs.566,582)

Fida Hussain & others.

(in CPs.567, 584)

Muhammad Anwar Shahid & others.

(in CP.568, 583)

Muhammad Arif & others.

(in Crl.P.2

14 & CMA.3540)

Mst. Bakhat Pari & others.

(in CPs.1596, 2066)

Muhammad Yousaf Afridi & others.

(in CPs.1597, 1602, 2064)

Sadiq Ali & others.

(in CPs.1643, 2065)

Muhammad Rafique & others.

(in CP.2067)

Respondent(s)

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C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

For the Petitioner(s)

[in

CP.565 & 566]

Mr. Khalid Javed Khan, ASC

[in CP.567]

Mr. Zia-ul-Haq Makhdoom, ASC

[in CP.568]

Mr. Rizwan Ijaz, ASC

Mr. Zia-ul-Haq Makhdoom, ASC

[in CP.582

584, 1596

1597,

1602, 1643] :

Mr. Shahid Anwar Bajwa, ASC

Ms. Zahida Awan, EVP (Legal) PTCL

[in Crl.P.214, CP.2064

2067]

Mr. Zulfiqar Khalid Maluka, ASC

For the Applicant(s)

[in CMA.3540]

Mr. Hashmat Ali Habib, ASC

For the Respondent(s)

[R.1

34 in CP.565]

[R.1-134 in CP.566]

[R.1-34 in CP.582]

Mr. Khalil-ur-Rehman, ASC

[R.1

4,6

9,11

18,20

51 in

CPs.567, 584]

Mr. Ghulam Mahboob Khokhar, ASC

[R.1 in CP.568]

Mr. Abdul Rahim Bhatti, ASC

[R.2 in CP.568]

[R.1-2 in CP.583]

Ch. Mushtaq Hussain, ASC

[R.1

60 in CP.1596]

[R.1 in CP.1597]

[R.1 in CP.1602]

[R.1-805 in CP.1643]

[R.1 in CP.2064]

[R.1-624 in CP.2065]

[R.1-60 in CP.2066]

[R.1-135 in CP.2067]

Mr. Salah-ud-Din Khan, ASC

Dates of Hearing :

10.11.2014, 27.11.2014, 28.11.2014,

01.12.2014 & 02.12.2014

JUDGMENT

GULZAR AHMED, J.— These petitions have arisen from two sets of

proceedings initiated by the respondents against the petitioners (1) at

the Islamabad High Court, Islamabad and; (2) at Peshawar High

Court, Peshawar. The impugned judgment of the Islamabad High

Court, Islamabad is dated 17.03.2014 while impugned judgment of

Peshawar High Court, Peshawar is dated 03.07.2014. Initially one set

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C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

of Writ Petitions were filed in the Islamabad High Court, Islamabad,

which were allowed by a learned Single Judge vide common judgment

dated 21.12.2011 against which the petitioners filed Intra Court

Appeals, which have been dismissed by the impugned judgment. The

Writ Petitions in the Peshawar High Court, Peshawar, were decided by

its Division Bench, by the impugned judgment.

2. Admittedly, the respondents were the serving employees,

retired employees and widows of retired employees, who were

employed in the Pakistan Telegraph & Telephone Department (T&T

Department) and through various enactments were transferred to

Pakistan Telecommunication Corporation (the Corporation) and then

to the Pakistan Telecommunication Company Limited (the Company).

The enactments under which their services were transferred are dealt

with in this judgment herein below. In nutshell the grievance of the

respondents who have filed Writ Petitions in the High Courts was that

the pension was being paid to the erstwhile employees of T&T

Department transferred to the Corporation and then to the Company

which was with increase announced by the Government of Pakistan but

this increase in pension was abruptly stopped by the petitioners. The

respondents have prayed that the pension be paid in accordance with

the increase announced by the Government of Pakistan vide its

notification dated 05.07.2010.

3. We have heard the learned ASCs for the parties and have

gone through the record.

4. Mr. Khalid Javed Khan, learned ASC appearing for the

petitioner-Pakistan Telecommunication Employees Trust, after

extensively going through various enactments and rules etc., has

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C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

contended that there is no provision in the Civil Servants Act, 1973 for

increase of pension and that whatever increase in pension is granted

by the Federal Government is on the basis of its own policy. He also

contended that the provision of Civil Servants Act being not applicable

to employees of the Company consequently any increase in pension

granted by the government to the civil servants will not extend to the

employees of the Company. He further contended that though

pension is granted as a part of terms and conditions of service but its

increase is not the part of terms and conditions as the increase in

pension is basically a matter of policy which has to be decided by the

Trustees of the Trust. He contended that though the Trust is a

statutory Trust but there being no provision in the statute providing for

increase in pension, the increase in pension being a matter of policy is

granted through an executive order. He admitted that before 2010,

the pension to the employees of the Company was being increased as

per the one announced by the Government of Pakistan but in 2010 the

increase granted by the Government was not followed rather the

increase in pension was granted as announced by the Trustees of the

Trust. He contended that if the employees are paid pension, as

increased by the Government of Pakistan, the provision of Section 44

of the Act of 1996 will become redundant. He further contended that

the liability of the Trust to pay pension and its increase to the

employees is restricted only to those, who were in employment in

1996, and those who came into employment after 1996 are not

governed by the Trust and are merely contract employees and their

contribution is paid to the Employees Oldage Benefit Institution

(EOBI). He also contended that the petitioner has paid benefit of

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C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

Voluntary Separation Scheme (VSS) to the employees and those who

have received the benefit of VSS cannot maintain the petition as their

dues including pensionary dues have been fully paid by the petitioner.

5. Mr. Zia-ul-Haq Makhdoom, learned ASC for the petitioner

in C.P.No.567 of 2014; Mr. Rizwan Ijaz, learned ASC for the petitioner

in C.P.No.568 of 2014; and Mr. Zulfiqar Khalid Maluka, learned ASC for

the petitioner in Crl.P.No.214 of 2014 & C.P.Nos.2064-2067 of 2014

have adopted the arguments advanced by Mr. Khalid Javed Khan.

6. Mr. Shahid Anwar Bajwa, learned ASC for the petitioners in

C.P.Nos.582-584, 1596-1597, 1602 & 1643 has contended that after

1996 on PTCL becoming a private Company, all the terms and

conditions of service of respondents came to be fixed by the Company

with the condition that it should not be less favourable to which they

were entitled. He further contended that in considering the increase in

pension actuary report is required to be taken into consideration and

the actuary report is made on the basis of inflation, financial

constraints of the Company to fund the unfunded portion of the

increase. He contended that those employees who have opted for VSS

in 2007, 2008 & 2009 are being paid pension @ 7% every month

according to the terms of VSS and such being the bargain made by the

VSS optees, they are not entitled to grant of any other pensionary

benefit. He contended that Section 45 (2) of the Act of 1996 provides

for contribution by the Company to the Pension Fund the amount

determined by Actuary representing the unfunded proportion of the

accrued pension liabilities from the effective date. He further

contended that in terms of SRO NO.115(I)/96 dated 11.02.1996 the

Company has discharged its obligation by making payment to the

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C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

Trust according to the amount specified in Schedule-III of the said

SRO and such became past and closed transaction. He contended that

there are two types of regulations; one are statutory and the other are

non-statutory and that the PTET Rules are statutory rules and are

designed to govern the transferred employees. He further contended

that the case of Masood Ahmed Bhatti is being reconsidered by this

Court.

7. Mr. Khalil-ur-Rehman, learned ASC for private respondents

in C.P.Nos.565, 566 and 582 of 2014 has read the provisions of six

Ordinances commencing from Ordinance LI of 1994. The learned ASC

has contended that through Trust Deed dated 02.04.1994 Pakistan

Telecommunication Corporation Employees Pension Fund was created

and all departmental employees transferred to the Corporation were

entitled to be paid pension as defined under the Federal Government

Pension Rules. He contended that after promulgation of the Act of

1996, Pakistan Telecommunication Employees Trust was created which

took over the liability of the Pension Fund created by the Trust Deed of

02.04.1994 to that there was a continuity of Pension Fund from the

one created by Trust Deed dated 02.04.1994 to that of the Pakistan

Telecommunication Employees Trust. He referred to the definition of

the term ‘telecommunication employees’ as given in the Act of 1996

and contended that all employees of former T&T Department are

entitled to receive pensionary benefits as per the one fixed by the

Federal Government. He contended that through vesting order dated

07.02.1996 issued by the Ministry of Communication, Government of

Pakistan, the effective date of vesting of all properties, rights and

liabilities of the Corporation to that of Pakistan Telecommunication

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C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

Company Limited was announced to be that of 01.01.1996. Similarly,

all employees of the Corporation become employees of the Company

also from 01.01.1996 with liability in respect of payment of pension,

therefore, the entitlement for payment of pension at the rate fixed by

the Federal Government was accepted by the Company. He referred

to the provision of subsection (2) of Section 59 of the Act of 1996 and

contended that all orders passed prior to the promulgation of this Act

were saved including the Employees Pension Fund Rules, 1994 and

that the Company has assumed the liability and such pension is also

protected.

8. Ch. Mushtaq Hussain, learned ASC for the respondents in

C.P.Nos.568 & 583 of 2014 has made distinction of 4 kinds of

employees that of T&T Department, Corporation Employees, Contract

Employees and Company Employees and contended that the

respondents are employees of T&T Department and being transferred

employees their benefits cannot be reduced from the one they were

enjoying as such departmental employees which is inclusive of

pension. He further contended that the Transferred Employees are

being paid salary and other dues that of a government employees and

posed a question as to why the pension as fixed by the Federal

Government should not be paid to the respondents.

9. Mr. Salah-ud-Din Khan, learned ASC for the respondents in

C.P.Nos.1596, 1597, 1602, 1643, 2064, 2065, 2066 and 2067 of 2014

has referred to the letter dated 05.04.2013 of the Ministry of

Information Technology wherein four questions were referred to the

Ministry of Law with regard to payment of dues and the opinion of

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C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

Ministry of Law dated 11.03.2013 where in dealing with the question of

increase in pension it is opined as follows:-

“Whether increase in pension of Federal Government is also allowed to

transferred employees of the PTCL the issue is answered in the

affirmative because their terms and conditions have been guaranteed

by the Federal Government”.

10. Mr. Abdul Rahim Bhatti, learned ASC for the respondents

in C.P.Nos.568 & 583 of 2014 has contended that the employees of

T&T Department were transferred to the Corporation and then to the

Company by operation of law with specific provision that their terms

and conditions will not be varied to their disadvantage. He contended

that the Company has been following the government rules in

payment of pension upto 2010 and that such was a guaranteed right

of the respondents which cannot be denied. He also referred to the

share-purchase agreement and the notifications providing for increase

in pension and contended that the increase in pension, as per

government rules, having been paid for almost 13 years became

practice and such practice cannot be discontinued as it becomes law.

He further contended that the Transferred Employees are civil servants

and their terms and conditions of service are governed by the Civil

Servants Act. In support of his submissions, learned ASC has relied

upon the case of Pakistan Telecommunication Corporation & another

V. Riaz Ahmed & 6 others [PLD 1996 SC 222]; Divisional Engineer

Phones, Phones Division, Sukkur & another V. Muhammad Shahid &

others [1999 SCMR 1526]; and order dated 23.08.2013 passed by this

Court in Civil Petition Nos.717 & 718 of 2013.

11. Mr. Hashmat Ali Habib, learned ASC for the applicants in

CMA No.3540 of 2014 and Mr. Ghulam Mahboob Khokhar, learned ASC

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C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

for the respondents in C.P.Nos.567 & 584 of 2014 have adopted the

arguments of the respondents' counsel referred to above.

12. The functions of telecommunication in Pakistan were being

undertaken by the T&T Department of the Federal Government of

Pakistan. By the Pakistan Telecommunication Act, 1991 (the Act of

1991), Pakistan Telecommunication Corporation was established with

the purpose and function to establish, maintain and operate

telecommunication with transfer of assets and liabilities and all

employees of T&T Department to the Corporation. Section 9 of the Act

of 1991 provided that the employees of T&T Department transferred to

the Corporation shall have the same terms and conditions to which

they were entitled immediately before such transfer and that the terms

and conditions of service shall not be varied by the Corporation to their

disadvantage. Subsequently, the Pakistan Telecommunication (Re-

Organization) Act, 1996 (the Act of 1996) was promulgated for the

re-organization of Pakistan Telecommunication system in Pakistan by

establishing Pakistan Telecommunication Authority, Frequency

Allocation Board, National Telecommunication Corporation and

Pakistan Telecommunication Employees Trust and transfer of

telecommunication service to private sector etc. Under Section 34 of

the Act of 1996, the Federal Government established a Company

known as Pakistan Telecommunication Company Limited incorporated

under the Companies Act, 1984, with the principal object of provision

of domestic and international telecommunication. Section 35 of the

Act of 1996 empowered the Federal Government to issue Vesting

Order vesting certain rights and liabilities of the Corporation to the

Company from the effective date. The Vesting Order was also to

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C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

specify the employees of the Corporation to be transferred and

become the employees of the Company from the effective date. Sub

Section (1) of Section 36 of the Act disentitled the Transferred

Employees to any compensation as a consequence of transfer to the

Company. The proviso, however, lays down that the Federal

Government shall guarantee the existing terms and conditions of

service and rights, including pensionary benefits of the Transferred

Employees. Sub Section (2) of Section 36 provided that the terms and

conditions of service of the Transferred Employees shall not be altered

adversely by the Company except in accordance with the laws of

Pakistan or with the consent of the Transferred Employees and the

award of appropriate compensation. Sub Section (5) of Section 36

provided that in the order vesting property of the Corporation to the

Company, the Federal Government shall require the Company to

assume responsibility of pensionary benefits of the telecommunication

employees and the Company shall not alter such pensionary benefits

without the consent of the individuals concerned and the award of

appropriate compensation. In terms of Section 35 of the Act of 1996,

the Government of Pakistan issued Vesting Order dated 07.02.1996,

by which all properties and liabilities of the Corporation were vested in

the Company w.e.f. 01.01.1996 and all employees of the Corporation

except those transferred to Pakistan Telecommunication Authority,

Frequency Allocation Board, National Telecommunication Corporation

and Pakistan Telecommunication Employees Trust stood transferred to

and become the employees of the Company w.e.f. 01.01.1996. It

further provided that w.e.f. 01.01.1996 the liability of Corporation in

respect of payment of pension to telecommunication employees shall

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C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

be transferred to the Pakistan Telecommunication Employees Trust

and the Company shall be liable for and assume the responsibility to

contribute to the Pakistan Telecommunication Employees Trust the

amount determined in accordance with Section 45. The order further

provided that the Corporation without being wound up stands

dissolved and ceased to exist w.e.f.01.01.1996.

13. From the reading of the Act of 1991 and thereafter of the

Act of 1996, it is abundantly clear that the employees of T&T

Department were transferred to the Corporation with the terms and

conditions of their service similar to the one they were enjoying before

such transfer. It is not in dispute before us that the employees of T&T

Department, whose case is before us, were transferred to the

Corporation and they enjoyed the same terms and conditions of

service as were applicable to them as employees of T&T Department.

Under the terms and conditions of service, such employees were also

entitled to payment of pension on their retirement. On 2nd April, 1994,

the Corporation executed a Trust Deed establishing Pakistan

Telecommunication Corporation Employees Pension Fund. Para 2 of

which reads as follows:-

“All departmental employees transferred to the Corporation as defined

in section 9 of the Pakistan Telecommunication Corporation Act, 1991

shall be entitled to benefits as defined under the Federal Government

Pension Rules as applicable to such employees before the formation of

PTC.”

By section 44 of the Act of 1996, the Federal Government has

established a trust called Pakistan Telecommunication Employees Trust

(the Trust). Section 45 of the Act of 1996 made provision for issuing

of Vesting Order by the Federal Government of vesting of all assets

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C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

and such liabilities as are specified in the Trust from the effective date.

Section 46 of the Act of 1996 lays down functions and powers of the

Trust which, inter alia, provides for making of provision for the

payment of pensions to telecommunication employees to the extent of

their entitlement with exclusive right to determine the amounts, if any,

payable in respect of pension benefits to the telecommunication

employees. It has already been mentioned above that by the Vesting

Order dated 07.02.1996, inter alia, the liability of payment of pension

of telecommunication employees was transferred to the Trust and the

Company was liable and has assumed the responsibility to contribute

to the Trust, the amounts determined in accordance with Section 45.

14. The question that needs to be addressed is about the

status in obtaining of pension by the employees of the erstwhile T&T

Department, who were transferred to the Corporation from where they

were transferred to the Company. It is clear from the reading of

provision of the Act of 1991 so also that of the Act of 1996 that the

terms and conditions of service of the Transferred Employees from T&T

Department to the Corporation and then to the Company remain

unaltered and they continued to be paid the benefits as were

admissible to them as employees of T&T Department. There seems to

be no dispute until 2009 regarding the entitlement of pension to the

employees of erstwhile T&T Department inasmuch as they have been

paid pension at the same rate of increase as has been provided by the

Federal Government to its employees as is apparent from the record of

pension payment submitted by the counsel for the Trust by way of

CMA No.6331 of 2014, which shows the payment of pension as

follows:-

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C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

CMA No.6331 of 201

Pension increased by the Pakistan Telecommunication Company

Employees Trust

Year(s)

Category

Percentage

2004

(i)

Retired before 01.01.96

16% As per GOP

(ii)

Retired after 01.01.96

2005

(i)

Retired before 01.01.96

10% as per GOP

(ii)

Retired after

01.01.96

10%

2006

(i)

Retired before 01.01.96

20% As per GOP

(ii)

Retired after 01.01.96

20%

2007

(i)

Retired before 01.01.96

Per GOP

(ii)

Retired after 01.01.96

2008

(i)

Retired before 01.01.96

20% As per GOP

(ii)

Retired after 01.01.9

20%

2009

(i)

Retired before 01.01.96

15% As per GOP

(ii)

Retired after 01.01.96

15%

15. The above chart of payment of pension by the Trust shows

that there were in all two categories of employees to whom the

pension was being paid by the Trust; (1) who retired before

01.01.1996 and (2) who retired after 01.01.1996. The chart also

makes it clear that those who had retired before 01.01.1996 are being

paid pension as per the increase announced by the Government of

Pakistan while those who had retired after 01.01.1996 being paid

pension according to the rate fixed by the Trust. The payment of

pension by the Trust until 2009 appears to be consistent with the rate

and entitlement of the employees of erstwhile T&T Department as has

been amplified from the provisions of the Act of 1991 and the Act of

1996 read with Para 2 of the Trust Deed of 2nd April, 1994, which term

was not varied or altered in creation of the Trust rather the same was

kept intact.

16. While examining the question in issue we also examined

some precedents of this Court in respect to the employees of PTCL,

who were initially in employment of T&T Department from where they

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C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

were transferred to the Corporation and then to the Company. In the

case of Divisional Engineer Phones, Phones Division , Sukkur & another

V. Muhammad Shahid & others [1999 SCMR 1526], the respondents

were appointed Telephone Operators and it was held that “in cases of

Corporation created by the Government through statutory instruments

if existing employees are transferred to the Corporation in the absence

of any provision to the contrary, the Transferred Employees continue

to remain in the service of Corporation on the same terms and

conditions under which they were working before their transfer to the

Corporation. Therefore, if an employee of the Corporation before his

transfer to the Corporation was a civil servant, he continues to be a

civil servant. In all other cases, where an employee is appointed in

the service of the Corporation after the Corporation is established, his

service is governed by Service Rules of the Corporation. If such Rules

are not statutory, the principal of master and servant governed the

relationship between the employee and the Corporation”. In the case

of Pakistan Telecommunication Corporation & another V. Riaz Ahmad

& 6 others [PLD 1996 SC 222], it was held that the employees of T&T

Department transferred to the Corporation were civil servants. In the

case of Ejaz Ali Bughti V. PTCL & others [2011 SCMR 333], this Court

has held that as there were no statutory rules of service applicable to

the employees of the Company and in view of the judgment in the

case of Muhammad Mubeen-us-Salam V. Federation of Pakistan [PLD

2006 SC 602], the petitioner was not civil servant and his appeal

before the Service Tribunal was not maintainable. In the case of

Pakistan Telecommunication Corporation Limited V. Iqbal Nasir &

others [PLD 2011 SC 132], though it was held that the Company is a

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C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

person within the meaning of Article 199 (5) of the Constitution and

will be amenable to the writ jurisdiction of the High Court but there

being no statutory rules of service applicable to its employees, the writ

petition in the High Court was found to be not maintainable.

17. Mr. Shahid Anwar Bajwa, learned ASC for the Company

has contended that the case of Masood Ahmed Bhatti & others V.

Federation of Pakistan through Secretary, M/O Information Technology

& Telecommunication & others [2012 SCMR 152] may not be relied

upon by this Court for the reason that such judgment is being

reconsidered by this Court. What we understand from this submission

of the learned ASC is that a review petition for the review of a reported

judgment may be pending in this Court. We may note that until the

judgment of this Court is reviewed and some other conclusion is

reached other than the one which has already been pronounced by this

Court, the same remains in field and operates as a law pronounced by

this Court. Therefore, we cannot ignore this case inasmuch as it is a

judgment of three members bench of this Court and as per the law of

precedent, the same is binding on us. In this case, the appellants

were admittedly civil servants and they were transferred from T&T

Department to the Corporation and then to the Company. The

grievances of the appellants were with regard to promotion, for

payment of pensionary benefits and of VSS. The High Court of Sindh

has dismissed the constitutional petition filed by the appellants on the

ground of non-availability of statutory rules of service applicable to the

employees of the Company. This Court, after evaluating various

provisions of the Acts of 1991 and 1996 and the Vesting Order dated

07.02.1996 has made following observations :-

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C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

“14. We may now consider the effect of this transfer of the

appellants to PTCL along with the assets and liabilities of the

Corporation and the implications of such transfer on the nature of the

rules of employment applicable to the appellants from the date (i.e.

1.1.1996) they became employees of PTCL. The provision to section

35(2) of the Reorganization Act provides a clear answer to this

controversy. It specifies that even after the transfer of the appellants

to PTCL their terms and conditions of service which existed on

1.1.1996, would be the base and bare minimum in matters of their

employment with PTCL. These terms and conditions were imposed on

PTCL by the Reorganization Act, as a legal obligation and the Vesting

Order was issued by the Federal Government “in exercise of powers

conferred by section 35” of the Reorganization Act. The Federal

Government, it will be noted, had been granted limited powers only;

the constraint on it was that the terms and conditions of service of

employees of the Corporation could not be varied to their

disadvantage. PTCL, as the recipient of the properties and rights of the

Corporation, also assumed the liabilities of the Corporation. Such

liabilities necessarily included the liabilities owed to the employees,

arising from the terms and conditions of their service as these could

not be varied to their disadvantage.

15. Thus it is evident that at the moment of transition when the

appellants ceased to remain the employees of the Corporation and

became the employees of PTCL, they admittedly were governed by

rules and regulations which had been protected by the PTC Act. The

said rules, therefore, by definition were statutory rules as has been

discussed above. PTCL, no doubt, could made beneficial rules in

relation to its employees which were in addition to the rules of

employment prevailing on 1.1.1996. However, by virtue of the

aforesaid proviso, PTCL had no power to “vary the terms and

conditions of service” of its employees who were previously employees

of the Corporation. “to their disadvantage”. Even the Federal

Government was debarred by virtue of section 35 ibid from varying

such terms and conditions of service to the disadvantage of the

appellants.

16. An easy and uncomplicated test becomes available to us to help

determine the status of the employment rules governing the

appellants. If the current employer of the appellant viz. PTCL is

constrained by legislation such as section 35(2) of the Reorganization

Act, and as a consequence, cannot vary the existing rules to the

disadvantage of the appellants, because of such legislation, it must

follow that such law has the effect of saving the rules which existed

- 17 –

C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

when the appellants became employees of PTCL. Such existing rules,

having been protected by section 35(2), therefore, can only be

categorized as statutory rules.

17. Section 36 of the Reorganization Act also has relevance in

determining the controversy which arises in these appeals. Subsection

(2) of section 36 gives protection to the terms and conditions of

service of employees such as the appellants who stood transferred

from the Corporation to PTCL on 1.1.1996. Their terms and conditions

of service cannot be altered adversely by PTCL “except in accordance

with the laws of Pakistan or with the consent of the transferred

employees and the award of appropriate compensation”. When this

legal provision is read together with section 35, it becomes abundantly

clear that by operation of the Reorganization Act, the terms and

conditions of service of the appellants as on 1.1.1996 stood conferred

on them as vested rights under the said law”.

18. Thus, in the above case this Court has held that the terms

and conditions of service so also the rules of service which were

applicable to the T&T Department employees while in employment of

the Government of Pakistan will continue to be applicable to them on

their transfer to the Corporation and then to the Company. The

proposition advanced by Mr. Khalid Javed Khan, learned ASC, that an

order granting increase in pension is an executive function based on a

policy taking into consideration various factors of inflation and financial

conditions, on its face, appears to be correct as the same is based

upon the pronouncement of this Court in the case of Akram Ul Haq Alvi

V. Joint Secretary (R-II) Government of Pakistan, Finance Division,

Islamabad & others [2012 SCMR 106]. However, the question before

us is not about the tenor and status of the government order or the

order which is passed by the petitioner for increasing the pension on

the very entitlement of the respondents to the benefit of increase in

pension awarded by the Government. The entitlement of the

- 18 –

C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

respondents to the increase in pension, as the one announced by the

Government of Pakistan, is to be determined on the basis of the law

applicable to their employment. In Masood Ahmed Bhatti’s case

(supra), this Court has held that not only the terms and conditions of

service of the employees of T&T Department who were transferred to

the Corporation and then to the Company will be the same but also the

rules of service as were applicable to them as employees of T&T

Department. Thus, it becomes clear that the employees of T&T

Department who were transferred to the Corporation and then to the

Company having retired, they will as per the terms and conditions of

service will be entitled to payment of pension also according to the one

announced by the Government of Pakistan. Thus if any increase in

pension is announced by the Government of Pakistan for its

employees, the same will also apply and will be paid to the employees

of T&T Department transferred to the Corporation and then to the

Company. This view of ours is further fortified by the provision of

Section 46 (1) (d) of the Act of 1996 where it is stated that the Board

of Trustees of the Trust shall make provision for payment of pension to

telecommunication employees to the extent of their entitlement. The

very term “to the extent of their entitlement” shows that there are

different kinds of employees having different entitlement and

provisions for them have to be made accordingly. This is also

apparent from the chart shown above where there already existed two

kinds of employees, one who have retired before 01.01.1996 and the

other who have retired after 01.01.1996 to whom different rate of

increase in pension is paid. It is, therefore, not correct to state that

there will be redundancy of Section 44 of the Act of 1996 if the

- 19 –

C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

Trustees are allowed to make provision for the pension according to

their own working. In view of this clear provision in Section 46 of the

Act of 1996, we do not find that this Section has any direct nexus with

Section 44 of the Act of 1996 nor the redundancy to Section 44 can be

attributed. We are here only dealing with cases of those employees,

who were employed in T&T Department and transferred to the

Corporation and then to the Company and not any other employees.

Similarly, we also note that there is no mention in either of the two

impugned judgments regarding the question of VSS. We, therefore,

do not consider it appropriate to decide this question at this stage.

19. Adverting to the submission of Mr. Shahid Anwar Bajwa,

learned ASC, we may note that while the Company may be entitled to

fix the terms and conditions of service of its employees so also the

provision of pension by the Board of Trustees of the Trust but as

discussed above, as regards the employees of T&T Department

transferred to the Corporation and then to the Company, their terms

and conditions of service stand protected by the provision of Section 9

of the Act of 1991 and Sections 35, 36 and 46 of the Act of 1996 and

thus they will be entitled to payment of increase in pension as is

announced by the Government of Pakistan. The contribution of the

Company to the Pension Fund determined by the Actuary and its

payment by the Company does not appear to be of much relevance

because the question before us is of entitlement of the respondents to

the increase in pension. In the case of Secretary, Government of the

Punjab, Finance Department & 269 others V. M. Ismail Tayer & 269

others [2014 SCMR 1336], this Court has held that while on

completion to commutation period the civil servant is entitled to

- 20 –

C.Ps 565-568, 582-584, 1596-1597, 1602, 1643, 2064-2067 of 2014, Crl.P.No.214 of 2014 & CMA No.3540 of 2014

payment of full pension. It was noted, and such has been done time

and again by this Court that pension is a part of a civil servant’s

retirement benefit and is not bounty or an ex-gratia payment but a

right acquired in consideration of his past service which was a vested

right with legitimate expectation. The right to pension is conferred by

law which could not be arbitrarily abridged or reduced except in

accordance with law. The aspect of the statutory rules has already

been dealt with above and we tend to agree with the rule laid down in

the case of Masood Ahmed Bhatti (supra).

20. For the foregoing reasons, we have come to conclusion

that the respondents, who were the employees of T&T Department

having retired after their transfer to the Corporation and the Company,

will be entitled to the same pension as is announced by the

Government of Pakistan and that the Board of Trustees of the Trust is

bound to follow such announcement of the Government in respect of

such employees. Consequently, these petitions are dismissed.

CJ.

Islamabad

APPROVED FOR REPORTING

*Hashmi* J.

Announced in open Court on 12.06.2015

3540 C.P. 565 2014

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