P L D 2015 Lahore 146

Before Shujaat Ali Khan, J

FLYING CEMENT CO. LTD. and others---Petitioners

Versus

GOVERNMENT OF PAKISTAN through Secretary, Ministry of Water and Power and others---

Respondents

Writ Petition No.24076 of 2013, decided on 5th November, 2014.

(a) Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997)---

----Ss. 31(4) & (5)---Constitution of Pakistan, Art. 199---Constitutional petition---Maintainability---

Equalization surcharge on electricity, levy of---Federal Government imposed equalization surcharge on

electricity vide a notification, but subsequently said notification was withdrawn---Contention of Government

that after withdrawal of the notification present constitutional petition became infructuous---Validity---

Petitioners had not only challenged the imposition of equalization surcharge in the present petition but also

prayed for refund of the amount already deducted on that account---Constitutional petition was held to be

maintainable accordingly.

(b) Constitution of Pakistan---

----Art. 199---Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997), S.

31---Constitutional jurisdiction of the High Court---Scope---Electricity/energy---Production, supply and tariff of

electricity---Interest of consumers, protection of---High Court, being custodian of the fundamental rights, could

take judicial notice in order to have continuous supply of energy for present and future domestic and

commercial needs in addition to maintaining the present sources of energy along with expansion of new sources

of energy---Government and National Electric Power Regulatory Authority (NEPRA) while imposing levies

and fixing rates of electricity, should strike a balance between the financial status of citizens of the country and

the extent of national requirement for energy on the one hand and available resources for electricity on the

other---Heavy duty laid upon the public functionaries, the executive as well as judiciary to see that a balance

was struck in such a manner that the system flourished and continued progressing on the one hand and the

interest of customers/citizens was ensured on the other.

(c) Words and phrases---

---"Tariff"---Meaning.

K.J. Aiyar Judicial Dictionary, 16h Edn. 2014; Wharton’s Law Lexicon, 14th Edn.; Black’s Law

Dictionary, 8th Edn.; Advanced Law Lexicon by P Ramanatha Aiyar’s 4th Edn., Vols. 1 & 4; The Chambers

Dictionary 12th Edn.; Halsbury’s Laws of India, Vol. 42 and Major Law Lexicon, Vol. VI ref.

(d) Words and phrases---

----"Rate"---Meaning.

K.J. Aiyar Judicial Dictionary, 16h Edn. 2014; Wharton’s Law Lexicon, 14th Edn.; Black’s Law

Dictionary, 9th Edn.; Encyclopaedic Law Dictionary (Legal and Commercial) by Dr. A.R. Biswas and The

Major Law Lexicon, by P Ramanatha Aiyar’s 4th Edn. ref.

(e) Words and phrases---

----"Charge"---Meaning.

Wharton’s Law Lexicon, 14th Edn. and Advanced Law Lexicon by P Ramanatha Aiyar’s 4th Edn.,

Vols. 1 and 4 ref.

(f) Words and phrases---

----"Surcharge"---Meaning.

Black’s Law Dictionary 9th Edn.; Aiyer’s Judicial Dictionary, 10th Edn.; Ballantine’s Law Dictionary,

3rd Edn. and Black’s Law Dictionary, 4th Edn. ref.

(g) Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997)---

----S.31---"Surcharge"---"Tariff", "rate" and "charge"---Distinction---"Surcharge" was entirely different from a

"tariff", "rate" or "charge"---Surcharge meant something chargeable over and above the original levy in

whatever shape it may be---Surcharge was neither an independent levy nor a tax.

Gadoon Textile Mills and 814 others v. WAPDA and others 1997 SCMR 641 ref.

(h) Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997)---

----S. 31(5)---Equalization surcharge on electricity, imposition of---Federal Government empowered to impose

surcharge on electricity---Government enjoyed exclusive power to impose surcharge on electricity against a

distribution company---In respect of 'tariff', 'charge' or 'rate' , the Government was bound to notify tariff as

determined by the National Electric Power Regulatory Authority (NEPRA) but in case of imposition of

surcharge in terms of S. 31(5) of the Regulation of Generation, Transmission and Distribution of Electric Power

Act, 1997, the Government enjoyed exclusive powers---Equalization Surcharge could not be considered as

independent tax or levy and Government enjoyed power to impose the same.

Gadoon Textile Mills and 814 others v. WAPDA and others 1997 SCMR 641 ref.

(i) Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997)---

----Ss. 3, 7(3)(a) & 31(5)---National Power Tariff and Subsidy Policy Guidelines, 2014---Quantum of surcharge

on electricity, determination of---Outside the domain of National Electric Power Regulatory Authority

(NEPRA)---Under the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997,

NEPRA was not given the authority to determine the quantum of surcharge---Government was not bound to

refer the matter of imposition of surcharge to NEPRA prior to its imposition; however, it was optional for the

Government to refer the matter of surcharge to NEPRA prior to its imposition or to impose the same directly

while exercising powers as contemplated under S.31(5) of the Regulation of Generation, Transmission and

Distribution of Electric Power Act, 1997.

(j) Interpretation of statutes---

----Provision of law---Ordinary meaning---While interpreting any provision of law, the ordinary meaning of a

word used therein should be followed until and unless the context provided otherwise.

(k) Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997)---

----Ss. 31(4) & (5)---Constitution of Pakistan, Art. 199---Constitutional petition---Surcharge on electricity---

Surcharge imposed through a notification---Notification, error in ---Surcharge was issued through a notification

wherein it was incorrectly mentioned that same was issued under S.31(4) of the Regulation of Generation,

Transmission and Distribution of Electric Power Act, 1997, whereas the correct provision for such purpose was

S.31(5) of the said Act---Effect---Nomenclature of surcharge had least relevance rather the purpose and

background of its imposition were pivotal---Omission to mention the relevant provision of law in a notification

or wrong mentioning thereof did not make any difference especially when the context and language of the

document vividly encompassed the purpose and legal backing thereof---Constitutional petition was dismissed

accordingly.

Zaman Cement Company (Pvt.) Ltd. v. Central Board of Revenue and others 2002 SCMR 312 and

Qurban v. Senior Member, Board of Revenue Sindh 2000 CLC 1083 ref.

(l) Notification---

----Omission to mention the relevant provision of law in a notification or wrong mentioning thereof did not

make any difference especially when the context and language of the document vividly encompassed the

purpose and legal backing thereof.

(m) Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997)---

----S. 31(5)---Constitution of Pakistan, Arts. 73 & 199---Constitutional petition---Equalization surcharge on

electricity, levy of---Constitutionality---Contention of petitioners that equalization surcharge was imposed by

the Federal Government without approval by the National Assembly and Senate, therefore the same was

unconstitutional---Validity---Section 31(5) of the Regulation of Generation, Transmission and Distribution of

Electric Power Act, 1997, under which the equalization surcharge was imposed, was incorporated in the said

Act through Finance Act, 2008---Said section still held the field and till the time the same was declared ultra

vires by a competent forum, any action taken thereunder could not be dubbed as unconstitutional---

Constitutional petition was dismissed accordingly.

(n) Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997)---

----S. 31(5)---Constitution of Pakistan, Arts. 154(1) & 199 & Fourth Sched. Part II, Entry No.4---Constitutional

petition---Equalization surcharge on electricity, levy of---Council of Common Interest---Scope---Federal

Government did not consult Council of Common Interest before imposing surcharge on electricity---Legality---

Council of Common Interest could form policies regarding electricity in respect of new projects or for

resolution of a dispute arising between two federating units but its scope could not be lowered down to

determine surcharge especially when matters regarding generation, transmission and distribution were being

controlled by National Electric Power Regulatory Authority (NEPRA)---No illegality had been committed by

the Government while imposing surcharge without intervention of Council of Common Interest---No enactment

could be declared ultra vires just for the reason that the same was promulgated without intervention of the

Council of Common Interest provided the same otherwise stood justified in the peculiar state of affairs---

Constitutional petition was disposed of accordingly.

Shaikh Nadeem Younas, Chief Executive, Noble Textile Mills Pattoki District Kasur v. WAPDA and 4

others 1996 CLC 1090 ref.

(o) Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997)---

----S. 31(5)---Constitution of Pakistan, Arts. 157 & 199 & Fourth Sched. Part II, Entry No.4---Constitutional

petition---Equalization surcharge on electricity---Federal and Provincial Governments both empowered to levy

equalization surcharge---Plea that only Provincial Government had exclusive power to levy any tax or surcharge

on distribution of electricity ---Validity---Provincial Government had been empowered to levy tax on

distribution of electricity in the province but the said fact did not take away the powers of the Federal

Government to do the same mainly because exercise of such powers by the Provincial Government was not

mandatory rather optional---When both Federal and Provincial Governments had simultaneous jurisdiction to

legislate qua a particular subject, preference should be given to the Federal Government---Subject of electricity

was simultaneously on the Federal as well as Provincial Legislative List, hence the Federal Government as well

as the Provincial Government could legislate qua the subject without entering into arena of each other---Subject

of electricity was available at Entry No.4 in the Federal Legislative List, thus the Federal Government was fully

competent to impose the equalization surcharge in the present case---Powers of the Federal government to levy

any surcharge on the electricity could not be declared illegal merely on the ground that Provincial Government

enjoyed the power to impose such levy/tax---Constitutional petition was dismissed accordingly.

Gadoon Textile Mills and 814 others v. WAPDA and others 1997 SCMR 641 ref.

(p) Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997)---

----S. 31(5)---Constitution of Pakistan, Art.199---Constitutional petition---Equalization surcharge on electricity,

levy of---Levy of surcharge for a limited period---Not exorbitant---Plea of petitioners that surcharge in question

was excessive and unreasonable, thus not sustainable---Validity---Price of the material which formed

components of fuel used for production of electricity had increased manifold---Price of furnace oil had

increased---Average cost of a unit of electricity produced from all sources was more than the price at which it

was being sold to the consumers---Levy of surcharge for a limited period could not be considered exorbitant or

excessive especially in the wake of the subsidy being provided by the government to different categories of

electricity consumers---Constitutional petition was dismissed accordingly.

(q) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction of the High Court ---Scope---Executive orders, legality of---High

Court could exercise its powers as contemplated under Art. 199 of the Constitution to determine the legality of

an order passed by the executive provided it was established on record that the action impugned seemed to be

arbitrary or mala fide on account of colourable exercise on the part of the competent authority or the same

appeared to be violative of any law of the land.

Dossani Travels (Pvt.) Ltd. and others v. Messrs Travels Shop (Pvt.) Ltd and others PLD 2014 SC 1 and

Dr. Akhtar Hassan Khan and others v. Federation of Pakistan and others 2012 SCMR 455 ref.

(r) Interpretation of statutes---

----Harmonious interpretation, principle of---Scope---While applying the principle of “harmonious

interpretation of a statute” the courts may take note of matters of common knowledge, the history of the times

and may assume every state of facts which could be conceived---Courts must always presume that the

Legislature understood and correctly appreciated the need of its own people and that discrimination, if any, was

based on adequate and intelligible grounds---Courts, thus in routine would accept an interpretation, which

would be in favour of constitutionality rather than the one which would render the same unconstitutional.

(s) Interpretation of statutes---

----"Reading down" or "reading into" a statute, principle of---Scope---When the Court, during the course of

hearing of a matter, came to the conclusion that any provision of a statute offended against the parent legislation

or was violative of any provision of the Constitution or the same was enacted by an incompetent authority, it

could declare it ultra vires following the principle of "reading down" or "reading into" the provision irrespective

of the fact as to whether the vires of said provision had been assailed before the court or not---Foremost

consideration before the courts should be to save the statute while following the rule of "reading down" or

"reading into" a provision---Court was to see that while following the said principle, could the statute remain

functional.

Province of Sindh through Chief Secretary and others v. M.Q.M. through Deputy Convener and others

PLD 2014 SC 531; Syed Mukhtar Hussain Shah v. Mst. Saba Imtiaz PLD 2011 SC 260; Arshad Mehmood v.

Commissioner/Delimitation Authority, Gujranwala and others PLD 2014 Lah. 221; Lone Cold Storage Lahore

v. Revenue Officer, Lahore Electric Power Co. 2010 PTD 2502 and Rub Nawaz Dhadwana Advocate and

others v. Rana Muhammad Akram, Advocate and others W.P. No.16793 of 2014 ref.

(t) Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997)---

----S. 31(5)---Constitution of Pakistan, Arts. 73 & 199 ---Constitutional petition---Vires of S.31(5) of the

Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997---"Reading down" of a

provision in a statute, principle of---Scope---When any provision of a statute offended the parent legislation or

was violative of any provision of the Constitution or was enacted by an incompetent authority, it could be

declared as ultra vires following the principle of "reading down"---Section 31(5) of the Regulation of

Generation, Transmission and Distribution of Electric Power Act, 1997, neither offended against any clear cut

provision of the parent statute or the Constitution nor did it run against the purposes for which the Regulation of

Generation, Transmission and Distribution of Electric Power Act, 1997, was promulgated inasmuch as the

prime purpose for promulgation of the said Act was to streamline the affairs regarding generation, transmission

and distribution, whereas S.31(5) had been added to the said Act just to enable the Government to recover any

amount which was to be incurred by it for implementation of uniform tariff irrespective of the determinations of

National Electric Power Regulatory Authority (NEPRA) in respect of 'rate', 'charge' or 'tariff'---Section 31(5) of

the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997, was added by virtue

of Finance Act, 2008 and there was no denying the fact that National Assembly could amend any law or

introduce any addition therein just to cope with the future situation through Finance Act while exercising

powers vested under Art. 73 of the Constitution---Both vital conditions for declaring a provision as ultra vires

following rule of "reading down" were missing in the present case---Section 31(5) of the Regulation of

Generation, Transmission and Distribution of Electric Power Act, 1997, could not be declared as ultra vires

under the rule of "reading down"---Constitutional petition was dismissed accordingly.

(u) Constitution of Pakistan---

----Art. 25---Equality of citizens---Discrimination---Scope---Discrimination against a group or an individual

implied making an adverse distinction with regard to some benefit, advantage or facility with an element of

unfavourable biasness---Equality must be amongst the equals---Guarantee (of equality) enshrined under Art. 25

of the Constitution was only that no person or class of persons shall be denied the same protection of law which

was enjoyed by other persons or other classes in the same set of circumstances---Although persons similarly

situated or in similar circumstances were to be treated in the same manner but the equality clause particularly

the provision about the equal protection of the law did not connote that all citizens shall be treated alike under

all set of circumstances and conditions---Equality of citizens did not mean that all laws must apply to all the

subjects or that all subjects must have the same rights and liabilities---Concept of equality before the law did not

involve the idea of absolute equality among human beings which was a physical impossibility---Protection of

equal laws did not mean that all laws must be uniform.

(v) Constitution of Pakistan---

----Arts. 25 & 199---Equality of citizens---Classification---Constitutional jurisdiction of the High Court---Scope

---Classification which was not arbitrary, capricious or violative of the doctrine of equality could not be

questioned in constitutional jurisdiction of the High Court.

Shahid Ahmed v. OGDC and others 2014 SCMR 1008; Human Rights Case No.40927-S of 2012 PLD 2013

SC 829 and Secretary Economic Affairs Division, Islamabad and others v. Anwarul Haq Ahmed and others

2013 SCMR 1687 ref.

(w) Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997)---

----S. 31(5)---Constitution of Pakistan, Arts. 25 & 199---Constitutional petition---Equalization surcharge on

electricity, imposition of---Discrimination---Scope---Plea of petitioners that surcharge in question had not been

imposed against the consumers of one of the electric supply companies (K-Electric), thus other electric supply

companies were being discriminated against ---Validity---Character of electric company in question i.e. K-

Electric was entirely different from the other Distribution, Generation and Transmission companies, inasmuch

as it was the sole electric company in the country which had multiple licenses of generation, transmission and

distribution---Plea of discrimination could be agitated when similarly placed persons were treated differently

but in the present case none of the other distribution companies had multiple licenses of generation,

transmission and distribution, thus, precedent of K-Electric could not be quoted to press into service point of

discrimination---Constitutional petition was dismissed accordingly.

N.-W.F.P. Public Service Commisision and others v. Muhammad Arif and others 2011 SCMR 848 ref.

(x) Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997)---

----S. 31(5)---Constitution of Pakistan, Arts. 25 & 199---Constitutional petition---Equalization surcharge on

electricity, imposition of---Discrimination---Scope---Industrial consumers---Plea of petitioners that surcharge in

question was discriminatory as it was only imposed against industrial consumers---Validity---Different tariffs

were determined for different consumers---While determining tariffs for different category of consumers, the

authorities concerned had to consider the geographic position of area, and the nature and purpose of supply---

Industrial consumers were comparatively financially sound as compared to other categories of consumers, thus

they could not be yoked with domestic consumers etc. in respect of tariff of electricity--- Constitutional petition

was dismissed accordingly.

Messrs Elahi Cotton Mills Ltd. and others v. Federation of Pakistan PLD 1997 SC 582 and Human

Rights Case No.14392 of 2013 2014 SCMR 220 ref.

(y) Subsidy--

----Provision of subsidy was not a vested right and the government enjoyed power to withdraw the same if

already provided to the citizens.

Human Rights Case No.14392 of 2013 2014 SCMR 220 ref.

(z) Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997)---

----S. 31(5)---Constitution of Pakistan, Art.199---Constitutional petition---Equalization surcharge on electricity,

imposition of---Legality---When the Government was bound to provide electricity to certain categories of

consumers at subsidized rates while considering it as their fundamental right, it also reserved the right to

recover the expenditures being incurred on its generation, transmission and distribution in addition to any other

charges from the financially sound customers---Due to the economic condition of the government at the

relevant time, the imposition of impugned surcharge to abridge the gap between the subsidy being given to

different categories of consumers and funds available with the government, the surcharge was neither

unconstitutional nor unjustified---Government was providing subsidy on electricity in order to share the

financial burden with electricity consumers who were unable to bear the day to day increase in the price of the

electricity---When the government was facilitating the consumers in the shape of subsidy etc., it was everyone's

national as well as moral obligation, in particular the persons/customers who could afford, to assist the

government to wriggle out from financial turmoil---High Court observed that the government shall have to take

stern action against the persons who were involved in electricity theft and the officials/officers of the

department who facilitated such theft; that, in respect of tariff, while making a uniform policy, the output of the

distribution company should be viewed critically and the inefficient companies should be put at guard in the

first instance and in case of no improvement they should be blacklisted forthwith; that, the competent authority

should take steps to control all kinds of losses like line losses, theft, etc., by using modern devices; that the

government should take steps to produce electricity by using less expensive sources; that a detailed study could

be undertaken to consider the alternate sources of generation being used by other countries; that for generation

through thermal sources, local sources of fuel like coal, natural gas etc. should be preferred, and that renewable

sources for generating electricity including wind and solar power could also be utilized---Constitutional petition

was dismissed accordingly.

Human Rights Case No.14392 of 2013 2014 SCMR 220; Engineer Zafar Iqbal Jhagra v. Federation of

Pakistan and others 2013 PTD 1491; Alleged Corruption in Rental Power Plants etc. 2012 SCMR 773; Pearl

Continental Hotel and another v. Government. of N.-W.F.P. and others 2010 PTD 2018; Pakistan Industrial

Development Corporation v. Pakistan through Secretary Ministry of Finance 1992 SCMR 891; Dawood

Hercules v. Collector of Sales Tax 2007 PTD 1161; Wattan Party through President v. Federation of Pakistan

and others PLD 2006 SC 697; Caltex Oil (Pakistan) Ltd. v. Collector, Central Excise and Sales Tax and others

2005 PTD 480; The Province of Punjab and another v. National Industrial Cooperative Credit Corporation and

another 2000 SCMR 567; Collector of Customs and others v. Sheikh Spinning Mills 1999 SCMR 1402; M/s

Shahbaz Garments (Pvt.) Ltd. and others v. Pakistan through Secretary Ministry of Finance and others PLD

2013 Sindh 449; M/s Azgard Nine Ltd. v. Pakistan through Secretary and others PLD 2013 Lah. 282; Abdul

Majid and another v. Province of East Pakistan and others PLD 1960 Dacca 502; Gatron (Industries) Limited v.

Govt. of Pakistan and others 1999 SCMR 1072; Government of Balochistan v. Azizullah Memon and 16 others

PLD 1993 SC 341; Aftab Shahban Mirani v. President of Pakistan and others 1998 SCMR 1863; Gadoon

Textile Mills and 814 others v. WAPDA and others 1997 SCMR 641; Mian Muhammad Nawaz Sharif v.

President of Pakistan and others PLD 1993 SC 473; Pakistan through Secretary Cabinet Division and others v.

Nawabzada Muhammad Umar Khan and others 1992 SCMR 2450; Haji Abdullah Khan and others v. Nisar

Muhammad Khan and others PLD 1965 SC 690; Abdul Latif v. Government of West Pakistan and others PLD

1962 SC 384; Syed Feroze Shah Ghillani and others v. Federation of Pakistan and others PLD 2013 Lah. 659;

Exide Pakistan Ltd. Cantonment Board Clifton and another 2012 CLC 1124; Sanofi Aventis Pakistan Ltd. and

others v. Province of Sindh and 2 others PLD 2009 Kar. 69; Rashid ur Rehman v. Mian Iqbal Hassain PLD

2005 Lah. 416; Standard Chartered Bank v. Karachi Electric Supply Corporation Ltd. PLD 2001 Kar. 344;

National Industrial Cooperative Credit Corporation Ltd. and another v. Province of Punjab/Government of

Punjab through Secretary, Cooperative Department and another PLD 1992 Lah. 462 and Naseem Mehmood v.

Principal King Edward Medical College and others PLD 1965 (W.P.) Lahore 272 distinguished.

(aa) Interpretation of statutes---

----Retrospective effect---Scope---No legislation or policy could be given retrospective effect until and unless

the legislature had decided so.

Petitioners by:

Azhar Siddique; Mian Mehmood Rashid, Babar Ilyas Chatha and Roohi Saleha for one Petitioner; Mian

Mehmood Rashid and Ms. Roohi Saleha for 146 Petitioners; Hussain Ibrahim Muhammad for 6 Petitioners;

Khurram Shahbaz Butt for 10 Petitioners; Hafeez ur Rehman Ch. for 4 Petitioners; Tahir Zia Mahar for one

Petitioner; Moazzam Ali Shah for one Petitioner; Sohail Ibne Saraj for one Petitioner; Ch. Imtiaz Ahmad for 4

Petitioners; Zulqarnain Hamid for 15 Petitioners; Mustafa Kamal for 11 Petitioners; Azhar Siddique for 8

Petitioners; Wasif Majeed for one Petitioner; M.A. Hameed Awan for two Petitioners; Barrister Ahmed Parvez

for two Petitioners; Fiaz Ahmad Khan Baloch for 5 Petitioners; Muhammad Anam Saleem and Ms. Mehnaz

Sheraz for one Petitioner; Mian Mehmood Rashid, Ms. Roohi Saleha and Mustafa Kamal for one Petitioner;

Zahid Aslam Malik for three Petitioners; Usman Akram Sahi, Muhammad Mujtaba and Furqan Naveed for one

Petitioner; Shahzad Ahmad Durrani for two Petitioners; Sharjeel Ijaz and Adnan Ahmad for 5 Petitioners; Mian

Muhammad Hussain Chotiya for 9 Petitioners; Khurram Shahbaz Butt and Mirza Bilal Zafar for two

Petitioners; Abdul Waheed Habib for 7 Petitioners; Muhammad Nawaz for one Petitioner; Ch. Fareed Anwar

for two Petitioners; Mirza Muhammad Abu Bakar Haider and Muhammad Mohsin Virk for one Petitioner;

Mian Khalid Habib Elahi for one Petitioner; Rana Ali Akbar Khan for 6 Petitioners; Usman Nawab, H.M. Adil

Sikandar and Faiz Rasool Khan Jalbani for two Petitioners; Sharjeel Ijaz, Adnan Ahmad and Abdul Waheed

Habib for one Petitioner; Ch. Ishtiaq Anwar for one Petitioner; Khalil Ur Rehman for 5 Petitioners; Rana Sajid

Rasool for one Petitioner; N.A. Butt for one Petitioner; Barrister Usman Rashid Cheema for two Petitioners;

Ch. Muhammad Mohsin Virk for 4 Petitioners; Muhammad Mohsin Virk for two Petitioners; Nasir Ahmad

Awan for one Petitioner; Ch. Khalil Ur Rehman for one Petitioner and Nemo for 321 Petitioners.

Respondents by:

Naseer Ahmad Bhutta, Addl. Attorney-General for Pakistan with Muhammad Zikria Sheikh, Nasar

Ahmad and Mian Tariq Ahmad, Dy. Attorney-Generals,

Rana Shamshad Khan, Asstt. Advocate-General.

Sheikh Muhammad Ali for Ministry of Water and Power, Government of Pakistan, assisted by Barrister

Haris Ramzan, Ms. Mubashra Khalid, Waseem Mehmood Malik and Nusrat Hashmi.

Umer Sharif for NEPRA.

Dr. Muhammad Irtiza Awan, Tahir Zia Mahar and Yasin Badar Legal Consultant for LESCO.

. Saad Rasool for WAPDA.

Orangzeb Mirza for GEPCO.

Mian Muhammad Javed for LESCO, FESCO and GEPCO.

Ch. Fayyas Ahmad Sanghaira for FESCO, PEPCO and LESCO

Sarfraz Ahmad Cheema for FESCO.

Syed Murtaza Ali Zaidi for Respondnets (in W.P. Nos. 18532 of 2011, 16607 of 2012, 11033 of 2011,

11034 of 2011, 24574 of 2013, 24363 of 2013, 24050 of 2013, 17886 of 2011, 27308 of 2013 and 23729 of

2013.

Mian Zafar Iqbal Kalanori for Respondnet No.4 in W.P. No.9748 of 2013.

Date of hearing: 26th September, 2014.

JUDGMENT

SHUJAAT ALI KHAN, J.---Through this consolidated judgment I intend to decide this petition as well

as those mentioned in Schedules-B and C having commonality of facts and law viz. in the petitions mentioned

in Schedule-B, the petitioners have challenged the imposition of Surcharge and its subsequent enhancement

through Notifications dated 15-3-2011 and 6-5-2011, respectively, whereas in the petitions mentioned in

Schedule-C (including the instant petition), the petitioners have assailed the levy of Equalization Surcharge

through Notification dated 5-8-2013.

2. Briefly, the facts, forming factual canvass of these petitions, are that the Government of Pakistan, Ministry of

Water and Power, through Notification dated 15-3-2011, levied Surcharge on electricity at the rate of 2%. By

virtue of Notification dated 6-5-2011 the rate of said Surcharge was enhanced from 2% to 4%. Later on, the

Government withdrew the Surcharge in question vide Notification dated 16-5-2012. However, through

Notification dated 5-8-2013, the Government again levied Surcharge known as "Equalization Surcharge' (EQ

Surcharge) but subsequently withdrew the same through Notification dated 11-10-2013. Aggrieved by the

imposition/enhancement of Surcharge in dispute, the petitioners have preferred these petitions.

3. During the course of hearing, I have observed that despite repeated calls, in certain cases neither the

petitioners nor their learned counsel are in attendance. Further, there is no intimation regarding petitioners or

their counsel's engagement elsewhere despite the fact that names of the learned counsel for the parties have duly

been reflected in the cause list. In this situation, such petitions can conveniently be dismissed due to non-

prosecution, however, as all the petitions have not only been clubbed together but the question of law involved

therein is also common, the same are being decided through this single judgment. Moreover, the decision of

these matters cannot be lingered on for an indefinite period awaiting representation of some of the petitioners

especially when learned counsel representing the petitioners, in major number of cases, are present before this

Court.

4. The contentions urged by Mian Mehmood Rashid, Advocate for petitioners can be summed up in the words

that no levy/surcharge can be imposed without determination by the National Electric Power Regulatory

Authority "NEPRA", as envisaged under section 31(4) of the Regulation of Generation, Transmission and

Distribution of Electric Power Act, 1997 (hereinafter to be referred as the Act, 1997); that those consumers,

irrespective of their category, who are not enjoying any kind of subsidy, are not liable to pay anything over and

above the tariff determined by NEPRA; that imposition of impugned Surcharge amounts to compulsory

extraction of money; that according to Article 157 of the Constitution of Islamic Republic of Pakistan, 1973

(hereinafter to be referred as the Constitution) only the Provincial Government can impose any surcharge etc.

on the distribution of the electricity within the Province; that section 31(5) of the Act, 1997 is ultra vires to the

provisions of the Constitution; that the matter was not routed through the Council of Common Interest (C C I),

as postulated under Article 154 of the Constitution, thus the imposition of impugned Surcharge is illegal; that

certain other provisions of the Act, 1997 are also ultra vires to the Constitution; that tax/levy/surcharge cannot

be imposed through a Finance Bill rather the matter is to be approved by both the Houses whereas impugned

Surcharge has been imposed without such approval; that in National Power Tariff and Subsidy Policy

Guidelines, 2014, it has been admitted that EQ Surcharge was imposed to recover the amount due on account of

line losses or subsidy given to the consumers of other DISCOs, thus, the same is not justifiable; that

discriminatory attitude of the government was overwhelmingly manifested when EQ Surcharge, imposed

through Notification dated 5-8-2013, was confined to industrial consumers only and that to fill up the gap

between the cost of electricity and the subsidy/line losses of inefficient Distribution Companies (DISCOs), the

consumers of the DISCOs, which are performing their affairs in an efficient manner, have been over-burdened.

In addition to his oral submissions, learned counsel has relied upon the cases reported as Human Rights Case

No.14392 of 2013 (2014 SCM R 220), Engineer Zafar Iqbal Jhagra v. Federation of Pakistan and others (2013

PTD 1491), Alleged Corruption in Rental Power Plants and others (2012 SCMR 773), Pearl Continental Hotel

and another v. Govt. of N.-W.F.P. and others (2010 PTD 2018), Pakistan through Secretary Finance and others

v. Messrs Lucky Cement and another (2007 SCMR 1367), Wattan Party through President v. Federation of

Pakistan and others (PLD 2006 SC 697), Caltex Oil (Pakistan) Ltd. v. Collector, Central Excise and Sales Tax

and others (2005 PTD 480), The Province of Punjab and another v. National Industrial Cooperative Credit

Corporation and another (2000 SCMR 567), Collector of Customs and others v. Sheikh Spinning Mills (1999

SCMR 1402), Gatron (Industries) Limited v. Govt. of Pakistan and others (1999 SCMR 1072), Aftab Shahban

Mirani v. President of Pakistan and others (1998 SCMR 1863), Messrs Elahi Cotton Mills Ltd. and others v.

Federation of Pakistan (PLD 1997 SC 582), Gadoon Textile Mills and 814 others v. WAPDA and others (1997

SCMR 641), Govt. of Balochistan v. Azizullah Memon and 16 others (PLD 1993 SC 341), Mian Muhammad

Nawaz Sharif v. President of Pakistan and others (PLD 1993 SC 473), Pakistan through Secretary Cabinet

Division and others v. Nawabzada Muhammad Umar Khan and others (1992 SCMR 2450), Pakistan Industrial

Development Corporation v. Pakistan through Secretary Ministry of Finance (1992 SCMR 891), Haji Abdullah

Khan and others v. Nisar Muhammad Khan and others (PLD 1965 SC 690), Abdul Latif v. Govt. of West

Pakistan and others (PLD 1962 SC 384), Messrs Shahbaz Garments (Pvt.) Ltd. and others v. Pakistan through

Secretary Ministry of Finance and others (PLD 2013 Sindh 449), Messrs Azgard Nine Ltd. v. Pakistan through

Secretary and others (PLD 2013 Lah. 282), Syed Feroze Shah Ghillani and others v. Federation of Pakistan and

others (PLD 2013 Lah. 659), Exide Pakistan Ltd. Cantonment Board Clifton and another (2012 CLC 1124),

Sanofi Aventis Pakistan Ltd. and others v. Province of Sindh and 2 others (PLD 2009 Karachi 69), ICC Textiles

Ltd. and 31 others v. WAPDA and 15 others (2009 CLC 1343), Dawood Hercules v. Collector of Sales Tax

(2007 PTD 1161), Rashid ur Rehman v. Mian Iqbal Hassain (PLD 2005 Lah. 416), Standard Chartered Bank v.

Karachi Electric Supply Corporation Ltd. (PLD 2001 Karachi 344), National Industrial Cooperative Credit

Corporation Ltd. and another v. Province of Punjab/Government of Punjab through Secretary, Cooperative

Department and another (PLD 1992 Lahore 462), Naseem Mehmood v. Principal King Edward Medical College

and others [PLD 1965 (W.P.) Lahore 272], Abdul Majid and another v. Province of East Pakistan and others

(PLD 1960 Dacca 502), I.T.As Nos.3934/LB/2002 and other allied matters [2007 PTD (Trib.) 181] and I.T.As

Nos.5138/LB/2004 and another allied matter [2007 PTD (Trib) 139].

5. On the constitutional plane, the legal propositions and basic objections, put forwarded by Mr. Azhar

Siddique, Advocate for petitioners in some of the petitions, are to the effect that as the source for imposition of

impugned surcharge is missing the same cannot be given legal blanket and that as the impugned Notifications

were not issued under section 31(5) of the Act, 1997, the same cannot be allowed to hold the field even for a

moment.

6. While controverting the submissions made by learned counsel for the petitioners, Sheikh Muhammad Ali,

Advocate, representing Ministry of Water and Power, Government of Pakistan, states that as impugned

notifications have already been withdrawn by the government, these petitions, as a matter of fact, have become

infructuous; that NEPRA is only regulatory authority for determination of rates, charges and tariffs but it has

nothing to do with the surcharge which exclusively falls within the domain of the government in terms of

section 31(5) of the Act, 1997; that NEPRA being only regulatory authority cannot pre-empt the powers of the

government to levy Surcharge; that under the new scheme, the generation, transmission and distribution of

electricity is being governed through distinct licensees, thus, the government, with a view to raise funds for

providing subsidy to the consumers has to impose Surcharge at certain points of time; that as the surcharge

cannot be equated with charge, rate and tariff, it has nothing to do with NEPRA; that provisions of Article

157(2) of the Constitution are only enabling and not mandatory in nature; that the Provincial Government can

levy a surcharge only when it constructs dams, grid stations etc. or purchases electricity in bulk from the

Federation for its onward distribution to the consumers in the Province; that wrong mentioning of a provision of

law or non-mentioning thereof does not make any difference as the same can be cured while following the

principle of reading down; that the periodical imposition of EQ Surcharge is proof positive of the fact that the

government resorted to such exercise just to cope with financial pandemonium for the time being; that even

today the government is providing subsidy to the electricity consumers approximately at the rate of Rs.3/4 per

unit; that in the instant case, the Golden Principle of interpretation is to be followed to make up any procedural

deficiency on the part of government; that as the government is providing subsidy considering it as obligation, it

reserves the right to impose Surcharge to raise funds in the hour of necessity and that after 18th Amendment

subject of electricity is also included at item No.4 in the Federal List, thus, the Surcharge in question was rightly

imposed by the Federal Government.

7. The legal formulations put forwarded by the learned Additional Attorney General, assisted by the learned

Deputy Attorney Generals, are to the effect that though the power regarding determination of tariff vests with

NEPRA but to notify the same is prerogative of the Federal Government as postulated under section 31(4) of

the Act, 1997; that Article 157(2)(b) of the Constitution does not debar the Federation to levy any surcharge on

electricity through DISCOs; that the word used under Article 157(2) of the Constitution is "may" therefore, if

the Provincial Government does not impose any surcharge on electricity, the Federal Government cannot be

debarred to do so; that the imposition of surcharge does not fall within the subjects which are to be referred to

CCI rather the same can be imposed by the government through Finance Act and that imposition of EQ

Surcharge has already been declared legal by a learned Division Bench of High Court of Balochistan, Quetta

through its judgment, dated 8-7-2014, rendered in Constitutional Petition No.904/2011 and other allied matters.

To substantiate his contentions, learned Additional Attorney General has relied upon the cases reported as

Gadoon Textile Mills and 814 others v. WAPDA and others (1997 SCMR 641), Shamshad Bibi v. District

Judge, Multan and 2 others (2012 YLR 277) and Shaikh Nadeem Younas, Chief Executive, Noble Textile Mills

Pattoki District K asur v. WAPDA and 4 others (1996 CLC 1090).

8. Mr. Muhammad Ilyas Khan Advocate, appearing on behalf of LESCO, pleads that if for the sake of

arguments it is admitted that there is some lacuna in the issuance of the notifications, in question, the same can

be filled up by this Court while following the dictum laid down in the cases reported as Dr. Akhtar Hassan

Khan and others v. Federation of Pakistan (2012 SCMR 455), Commissioner of Income Tax v. Messrs Eli Lilly

Pakistan (Pvt.) Ltd. (2009 PTD 1392), Messrs Elahi Cotton Mills Ltd. and others v. Federation of Pakistan

(PLD 1997 SC 582) and Indus Jute Mills Ltd. v. Federation of Pakistan and 3 others (2009 PTD 1473) .

9. Mr. Sarfraz Ahmad Cheema, Advocate for FESCO, in furtherance of the arguments put forwarded by learned

counsel for LESCO states that second part of impugned notifications renders it unambiguously clear that the

same was issued by the government while exercising powers as contemplated under section 31(5) of the Act,

1997, thus, the impugned Notifications were issued validly; that as language of the notification is explicit, the

objection raised by learned counsel for the petitioners has no worth especially when the same is put in

juxtaposition to the judgment rendered by the Hon'ble Supreme Court of Pakistan in the case Messrs Jame's

Construction Co. (Pvt.) Ltd. through Executive Director v. Province of Punjab and 3 others (PLD 2002 SC 310).

10. Mr. Aurangzeb Mirza Advocate, representing GEPCO, states that after admission on the part of counsel for

the petitioners that the Federal government enjoys power to levy surcharge in view of section 31(5) of the Act,

1997, there is nothing to be left for adjudication by this Court rather the petitions deserve outright dismissal and

that as the preposition, under discussion, has already been set at rest by a learned Division Bench of High Court

of Balochistan, the entire exercise is nothing but wastage of precious time of this court.

11. Learned counsel for the petitioners, while exercising their right of rebuttal, submit that Federal Government

cannot impose any surcharge while pressing into service the question of subsidy being given to the consumers

of other DISCOs; that the subsidy being provided to the consumers cannot be withdrawn by the Government in

view of the verdict of the apex Court of the country in Human Rights Case No.14392 of 2013 (supra); that as

the case-law being relied upon by the respondents side relates to tax matters, the same is of no help to the

respondents; that tax and surcharge being polls apart from each other cannot be intermingled; that the

consumers/petitioners before this Court cannot be burdened with any extra surcharge/levy just to facilitate or

accommodate the consumers of inefficient DISCOs in other provinces as lapse on the part of one entity cannot

be made ground for punishment to another; that the Federal Government can manage cost of electricity by using

less expensive sources for its production in addition to controlling electricity theft etc; that argument advanced

by learned counsel appearing on behalf of the respondents that EQ Surcharge is not payable on consumption of

electricity rather it is on sale thereof is not tenable as on the face of it the same is payable on consumption and

not on sale; that if for the sake of arguments it is admitted that EQ Surcharge was imposed by the government,

while exercising powers under section 31(5) of the Act, 1997, the same can be set at naught by following the

principle of "reading down"; that the judgment passed by the High Court of Balochistan is not binding on this

Court; that, as a matter of fact, the question regarding EQ Surcharge has not been dealt with by High Court of

Balochistan independently rather the same was taken up along with proposition qua imposition of Fuel Price

Adjustment; that the judgment of High Court of Balochistan is also distinguishable on the ground that QESCO

cannot be equated with distribution companies, whose consumers have instituted these petitions; that the

judgment passed by the High Court of Balochistan cannot be considered on all fours as the principle of "reading

down" has not been discussed in the said judgment; that Karachi Electricity Supply Company (KESC now K-

Electric) has not been burdened with such surcharge which speaks volumes about the discriminatory attitude of

Government of Pakistan, Ministry of Water and Power towards different DISCOs. To conclude his arguments,

Mr.Azhar Siddique, Advocate has pleaded that had the notification been issued under section 31(5) of the Act,

1997, the petitioners would have definitely challenged the same while calling in question the vires of said

section.

12. At this juncture, learned Additional Attorney General, assisted by Sheikh Muhammad Ali, Advocate, in

furtherance of his arguments enumerated above, states that as the K-Electric has multiple licenses viz. in respect

of "Generation", "Transmission" and "Distribution", the same cannot be quoted as precedent in respect of

tariff/surcharge being levied against other Generation, Transmission and Distribution Companies; that since the

promulgation of the Act, 1997 all the notifications by the government are being issued under section 31(4) of

the Act, 1997, thus the impugned notifications cannot be set at naught only for the reason that the same were

issued while mentioning wrong provision of law; that as uniform policy is being followed by the government in

respect of tariffs for different DISCOs except K-Electric for the reasons narrated above, the petitioners have no

cheeks to press into service the point of discrimination; that in order to meet with raising demand of electricity,

same is being produced on commercial basis and the consumers are bound to face the brunt of fluctuation in

cost thereof, in particular the fuel being used for the said purpose; that the intent of the government is not to put

additional burden on the consumers rather is to manage funds to provide subsidy to the consumers who are not

able to bear the raising price of the electricity.

13. I have given patient hearing to learned counsel for the parties and have also scanned the relevant documents

in addition to going through the provisions of law as well as the case-law cited at the bar.

14. Firstly, taking up the plea of the respondents that after withdrawal of impugned notifications, these petitions

have become infructuous, I do not find myself in agreement on the said point for the reason that not only the

imposition of Surcharge has been challenged in these petitions but the petitioners have also prayed for refund of

the amount already deducted on that account.

15. It is of common knowledge that in this era, the electricity has assumed crucial role for survival of a nation

and to compete with others in the comity of nations. The energy, as such, has become one of the basic

components of everyday life. With the change in seasonal cycle and raising demand, the production of the

electricity on priority basis through alternate sources has become one of the foremost challenges for the persons

at the helm of the affairs of a State. With a view to fulfil the raising demand of electricity the government is

compelled to introduce lucrative packages for private power generation entities just to expand the sources for

production of electricity. During the said process, sometimes the private power generation companies, with a

view to extract maximum profit and blackmail the consumer on the one hand and the government on the other,

create a monopoly. Due to monopolistic attitude of the power generation units the consumers have to bear extra

burden. This Court, being custodian of the fundamental rights, can take judicial notice in order to have the

continuous supply of energy for the present and future domestic and commercial needs in addition to

maintaining the present sources of energy along with expansion of new sources of energy. Therefore, while

imposing the levies and fixation of rates by the Government, in particular NEPRA, a balance has to be struck

between the financial status of citizens of the country and the extent of national requirement for energy on the

one hand and available resources for electricity on the other. Thus, a very heavy duty casts upon the public

functionaries, the executive as well as judiciary to see that balance is struck in such a manner that the system

flourishes and continue progressing on the one hand and the interest of customers/citizens is ensured on the

other.

16. Now reverting to the merits of the case, out of divergent contentions urged by learned counsel for the

parties, inter alia following legal propositions have emerged out for determination by this court: -

(i) Whether word "Surcharge" carries the same meaning as those of "Tariff", "Rate" or "Charge" or it has

independent character?

(ii) Whether Surcharge is a tax and further as to whether Federal Government is empowered to impose

Surcharge in electricity bills or not?

(iii) Whether the Government is bound to refer the matter to NEPRA prior to imposition of Surcharge?

(iv)Whether a notification issued under section 31(4) of the Act, 1997 can be considered as under section 31(5)

of the said Act?

(v) Whether the matter regarding levy of Surcharge was to be routed through the Council of Common Interests

(CCI)?

(vi)Whether under Article 157 of the Constitution the provincial government has the exclusive power to levy

any tax/surcharge on distribution of electricity in the province or the Federal Government has simultaneous

powers to do so?

(vii) Whether the questioned levies are excessive and unreasonable and, hence, are liable to be struck down, in

exercise of power of judicial review by this Court?

(vii) Whether subsection (5) of section 31 of the Act, 1997 can be struck down while following the principle of

"reading down"?

(viii) Whether non-imposition of Surcharge, under discussion, against Karachi Electricity Company (KESE now

K- Electric) or against a particular category of consumers can be considered as discrimination on the part of the

government?

17. Firstly, taking up the question as to whether the word "Surcharge" can be equated with the terms known as

"Tariff" "Rate" and "Charge", it is imperative to know their respective meanings. According to K. J. Aiyar

Judicial Dictionary, 16th Edition 2014, the word "tariff" means-

"A table alphabetically arranged and containing duties, bounties, etc. charged upon merchandise exported and

imported, as settled by authority or authorities that hold commerce together.

It is a list of duties charged on specified articles; any list of charges.

Includes within its ambit not only the fixation of rates but also the rules and regulations relating to it. "

In Wharton's Law Lexicon, 14th Edition, the word "Tariff" has been defined as-

"Tariff: [Span.] a cartel of commerce, a book of rates, a table or catalogue, drawn up usually in alphabetical

order, containing the names of several kinds of merchandise, with the duties or customs to be paid for the same,

as settled by authority or agreed on between the several States that hold commerce together."

The word "Tariff" in BLACK'S LAW DICTIONARY, Eighth Edition has been defined as:--

"A schedule or system of duties imposed by a government on imported or exported goods. In the United States,

tariffs are imposed on imported goods only.

A duty imposed on imported or exported goods under such a system."

According to ADVANCED LAW LEXICON by P Ramanatha Aiyar's 4th Edition Volume 1 and 4 word

"Tariff" means:--

"Duties or customs to be paid on imports or exports, such duties collectively; law imposing these duties.

'Tariff' means a rate of tariff leviable upon the consumption of electricity in the State supplied by the licensee

and as fixed by the Tamil Nadu electricity Regulatory Commission.'

Determination, ascertainment, a table of rates of export and import duties, in which sense the word has been

adopted in English and other European languages.

Levied either on ad valorem basis or on a specific basis, customs duty on merchandise imports.

Custom, duties, toll, or tribute, payable upon merchandise exported and imported, are so called, (Tomlin)."

Similarly word "tariff" has been defined in The Chambers Dictionary 12th Edition as under:--

"a list or set of customs duties; a customs duty levied on particular goods (eg at a hotel); (a list of) standard rates

charged for a service, eg electricity or insurance; a menu; a scale of penalties established by law for sentencing

those convicted of certain crimes."

Likewise, the word "tariff" in Halsbury's Laws of India, Volume 42, has been explained as under:--

"where the exigibility to duty cannot be gathered from positive terms under a particular entry, it must be

deduced from a proper construction of the tariff entry."

The Major Law Lexicon, Volume VI, defines "tariff" in the following manner:- "

Duties or customs to be paid on imports or exports, such duties collectively; law imposing these duties." Insofar

as meaning of the word "RATE" is concerned, the same has been defined in K J Aiyar Judicial Dictionary, 16th

Edition 2014 as under: -

"The history of the use of the word ' rate' for purposes of local taxation in English law clearly shows that the

word 'rate' was used with respect to a tax which was levied on the net annual value or rateable value of lands

and buildings and not on their capital value. But according to AK Sarkar J, expressing minority view 'rate', is an

expression used to indicate an impost levied by the local authority to raise funds for its expenses. Such an

impost would be rate irrespective of the basis on which it is levied."

According to Wharton's Law Lexicon, 14th Edition, the word "Rate" means--

"A contribution levied by some public body for a public purpose, as a poor rate, a highway rate, a sewers rate,

upon, as a general rule, the occupiers of property within a parish or other area.

The term 'rate' is also used to mean a charge by a water, gas, railway, or other public undertaking for services

rendered."

In BLACK'S LAW DICTIONARY, Ninth Edition, the word "Rate" has been defined as under:--

(1) Proportional or relative value; the proportion by which quantity or value is adjusted <rate of inflation>.

(2) An amount paid or charged for a good or service <the rate for a business-class fare is $550>.

According to ENCYCLOPAEDIC LAW DICTIONARY, (Legal & Commercial), By Dr. A. R. Biswas, the

word "Rate" means-

"Rates are the principal means by which money to defray local Government expenses is raised by direct levy on

occupiers, or in certain cases owners of property within the area of the authority making the rate. Halsbury's

laws of England, 3rd Edn., Vol. 32, p.3.

'Rate' includes any fare, charge or other payment for the carriage of any passenger, animal or goods."

D

The definition of word "Rate" has been given by The Major Law Lexicon, By P Ramanatha Aiyar's, 4th

Edition, in the following manner:--

"Rate" defined. [N.B. this word is also used in combination with other words (as) occupier's rate; Owner's rate;

Rural policy-rate.]

"Rate" includes any fare, charge or other payment for the carriage of any passenger, animal or goods as Railway

rate.

"Rate" includes any toll, rent, rate, fee or charge leviable under this Act.

"Rate" includes any fare, charge, or other payment for the carriage of passengers, animals or goods.

Now reverting to word "Charge" the same has been defined in Wharton's Law Lexicon, 14th Edition as under:--

"Charge: A burden, duty, or trust; when attached to property."

According to ADVANCED LAW LEXICON by P Ramanatha Aiyar's, 4th Edition, Volume 1 & 4, the word

"Charge" means-

E

"Obligation to meet a debt, a debit to an account, or the process of debiting. It is also a legal interest in land

agreed by a borrower to secure a lone that gives the charge (often a bank or building society) a priority right to

repayment when the land is sold. A creditor's interest in company property is also called charge and must be

registered with the Registrar of Companies. Includes all taxes.

The term 'charges' in relation of fixation of price must be read ejusdem generis taking colour from the

succeeding terms-rates, duties and taxes, under Cl. 2(d). "

As far as the word "Surcharge" is concerned the same has been defined in Black's Law Dictionary, Ninth

Edition, in the following manner:--

"Surcharge, 1. n. An additional tax, charge, or cost, usu. One that is excessive.2. An additional load or burden.

3. A second or further mortgage. 4. The omission of a proper credit on an account. 5. The amount that a court

may charge a fiduciary that has breached its duty. 6. An overprint on a stamp, esp. one that changes its face

value. 7. The overstocking of an area with animals."

In Aiyer's Judicial Dictionary, 10th Edition, the word "Surcharge" has been defined in the following way:--

F

"Surcharge: "An overcharge of what is just and right".

According to Ballantine's Law Dictionary, 3rd-Edition, the word "Surcharge" means~

"An additional amount added to the usual charge, an exaction."

In Black's Law Dictionary, 4th Edition, the word "Surcharge" has been interpreted as under:--

"An over-charge; an exaction imposed or encumbrance beyond what is just or right, or beyond one's authority

or power."

G

After comparison of afore-quoted definitions one thing is clear that word "Surcharge" is entirely different from

other words and accumulatively it means something chargeable over and above the original levy in whatever

shape it may be.

18. Now coming to the point as to whether the Surcharge is a tax, I am of the view that a bare reading of

section 31(5) of the Act, 1997 renders it indubitably clear that neither it is an independent levy nor a tax rather

is part of tariff to be determined by the NEPRA. When the Legislator has declared it as part of tariff, the same

cannot be considered as an independent tax. The said preposition also came under discussion before the apex

court of the country in the matter of Gadoon Textile Mills and 814 others (supra) wherein it has been dealt with

in the following words:--

"40. After having gone through the record, we are of the view that surcharge and additional surcharge are in

substance part of electricity tariff and are not taxes. The use of the above words or use of word "levy" will not

change the nature of the charge, the same is to be ascertained on the basis of the facts as a whole and attending

circumstances."

(emphasis provided)

As far as question regarding power of the Government to impose any surcharge is concerned, it is observed that

for determination of said question perusal of section 31 of the Act, 1997 is very conducive, which for ready

reference is reproduced herein below:--

331. Tariff. (1)---As soon as may be, but not later than six months from the commencement of this Act, the

Authority shall determine and prescribe procedures and standards for determination, modification or revision of

rates charges and terms and conditions for generation of electric power, transmission, inter-connection,

distribution services and power sales to consumers by licensees and until such procedures and standards are

prescribed, the Authority shall determine, modify or revise such rates, charges and terms and conditions in

accordance with the directions issued by the Federal Government.

(2) The Authority while determining the standards referred to in subsection (1) shall-

(a) protect consumers against monopolistic and oligopolistic prices;

(b) keep in view the research, development and capital investment programme costs of licensee;

(c) encourage efficiency in licensees operations and quality of service;

(d) encourage economic efficiency in the electric power industry;

(e) keep in view the economic and social policy objectives of the Federal Government; and

(f) determine tariffs so as to eliminate exploitation and minimize economic distortions.

(3) The procedures established under subsection (1) shall include-

(a) time frame for decisions by the Authority on tariff applications;

(b) opportunity for customers and other interested parties to participate meaningfully in the tariff approval

process; and

(c) protection for refund, if any, to customers while tariff decisions are pending.

(4) Notification of the Authority's approved tariff, rates, charges, and other terms and conditions for the

supply of electric power services by generation, transmission and distribution companies shall be made, in the

official Gazette, by the Federal Government upon intimation by the Authority:

Provided that the Federal Government may, as soon as may be, but not later than fifteen days of receipt of the

Authority's intimation, require the Authority to reconsider its determination of such tariff, rates, charges and

other terms and conditions. Whereupon the Authority shall, within fifteen days, determine these anew after

reconsideration and intimate the same to the Federal Government;

Provided further that the Authority may, on a monthly basis and not later than a period of seven days, make

adjustments in the approved tariff on account of, any variations in the fuel charges and, policy guidelines as the

Federal Government may issue and, notify the tariff so adjusted in the official Gazette.

(5) Each distribution company shall pay to the Federal Government such surcharge as the Federal

Government, from time to time, notify in respect of each unit of electric power sold to the consumers and any

amount paid under this subsection shall be considered as a cost incurred by the distribution company to be

included in the tariff determined by the Authority. "(emphasis provided)

According to afore-quoted provision of law, in particular section 31(5) of the Act, 1997, the Government enjoys

exclusive power to impose surcharge on electricity against a distribution company. There is no cavil with the

proposition that Government is bound to notify tariff as determined by the N EPRA in respect of 'Tariff',

'Charge' or 'Rate' but regarding imposition of surcharge in terms of section 31(5) of the Act, 1997, the

Government enjoys the exclusive powers. Further, the question regarding imposition of surcharge and

additional surcharge in electricity bill came under discussion before the Hon'ble Supreme Court of Pakistan in

the case of Gadoon Textile Mills and 814 others (Supra) wherein the law has been laid to the following effect:--

-

"39. We may now take up the question as to the legality of the surcharge and additional surcharge. It was

vehemently urged by Messrs Abdul Hafeez Pirzada and Khalid Anwar that the above two levies are in fact taxes

and not part of tariff and, therefore, WAPDA has no power under the Act to impose the same; whereas Mr.

Fakhruddin G. Ebrahim's submission was that a perusal of the documents on record indicates that in substance

and in fact they are part of electricity tariff and they are not taxes. If we were to hold that the above two levies

are taxes the same would be ultra vires the power of WAPDA. However, if we were to agree with

Mr.Fakhruddin G. Ebrahim's above submission, then the next question which would require consideration

would be, whether the same are violative of any provisions of the Act or any law or principle of

law........................................................................ ..............................................................................

12. In the result we are unable to sustain the view of the High Court. The question that was referred must be

answered in the affirmative and in favour of the Revenue. In view of the nature of the points involved the

parties are left to bear their own costs in this Court, certificate is dismissed. "(emphasis provided)

K

If we see the nature of Surcharge, subject matter of these petitions, it is conspicuously clear that the same is

nothing else merely because of a different nomenclature as shown in the break-up of electricity bills separately

just for keeping different heads of account of various imposts and to demonstrate transparency of demand to the

consumers but appendage of the tariff determined by the NEPRA. As a net conclusion of the discussion made in

this paragraph, the Surcharge, under discussion, cannot be considered as independent tax or levy and

government enjoys power to impose the same.

19. The hub of arguments of the learned counsel for the petitioners, in particular Mian Mehmood Rashid,

Advocate is that impugned surcharge has been imposed without the intervention of NEPRA. In this regard, I am

of the humble view that the Act, 1997 was promulgated on 6-12-1997 to regulate the affairs of Generation,

Transmission and Distribution of Electric Power and other allied matters and the NEPRA has been established

under section 3 thereof. According to section 7 of the Act, 1997 the NEPRA has been vested with the following

powers and functions:--

7. Powers and functions of the Authority.---(1) The Authority shall be exclusively responsible for regulating the

provision of electric power services.

(2) In particular and without prejudice to the generality of the foregoing power, only the Authority, but

subject to the provisions of subsection (4), shall--

(a) grant licenses for generation, transmission and distribution of electric power;

(b) prescribe procedures and standards for investment programmes by generation, transmission and

distribution companies;

(c) prescribe and enforce performance standards for generation, transmission and distribution companies;

(d) establish a uniform system of accounts by generation, transmission and distribution companies;

(e) prescribe fees including fees for grant of licences and renewal thereof;

(f) prescribe fines for contravention of the provisions of this Act;

(g) review its orders, decisions or determinations;

(h) settle disputes between the licensees;

(i) issue guidelines and standards operating procedures; and

(j) perform any other function which is incidental or consequential to any of the aforesaid functions.

(3) Notwithstanding the provisions of subsection (2) and without prejudice to the generality of the power

conferred by subsection (1) the Authority shall--

(a) determine tariff, rates, charges and other terms and conditions for supply of electric power services by

the generation, transmission and distribution companies and recommend to the Federal Government for

notification;

(b) review organizational affairs of generation, transmission and distribution companies to avoid any

adverse effect on the operation of electric power services and for continuous and efficient supply of such

services;

(c) encourage uniform industry standards and code of conduct for generation, transmission and distribution

companies;

(d) tender advice to public sector project;

(e) submit reports to the Federal Government in respect of activities of generation, transmission and

distribution companies; and

(f) perform any other function which is incidental or consequential to any of the aforesaid functions.

(4) Notwithstanding anything contained in this Act, the Government of a Province may construct power

houses and grid stations and lay transmission lines for use within the Province and determine the tariff for

distribution of electricity within the Province.

(5) Before approving the tariff for the supply of electric power by generation companies using hydro-

electric plant, the Authority shall consider the recommendations of the Government of the Province in which

such generation facility is located.

(6) In performing its functions under this Act, the Authority shall, as far as practicable, protect the interests

of consumers and companies providing electric power services in accordance with guidelines, not inconsistent

with the provisions of this Act, laid down by the Federal Government.

A glance over the afore-quoted provision, in particular section 7(3)(a), makes it crystal clear that though

NEPRA has been given multiple tasks in connection with the Generation, Transmission and Distribution of

electricity, including determination of tariff, rates, charges and other terms and conditions for supply of electric

power services by Generation, Transmission and Distribution Companies but nowhere it has been given any

authority to determine the quantum of Surcharge. It is well entrenched by now that while interpreting any

provision of law, the ordinary meaning of a word used therein should be followed until and unless the context

provides otherwise. Insofar as question, under discussion, is concerned, suffice it to observe that when the

legislator has knowingly confined the jurisdiction of NEPRA to determine "Rate", "Tariff" and "Charge"

excluding "Surcharge" this Court, in no way, can hold that NEPRA has the authority to determine the same

while introducing an entirely different meaning as against the explicit terminology of section 31 of the Act,

1997 as the same would amount to deviate from well-recognized principles of Interpretation of a Statute.

However, if the government decides to refer the matter to NEPRA prior to imposition of Surcharge as has been

decided under the National Power Tariff and Subsidy Policy Guidelines, 2014, then the situation would be

entirely different. The discussion in the fore-going lines leads to indubitable conclusion that it is optional for the

Government either to refer the matter to NEPRA prior to imposition of Surcharge or impose the same directly

while exercising powers as contemplated under section 31(5) of the Act, 1997.

Even otherwise, if the intention of the legislator was to put a condition of prior approval by the Government

from NEPRA while imposing any Surcharge there was no need to mention under section 31(5) of the Act, 1997

that the Surcharge so imposed shall be considered as cost incurred by the DISCO to be included in the tariff

determined by NEPRA. When the intent of the legislator is explicit that imposition of Surcharge in the wake of

section 31(5) of the Act, 1997, shall be considered as cost of electricity incurred by the Distribution Company

thus the same cannot be intermingled with the tariff to be determined by NEPRA under section 31(4) of the Act,

1997.

O

20. The next ticklish question is as to whether a Notification issued by the Government under section 31(4)

of the Act, 1997 can be considered as having been issued under section 31(5) of the said Act. To resolve the

controversy, a cursory glance over the notifications through which the impugned surcharge was imposed twice

firstly in the year 2011 and secondly in the year 2013, is of much importance, which for purposes of reference

are being reproduced herein below: -

"Government of Pakistan

Ministry of Water and Power

Islamabad the 15th March, 2011.

NOTIFICATION

S.R.O. 235(I)/2011. In pursuance of subsection (4) of section 31 of the Regulation of Generation, Transmission

and Distribution of Electric Power Act, 1997 (XL of 1997), and in supersession of its Notification No. S.R.O.

No.1127(I)/2009, dated the 21st December, 2009, the Federal Government is pleased to notify the National

Electric Power Regulatory Authority's determination as per Schedule-I to this notification for the quarter July-

September, 2010 with effect from 1st October, 2010 and applicable tariff as per Schedule- II to this notification.

In respect of the FESCO and it is notified that FESCO shall receive payments from its consumers at the rates as

per Schedule-II. The difference between the relevant rates determined by NEPRA as per Schedule-I and the

rates charged from the consumers as per Schedule-II shall be paid to FESCO by the Federal Government.

O

Provided that there shall be levied a surcharge @ 2% on the consumption of electricity by every category of

electricity consumer mentioned in Schedule-II except consumption up to 300 units "Residential-A1".

Provided further that consumer of domestic category "Residential-A1" will be billed and given benefit of all

previous slabs of the tariff as per existing procedure.

Provided also that there shall be levied till the 31st December, 2015, an additional charge at the rate of

Rs.0.10/kwh on the consumption of electricity by every category of electricity consumer mentioned in

Schedule- II except the lifeline domestic consumers of the category "Residential-A1 " and such additional

charges: -

(i) Shall not form a part while calculating the difference between the relevant rates of Schedule-1 and

Schedule-II and

(ii) Shall be deposited in a Fund called the "Neelum Jhelum Hydro Power Development Fund" to be kept in

the Escrow Account of the Neelum-Jhelum Company for exclusive use of the Neelum-Jhelum Hydro Power

Project.

The Fuel Price Adjustment Mechanism is placed at Annex-I, FESCO Power Purchase Price at Annex-II and the

Terms and Conditions at Annex-III to this notification."

"Government of Pakistan

Ministry of Water and Power

Islamabad the 5th August, 2013.

NOTIFICATION

O

S.R.O. 700(I)/2013. In pursuance of subsection (4) of section 31 of the Regulation of Generation, Transmission

and Distribution of Electric Power Act, 1997 (XL of 1997), and in supersession of its Notification No.S.R.O.

No.235(I)/2011, dated the 15th March, 2011, the Federal Government is pleased to notify the National Electric

Power Regulatory Authority's determination as per Schedule-I to this notification with effect from the 1st July,

2012 and applicable tariff as per Schedule-II to this notification with immediate effect, in respect of the FESCO

and it is notified that FESCO shall receive payments from its consumers at the rates as per Schedule-II. The

difference between the relevant rates determined by NEPRA as per Schedule-I and the rates charged from the

consumers as per Schedule-II shall be paid to FESCO by the Federal Government.

Provided that consumer of domestic category "Residential-A1" will be billed and given benefit of all previous

slabs of the tariff as per existing procedure.

Provided that there shall be levied till the 31st December, 2015, an additional charge at the rate of 1.10/kwh on

the consumption of electricity by every category of electricity consumer mentioned in Schedule- II except the

lifeline domestic consumers of the category "Residential A-1 " and such additional charges :

(a) Shall not form a part while calculating the difference between the relevant rates of Schedule-1 and

Schedule-II and

(b) Shall be deposited in a Fund called the "Neelum Jhelum Hydro Power Development Fund" to be kept in

the Escrow Account of the Neelum-Jhelum Company for exclusive use of the Neelum-Jhelum Hydro Power

Project.

2. The Order of the Authority is placed at Annex-I, Fuel Price Adjustment Mechanism at Annex-II, FESCO

Power Purchase Price at Annex-III and the Terms and Conditions at Annex-IV to this notification."

P

A perusal of first proviso to Notification dated 15-3-2011 shows that Government proceeded to impose

Surcharge at the rate of 2% against all types of electricity consumers excluding those having tariff "Residential

A1". Similarly, through Notification, dated 5-8-2013, the Government while issuing Tariffs for different

categories of consumers in the Schedule under the heading of "Industrial Supply Tariffs" imposed Surcharge by

the name of "EQ Surcharge" at the rate of Rs.0.81 per KWH. In both the Notifications the word is "Surcharge"

and in view of the discussion made in the foregoing paragraphs, I have no doubt in my mind to hold that the

same was imposed by the Government while exercising powers under section 31(5) of the Act, 1997 as the

nomenclature of surcharge has least relevancy rather the purposes and the background of its imposition are

pivotal. In this regard, I seek guidance from the judgment of the august Supreme Court in the case of Gadoon

Textile Mills and 814 others (supra) wherein the apex court of the country, while determining the validity of a

surcharge on the basis of nomenclature, has inter alia held as follows:--

"*****If the tariff rates are fixed within the parameters laid down by above subsection (2) of section 25

of the Act, whether the same are recovered under the nomenclature of electricity charges or surcharge or

additional surcharge, it does not matter. No exception can be taken to the same."

Q

As far as the plea of the petitioners that as the Notifications in question having not been specifically

issued under section 31(5) of the Act, 1997 cannot be read under the said provision, is concerned, I am

of the humble view that omission to mention the relevant provision of law or wrong mentioning thereof

does not make any difference especially when the context and the language of a document vividly

encompasses the purposes and the legal backing thereof. In this regard, I stand guided by the judgment

of the apex Court of the country reported as Zaman Cement Company (Pvt.) Ltd. v. Central Board of

Revenue and others (2002 SCMR 312) wherein it has inter alia been observed as under:--

"8. There is no denying the fact that while interpreting a notification "the purpose or purposes for which

a notification is issued would be relevant in determining the vires of a notification. One of the practical and

effective ways of proliferating the purpose is to see how far the suggested meaning destroys and defeats or

promotes the ultimate purpose.

In this research the Court is not confined to the literal meaning of the words used in the notification but

it has to adopt a rational attitude by attempting to align its vision to that of the draftsman while drafting the

notification in question. "(emphasis provided).

Further, a learned Division Bench of Sindh High Court, in the case of Qurban v. Senior Member, Board of

Revenue, Sindh (2000 CLC 1083), while clinching the issue, under discussion, has observed as under:--

"*****But the fact remains that misquoting of provision of law would not render particular proceedings

incompetent, provided the jurisdiction invoked is available under the law.... (emphasis provided)

It is important to mention over here that when the government has been empowered to levy surcharge in terms

of section 31(5) of the Act, 1997, neither any embargo can be put against it to impose the same while notifying

the tariff determined by NEPRA nor the said notification can be declared illegal merely for the reason that it

does not specifically find mention of section 31(5) of the Act, 1997. At the cost of repetition it is made clear

that for the first time the surcharge was introduced in the year 2011 in the shape of a proviso to the Notification

issued under section 31(4) of the Act, 1997 and subsequently EQ Surcharge was included in the Schedule of

tariff determined for Industrial consumers through Notification dated 5-8-2013, thus, issuance of independent

notification for imposition of said Surcharge was not necessary.

R

21. As far as the plea of the petitioners that as the impugned EQ Surcharge was imposed without approval

by the National Assembly and Senate the same is not justified, is concerned, suffice it to observe that section

31(5) of the Act, 1997 was incorporated in the Act, 1997 through Finance Act, 2008. Article 73 of the

Constitution deals with the procedure regarding Money Bills which for ready reference is reproduced herein

below:--

"73. Procedure with respect to Money Bills.---(1) Notwith-standing anything contained in Article 70 or

Article 71, a Money Bill shall originate in the National Assembly:

Provided that simultaneously when a Money Bill, including the Finance Bill containing the Annual Budget

Statement, is presented in the National Assembly, a copy thereof shall be transmitted to the Senate which may,

within fourteen days, make recommendations thereon to the National Assembly.

(1A) The National Assembly shall, consider the recommendations of the Senate and after the bill has been

passed by the Assembly with or without incorporating the recommendations of the Senate, it shall be presented

to the President for assent.

(2) For the purposes of this Chapter, a Bill or amendment shall be deemed to be a Money Bill if it contains

provisions dealing with all or any of the following matters, namely :----

(a) the imposition, abolition, remission, alteration or regulation of any tax;

(b) the borrowing of money, or the giving of any guarantee, by the Federal Government, or the amendment

of the law relating to the financial obligations of that Government;

(c) the custody of the Federal Consolidated Fund, the payment of moneys into, or the issue of moneys from,

that Fund;

(d) the imposition of a charge upon the Federal Consolidated Fund, or the abolition or alteration of any such

charge;

(e) the receipt of moneys on account of the Public Account of the Federation, the custody or issue of such

moneys;

(f) the audit of the accounts of the Federal Government or a Provincial Government ; and

(g) any matter incidental to any of the matters specified in the preceding paragraphs.

(3) A Bill shall not be deemed to be a Money Bill by reason only that it provides-

(a) for the imposition or alteration of any fine or other pecuniary penalty, or for the demand or payment of a

licence fee or a fee or charge for any service rendered ; or

(b) for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body

for local purposes.

(4) If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the National

Assembly thereon shall be final.

(5) Every Money Bill presented to the President for assent shall bear a certificate under the hand of the

Speaker of the National Assembly that it is a Money Bill, and such certificate shall be conclusive for all

purposes and shall not be called in question."

According to sub-Article 4 (supra) the decision of the Speaker qua the nature of a Bill as to whether the same is

a Money Bill or not is conclusive. In the matter, under discussion, the Parliament ventured to pass Finance Bill,

2008 after considering it as Money Bill. Further, a perusal of sub-Article (5) of the afore-quoted Article renders

it explicitly clear that after approval of Money Bill by the National Assembly, it is not mandatory rather

optional to refer to the same to the Senate. Moreover, the certificate issued by Speaker of the National

Assembly in support of authenticity of a Money Bill is considered sufficient for soliciting requisite assent of the

President. Further, the said proposition has beautifully been dealt by a learned Division Bench of this court in

the case of Chaudhry Sugar Mills Ltd. v. Govt. of Punjab and others (2012 PTD 798), in the following manner:-

-

"4. Under our Constitution, a Money Bill has a unique position under Article 73(1A) of the Constitution. After

being passed by the National Assembly, a Money Bill must be presented to the President for his assent. When

so presented, the President must assent the same within 10 days in terms of the duty imposed by Article 75(1)

(b) of the Constitution read with Article 75(1)(a) thereof. Consequently, a duly passed Money Bill is legislation

that can be deemed under Article 75(2) of the Constitution to have been assented by the President. Therefore, on

the day a Money Bill is passed, it is a validly made law but one that comes into force not later than ten days

from the date of its presentation for the Presidential assent. In terms of proviso to Article 73(1) of the

Constitution, a Finance Bill is a Money Bill that contains the Annual Budget statement for that year. For the

foregoing reasons the duly passed Finance Bill, 2007 is valid legislation which can be analogized with a 'passed'

Act for the purposes of section 22 of the General Clauses Act, 1897. Accordingly the challenge made by the

appellants has no force."

Further a Full Bench of the Sindh High Court, Karachi, in the case reported as Pakistan Burmah Shell Ltd. and

another v. Federation of Pakistan and 3 others (1998 PTD 1804) while determining the authenticity of a Money

Bill after assent by the President has inter alia held as under:--

"* * * * *It may be pointed out that although Article 73 of the Constitution provides for a different procedure in

respect of Money Bills but when the Bill has been passed by the National Assembly and it receives assent by

the President, it will have effect like an Act of Parliament. The fact that the Money Bill was not transmitted to

Senate, in no case places it at a lower pedestal when compared to any other Act passed by the Parliament.

However, after raising the contention, Mr. Khalid Ishaque did not support it by full length arguments. We

would, therefore, refrain from dilating further on this question." (emphasis provided)

Even otherwise, according to mandate given under Article 77 read with 97 of the Constitution, the Federation

enjoys power qua the matters in respect whereof the Parliament has been empowered to legislate. The said

question came under discussion before the august Supreme Court of Pakistan in case of Messrs Elahi Cotton

Mills Ltd. and others (Supra) wherein it has inter alia been held as under: -

"The power of taxation rests on necessity, and is an essential and inherent attribute of sovereignty belonging as

a matter of right to every independent State or Government. Such power is an inherent one, and is not

dependent on any grant by the Constitution, or the consent of the owners of property subject to taxation;

Constitutional provisions with respect to taxation constitute a limitation on the legislative power and not a grant

of power. The power to tax rests primarily in the State, to be exercised by its Legislature, as discussed infra

section 7, and the State may exercise the power directly or may delegate such power as political sub-divisions

of the State, as considered in infra section 8. The H exercise of the taxing power is a high Governmental

function, in invitum in nature. "(emphasis provided).

S

There is nobody denying the competence of the National Assembly to introduce any amendment in the laws

relating to matters enumerated under Article 73 of the Constitution while bypassing the procedure provided

under Articles 71 and 72 of the Constitution. Any act of the National Assembly towards amendment of any

provision of law relating to a subject enumerated under Article 73 of the Constitution cannot be declared ultra

vires merely for the reason that the matter was not assented to by the Upper House (Senate). As far as addition

of subsection (5) under section 31 of the Act, 1997, through which the government was empowered to impose

surcharge, is concerned, suffice it to note that the same still holds the field and till the time the same is declared

ultra vires by a competent forum, any action taken thereunder cannot be dubbed as unconstitutional.

22. It has emphatically been argued on behalf of the petitioners that the Surcharge in question was levied

without resorting to CCI. Article 154 of the Constitution deals with formation and jurisdiction of CCI, which for

convenience of reference is reproduced herein below:--

154. Functions and rules of procedure.--(1) The Council shall formulate and regulate policies in relation to

matters in Part II of the Federal Legislative List and shall exercise supervision and control over related

institutions. (emphasis provided)

(2) The Council shall be constituted within thirty days of the Prime Minister taking oath of office.

(3) The Council shall have a permanent Secretariat and shall meet at least once in ninety days:

Provided that the Prime Minister may convene a meeting on the request of a Province on an urgent matter.

(4) The decisions of the Council shall be expressed in terms of the opinion of the majority.

(5) Until [Majlis-e-Shoora (Parliament)] makes provision by law in this behalf, the Council may make its

rules of procedure.

(6) Majlis-e-Shoora (Parliament)] in joint sitting may from time to time by resolution issue directions

through the Federal Government to the Council generally or in a particular matter to take action as Majlis-e-

Shoora (Parliament) may deem just and proper and such directions shall be binding on the Council.

(7) If the Federal Government or a Provincial Government is dissatisfied with a decision of the council, it

may refer the matter to [Majlis-e-Shoora (Parliament)] in a joint sitting whose decision in this behalf shall be

final.

A cursory glance over the afore-quoted Article shows that the powers of CCI are limited to formulate and

regulate policies in relation to matters in Part-II of the Legislative List.

The following subjects form Part-II of the Federal Legislative List: -

"PART II

1. Railways.

2. Mineral oil and natural gas; liquids and substances declared by Federal Law to be dangerously

inflammable.

3. Development of industries, where development under Federal control is declared by Federal law to be

expedient in the public interest; institutions, establishments, bodies and corporations administered or managed

by the Federal Government immediately before the commencing day, including the Pakistan Water and Power

Development Authority and the Pakistan Industrial Development Corporation; all undertakings, projects and

schemes of such institutions, establishments, bodies and corporations, industries, projects and undertakings

owned wholly or partially by the Federation or by a corporation set up by the Federation.

4. Electricity (emphasis provided)

5. Major ports, that is to say, the declaration and delimitation of such ports, and the constitution and

powers of port authorities therein.

6. All regulatory authorities established under a Federal law.

7. National planning and national economic coordination including planning and coordination of scientific

and technological research.

8. Supervision and management of public debt.

9. Census.

10. Extension of the powers and jurisdiction of members of a police force belonging to any Province to any

area in another Province, but not so as to enable the police of one Province to exercise powers and jurisdiction

in another Province without the consent of the Government of that Province; extension of the powers and

jurisdiction of members of a police force belonging to any Province to railway areas outside that Province.

11. Legal, medical and other professions.

12. Standards in institutions for higher education and research, scientific and technical institutions.

13. Inter-provincial matters and co-ordination.

14. Council of Common Interests.

15. Fees in respect of any of the matters in this Part but not including fees taken in any Court.

16. Offences against laws with respect to any of the matters in this Part.

17. Inquiries and statistics for the purposes of any of the matters in this Part.

18. Matters incidental or ancillary to any matter enumerated in this Part."

T

A perusal of afore-quoted Part-II of the Federal Legislative List shows that subject of electricity is available at

Serial No.4. Now the next query is as to which extent the CCI can formulate or regulate policies relating to the

subject of electricity. To me, the CCI can form policies regarding electricity in respect of new projects or for

resolution of a dispute arising between two federating units but its scope cannot be lowered down to determine

Surcharge especially when after enactment of the Act, 1997 the matters regarding Generation, Transmission and

Distribution are being controlled by NEPRA. In this scenario, this Court is of the opinion that no illegality has

been committed by the government while imposing surcharge without intervention of CCI. Moreover, a learned

Division Bench of this Court, while discussing the role of the CCI towards determination of tariff, in the case of

Shaikh Nadeem Younas, Chief Executive, Noble Textile Mills Pattoki District Kasur (Supra) has inter alia

observed as under:--

T

"17. Keeping in view the above-referred background and contentions, first issue to be decided is as to who is to

fix the tariff. Argument from the petitioners' side except by Mr. Qamar Afzal Khan, Advocate is that the tariff

for sale of power is to be fixed by the Provincial Government within whose territorial jurisdiction the energy is

being distributed by WAPDA. Reliance in this behalf is placed on the provisions of Article 157 of the

Constitution which has been reproduced in the earlier part of the judgment. Argument of Mr. Qamar Afzal

Khan, Advocate is that it is the Council of Common Interests alone, who can fix rates of tariff and neither the

Authority nor the Provincial Government is authorised to fix the price. Case of the respondents, however, is that

fixation of the price of tariff is the prerogative of the Authority with the approval of the Federal Government as

per provisions of section 25 of the WAPDA Act, 1958 --------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------------------

--------------------------........Therefore, the argument that the tariff for distribution of electricity is to be

determined by the Provincial Government is misconceived and, hence, is repelled. For the same reasons

argument addressed by Mr. Qamar Afzal Khan, Advocate to the effect that it is the Council of Common

Interests who alone can determine the price of electricity, the same is also misconceived and is based upon

misreading of the relevant Article hence, is repelled. (emphasis provided)"

U

23. Now coming to the proposition as to whether after 18th Amendment the provincial government has

exclusive power to levy any tax or surcharge on distribution of electricity in the province in terms of Article 157

of the Constitution, I am of the view that though the provincial government has been empowered to levy tax on

distribution of electricity in the province but the said fact does not take away the powers of the Federal

government to do so mainly for the reason that exercise of such powers by the provincial government is not

mandatory rather optional. It is well entrenched by now that when both Federal and Provincial Governments

have simultaneous jurisdiction to legislate qua a particular subject, preference should be given to the Federal

Government. Further, even after the introduction of 18th Amendment subject of electricity is available at Item

No.4 in the Federal Legislative List thus the Federal Government was fully competent to impose the Surcharge

under discussion. In this backdrop, powers of the Federal government to levy any surcharge on the electricity

cannot be declared illegal merely on the ground that provincial government enjoys the power to impose such

levy/tax. The said proposition also came under discussion before the august Supreme Court of Pakistan in the

case of Gadoon Textile Mills and 814 others (supra) wherein it has inter alia been held as under:--

U

"18. It will not be out of context to point out that in the above Article 157, the word "may" has been employed

and not the word "shall", meaning thereby that it is an enabling provision and not a mandatory provision. The

Federal Government and the Government of a Province have discretion either to act under the above Article or

not to act. In other words, there is no Constitutional obligation to carry out words or to take action mentioned in

the above Article. "(emphasis provided)

V

It is admitted position that even after 18th Amendment, the electricity is simultaneously on the Federal and as

well as Provincial Legislative List, hence the Federal Government as well as the Provincial Government can

legislate qua the subject without entering into arena of each other. In these circumstances, the argument raised

on the petitioners side that the surcharge on the distribution of electricity is to be imposed solely by the

Provincial Government is misconceived and is accordingly spurned.

W

24. Insofar as the contention of the petitioners that the impugned Surcharge being excessive and

unreasonable is not sustainable, is concerned, suffice it to observe that there is no denying the fact that the price

of the material which form components of the fuel being used for production of electricity has increased

manifold. To exemplify the said fact day to day increase in price of furnace oil can be quoted as precedent.

According to the detail narrated by the learned counsel appearing on behalf of the Ministry of Water and Power,

average cost of a unit of electricity produced from all sources comes to Rs.22/23 approximately whereas the

same is being sold to the consumers at the rate of Rs.18/19 per unit. In this backdrop, the levy of Surcharge for

a limited period cannot be considered exorbitant or excessive especially in the wake of the subsidy being

provided by the government to different categories of electricity consumers.

W

X

25. Reverting to the question regarding powers of this Court to take care of an action of the executive, I am

of the considered opinion that there is no second thought that this Court can exercise its powers as contemplated

under Article 199 of the Constitution to determine the legality of an order passed by the executive provided it is

established on record that the action impugned seems to be arbitrary or mala fide on account of colourable

exercise on the part of the competent authority or the same appears to be violative of any law of the land.

Reliance in this regard can be placed on the cases reported as Dossani Travels (Pvt.) Ltd. and others v. Messrs

Travels Shop (Pvt.) Ltd. and others (PLD 2014 SC 1) wherein the Hon'ble Supreme Court has inter alia been

observed as follows:--

"*****Besides the task of allocating such quotas and making arrangements for Hajj fell within the policy

making domain of MORA and in absence of any illegality, arbitrariness or established mala fides, it was not

open for the learned High Court to annul the policy framed by the competent authority. "(emphasis provided)

Further, the apex court of the country in the case of Dr. Akhtar Hassan Khan and others v. Federation of

Pakistan and others (2012 SCMR 455) while highlighting guidelines for judicial review of a government policy

has inter alia observed as under:--

"Though its policies sometimes may be open to criticism but that is for the concerned economists in the

government or academics to examine and opine but once the Competent Authority in the government has taken

a decision backed by law, it would not be in consonance with the well established norms of judicial review to

interfere in policy making domain of the executive authority."

If we adjudge the validity of the impugned Notifications on the touchstone of the principles highlighted in the

above quoted judgment, it is unequivocally clear that the same do not fall within the category of documents

where exercise of power of judicial review by this court is justified. The said conclusion finds further support

when the same is visualized in the light of the fact that the government has been empowered to levy surcharge

in terms of section 31(5) of the Act, 1997. Moreover, the interference by this court in the impugned

notifications is also uncalled for the reason that the provision under which the same have been issued still holds

the field and the compelling circumstances behind their issuance are also apparent.

Z

Y

26. It has vehemently been argued on the petitioners side that though the vires of subsection (5) of section

31 of the Act, 1997 have not been specifically called in question but this court can strike it down by following

the rule of "reading down". In this regard, I am of the humble view that while applying principle of harmonious

interpretation of a statute the courts may take note of matters of common knowledge, the history of the times

and may assume every state of facts which can be conceived. It must always be presumed that the Legislature

understands and correctly appreciates the need of its own people and that discrimination, if any, is based on

adequate and intelligible grounds. Thus, in routine the courts would accept an interpretation, which would be in

favour of constitutionality rather than the one which would render the same unconstitutional as the latter is one

of the last resorts. On the other hand, when the Court, during the course of hearing of a matter, comes to the

conclusion that any provision of a statute offends against the parent legislation or is violative of any provision

of Constitution or the same was enacted by an incompetent authority can declare it ultra vires while following

the principle of "reading down" or "reading into" the provision irrespective of the fact as to whether the vires of

said provision has been assailed before it or not. The principle of reading down has beautifully been dealt with

by apex Court of the country in the case reported as Province of Sindh through Chief Secretary and others v.

M.Q.M. through Deputy Convener and others (PLD 2014 SC 531), wherein it has inter alia has held as under:--

"***** An argument was raised that the Court should make every effort to save the statute and this can be done

by invoking the principle of 'reading in' or 'reading down'. However in this context two principles have to be

kept in view. First, that the object of 'reading down' is primarily to save the statute and in doing so the

paramount question would be whether in the event of reading down, can the statute remain functional? Second,

would the legislature have enacted the law, if that issue had been brought to its notice which is being agitated

before the Court" (emphasis provided).

The question regarding "reading down" also came under discussion in Syed Mukhtar Hussain Shah v. Mst. Saba

Imtiaz (PLD 2011 SC 260) wherein it has inter alia been observed as under:--

"Because according to the literal approach of reading a statute, the statute has to be read literally by giving the

words used therein, ordinary, natural and grammatical meaning. Besides, the addition and substraction of a

word in a statute is not justified, except where for the interpretation thereof the principle of reading in and

reading down may be pressed into service in certain cases; thus when in Entry No.9 actionable claim has not

been provided by the legislature, it shall be improper and shall impinge upon the legislative intent and the rules

of interpretation to add this expression to the clause/entry. "(emphasis provided)

Further, a full Bench of this Court in the case reported as Arshad Mehmood v. Commissioner/Delimitation

Authority, Gujranwala and others (PLD 2014 Lah. 221), has inter alia held as under:--

"***** 'The theory of reading down is a rule of interpretation resorted to by the Courts where a provision, read

literally, seems to offend a fundamental right, or falls outside the competence of the particular legislature. In

interpreting the provision of a statute the courts will presume that the legislation was intended to be inter vires

and also reasonable. The rule followed is that the enactment is interpreted consistent with the presumption

which imputes to the legislature an intention of limiting the direct operation of its enactment to the extent that is

permissible. Legislature is presumed to be aware of its limitations and is also attributed an intention not to over-

step its limits. To keep the act within the limit of its scope and not to disturb the existing law beyond what the

object requires, it is construed as operative between certain persons, or in certain circumstances, or for certain

purposes only, even though the language expresses no such circumstances of the field of operation. To sustain

law by interpretation is the rule. The reading down of a provision of a statute puts into operation the principle

that so far is reasonably possible to do so, the legislation should be construed as being within its power. It has

the principal effect that where an Act is expressed in language of a generality which makes it capable, if read

literally, of applying to matters beyond the relevant legislative power, the court will construe it in a more

limited sense so as to keep it within power. If certain provision of law construed in one way would make them

consistent with the Constitution and another interpretation would render them unconstitutional the court would

lean in favour of the former construction. (emphasis provided)

Moreover, this Court, in the case of Lone Cold Storage, Lahore v. Revenue Officer, Lahore Electric Power Co.

(2010 PTD 2502), has inter alia observed as under:--

"34. It is settled law that where literal construction or plain meaning causes hardship, futility, absurdity or

uncertainty, purposive or contextual construction is preferred to arrive at a more just, reasonable and sensible

result. "Every law is designed to further the ends of justice and not to frustrate it on mere technicalities. Though

the function of the courts is only to expound the law and not to legislate, nonetheless the legislature cannot be

asked to sit to resolve the difficulties in the implementation of its intention and the spirit of the law. In such

circumstances, it is the duty of the court to mould or creatively interpret the legislation by liberally interpreting

the statute. The statutes must be interpreted to advance the cause of statute and not to defeat it......"

Further, a full Bench of this Court in the case of Rub Nawaz Dhadwana Advocate and others v. Rana

Muhammad Akram Advocate and others (Writ Petition No.16793 of 2014) while dealing with the question

regarding "reading down" a provision, has inter alia observed as under:--

"Professor A. Barak emphasizes the importance of "purposive interpretation" in the following manner: "The aim

of interpretation in law is to realize the purpose of the law; the aim in interpreting a legal text (such as a

constitution or statute) is to realize the purpose the text serves. Law is thus a tool designed to realize a social

goal. It is intended to ensure the social life of the community, on the one hand, and human rights, equality, and

justice on the other. The history of law is a search for the proper balance between these goals, and the

interpretation of the legal text must express this balance ... Every statute has a purpose, without which it is

meaningless. This purpose, or ratio legis, is made up of the objectives, the goals, the interests, the values, the

policy, and the function that the statute is designed to actualize. It comprises both subjective and objective

elements. The judge must give the statute's language the meaning that best realizes its purpose." Subjective

purpose is not the only purpose relevant to statutory interpretation, especially in situations where we lack

information about that purpose. Even when we do have such information, it does not always help us in the

interpretive task. Moreover, even when we do find useful information about the subjective purpose, we must

keep in mind that focusing on legislative intent alone fails to regard the statute as a living organism in a

changing environment. It is insensitive to the existence of the system in which the statute operates. It is not

capable of integrating the individual statute into the framework of the whole legal system. It makes it difficult to

bridge the gap between law and society. Thus, it does not allow the meaning of the statute to be developed as

the legal system develops. Rather, it freezes the meaning of the statute at the historical moment of its

legislation, which may no longer be relevant to the meaning of the statute in a modern democracy. If a judge

relies too much on legislative intent, the statute ceases to fulfill its objective. As a result, the judge becomes

merely a historian and an archaeologist and cannot fulfil his role as a judge. Instead of looking forward, the

judge looks backward. The judge becomes sterile and frozen, creating stagnation instead of progress. Instead of

acting in partnership with the legislative branch, the judge becomes subordinate to a historical legislature. This

subservience does not accord with the role of the judge in a democracy. The objective purpose of the statute

means the interests, values, objectives, policy and functions that the law should realize in a democracy...just as

the supremacy of fundamental values, principles, and human rights justifies judicial review of the

constitutionality of statutes, so too must that supremacy assert itself in statutory interpretation. The judge must

reflect these fundamental values in the interpretation of legislation. The judge should not narrow interpretation

to the exclusive search for subjective legislative intent. He must also consider the "intention" of the legal

system, for the statute is always wiser than the legislature. By doing so the judge gives the statute a dynamic

meaning and thus bridges the gap between law and society."

33. Lord Denning in Macgor and St Mellons Rural District Council v New- port Corporation held: 'We do not

sit here to pull the language of Parliament and of Ministers to pieces and make nonsense of it...We sit here to

find out the intention of Parliament... and we do this better by filling the gaps and making sense of the

enactment rather than by opening it up to destructive analysis"(emphasis provided)

C

C

A

A

According to afore-quoted judgments the foremost consideration before the courts should be to save the statute

while following the rule of "reading down" or "reading into" a provision. Secondly, it is to be seen that while

following the said principle, can the statute remain functional. Insofar as the case in hand is concerned, the

question which surfaces for adjudication by this court is that as to whether section 31(5) of the Act, 1997 can be

declared ultra vires while following the principle of "reading down". In view of the guidelines framed in the

afore-quoted judgments, firstly, it is to be seen that as to whether the insertion of subsection (5) under section

31 of the Act, 1997 offends against any provision of the parent statute (the Act, 1997). A cursory glance over

the Act, 1997 in entirety renders it crystal clear that subsection (5) of section 31 of the Act, 1997 neither offends

against any clear cut provision of the parent statute or the constitution nor runs against the purposes for which

the Act, 1997 was promulgated inasmuch as the prime purpose for promulgation the Act, 1997 is to streamline

the affairs regarding Generation, Transmission and Distribution whereas sub-section (5) has been added just to

enable the government to recover any amount which is to be incurred by it for implementation of uniform tariff

irrespective of the determinations of NEPRA in respect of 'Rate' 'Charge' or 'Tariff'. Though the mainstay of the

arguments of learned counsel for the petitioners is that after establishment of NEPRA, the government cannot

impose independent surcharge against the tariff determined by NEPRA but the said plea is not worth

consideration for the reason that from the discussion made in the foregoing paragraphs it is clear that imposition

of surcharge does not fall within the domain of NEPRA. The second condition precedent for declaring a

provision ultra vires while following the principle of "reading down" is the incompetence of the authority to

enact said provision. It is admitted position that subsection (5) of section 31 of the Act, 1997 was added by

virtue of Finance Act, 2008 and there is no denying the fact that National Assembly can amend any law or

introduce any addition therein just to cope with the future situation through Finance Act while exercising

powers vested under Article 73 of the Constitution. Thus, in the instant case both the most vital conditions for

declaring a provision ultra vires while following rule of "reading down" are missing, thus the request of the

petitioners for declaring subsection (5) of section 31 of the Act, 1997 as such cannot be acceded to.

C

C

B

B

27. It is imperative to observe over here that the petitioners have called in question the vires of Notifications

whereby the Surcharge in question has been imposed. It is bounden duty of this court to follow the principles

laid down by the august Supreme Court of Pakistan regarding Interpretation of Statutes relating to fiscal

matters. The matter regarding interpretation of Statutes pertaining to fiscal matters came under discussion in the

case reported as H.R.C. No.40927-S of 2012 Application by Abdul Rehman Farooq Pirzada (PLD 2013 SC

829) in which the apex Court of the country, while highlighting the principles on the subject, has inter alia

observed as under:--

"The interpretation cannot be narrow and pedantic but the Courts' efforts should be to construe the same

broadly, so that it may be able to meet the requirements of an ever changing society. The general words cannot

be construed in isolation but the same are to be construed in the context in which they are employed. In other

words, their colour and contents are derived from the context." (emphasis provided).

Further the Hon'ble Supreme Court of Pakistan in the case of Elahi Cotton Mills (Supra), while setting down

guidelines for interpretation of a Statute relating to taxation etc., has inter alia held as under:--

"31. From the above case-law and the treatises, inter alia the following principles of law are deducible:---

(i) ... ….

(ii) That Courts while interpreting laws relating to economic activities view the same with greater latitude

than the laws relating to civil rights such as freedom of speech, religion etc., keeping in view the complexity of

economic problems which do not admit of solution through any doctrinaire or straitjacket formula as pointed

out by Holmes, J. in one of his judgments.

(iii) .........

(iv) .........

(v) .........

(vi) .........

(vii) .........

(viii) That while interpreting Constitutional provisions Court should keep in mind, social setting of the country,

growing requirements of the society/nation, burning problems of the day and the complex issues facing the

people, which the Legislature in its wisdom through legislation seeks to solve. The judicial approach should be

dynamic rather than static, pragmatic and not pedantic and elastic rather, than rigid. "(emphasis provided).

Similarly, the Islamabad High Court, in the case of OMV Pakistan Exploration v. Commissioner of Inland

Revenue (2013 PTD 1620) has inter alia observed as under:--

"*****There is no doubt that legislative history of a fiscal statute could be traced and considered to understand

its scope, but such an effort is not required to be made when there is no ambiguity in the statute itself............. In

the interpretation of statute levying taxes, it is established rule not to extend their provision by implication,

beyond the clear import of the language used or to enlarge their operation so as to embrace matters not

specifically pointed out. Reference for the sake of guidance may be made to PLD 1990 SC 332. "(emphasis

provided).

If we adjudge the authenticity of impugned Notifications on the touchstone of the aforequoted judgments, there

is no ambiguity left that the reasons advanced by the learned counsel for the petitioners do not justify their

setting aside.

D

28. As far as question regarding discrimination qua imposition of impugned Surcharge is concerned, I am of

the view that discrimination against a group or an individual implies making an adverse distinction with regard

to some benefit, advantage or facility with an element of unfavourable biasness. Article 25 of the Constitution

provides that all citizens are equal before law and entitled to equal protection of law viz. all persons subjected to

a law should be treated alike both in respect of privileges conferred and in the liabilities imposed. The equality

must be amongst the equals. The guarantee enshrined under this Article is only that no person or class of

persons shall be denied the same protection of law which is enjoyed by other persons or other classes in the

same set of circumstances. It must, however, be kept in mind that though the persons similarly situated or in

similar circumstances are to be treated in the same manner but the equality clause particularly the provision

about the equal protection of the law does not connote that all citizens shall be treated alike under all set of

circumstances and conditions. Equality of citizens does not mean that all laws must apply to all the subjects or

that all subjects must have the same rights and liabilities. The concept of equality before the law does not

involve the idea of absolute equality among human beings which is a physical impossibility. The protection of

equal laws does not mean that all laws must be uniform. In nutshell, classification which is not arbitrary,

capricious or violative of the doctrine of equality cannot be questioned in constitutional jurisdiction of this

court. In this respect, I stand guided by the various verdicts of the august Supreme Court of Pakistan including

in the cases reported as Shahid Ahmed v. OGDC and others (2014 SCMR 1008), Human Rights Case

No.40927-S of 2012 (PLD 2013 SC 829) and Secretary Economic Affairs Division, Islamabad and others v.

Anwarul Haq Ahmed and others (2013 SCMR 1687). In the case of Secretary Economic Affairs Division,

Islamabad and others (supra) the apex court of the country has laid law to the following effect:-

"22. With regard to the arguments of the learned counsel for the respondents-students that the charging of

fee/endowment funds at higher rates from the students of SFS as compared to other students is discriminatory as

well as violative of Article 9 read with Article 25 of the Constitution, it is to be noted that Article 25 provides

that all citizens are equal before law and are entitled to equal protection of law, and that there shall be no

discrimination on the basis of sex. However, by now it is well settled that equality clause does not prohibit

classification for those differently circumstanced provided a rational standard is laid down. The doctrine of

reasonable classification is founded on the assumption that the State has to perform multifarious activities and

deal with a vast number of problems. The protection of Article 25 of the Constitution can be denied in peculiar

circumstances of the case on basis of reasonable classification founded on an intelligible differentia which

distinguishes persons or things that are grouped together from those who have been left out." (emphasis

provided)

While agitating the point of discrimination, learned counsel for the petitioners have argued that firstly the said

surcharge has not been imposed against the consumers of KESE (now K-Electric) and secondly in the impugned

notification, dated 5-8-2013, the same has been confined only to industrial consumers. Taking up the point

regarding non-imposition of impugned surcharge against KESE (now K-Electric), it is observed that character

of K-Electric is entirely different from the other DISCOs, GENCOs and Transmission Companies, inasmuch as

it is the sole electric company in the country which has multiple licenses of Generation, Transmission and

Distribution, thus, said precedent cannot be used to establish the discriminatory attitude on the part of the

government while determining tariffs for different electric companies or imposing surcharge. At the cost of

repetition, it is reiterated that the point of discrimination can be agitated when the similarly placed persons are

treated differently but in the case in hand none of the distribution companies/licensees of the

petitioners/consumers, have multiple licenses of Generation, Transmission and Distribution, thus, precedent of

K-Electric cannot be quoted to press into service point of discrimination. The apex court of the country, in the

matter of N.-W.F.P. Public Service Commission and others v. Muhammad Arif and others (2011 SCMR 848),

while dilating upon the question of discrimination has held as under:-

"8. In view of what has been discussed hereinabove it can be inferred safely that reasonable classification which

is not arbitrary or violative of doctrine of equality cannot be questioned. We are not impressed by the contention

made by the learned Advocate Supreme Court on behalf of respondents that it is a case of sheer discrimination

because discrimination means "making a distinction or difference between things; a distinction; a difference; a

distinguishing mark or characteristic; the power of observing differences accurately, or of making exact

distinctions; discernment. But discrimination against a group or an individual implies making an adverse

distinction with regard to some benefit, advantage or facility. Discrimination thus involves an element of

unfavourbale bias and it is in that sense that the expression has to be understood in this context (Shirin Munir v.

Government of Punjab (PLD 1990 SC 295), (Pakcom Limited v. Federation of Pakistan (PLD 2011 SC 44). The

learned Advocate Supreme Court has failed to point out any unfavourable bias which is an essential ingredient

of discrimination and it is not understandable that how it can be pressed in to service. "(emphasis provided).

As far as contention of the petitioners that the surcharge in question has been imposed against industrial

consumers only is concerned, suffice it to note that the same hardly establishes discrimination on the part of the

government for the reason that different tariffs are determined for different consumers as is evident from the

impugned notifications and the Schedules annexed therewith. Apparently, while determining tariffs for different

category of consumers, the authorities concerned have to consider the geographic position of area, nature of

supply and purpose of supply. Further, the apex court of the country in the case of Messrs Elahi Cotton Mills

Ltd. and others (Supra), while dealing with the question regarding power of the Legislature to draw a line of

distinction amongst different classes/groups of the society, has inter alia observed as under: --

"That the Legislature is competent to classify persons or properties into different categories subject to different

rates of tax. But if the same class of property similarly situated is subject to an incidence of taxation, which

results in inequality amongst holders of the same kind of property, it is liable to be struck down on account of

infringement of the fundamental right relating to equality."

In Human Rights Case No.14392 of 2013 (supra) being relied by Mr. Azhar Siddique, Advocate, the august

Supreme Court of Pakistan has directed that government should ensure provision of subsidy to the consumers

who are unable to pay the raising price of electricity. In this regard, following lines from the said judgment are

of prime importance:--

"Though subsidy is not the right of the consumers, the Government being responsible for their welfare may

consider in near future to increase the rate of subsidy by extending its benefits to the consumers, who are not in

a position to pay high charges of the electricity." (emphasis provided)

When the apex court of the country has drawn a line of distinction between different categories of consumers,

it is not open for the petitioners to press the said point into service to establish discrimination. Further, it is

observed without any fear of contradiction that industrial consumers are comparatively financial sound as

compared to other categories of consumers, thus they cannot be yoked with domestic consumers etc. in respect

of tariff of electricity.

29. Mr. Azhar Siddique, Advocate has argued that government cannot withdraw any subsidy previously

enjoyed by citizens of the country in view of dictum laid down in the case Human Rights Case No.14392 of

2013 (supra). The said assertion of learned counsel seems to be worthless when the same is put in juxtaposition

to the following lines from the said judgment of the apex court of the country in the said case:--

"*****However, the exorbitant tariff was reinstated by NEPRA and the subsidy that is afforded to consumers

was taken away under section 31 of the 1997 Act vide notification dated 10-10-2013 as noted in 22-10-2013. It

is not disputed that Government has the power to take away subsidies......"

In the judgment being relied upon by Mr. Azhar Siddique, Advocate the Hon'ble Supreme Court has held in

unequivocal terms that provision of subsidy is not vested right and the government enjoys power to withdraw

the same if already provided to the citizens. Moreover, said assertion becomes irrelevant when the same is

considered while putting in juxtaposition to the fact that the question involved in these petitions revolves around

imposition of impugned Surcharge and in no way deals with the grant or withdrawal of subsidy by the

government. With utmost respect to the verdicts of the apex Court of the country, when the government is

bound to provide electricity to certain categories of consumers at subsidized rates while considering it as their

fundamental right, it also reserves the right to recover the expenditures being incurred on its Generation,

Transmission and Distribution in addition to any other charges from the financially sound customers. In the

wake of the economic condition of the government at the relevant time the imposition of impugned surcharge

just to abridge the gap between the subsidy being given to different categories of consumers and funds available

with the government neither the same can be considered unconstitutional nor unjustified.

30. The question regarding imposition of EQ Surcharge also came under discussion before a learned

Division Bench of High Court of Balochistan in Constitution Petition Nos.861/2011 and other allied matters.

Operative part of the judgment passed by the Hon'ble High Court of Balochistan reads as under:--

"13. We now turn to the remaining matter of the 'equalization surcharge' which is referred to as 'EQ' surcharge

in the bills. Mr. Muhammad Shafiq stated that NEPRA does not impose the equalization surcharge. The learned

counsel for QESCO and the learned DAG stated, that, the same was imposed vide Notification S.R.O. 233

(1)/2011 dated 15th March 2011 by the Government of Pakistan; the operative part of the said notification is

reproduced hereunder:

S.R.O. 233(I)/2011. In pursuance of subsection (4) of section 31 of the Regulation of Generation, Transmission

and Distribution of Electric Power Act, 1997 (XL of 1997), and in supersession of its Notification No.S.R.O.

No.1125(I)/2009, dated the 21st December, 2009, the Federal Government is pleased to notify the National

Electric Power Regulatory Authority's determination as per Schedule-I to this notification for the quarter July-

September 2010 with effect from 1st October, 2010 and applicable tariff as per Schedule-II to this notification.

In respect of the QESCO and it is notified that QESCO shall receive payments from its consumers at the rates as

per Schedule-II. The difference between the relevant rates determined by NEPRA as per Schedule-I and the

rates charged from the consumers as per Schedule-II shall be paid to QESCO by the Federal Government.

Provided that there shall be levied a surcharge @ 2% on the consumption of electricity by every category of

electricity consumer mentioned in Schedule- II except consumption up to 300 units "Residential-A1".

Subsequently, the rate was enhanced from 2 to 4 % vide Notification S.R.O. 360(1)/2011 dated 6th May 2011,

which was further revised vide Notification S.R.O. 698(1)/2013 dated 5th August 2013, wherein on all

consumers consuming more than 50 units of electricity were subject to a levy at the rate of 10 paisas per

kilowatt hour and industrial consumers were levied at the rate of 81 paisas per kilowatt hour. We were told that

NEPRA would determine the tariff in respect of each of the electricity distribution companies, including

QESCO, and the Government of Pakistan would usually take the lowest tariff so determined and notify the

same in Schedule II of the tariff notification and notify the rates determined by NEPRA in Schedule 1; the

difference between the two rates was a subsidy that the Government of Pakistan granted to the respective

distribution companies. The equalization charge attempted to reduce the effect the financial impact of the

subsidy granted by the Government of Pakistan. It is further stated that QESCO is one of the most inefficient

units and receives the largest subsidy from the Government of Pakistan, whereas the equalization surcharge was

uniformly applied throughout Pakistan, thus the QESCO consumers had a lesser financial impact than those in

other provinces. The equalization surcharge however has been discontinued with effect from 1st October, 2013

(reference Notification S.R.O. 911(I)/2013 dated 11th October, 2013 issued by the Government of Pakistan).

The equalization surcharge was the difference between the two rates as mentioned above; the Government of

Pakistan first granted a subsidy and then sought to reduce the financial impact thereof by imposing the

equalization surcharge, therefore, it would not be correct to categorize the equalization surcharge as an

additional imposition. The financial gymnastics resorted to by the Government was probably to cover the real

price of electric power borne by the consumer.

14. We therefore conclude that the fuel price adjustment and the equalization surcharge are/were neither illegal

nor unconstitutional. Moreover, by the imposition of FPA and equalization surcharge QESCO did not seek to

recover anything beyond the cost of the electricity consumed by the petitioners. Therefore, we are constrained

to dismiss these petitions, but with no order as to costs. We had however passed interlocutory orders restraining

QESCO from the recovery of the fuel price adjustment and equalization surcharge and it may work hardship on

the petitioners if they are required to make immediate payment thereof. Therefore, following the precedent of

the interim relief granted by the Hon'ble Supreme Court, the said amounts may be recovered by QESCO in

twelve equal monthly instalments."

According to information imparted by Additional Attorney General, on the instructions imparted by the

respondents, the judgment passed by the Hon'ble High Court of Balochistan, having not been challenged any

further, has attained finality. Thus, this court has been left with no option but to follow the dictum laid down in

aforementioned case.

31. Insofar as the contention of Mr. Azhar Siddique, Advocate that in absence of source the impugned

surcharge is not justified, is concerned, suffice it to note that from the discussion made in the foregoing

paragraphs it is clear that the same is part of the tariff to be determined by the NEPRA. Further, when the

legislature itself has made it clear that same would be considered as cost of the electricity the said argument has

little value. It is of common knowledge that the government, in order to share financial burden with the

electricity consumers who are unable to bear the day to day increase in the price of the electricity, is providing

subsidy. When the government is facilitating the consumers in the shape of subsidy etc., it is our national as

well as moral obligation, in particular the well-off persons/customers, to assist the government to wriggle out

from financial turmoil. The imposition of impugned surcharge also seems to be reasonable when the same is

considered in the light of the fact that the government, with a view to maintain harmony and integrity amongst

different federating units, has introduced a uniform tariff qua companies having licences of Generation,

Transmission or Distribution excluding KESE (now K-Electric) for the reasons enshrined above. In this

backdrop, the argument of the learned counsel for the petitioners that default on the part of consumers of one

company cannot be adjusted against the other has little value. Moreover, we should not hesitate to alter our

individual interests over the national so that national harmony amongst the federating units becomes strong and

cohesive.

32. It is important to mention over here that with a view to further streamline the affairs regarding

Generation, Transmission and Distribution, the government has introduced National Power Tariff and Subsidy

Policy Guidelines, 2014. According to the said policy, in future, the quantum of E.Q. shall be determined by the

NEPRA. The said fact provides an answer to the query raised on behalf of the petitioners that in terms of

section 31(5) of the Act, 1997 the executive has been given unfettered power to levy surcharge without laying

down any criteria for its determination.

33. To establish that the EQ Surcharge has been imposed to facilitate the consumers of DISCOs who are

being provided subsidy or to make up the difference between the actual cost and line losses of inefficient

DISCOs, Mian Mehmood Rashid, Advocate, has referred to National Power Tariff and Subsidy Policy

Guidelines, 2014. Firstly the same is not applicable in these cases for the reason that the same is only to be

operative from the year 2014 onwards and the same has nothing to do with cases in hand. It is settled

proposition of law that no legislation or policy can be given retrospective effect until and unless the legislature

has decided so, thus, the reference made in this behalf is not relevant to the facts and circumstances of the

instant case. Even otherwise, if for the sake of arguments, it is admitted for a moment that the impugned

surcharge was levied just to abridge the gap between the actual cost of the electricity and the subsidy being

provided by the government to the consumers of distribution companies which have higher tariff, the same does

not justify setting aside of the impugned notifications simply for the reason that when a uniform policy is being

followed by the government towards determination of tariff and other allied matters, it cannot be debarred to

raise funds for said purpose. Further, in view of the ever changing circumstances, it cannot be ruled out that at

some point the petitioners may also be beneficiaries of the said policy, thus, instead of challenging the same

they should sacrifice something for their brethren.

34. The suggestion posed by Mr. Azhar Siddique, Advocate that instead of putting extra burden on the

consumers in the shape of Surcharge or Additional Surcharge, the government should minimize the line losses

and lower down price of electricity by using less expensive sources in particular hydel sources in addition to

controlling the pilferage of electricity, is worth consideration. For the purpose first of all the government shall

have to take stern action against the persons who are involved in electricity theft and the officials/officers of the

department who have facilitating role in this respect. Likewise, in respect of tariff, while making uniform

policy, the output of the distribution company should be viewed critically and the inefficient companies be put

at guard in the first instance and in case of non-improving they be blacklisted forthwith. Further, the competent

authority should take steps to control all kinds of losses after supply of the generation like line losses, theft, etc.,

by using modern devices. At the cost of repetition, it is observed that the uninterrupted supply of electricity for

all types of consumers has assumed identical role as that of blood in the human body. The government should

take steps to produce electricity by using less expensive sources. For the purpose, a detailed study can be

undertaken while considering the alternate sources of generation being applied by the other countries. Further,

for generation through thermal sources, the local sources of fuel like coal, natural gas etc. should be preferred.

Furthermore, the renewable sources for generating electricity including wind and solar power can also be

utilized to overcome this phenomenon.

35. Now coming to the case-law cited by learned counsel for the petitioners, I am of the view that the same

being quite distinguishable from the facts and circumstances of present case is inapplicable inasmuch while

declaring the GIDC Act, 2011 as ultra vires in the judgment rendered in Federation of Pakistan through

Secretary Ministry of Petroleum and Natural Resources and another v. Durrani Ceramics and others (Civil

Appeals Nos.1540-1590 of 2013 and 21 of 2014) the apex Court of the country has inter alia observed as

under:--

"*****True that such an advice or opinion or non- reference of the matter to the Council of Common Interest

would not render the levy illegal or invalid…."

If we consider contention of the petitioners that the Surcharge was imposed without referring the matter to CCI,

the same is not worth consideration firstly for the reasons enumerated above and secondly the apex Court of the

country has held that no enactment can be declared ultra vires just for the reason that the same was promulgated

without intervention of CCI provided the same otherwise stands justified in the peculiar state of affairs. As far

as verdict of august Supreme Court of Pakistan in Human Rights Case N o.14392 of 2013 (supra) is concerned,

though the Hon'ble Supreme Court has observed that the government is bound to ensure well-being of citizens

in terms of Article 38 of the Constitution but at the same time a line of distinction has been drawn amongst

different categories of consumers in the said judgment, thus, the same is inapplicable for the reason that in both

the impugned notifications the Surcharge has been confined to comparatively well-off categories of consumers.

Moreover, the government with a view to fulfil its obligation towards provision of subsidy on electricity to poor

customers issued impugned notifications thus the same are unexceptionable. In the case of Engineer Zafar Iqbal

Jhagra (supra), the point, under consideration, was regarding tax and in view of the discussion made in the

preceding paragraphs, as Surcharge is not a tax, thus the said case is quite distinguishable. Now taking up the

case of Alleged Corruption in Rental Power Plants etc. (supra) I am of the humble opinion that the same

pertains to corruption in rental power plants. Further though the matters pertaining to NEPRA also came under

discussion but as the question of Surcharge having not been dilated upon by apex Court of the country the same

cannot not be quoted in the present case rather policies towards Generation, Transmission and Distribution of

electricity. In the cases of Pearl Continental Hotel and another, Pakistan through Secretary Finance and others v.

Pakistan Industrial Development Corporation and Dawood Hercules (supra), the flashing point was the

interpretation of Taxing Statutes in case of any ambiguity whereas in the matter in hand the language of Section

31(5) of the Act, 1997 being self-explanatory, the said precedents are irrelevant. Coming to the case of Wattan

Party through President (supra), it is observed that the same is polls apart from the present case as none of the

prepositions evolved in this case were discussed in the said judgment. Insofar as the case of Caltex Oil

(Pakistan) Ltd. (supra) is concerned, it was inter alia held therein that in certain cases which pertain to

fundamental rights of the parties, the Hon'ble Supreme Court can entertain a question which was not raised

before the lower forum, thus, the same has no relevancy with the instant case. Now coming to the case of The

Province of Punjab and another (supra) I have observed that in the said case the apex Court of the country has

inter alia framed guidelines for judicial review of a legislation introduced on account of some emergency thus

the same is not aptly applicable to the present case. As far as the cases of Collector of Customs and others,

Messrs Shahbaz Garments (Pvt.) Ltd. and others v. Messrs Azgard Nine Ltd. and Abdul Majid and another

(supra) are concerned, the proposition, under discussion, in the said cases revolved around difference between

the words "tax" and "fee" whereas as it has been held that Surcharge is neither independent tax nor fee, the said

judgment is of no help to the petitioners. In the cases of Gatron (Industries) Limited and Govt. of Balochistan

(supra), the apex Court of the country has inter alia observed that equal protection of law should be ensured

whereas the instant case is quite distinguishable for the reason that the test of reasonable classification has been

fully applied by the legislator while excluding different categories of consumers from levy of impugned

surcharge. The case of Aftab Shahban Mirani (supra) inter alia deals with the principle known as "due process

of law" with reference to Article 4 of the Constitution whereas in the instant case the impugned Surcharge was

levied subsequent to an amendment introduced in the Act, 1997 through Finance Act, 2008, thus the same

cannot be dubbed as having been levied without due process of law. As far as case of Messrs Elahi Cotton Mills

Ltd. and others (supra) is concerned, the same instead of lending any support to petitioners’ version seemingly

supports the version of the respondents that in the matters relating to interpretation of fiscal matters judicial

self-restraint should be shown by the courts. In the matter of Gadoon Textile Mills and 814 others (supra) the

powers of CCI in respect of formation of policies regarding electricity came under discussion but while

responding to the proposition regarding power of CCI to determine tariff, it has been held that CCI has nothing

to do with the same, thus, the same is quite distinguishable. As far as the matter of Mian Muhammad Nawaz

Sharif (supra), is concerned, its facts and circumstances being entirely different stands polls apart from the

instant case. Insofar as the case of Pakistan through Secretary Cabinet Division and others (supra) is concerned,

the proposition involved therein was qua the mala fides on the part of the authorities concerned. As no such

element has been pointed out by learned counsel for the petitioners in these matters, the said case also stands

distinguished. The case of Haji Abdullah Khan and others (supra), has not the remotest connectivity with the

case in hand as the said case had arisen out of civil proceedings. The case of Abdul Latif (supra) is also

distinguishable on the ground that in the said case the apex Court of the country held that nobody should be

condemned unheard whereas no such question is involved in the instant matter. The matter of Syed Feroze Shah

Ghillani and others (supra) deals with the implementation of the order passed by CCI, thus, the same is quite

distinguishable from the instant case. In the case of Exide Pakistan Ltd. (supra) the subject was the powers of

the Cantonment Board to levy Shop Board Fee whereas in the instant case the situation being entirely different

the same is not applicable here. The case of Sanofi Aventis Pakistan Ltd. and others (supra) deals with the

powers of the Federal as well as Provincial Government to legislate qua a subject but in the instant matter when

the item of electricity is available in Federal Legislative List, that said precedent has no relevancy with the case

in hand. The judgments in the cases of Rashid-ur-Rehman, National Industrial Cooperative Credit Corporation

Ltd. and another and Naseem Mehmood (supra) are not relevant to the case in hand as having been rendered in

entirely different backdrop. So far as the case of Standard Chartered Bank (Supra) is concerned, the legal

question involved in the said matter, in pith and substance, was the powers of NEPRA to determine rate, charge

and tariff whereas in the instant case the question is as to whether the NEPRA has the power to determine

Surcharge, thus, the same is on quite distinct footing. So far as judgments in cases of I.T.As Nos.3934/LB/2002

and other allied matters and I.T.As Nos.5138/LB/2004 and another allied matter (Supra) are concerned, these

having been rendered by different Tribunals have no binding force on this court.

36. As a necessary corollary to discussion in the fore-going paragraphs, I have no doubt in my mind to hold

that Surcharge is entirely different from 'Rate' 'Tariff' and 'Charge' and Government enjoys power to impose the

same with or without courtesy of NEPRA. Further when valid grounds for reasonable classification are

available no legislation can be annulled on the ground of discrimination. Consequently, I see no merits in these

petitions which are accordingly dismissed with the observation that the amount due on account of impugned

Surcharge, if any, against the petitioners due to restraint order issued by this court during pendency of these

petitions shall be recovered by the Government in twelve equal monthly instalments. There shall be no order as

to costs.

37. Before parting with this judgment, I am of the view that it would not be out of place to appreciate the

assistance rendered by the Research Centre of this Court, in particular Messrs Mohsin Mumtaz and Qaisar

Abbas, Research Officers. I hope that the members of the Research Centre shall continue with this spirit of

enthusiasm and commitment in future as well.

MWA/F-39/L Petitions dismissed.

Per Mr. Justice Pir Muhammad Karam Shah, Member –

---Repugnancy to Injunction of Islam --- Provision of S. 28, Limitation Act, 1908 was repugnant to Injunctions

of Islam in so far as same provided for extinguishment of right in the property at the determination of period

prescribed for instituting suit for possession of property --- Decision of Supreme Court would take effect from

31st August 1991, and on that date S. 28, Limitation Act, 1908, would also cease to have effect.

NASIM HASAN SHAH, CHAIRMAN. - I agree with the conclusion recorded by Mr. Justice Muhammad Taqi

Usmani.

SHAFI-UR-RAHMAN, MEMBER: - I agree with the reasoning and the conclusion of my learned brother Mr.

Justice Muhammad Taqi Usmani.

ABDUL QADEER CHAUDHRY, MEMBER. -- I also agree with the conclusion of Mr. Justice Muhammad

Taqi Usmani.

"At the determination of the period here by limited to any person for instituting a suit for possession of any

property his right to such property shall be extinguished."

"The extinguishment of the title of the rightful owner will operate to give a good title to the wrongdoer."

(1) AIR 1942 P.C. 64 = 69 Ind. App. 137 = ILR 1942 Kar. (P.C.) etc. as quoted by Shaukat Mahmood, Limitation

Act, p 301.

person acquiring a title by the operation of this section can maintain a a suit for:

(a) A declaration of his title.

(b) Possession of the property if he is dispossessed of it.

"Where in the, case of immovable property a right to claim possession becomes time-barred, title to the

property itself is extinguished by virtue of S.28. But in the case of movable property though the right to sue

itself is extinguished. Yet the title does not cease to exist- similarly, a debt does not cease to be due because it

cannot be recovered after the expiration of the period of limitation provided fur instituting a suit for

its recovery. In all personal actions, the right subsists although the remedy is no longer available.

(Shaukat Mahmood, p.301, S . 28)

ORDER OF THE COURT

For reasons recorded in two separate judgments, the Court is unanimous in holding that section 28 of the

Limitation Act, 1908 (Act No.IX of 1908) is repugnant to the Injunctions of Islam in so far as it provides for

extinguishment of the right in the property at the determination of the period prescribed for instituting a suit for

possession of the said property. It is further held that this decision shall take effect from 31st of August, 1991

and on this date section 281 aforesaid shall also cease to have effect.

AA./M-1506/S Order accordingly.

2015 C L C 1509

[Lahore]

Before Syed Mansoor Ali Shah, J

NADEEM ASGHAR NADEEM and others----Petitioners

versus

PROVINCE OF THE PUNJAB and others----Respondents

W.P.No.26696 of 2014, heard on 6th May, 2015.

(a) Constitution of Pakistan---

----Art. 10A---Right to fair trial---Civil rights---Obligations---Nature and ambit of right to fair trial under

Art.10A of the Constitution---"Determination of civil rights and obligations of a person through fair trial and

due process" was a fundamental right---Civil rights were the rights guaranteed by the Constitution and the

legislation---"Obligations" may refer to anything that a person was bound to do or forbear from doing, whether

such duty was imposed by law, contract, promise, social relations, courtesy, kindness or morality and anything

that an individual was required to do because of a promise, vow, oath, contract, or law; and it referred to a legal

or moral duty that an individual could be forced to perform or penalized for neglecting to perform---Right of

one person was an obligation of the other, and vice versa and such mutually corresponding and symbolic

relationship between civil rights and obligations, expanded the proportions and broadened the amplitude of

Art.10A of the Constitution and placed it as one of the most robust, dynamic and an evergreen Fundamental

Right that was not frozen in time or moored to serve only the age old vested rights---Article 10A of the

Constitution was a Constitutional right, hence it was open and all embracing and was there to include all kinds

of rights and obligations that emerged from the Constitution, legislation, law, contract, promise, social relations,

courtesy, kindness or morality---Article 10A of the Constitution could not be put in shackles and in fact went

beyond vested rights---Article 10A of the Constitution therefore, dealt with rights and duties, which if violated

could result in loss of some personal benefit or advantage or curtail a privilege or liberty or franchise.

Warid Telecom (Pvt.) Ltd. and 4 others v. Pakistan Telecommunication Authority through Chairman

2015 SCMR 338; Suo Motu action regarding allegation of business deal between Malik Riaz Hussain and Dr.

Arsalan Iftikhar attempting to influence the judicial process PLD 2012 SC 664; Babar Hussain Shah and

another v. Mujeed Ahmed Khan and another 2012 SCMR 1235; Suo Motu Case No.4 of 2010 PLD 2012 SC

553; Liaqat Ali Chugtai v. Federation of Pakistan through Secretary Railways and 6 others PLD 2013 Lah. 413;

Shabbir Ahmed v. Kiran Khursheed and 8 others 2012 CLC 1236; The most common legal application of the

term civil rights involves the rights guaranteed to U.S. citizens and residents by legislation and by the

Constitution, Free Dictionary. <URL:www.thefreedictionary.com>.; Black's Law Dictionary. 9th Ed. p.1179

and Mian Fazal Din v. Lahore Improvement Trust, Lahore, etc. PLD 1969 SC 223 rel.

(b) Fundamental Rights---

----"Civil rights", meaning of---Civil rights were rights guaranteed by the Constitution and Legislation.

The most common legal application of the term civil rights involves the rights guaranteed to U.S.

citizens and residents by legislation and by the Constitution, Free Dictionary.

<URL:www.thefreedictionary.com>. rel.

(c) Words and Phrases---

----"Obligations", meaning of---Obligations may refer to anything that a person was bound to do or forbear from

doing, whether the duty was imposed by law, contract, promise, social relations, courtesy, kindness or morality

and anything that an individual was required to do because of a promise, vow, oath, contract, or law; and it

referred to a legal or moral duty that an individual could be forced to perform or penalized for neglecting to

perform.

Black'sLaw Dictionary. 9th Ed. p.1179 rel.

(d) Punjab Civil Servants Act (VIII of 1974)---

----Ss. 10(1)(i), 5, 4 & 6---Punjab Judicial Service Rules, 1974 R.7A---Constitution of Pakistan, Arts.10A, 4, 9,

14 & 25---Constitutional petition---Civil service---Judicial Officers---Probation---Termination of service during

the initial or extended period of probation---Constitutionality of termination of service without notice under

S.10(1)(i) of the Punjab Civil Servants Act, 1974---Petitioners were appointed as Civil Judges-cum-Judicial

Magistrates, subject to probation and their services were terminated thereafter, under S.10(1)(i) of the Punjab

Civil Servants Act, 1974 without notice and without disclosing of reasons---Petitioners challenged the vires of

S.10(1)(i) of the Punjab Civil Servants Act, 1974 on the ground that same was unconstitutional in view of

Art.10A of the Constitution---Held, that, in the present case, Ss.4, 5 & 6 of the Punjab Civil Servants Act, 1974,

conferred a right to confirmation, once the judicial officer successfully completed his period of probation and

also conferred an obligation on the authority to confirm the appointment of the officer if the probationer

successfully completed the period of probation---Probationer was also under an obligation to meet the

requirements of R.7A of Punjab Judicial Service Rules, 1974 and had a corresponding right to confirmation

subject to his fulfilling such obligations---Probationer, in effect, already stood appointed but had to undergo the

process of confirmation and therefore, the right of confirmation of a probationer or the obligation of the

authority to confirm the probationer, if he successfully completed the period of probation, or vice versa, were

covered under Art.10A of the Constitution and such rights and obligations had to be determined through a fair

trial and due process---One of the requirements for confirmation after period of probation were given under

R.7A(a) of the Punjab Judicial Service Rules, 1974, wherein "performance evaluation" was subjective and

relied on sources other than the result of the Departmental Examination and the Course and Training scorecard

and if the information or evidence collected was adverse to the interest of the judicial officer, natural justice and

the strength of the settled jurisprudence required that the judicial officer be put on notice and be heard after an

adequate disclosure of the adverse material and information was made available to such judicial officer---Said

well-established principle stood Constitutionalized as a fundamental right under Art.10A of the Constitution,

and fair trial and due process required that adequate disclosure was made and the probationer was put on notice

and even otherwise, right to life which included right to livelihood and right to dignity of a person under Art.14

of the Constitution also stood behind Art.10A and that S.10(1)(i) of the Punjab Civil Servants Act, 1974,

therefore, offended Art.10A of the Constitution in such respect---Termination simplicter was termination from

service when a probationer failed to meet the eligibility requirements of the post set by the employer like a

departmental examination or in service training or if the appointment was ad hoc and dependent on certain

conditions or if the post itself was abolished and such like termination was not punitive or penalizing in nature

and it did not cast any allegation or affect the professional reputation of the officer or the future prospects of

employment of the probationer; which under the law was referred to as a "discharge" from service---

Probationer, in such a case, therefore need not be put on notice if the termination was actually a discharge from

service or was termination simpliciter as no useful purpose could be served by issuing any such notice as the

authority had already granted the probationer an opportunity of appearing before the authority in the

departmental examination and also in the course and training conducted by the authority---High Court observed

that in such a case of termination simpliciter, the competent authority was under no obligation to issue notice

before termination of service and S.10(1)(i) of the Punjab Civil Servants Act, 1974 was applicable in such a

case; however probationer under Art.10A of the Constitution was, free to challenge the legality of the

termination order or the merits of the departmental examination or the transparency of the departmental training

in a court of competent jurisdiction, if he so desired, on grounds other than the ground of failure to issue notice-

--Where termination carried allegations of misconduct, inefficiency and corruption, the civil servant was

entitled to a notice to defend himself and also to an adequate disclosure of the evidence against him and if such

adverse information and material had weighed on the mind of the authority and had been the dominant reason

behind the order of termination, withholding of any such allegation or avoiding to disclose any reason for

termination, in order to bypass the requirement of notice by opting for termination simpliciter was offensive to

Art.10A of the Constitution and the option of termination simpliciter was available with the authority only when

the termination according to the service record of the civil servant, was not based on any allegations of

misconduct, inefficiency or corruption against a civil servant---While S.10(1)(i) of the Punjab Civil Servants

Act, 1974 was unconstitutional in some situations, it was constitutionally permissible in others, and hence in

such a situation, the Constitutionality of the said section could be saved if the same was read down, instead of

being struck down---High Court, therefore, held that in the light of Art.10A of the Constitution read with Arts.4,

9, 14 & 25 of the Constitution, S.10(1)(i) of the Punjab Civil Servants Act, 1974 was read down, to the extent,

that firstly in cases where termination of a probationer was on the grounds of misconduct, inefficiency,

corruption, etc. prior notice was mandatory and was required to be issued to the probationer; and that secondly

where the probationer had failed to meet the eligibility requirements of a departmental examination or in service

training course, the probationer could be terminated without notice, but any such termination order must carry

reasons for termination; and thirdly that; in case the probationer had passed the eligibility criteria and had been

found liable for misconduct, inefficiency or corruption, the competent authority did not have a choice to opt for

termination simpliciter by withholding the real reason for termination and must issue a reasoned termination

order---Constitutional petitions were allowed, accordingly.

Asif Saeed v. Registrar, Lahore High Court and others PLD 1999 Lah. 350; Muhammad Iqbal and

others v. Lahore High Court through Registrar and others 2010 SCMR 632; Wattan Party through President v.

Federation of Pakistan through Cabinet Committee of Privatization, Islamabad and others PLD 2006 SC 697;

Pakistan Peoples Party v. Government of Punjab and others PLD 2014 Lah. 330; Muhammad Ashraf Tiwana

and others v. Pakistan and others 2013 SCMR 1159; National Bank of Pakistan and 117 others v. SAF Textile

Mills Ltd and another PLD 2014 SC 283; Messrs Chenone Stores Ltd through Executive Director (Finance

Accounts) v. Federal Board of Revenue through Chairman and 2 others 2012 PTD 1815; Bilal Akbar Bhatti v.

Election Tribunal, Multan and 15 others PLD 2015 Lah. 272; Al-Jehad Trust through Raeesul Mujahideen

Habib-ul-Wahabb-ul-Khairi and others v. Federation of Pakistan and others PLD 1996 SC 324; Imtiaz Ahmad

Kaifi v. Government of Punjab and others PLD 2013 Lah. 598; Engineer Majeed Ahmed Memon v. Liaquat

University of Medical and Health Sciences Jamshoro and others 2014 SCMR 1236; State of M.P. v. Rakesh

Kohli and another 2013 SCMR 34; Arshad Mehmood v. Commissioner/Delimitation Authority, Gujranwala and

others PLD 2014 Lah. 221; Babar Hussain Shah and another v. Mujeeb Ahmed Khan and another 2012 SCMR

1235; Federation of Pakistan v. Riaz Ali Khan PLD 1958 (W.P.) Lah. 22; Muhammad Siddiq Javaid Chaudhry

v. The Government of West Pakistan PLD 1974 SC 393; Justice Khurshid Anwar Bhinder and others v.

Federation of Pakistan and others v. Federation of Pakistan and another PLD 2010 SC 483; Abdul Haque Indhar

and others v. Province of Sindh through Secretary Forest, Fisheries and Livestock Department, Karachi and 3

others 2000 SCMR 907; Ch. Muhammad Hussain Naqshbandi v. Government of the Punjab and others 2003

PLC (C.S.) 1421 and Liaqat Ali Shahid, Ex-Civil Judge, Bhalwal v. Government of the Punjab through Chief

Secretary, Punjab, Lahore 1999 PLC (C.S.) 334 ref.

Mrs. Abida Parveen Channar v. High Court of Sindh 2011 PLC (C.S.) 836 rel.

(e) Civil service---

----Termination from service---Probationer---Requirement of notice prior to terminating the services of a

probationer---Termination simplicter---Scope---Services of a probationer could be terminated without notice, in

case of termination simpliciter but where there were allegations of misconduct or inefficiency levelled against

the probationer, in such an eventuality, it was mandatory that the officer was put on notice and if there were

allegations of inefficiency, misconduct or corruption, a probationer was required to be served with a notice,

with the rationale being that any termination in the nature of dismissal or removal carried a stigma, hence the

civil servant should be granted an opportunity to defend and wash away any slur and taint alleged against such a

civil servant.

Muhammad Siddiq Javaid Chaudhry v. The Government of West Pakistan PLD 1974 SC 393;

Muhammad Amjad v. The Chief Engineer, WAPDA and another 1998 PSC 337; Ch. Muhammad Hussain

Naqshbandi v. Government of the Punjab and others 2004 SCMR 44; Muhammad Iqbal Khan Niazi v. Lahore

High Court, Lahore through Registrar 2003 PLC (C.S.) 285 and Rehan Saeed Khan and others v. Federation of

Pakistan and others 2001 PLC (C.S.) 1275 rel.

(f) Constitution of Pakistan---

----Art. 14---Inviolability of dignity of man, etc.---Civil service---Termination from service---Reasons for

termination---Every termination order must carry reasons and this was equally applicable to the case of

termination simpliciter and there was no plausible explanation why a public authority must shy away from

giving reasons for termination---To withhold reasons for termination of a civil servant generated a host of

adverse assumptions against the character of a civil servant which had a bearing on his reputation and goodwill

and failure of disclosing or intentional withholding of reasons was, therefore, below the dignity of any white

collared officer and offended Art.14 of the Constitution.

(g) Civil Service---

----Termination simpliciter---Concept---Concept of termination simpliciter as opposed to a termination carrying

a stigma---"Termination simpliciter" meant termination without any ceremony or termination in a summary

manner and such a termination from service was when a probationer failed to meet the eligibility requirements

of the post set by the employer like a departmental examination or in service training or if the appointment is ad

hoc and dependent on certain conditions or if the post itself is abolished---Such like termination was not

punitive or penalizing in nature and more importantly, it did not cast any allegation or affect the professional

reputation of the officer or the future prospects of employment of the probationer and in such cases, probationer

therefore need not be put on notice if the termination is actually a discharge from service or was termination

simpliciter.

National Bank of Pakistan and 117 others v. SAF Textile Mills Ltd and another PLD 2014 SC 283 rel.

(h) Interpretation of Statutes---

----Purposive or contextual construction---Reading down of statute---Concept and scope---Where literal

construction or plain meaning caused hardship, futility, absurdity or uncertainty, the purposive or contextual

construction was to be preferred to arrive at a more just, reasonable and sensible result---Every law was

designed to further the ends of justice and not to frustrate it on mere technicalities and though the function of

the courts was only to expound the law and not to legislate, nonetheless the Legislature could not be asked to sit

to resolve the difficulties in the implementation of its intention and the spirit of the law and in such

circumstances, it was the duty of the court to mould or creatively interpret the legislation by liberally

interpreting the statute---Statutes must be interpreted to advance the cause of statute and not to defeat it and if

certain provision of law construed in one way would make them consistent with the Constitution and another

interpretation would render them unconstitutional; the court would lean in favour of the former construction---

For upholding any provision, if it could be saved by reading it down, it should be done, unless plain words were

so clear as to be in defiance of the Constitution---Such interpretations spring out because of the concern of

courts to always let legislation to achieve its objective and not to let it fall merely because of a possible

ingenious interpretation and words were not static but dynamic and this infused fertility in the field of

interpretation---Principle of reading down, however, could not be available, where the plain and literal meaning

from a bare reading of any impugned provision clearly showed it conferred arbitrary, uncanalised or unbridled

power---Reading down the meanings of words with loose lexical amplitude was permissible as part of the

judicial process and to sustain a law by interpretation was the rule---Courts could and must interpret words and

read their meanings so that public good was promoted and power misuse was interdicted.

Elahi Cotton Mills Ltd. v. Federation of Pakistan PLD 1997 SC 582; Indus Jute Mills Ltd. v. Federation

of Pakistan 2009 PTD 1473; Interpretation of Taxing Statutes by Mittal; Maharao Saheb Shri Bhim Singhji and

others v. Union of India and others AIR 1981 SC 234; Muhammad Umer Rathore v. Federation of Pakistan

PLD 2009 Lah. 268; Federal Steam Navigation Co. Ltd. and another v. Department of Trade and Industry

(1974) 2 All E R 97; Delhi Transporate Corporation v. D.T.C. Mazdoor Congress and others AIR 1991 SC 101;

Sunil Batra v. Delhi Administration and others etc. AIR 1978 SC 1675 and Jagdish Pandey v. The Chancellor,

University of Bihar and others AIR 1968 SC 353 rel.

Muhammad Aslam Rizvi, Mushtaq Ahmed Mohal for Petitioners.

Azhar Iqbal, Muzammal Akhtar Shabbir, Muqtedir Akhtar and Ch. Muhammad Shahid Iqbal for

Petitioners (in connected writ petitions).

Shan Gul, Addl. A.-G. Punjab and Barrister Qasim Ali Chowhan, Asstt. A.-G. Punjab for Respondents.

Junaid Jabbar Khan Amicus Curiae.

Assisted by Qaisar Abbas and Mohsin Mumtaz, Research Associates and Civil Judges, Lahore High

Court Research Centre (LHCRC).

Date of hearing: 6th May, 2015.

JUDGMENT

SYED MANSOOR ALI SHAH, J.--- Petitioners have challenged the constitutionality of section

10(1)(i) of the Punjab Civil Servants Act, 1974 ("Act") as being ultra vires Article 10A of the Constitution of

Islamic Republic of Pakistan, 1973 ("Constitution").

2. Brief facts leading to the above challenge are that petitioners were appointed as Civil Judges-cum-

Judicial Magistrates vide Notification dated 23-6-2010 and posted as Civil Judges-cum-Judicial Magistrates

against existing vacancies vide Notification dated 30-6-2010. The appointment of the petitioners was subject to

confirmation in terms of Rule 7A of the Punjab Judicial Service Rules, 1994 ("Judicial Rules") which required

that the candidates complete initial or extended period of probation satisfactorily on the basis of (a)

Performance Evaluation made by the Departmental Confirmation Committee; (b) attend and successfully

qualify such Course and Training as may be determined by the High Court and (c) pass Departmental

Examination under the Punjab Civil Judges Departmental Examination Rules, 1991.

3. It is submitted that the petitioners successfully completed the Course and Training and passed the

Departmental Examination, however, just a day before the expiry of the probationary period of four years, the

services of the petitioners were terminated, without notice and without furnishing any reason, under section

10(1)(i) of the Act, vide Notification dated 4-7-2014.

4. Petitioners, through the instant petition, have laid challenge to the constitutionality of section 10(1)(i) of

the Act, which deprives the petitioners of an opportunity of prior notice and reason for the termination of their

services. It has been argued that the impugned section is ultra vires the Constitution as it deprives the petitioners

their right to due process and fair trial under Articles 4 and 10A of the Constitution besides being discriminatory

and as such violative of Article 25. They submit that if section 10(1)(i) of the Act is declared unconstitutional

they will have an opportunity to approach the Lahore High Court on the administrative side for the

reconsideration of their case, hence the instant challenge is not an academic exercise, as future remedies of the

petitioners, are dependent on the fate of this petition. Petitioners, have reiterated that they are not challenging

the Notification, where under their services have been terminated by the Lahore High Court, as they are aware

that writ is not maintainable against the High Court in the light of Asif Saeed v. Registrar, Lahore High Court

and others (PLD 1999 Lahore 350) and Muhammad Iqbal and others v. Lahore High Court through Registrar

and others (2010 SCMR 632). They submit that they will pursue the same administratively once the fate of

section 10 (1)(i) of the Act is determined.

5. It is argued that the petitioners were appointed as Civil Judges-cum-Judicial Magistrates against

substantive vacant posts, however, their appointment was subject to probation. They, therefore, do not have a

vested right to be appointed to the post, but have the vested right to be appointed to the post, if they successfully

complete the period of probation. They further argued that the petitioners were entitled to know the reasons

behind the opinion formed against them during the period of probation and in case the opinion was adverse,

they had the right to be put to notice, so that they could explain and defend themselves, before they be deprived

of their confirmation to a substantive vacant post. It is submitted that there has been no adverse comment

against the petitioners, as none has been communicated to them during the course of their service, therefore,

they are doubly curious regarding the reasons for their termination. They are, therefore, aggrieved of section 10

(1) (i) of the Act, which provides that the services of civil servant may be terminated without notice, during the

period of his probation.

6. It is emphasized that, as far as petitioner No.2 is concerned, Certification of Appreciation dated 18-11-

2013 has been issued by the District and Sessions Judge, Sahiwal which states as follows:---

"I have the honour to submit that Miss Bushra Farid, learned Civil Judge was posted at Sahiwal on 17-7-

2013. At present she is exclusively dealing with cases of family nature and performing upto the level of

satisfaction without any complaint with regard to her integrity."

7. It is submitted that the petitioners served as Civil Judges-cum-Judicial Magistrates for a period of almost

four years (extended period of probation) therefore their services could not be terminated without notice. They

submitted that section 10(1)(i) of the Act deprives the petitioner of the right to notice, hearing and reasons and

therefore offends Article 10A of the Constitution. Reliance is placed on Wattan Party through President v.

Federation of Pakistan through Cabinet Committee of Privatization, Islamabad and others (PLD 2006 SC 697),

Pakistan Peoples Party v. Government of Punjab and others (PLD 2014 Lahore 330), Muhammad Ashraf

Tiwana and others v. Pakistan and others (2013 SCMR 1159), National Bank of Pakistan and 117 others v. SAF

Textile Mills Ltd. and another (PLD 2014 SC 283), Messrs Chenone Stores Ltd. through Executive Director

(Finance Accounts) v. Federal Board of Revenue through Chairman and 2 others (2012 PTD 1815), Bilal Akbar

Bhatti v. Election Tribunal, Multan and 15 others (PLD 2015 Lahore 272), Al-Jehad Trust through Raeesul

Mujahideen Habib-ul-Wahabb-ul-Khairi and others v. Federation of Pakistan and others (PLD 1996 SC 324),

Imtiaz Ahmad Kaifi v. Government of Punjab and others (PLD 2013 Lahore 598), Engineer Majeed Ahmed

Memon v. Liaquat University of Medical and Health Sciences Jamshoro and others (2014 SCMR 1236), State

of M.P. v. Rakesh Kohli and another (2013 SCMR 34), Arshad Mehmood v. Commissioner/ Delimitation

Authority, Gujranwala and others (PLD 2014 Lahore 221) and Babar Hussain Shah and another v. Mujeeb

Ahmed Khan and another (2012 SCMR 1235).

8. Learned Additional Advocate General, Punjab along with Assistant Advocate General, Punjab, who are

also on notice under Order XXVII-A of C.P.C., submit that Articles 4 and 10-A of the Constitution are not

attracted to this case, as the petitioners, being probationers, do not have any right to be appointed to the post. In

support of his contention learned Additional Advocate General placed reliance on Federation of Pakistan v.

Riaz Ali Khan (PLD 1958 (W.P.) Lahore 22) and Muhammad Siddiq Javaid Chaudhry v. The Government of

West Pakistan (PLD 1974 SC 393). He also submitted that the petitioners were fully aware at the time of their

appointment regarding section 10 of the Act but they did not challenge the same at that time and have

challenged the same after their termination, therefore, the petitioners are blowing hot and cold, which is not

permitted under the law. Learned Law Officer placed reliance on Justice Khurshid Anwar Bhinder and others v.

Federation of Pakistan and others v. Federation of Pakistan and another (PLD 2010 SC 483) to submit that the

petitioners have no vested right to a notice or hearing during the period of probation. He further placed reliance

on Abdul Haque Indhar and others v. Province of Sindh through Secretary Forest, Fisheries and Livestock

Department, Karachi and 3 others (2000 SCMR 907), Ch. Muhammad Hussain Naqshbandi v. Government of

the Punjab and others (2003 PLC (C.S.) 1421) and Liaqat Ali Shahid, Ex-Civil Judge, Bhalwal v. Government

of the Punjab through Chief Secretary, Punjab, Lahore (1999 PLC (C.S.) 334). Lastly, he submits that the

petitioners have no locus standi to challenge their termination or the constitutionality of the law.

9. I have heard the parties at length, have gone through the record and examined the case-law cited by the

parties. The opinion of the court is as follows:---

OPINION OF THE COURT

Facts

10. The petitioners were appointed as Civil Judges-Cum-Judicial Magistrates on 23-6-2010 subject to

probation. During probation, they were posted against existing vacancies vide Notification dated 30-6-2010.

Petitioners passed the Departmental Examination and successfully attended and qualified the Course and

Training prescribed by the High Court during the initial few months of their service. Thereafter, the petitioners,

served the District Judiciary for a period of four years and a day before the completion of the extended period of

probation, the services of the petitioners were terminated, without notice and without disclosing the reasons for

their termination, under section 10(1)(i) of the Act, vide Notification dated 4-7-2014.

11. The terms and conditions of a judicial officer, including appointment, probation, confirmation and

termination are governed under the Punjab Civil Servants Act, 1974 ("Act"), read with the Punjab Judicial

Service Rules, 1994 ("Judicial Rules") and where the Judicial Rules are deficient or lacking,1 by Punjab Civil

Servants (Appointment and Conditions of Service) Rules, 1974 ("Rules").

12. Initial appointment of a civil servant to a substantive post is subject to probation under section 5 of the

Act. Section 5 of the Act describes the scope and nature of the term probation in the following manner:---

"5. Probation: (1) An initial appointment to a service or post, referred to in section 4, not being an ad hoc,

appointment, shall be on such probation and for such period of probation, as may be prescribed.

(2) Any appointment of a civil servant by promotion or transfer to a service or post may also be made on

such probation and for such period of probation as may be prescribed.

(3) Where, in respect of any service or post, the satisfactory completion of probation includes the passing of

a prescribed examination, test or course or successful completion of any training, a person appointed on

probation to such service or post who, before the expiry of the original or extended period of his probation, has

failed to pass such examination or test or to successfully complete the course or the training shall, except as may

be prescribed otherwise---

(a) if he was appointed to such service or post by initial recruitment, be discharged; or

(b) if he was appointed to such service or post by promotion or transfer, be reverted to the service or post

from which he was promoted or transferred and against which he holds a lien or, if there be no such service or

post, be discharged." (emphasis supplied)

A probationer is "eligible" for confirmation in service on the satisfactory completion of his probation under

section 6 of the Act which states as under:---

6. Confirmation.--

(1) A person appointed on probation shall, on satisfactory commotion of his probation, be eligible for

confirmation in a service or a post as may be prescribed.

(2) A civil servant promoted to a post 2(or grade) on probation shall, on satisfactory completion of his

probation, be confirmed in such post as may be prescribed.

(3) A civil servant promoted to a post 2(or grade) on regular basis shall be confirmed after rendering

satisfactory service for such period as may be prescribed.

(4) There shall be no confirmation against any temporary post.

(5) A civil servant who, during the period of his service, was eligible for confirmation in any service or

against any post, retires from service before confirmation shall not, merely by reason of such retirement, be

refused confirmation in such service or against such post or any benefits accruing there-from.

(6) Confirmation of a civil servant in a service or against a post shall take effect from the date of the

occurrence of a permanent vacancy in such service or against such post or from the date of continuous

officiation, in such service or against such post, whichever is later. (emphasis supplied)

Rule 7A of the Judicial Rules provides as under:---

"7A. Confirmation of Civil Judge-cum-Magistrate.--- A Civil Judge-cum-Magistrate shall not be confirmed in

service unless:

(a) He completes initial or extended period of probation satisfactorily on the basis of performance

evaluation made by Departmental Confirmation Committee;

(b) He undergoes, attends and successfully qualifies such course and training as may be determined by the

High Court; and

(c) He has passed the departmental examination under the Punjab Civil Judges Departmental Examination

Rules, 1991."

Rule 82 of the Judicial Rules provides as under:---

"8. (1) A person appointed to a post in a grade against a substantive vacancy shall remain on probation for a

period of two years, if appointed by initial recruitment, and for a period of one year, if appointed otherwise;

provided that the appointing authority may extend the period of probation by a further period not exceeding two

years in all.

Explanation--- Officiating service and service spent on deputation to a corresponding or a higher post

may be allowed to count towards the period of probation.

(2) If no orders have been made by the day following the completion of the initial probationary period, the

period of probation shall be deemed to have been extended.

(3) A Civil Judge-cum-Magistrate or an Additional District and Sessions Judge appointed through initial

recruitment, who has been confirmed under rule 7A or rule 7B, the confirmation shall take effect from the date

of initial appointment in the service." (emphasis supplied)

The above shows that a judicial officer is appointed as a Civil Judge-cum-Judicial Magistrate against a

substantive vacant post. The appointment is subject to confirmation after successful completion of the probation

period. The confirmation requires that (i) the probationer completes the period of probation satisfactorily on the

basis of the Performance Evaluation made by the Departmental Confirmation Committee. (ii) Qualifies such

Course and Training as prescribed and (iii) passes the Departmental Examination. Under Rule 8, confirmation

of a probationer takes effect from the date of initial appointment in service. Conditions prescribed in Rule 7A

are in addition to the passing of a departmental examination and successful completion of training as envisaged

under section 5 of the Act. Evaluation under Rule 7A (a) is free to place reliance on extraneous evidence

procured from other sources (e.g. Police, Special Branch, etc.) to gauge the eligibility and fitness of the civil

servant/judicial officer. The evidence collected can be adverse to the interest of the civil servant/judicial officer,

which would ordinarily necessitate the dismissal or removal of the civil servant from service on the grounds of

inefficiency, misconduct, corruption or being involved in any other subversive activity. Termination from

service during probation on these grounds is punitive and penal in nature.

13. Section 10 (1) (i) of the Act provides as under:---

10. Termination of service.---

(1) The service of a civil servant may be terminated without notice---

(i) during the initial or extended period of his probation:

Provided that, where such civil servant is appointed by promotion on probation or, as the case may be, is

transferred and promoted on probation from one service cadre or post to another service, cadre or post his

service shall not be terminated so long as he holds a lien against his former post, service or cadre, and he shall

be reverted to his former service, or as the case may be, cadre or post;

(ii) If the appointment is made on ad hoc basis liable to termination on the appointment of a person on the

recommendation of the selection authority, on the appointment of such person.

(2) In the event of a post being abolished or number of posts in a cadre or service being reduced the services

of the most junior person in such cadre or service shall be terminated.

(3) Notwithstanding the provisions of subsection (1) but subject to the provisions of subsection (2), the

service of a civil servant in temporary employment or appointed on ad hoc basis shall be liable to termination

on thirty days notice or pay in lieu thereof.

Section 10(1)(i) states that if the services of a probationer are terminated during the period of probation he is not

entitled to any notice. Section 5(6) of the Act employs the term "discharged" for a person who fails the

departmental test or the training course. This is also echoed in Rule 4(3) of the Punjab Civil Servants

(Efficiency and Discipline) Rules, 1999. The collective reading of sections 5 and 10 of the Act, envisage two

distinct species of terminations. One where the probationer fails to pass the departmental examination or the

training course prescribed by the authority. There is no allegation levelled against the probationer. The

termination is, therefore, not punitive or penal. It simply results in the discharge of the probationer, which does

not in any manner mar the future employment prospects of the probationer. Such like termination has come to

be known as termination simpliciter.

14. The other specie of termination is where specific allegation is levelled against the officer on the basis of

adverse information or evidence collected by the competent authority. Such a termination is akin to dismissal or

removal from service and is punitive in nature. It also taints the service record of the probationer and impairs his

future employment prospects.

15. A probationer under Rule 7A can fall in either of the two categories of terminations, but section 10(1)(i)

does not make any such distinction and disallows the issuance of notice in both sets of terminations. This

aspect, without reference to section 10(1)(i) of the Act, has earlier come up before the superior courts. The

jurisprudence evolved over the years on the requirement of notice prior to terminating the services of the

probationer is that the services of a probationer can be terminated without notice, in case of termination

simpliciter but where there are allegations of misconduct or inefficiency levelled against the probationer, in

such an eventuality, it is mandatory that the officer is put on notice. Reliance with advantage is placed on

Muhammad Siddiq Javaid Chaudhry v. The Government of West Pakistan (PLD 1974 SC 393), Muhammad

Amjad v. The Chief Engineer, WAPDA and another (1998 PSC 337), Ch. Muhammad Hussain Naqshbandi v.

Government of the Punjab and others (2004 SCMR 44), Muhammad Iqbal Khan Niazi v. Lahore High Court,

Lahore through Registrar (2003 PLC (C.S.) 285) and Rehan Saeed Khan and others v. Federation of Pakistan

and others (2001 PLC (C.S.) 1275).

16. The essence of our pre-18th constitutional amendment jurisprudence, to a large extent, can be captured

and constitutionalized in the shape of the new fundamental right of fair trial under Article 10A of the

Constitution. This has since been so judicially recognized. Reference can be made to Warid Telecom (Pvt.) Ltd.

and 4 others v. Pakistan Telecommunication Authority through Chairman (2015 SCMR 338), Suo Motu action

regarding allegation of business deal between Malik Riaz Hussain and Dr. Arsalan attempting to influence the

judicial process (PLD 2012 SC 664), Babar Hussain Shah and another v. Mujeed Ahmed Khan and another

(2012 SCMR 1235), Suo Motu Case No.4 of 2010 (PLD 2012 SC 553), Liaqat Ali Chugtai v. Federation of

Pakistan through Secretary Railways and 6 others (PLD 2013 Lahore 413) and Shabbir Ahmed v. Kiran

Khursheed and 8 others (2012 CLC 1236).

17. Article 10A provides as under:---

"10A. Right to fair trial.-- For the determination of his civil rights and obligations or in any criminal charge

against him a person shall be entitled to a fair trial and due process." (emphasis supplied)

It is now a fundamental right that determination of civil rights and obligations of a person shall be through fair

trial and due process. Civil rights3 are the rights guaranteed by the Constitution and the legislation. Obligations

may refer to anything that a person is bound to do or forbear from doing, whether the duty is imposed by law,

contract, promise, social relations, courtesy, kindness or morality.4 "Anything that an individual is required to

do because of a promise, vow, oath, contract, or law. It refers to a legal or moral duty that an individual can be

forced to perform or penalized for neglecting to perform."5 Right of one person is an obligation of the other and

vice versa. This mutually corresponding and symbiolic relationship between civil rights and obligations,

expands the proportions and broadens the amplitude of Article 10A and places it as one of the most robust,

dynamic and an evergreen fundamental right that is not frozen in time or moored to serve, only the age old

vested rights. Article 10A, is a constitutional right, hence it is open and all embracing and is there to include all

kinds of rights and obligations that emerge from the Constitution, legislation, "law, contract, promise, social

relations, courtesy, kindness or morality." Article 10A cannot be put in shackles and in fact goes beyond vested

rights. The words of Hamoodur Rehman, CJ in Fazal Din's case6 resonate so audibly even today: "It is clear

from the above that the right considered sufficient for maintaining a proceeding of this nature [writ jurisdiction]

is not necessarily a right in the strict juristic sense but it is enough if the applicant discloses that he had a

personal interest in the performance of the legal duty which if not performed or performed in a manner not

permitted by law would result in the loss of some personal benefit or advantage or the curtailment of a privilege

or liberty of franchise." Article 10A, therefore, is all embracing and deals with rights and duties, which if

violated can "result in loss of some personal benefit or advantage or curtail a privilege or liberty or franchise."

18. In the present case sections 4, 5 and 6 of the Act, confer a right to confirmation, once the judicial officer

successfully completes his period of probation. It also confers an obligation on the authority to confirm the

appointment of the officer if the probationer successfully completes the period of probation. Viewed differently,

probationer is also under an obligation to meet the requirements of Rule 7A and has a corresponding right to

confirmation subject to his fulfilling these obligations. A probationer, in effect, already stands appointed but has

to undergo the process of confirmation. Therefore, the right of confirmation of a probationer or the obligation of

the authority to confirm the probationer, if he successfully completes the period of probation, or vice versa, are

covered under Article 10A and these rights and obligations have to be determined through a fair trial and due

process. The objection of the learned Addl. A.G that the petitioners being probationers have no right to the post

and, therefore, have no right to invoke Article 10A is hopelessly misplaced and is hereby rejected.

19. In this background the questions before this Court, in the context of section 10(1)(i) of the Act are: (i)

Whether, in case where termination order is punitive in nature i.e., on the grounds of misconduct, corruption

and inefficiency levelled against a judicial officer, section 10 (1) (i) of the Act by not allowing notice to be

issued to the probationer before termination offends Article 10A of the Constitution? (ii) Whether Articles, 4, 9,

10A, 14 and 19A of the Constitution read with section 24A of the General Clauses Act, 1897 mandate, that

termination order of a probationer, including termination simpliciter, must always disclose reason(s) or

ground(s) for termination?

20. It is now well settled, that if there are allegations of inefficiency, misconduct or corruption, a

probationer is required to be served with a notice. Rationale being that any termination in the nature of

dismissal or removal carries a stigma, hence the civil servant be granted an opportunity to defend and wash

away any slur and taint alleged against him. Reference has already been made to the relevant case law above.

One of the requirements for confirmation after the period of probation is given under Rule 7A(a) of the Judicial

Rules, which reads as under:

(a) He completes initial or extended period of probation satisfactorily on the basis of performance

evaluation made by Departmental Confirmation Committee;

Performance Evaluation is subjective and relies on sources other than the result of the Departmental

Examination and the Course and Training scorecard. If the information or evidence collected is adverse to the

interest of the judicial officer, natural justice and the strength of the settled jurisprudence (above) requires that

the judicial officer be put on notice and be heard after an adequate disclosure of the adverse material and

information is made to the judicial officer. This well established principle stands constitutionalized as a

fundamental right under Article 10A. Fair trial and due process requires that adequate disclosure is made and

the probationer is put on notice. Even otherwise, right to life which includes right to livelihood and right to

dignity of a person under Article 14 of the Constitution also stand behind Article 10A. Section 10(1)(i),

therefore, offends Article 10A of the Constitution in this respect. There are, however, other dimensions to

section 10(1)(i) of the Act which need to be considered before finalizing this opinion.

21. The first dimension deals with situations covered under Rule 7A(b) and (c), which are as under:--

(a) He undergoes, attends and successfully qualifies such course and training as may be determined by the

High Court; and

(b) He has passed the departmental examination under the Punjab Civil Judges Departmental Examination

Rules, 1991.

This brings us to the concept of termination simpliciter as opposed to a termination carrying a stigma.

Termination simplicter means termination without any ceremony or termination in a summary manner.7 Such a

termination from service is when a robationer fails to meet the eligibility requirements of the post set by the

employer like a departmental examination or in service training or if the appointment is ad hoc and dependent

on certain conditions or if the post itself is abolished. Such like termination is not punitive or penalizing in

nature. More importantly, it does not cast any allegation or affect the professional reputation of the officer or the

future prospects of employment of the probationer. It is for this reason that section 5 of the Act and Rule 4(3) of

the Punjab Civil Servants (Efficiency and Discipline) Rules, 1999 refer to it as a "discharge" from service. The

probationer therefore need not be put on notice if the termination is actually a discharge from service or is

termination simpliciter. No useful purpose can be served by issuing any such notice as the authority has already

granted the probationer an opportunity of appearing before the authority in the departmental examination and

also in the course and training conducted by the authority. A parallel can be drawn with candidates applying for

admission or employment, subject to an entrance test. In case the candidate fails to pass the entrance test, is he

to be put on notice first? The answer is NO. Therefore, in such a case the competent authority is under no

obligation to issue notice before termination of service. Section 10(1)(i) of the Act is applicable in such a case.

It is important to note that the probationer under Article 10A is, however, free to challenge the legality of the

termination order or the merits of the departmental examination or the transparency of the departmental training

in a court of competent jurisdiction, if he so desires, on grounds other than the ground of failure to issue notice.

22. The next dimension of section 10(1)(i) of the Act is where there are allegations of misconduct or

inefficiency against a judicial officer and the same have weighed on the mind of the authority but instead of

leveling any allegations of misconduct and inefficiency against the probationer, the employer, in order to take

advantage of section 10(1)(i) of the Act and to avoid the process of notice takes an easy course by opting for

discharge of services or termination simpliciter. Can the benefit of section 10(1)(i) be availed in such like

circumstances?

23. Where termination carries allegations of misconduct, inefficiency and corruption, the civil servant is

entitled to a notice to defend himself and also to an adequate disclosure of the evidence against him. If the

adverse information and material has weighed on the mind of the authority and has been the dominant reason

behind the order of termination, withholding of any such allegation or avoiding to disclose any reason for

termination, in order to bypass the requirement of notice by opting for termination simpliciter is offensive to

Article 10A of the Constitution. Reliance is placed on Mrs. Abida Parveen Channar v. High Court of Sindh

(2011 PLC (C.S.) 836). Termination simpliciter is an option available with the authority only when the

termination, according to the service record of the civil servant, is not based on any allegations of misconduct,

inefficiency or corruption against a civil servant. Interestingly, in the present case the petitioners have passed

the departmental examination and the successfully completed the training in the initial few months of their

appointment. Therefore, there termination is purely on the basis of Rule 7A(a).

24. Every termination order must carry reasons. This is equally applicable to the case of termination

simplieiter. There is no plausible explanation why a public authority must shy away from giving reasons for

termination. To withhold reasons for termination of a civil servant generates a host of adverse assumptions

against the character of a civil servant which has a bearing on his reputation and good will. The failure of

disclosing or intentional withholding of reasons is, therefore, below the dignity of any white collared officer and

offends Article 14 of the Constitution.

25. While section 10(1)(i) of the Act is unconstitutional in some situations, it is constitutionally permissible

in others. In such a situation, the constitutionality of the said section can be saved, if section 10(1)(i) of the Act

is read down, instead of being struck down.

26. The way ahead through this legislative impasse can either be to independently judge the constitutionality

of section 10(1)(i) of the Act and strike it down as being unconstitutional or then try to save the provision by

using purposive interpretation of the Act and using the interpretative tool of "reading down" or "recasting the

statue." It is settled law that where literal construction or plain meaning causes hardship, futility, absurdity or

uncertainty, the purposive or contextual construction is preferred to arrive at a more just, reasonable and

sensible result. "Every law is designed to further the ends of justice and not to frustrate it on mere technicalities.

Though the function of the courts is only to expound the law and not to legislate, nonetheless the legislature

cannot be asked to sit to resolve the difficulties in the implementation of its intention and the spirit of the law. In

such circumstances, it is the duty of the court to mould or creatively interpret the legislation by liberally

interpreting the statute. The statutes must be interpreted to advance the cause of statute and not to defeat it8."

Justice Ajmal Mian, J in Elahi Cotton Mills Ltd. v. Federation of Pakistan (PLD 1997 SC 582) held:

"That theory of reading down is a rule of interpretation which is resorted to by the courts when they find

a provision read literally seems to offend a fundamental right or falls outside the competence of the particular

Legislature."

In Indus Jute Mills Ltd. v. Federation of Pakistan (2009 PTD 1473), Sh. Azmat Saeed, J. (as he then was)

speaking for this Court held:

"37. In view of the above, this court is confronted with two possible options; either is to strike down

impugned section 235 Income Tax Ordinance, 2001 being ultra vires the Constitution and fundamental rights of

the citizens or in the alternate, to resort to the time honoured rule of interpretation of employing the theory of

reading down and looking beyond the literal meaning of the provision..."

27. If certain provision of law construed in one way would make them consistent with the constitution and

another interpretation would render them unconstitutional the court would lean in favour of the former

construction. Dr. Avtar Singh in Introduction to Interpretation of Statues (Reprint Edition 2007) writes:---

"Similarly, for upholding any provision, if it could be saved by reading it down, it should be done,

unless plain words are so clear as to be in defiance of the Constitution. These interpretations spring out because

of the concern of courts to always let a legislation to achieve its objective and not to let it fall merely because of

a possible ingenious interpretation. The words are not static but dynamic. This infuses fertility in the field of

interpretation. The principle of reading down, however, will not be available, where the plain and literal

meaning from a bare reading of any impugned provisions clearly shows that it confers arbitrary, uncanalised or

unbridled power."

28. In Maharao Saheb Shri Bhim Singhji and others v. Union of India and others (AIR 1981 SC 234) V.R.

Krishna Iyer J held: "...reading down meanings of words with loose lexical amplitude is permissible as part of

the judicial process. To sustain a law by interpretation is the rule... Courts can and must interpret words and

read their meanings so that public good is promoted and power misuse is interdicted. As Lord Denning said: 'A

judge should not be a servant of the words used. He should not be a mere mechanic in the power house of

semantics'..." Reliance is also placed on Muhammad Umer Rathore v. Federation of Pakistan (PLD 2009 Lahore

268), Federal Steam Navigation Co. Ltd. and another v. Department of Trade and Industry (1974) 2 All E R 97),

Delhi Transporate Corporation v. D.T.C. Mazdoor Congress and others (AIR 1991 SC 101), Sunil Batra v.

Delhi Administration and others etc. (AIR 1978 SC 1675) and Jagdish Pandey v. The Chancellor, University of

Bihar and others (AIR 1968 SC 353).

29. For the above reasons it is held as follows:---

A. In the light of Article 10A read with Articles 4, 9, 14 and 25 of the Constitution, section 10(1)(i) of the

Punjab Civil Servants Act, 1974 is read down, to the extent, that in cases where termination of a probationer is

on the grounds of misconduct, inefficiency, corruption, etc prior notice is mandatory and is required to be issued

to the probationer.

B. Where the probationer has failed to meet the eligibility requirements of a departmental examination or in

service training course, the probationer can be terminated without notice, but any such termination order must

carry reasons for termination.

C. In case the probationer has passed the eligibility criteria and has been found liable for misconduct,

inefficiency or corruption, the competent authority does not have a choice to opt for termination simpliciter by

withholding the real reason for termination and must issue a reasoned termination order.

D. It is clarified that this judgment does not examine or attend to the order of termination of services of the

petitioners vide notification dated 4-7-2014 issued by the Lahore High Court, Lahore and the scope of this

judgment is limited to the extent of vires of section 10 (1) (i) of the Act.

30. For the above reasons this petition along with connected petitions is allowed in the above terms. This

judgment will decide the instant petition, as well as, connected writ petitions i.e., W.P. Nos.27171/2014 and

28557/2014 as all these petitions raise common questions of law and facts.

31. Before parting with the judgment I acknowledge the valuable assistance rendered by Junaid Jabbar,

Advocate/learned amici curie and M/s. Qaisar Abbas and Mohsin Mumtaz, Research Associates/learned Civil

Judges, Lahore High Court Research (LHCRC).

KMZ/N-34/L Petitions accepted.