IN THE SUPREME COURT OF PAKISTAN  
(Original Jurisdiction) 
 
 
 
 
 
 
 
 
PRESENT:  
 
 
Mr. Justice Iftikhar Muhammad Chaudhry, CJ  
 
 
 
Mr. Justice Ghulam Rabbani  
 
 
 
Mr. Justice Khalilur Rehman Ramday  
 
 
CONSTITUTION PETITION NO. 58 OF 2010  
WITH CIVIL MISC. APPLICATION NO.3387 OF 2010 
 
Mir Muhammad Idris & another    
 
 
  …   PETITIONERS 
 
VERSUS  
 
Federation of Pakistan through Secretary  
Ministry of Finance & others   
 
  
    … RESPONDENTS  
 
 
For the petitioners:  
 
Mr. Manzoor Qadir, ASC  
 
 
 
 
 
Mr.G.N. Gohar, AOR  
 
For the applicant   
 
Barrister Zafarullah Khan, ASC  
(CMA.3387/10) 
 
 
  
 
On Court notice:  
 
Maulvi Anwar-ul-Haq  
 
 
 
 
 
Attorney General for Pakistan  
 
For respondent No.3:   
Mr. Abid S. Zubairi, ASC 
 
 
 
 
 
Kh. Muhammad Farooq, Sr. ASC 
 
 
 
 
 
Dr. Ibrar Baig, SEVP 
Mr. Fazal-ur-Rahman, EVP 
Mr. Tariq Zafar Iqbal, Regional Chief 
Mr. Saeed Khan, Legal Head 
 
For respondent No. 2:   
Mr. M. Bilal, Sr. ASC 
 
 
 
 
 
Mr. Babar Bilal, ASC 
 
 
 
 
 
Syed Safdar Hussain, AOR 
 
 
 
 
 
Mr. Amjad Iqbal, Joint Director 
 
For respondent No. 1:   
Mr. Ali Sher, S.O.  
 
Date of hearing:  
 
05.01.2011  
.-.-.  
 
J U D G M E N T  
 
 
 
Iftikhar Muhammad Chaudhry, CJ –. By the above 
Constitution Petition, the petitioners have challenged the validity of the 
Const. P. 58 of 2010 
 
 
2 
reappointment of respondent No. 3, Syed Ali Raza as President of the 
National Bank of Pakistan (NBP) for fifth time for one year 
commencing from 01.07.2010 by the respondent No. 1, Federation of 
Pakistan through Secretary, Ministry of Finance, Government of 
Pakistan. It has been prayed that the notification of his reappointment 
vide No. F.1(8)Bkg-III/2000 dated 10.04.2010 be declared illegal, null 
and void and that the respondent No.3 be restrained from acting as 
President NBP. It has further been prayed that the respondent be 
directed to produce a list of those personalities who got benefits of 
loans written off by the respondent No. 3 since his first appointment 
i.e. from 01.07.2000 till 31.07.2010.   
2.  
 
The case of the petitioners is that the respondent No.3 
was, initially, appointed as President, NBP for a period of three years 
w.e.f. 01.07.2000, for another period of three years w.e.f. 01.07.2003, 
for yet another period of three years w.e.f. 01.07.2006 and for a 
further period of one year w.e.f. 01.07.2009 and then for one year 
more w.e.f. 01.07.2010. It is stated that before the expiry of his 
previous term of one year commencing from 01.07.2009 vide 
notification dated 20.03.2010, the respondent No.3 was reappointed 
till further orders; however, by another notification dated 21.03.2010, 
the first mentioned notification dated 20.03.2010 was withdrawn and 
then by a notification dated 10.04.2010, he was again reappointed for 
a period of one year w.e.f. 01.07.2010. The grievance of the 
petitioners is that the respondent No.3 is holding office of President 
NBP illegally and unlawfully, his reappointment for fifth term being 
void ab initio.   
3.  
 
Mr. Manzoor Qadir, ASC for the petitioners contended that 
in view of the provision of section 11(3)(d) of the Banks 
Const. P. 58 of 2010 
 
 
3 
(Nationalization) Act, 1974 as amended by the Banks (Nationalization) 
(Amendment) Act, 1997, a person could be appointed as President 
NBP for not more than two terms, but the respondent No. 3 was 
reappointed from time to time as President NBP for several terms by 
making amendments in the Banks (Nationalization) Act, 1974, 
hereinafter referred to as the Act of 1974 illegally with a view to 
extend favour to him. The learned counsel submitted that on 
promulgation of the Act of 1974 as amended, the ownership, 
management and control of all banks including the NBP stood 
transferred and vested in the Federal Government w.e.f. 01.01.1974. 
Section 11(1) of the Act of 1974 provided that a Bank shall have a 
Board consisting of a President and not less than five and not more 
than seven other members to be appointed by the Federal 
Government for a period of three years while under section 11(3)(d) 
ibid, a person could be so reappointed for a further period of three 
years. However, while the respondent No.3 was holding office of 
President by reappointments, in order to favour him to continue with 
it,  a further amendment in section 11(3)(d) was brought about by 
Ordinance No. XII of 2006 dated 31.05.2006, providing that the 
reappointment may be made for “such further term or terms as may 
be determined”. The said Ordinance, according to learned counsel, 
stood repealed at the expiration of 120 days as it was not laid before 
the National Assembly within the said period, however, the aforesaid 
amendment was reintroduced by another Ordinance No. XXIX of 2006 
dated 04.11.2006 operative from 28.09.2006, which too stood 
repealed on expiry of the prescribed period since the same was not 
laid before the National Assembly. Later, learned counsel emphasized, 
this exercise of amending the Act of 1974 continued persistently, such 
Const. P. 58 of 2010 
 
 
4 
as by means of Ordinance No. IV of 2007 dated 05.02.2007 effective 
from 28.01.2007 and Ordinance No. XXVIII of 2007 dated 04.06.2007 
effective from 28.05.2007 evidently to accommodate the respondent 
No.3. Ultimately, learned counsel contended, the said amendment was 
incorporated unconstitutionally by way of the Finance Act, 2007.  
4.  
 
The learned counsel further submitted that during the 
tenure of respondent No. 3, loans of billions of rupees were written off 
to accommodate influential borrowers with the result that the annual 
profits of the bank started showing evident decline since 2007, 
therefore, there was no justification for his reappointment as 
President. He stressed that the Act of 1974 could not have been 
amended through the Finance Act, 2007, as the Finance Act only dealt 
with fiscal matters, and was passed, not by both the Houses of 
Parliament, but by the National Assembly alone; therefore, as a 
consequence 
the 
notification 
dated 
10.04.2010 
whereby 
the 
respondent No. 3 was reappointed for a period of one year w.e.f. 
01.07.2010, having been issued in pursuance of an invalid law, was 
void. In support, he placed reliance on Sindh High Court Bar 
Association v. Federation of Pakistan (PLD 2009 SC 879).   
5.  
 
Barrister Zafarullah Khan, ASC appeared in CMA No. 3387 
of 2010 filed for impleadment as party. He reiterated the arguments 
made by Mr. Manzoor Qadir and added that the Ordinance No. XII of 
2006 dated 31.05.2006 under which the respondent No.3 was 
reappointed for the third term died its natural death after lapse of 120 
days as it was never laid before the National Assembly, but he was 
allowed to continue holding the post illegally.   
6.  
 
Mr. Abid Zubairi, ASC, learned counsel for respondent No.3 
submitted that the amendments in the Act of 1974 were to be seen by 
Const. P. 58 of 2010 
 
 
5 
the Court as a whole and not just the amendment in section 11(3)(d) 
of the Act of 1974 whereby the appointment of President could be 
made for such further term or terms as may be determined. He 
contended that the appointment of respondent No.3 made vide 
notification dated 10.04.2010 for a period of one year from 
01.07.2010 to 30.06.2011 was a past and closed transaction and the 
declaration by the Court, if any, would have a prospective effect not 
affecting his such appointment. According to him, the Finance Act was 
an Act of Parliament, duly assented to by the President under Article 
75 of the Constitution to be seen as falling within the scope of Article 
73(4) & (5). Mr. Zubairi, alternatively, argued that in case the Court 
came to the conclusion that amendment in the Act of 1974 could not 
have been brought about through the Finance Act, therefore, it would 
void, not void ab initio and it would also not revive the old law. He has 
placed reliance on Sindh High Court Bar Association's case, Dr. 
Mobashir Hasan v. Federation of Pakistan (PLD 2010 SC 265), Abul 
A’la Maudoodi v. Govt. of West Pakistan (PLD 1964 SC 673) and Hajji 
Muhammad Hussain v. Province of Blochistan (NLR 1995 CrLJ 313).   
7.  
 
Khawaja Muhammad Farooq, Sr. ASC also appeared on 
behalf of respondent No. 3. He argued that the petitioners’ averment 
that the Act of 1974 was amended from time to time for the benefit of 
respondent No.3 could not be maintained on the ground that mala 
fides could not be attributed to the legislature; Constitution/Writ 
Petitions were filed in the High Court of Sindh and the Lahore High 
Court with the same prayer by the employees of the Bank who had 
individual grievances, which were sub judice, therefore, in line with the 
general principle of jurisprudence that the higher courts should have 
the benefit of judgment/views of the lower courts, the High Courts 
Const. P. 58 of 2010 
 
 
6 
should be allowed to proceed with the matters pending before them; 
the appointment of respondent No.3 was in accordance with the 
provisions of the Act of 1974 as amended from time to time; the Bank 
had flourished on account of vast experience in the banking industry of 
the respondent No. 3, who had earned appreciation and praise both 
from national as well as international forums for his professional 
competence and his efforts for enhancing the international rating of 
the Bank; the amendment of the Act of 1974 by means of the Finance 
Act was valid as in the past many laws, such as Companies Ordinance, 
Securities and Exchange Commission Act, Social Security Ordinance, 
Khushhali Bank and even the Act of 1974 itself had been amended by 
various Finance Acts/Ordinances; the respondent No. 3 was not the 
authority to write off the loans, which was done by the Board in 
accordance with the policy guidelines/circulars issued by the State 
Bank of Pakistan, reports whereof were submitted to the State Bank 
and were also reflected in the annual reports of the Banks; and that 
the actions taken, orders passed, notifications issued during the 
currency of a repealed Ordinance did not lose legal force and continued 
to hold the field and could not be called in question on account of 
lapse/repeal of the Ordinance.   
8. 
 
Learned Attorney General for Pakistan also followed same 
line of arguments of respondent No.3. However, he stated that if 
section 11(3)(d) of the Act of 1974 was declared unconstitutional, it 
would have effect on other such like provisions, which were amended 
by means of Finance Act, 2007. Therefore, he emphasized to save this 
provision as respondent No.3 otherwise will retire on 30.06.2011.  
9.  
 
Mr. M. Bilal, Sr. ASC appeared on behalf of State Bank of 
Pakistan and stated that respondent No.3 was appointed with the 
Const. P. 58 of 2010 
 
 
7 
concurrence of Ministry of Finance in accordance with existing law. No 
arguments were advanced on behalf of Federation of Pakistan nor 
request was made to engage a counsel.  
10.   
We have heard the learned counsel and have gone through 
the relevant provisions of the law and Constitution as also the case law 
cited at the bar.  
11.   
The main question falling for determination by this Court in 
the instant case is whether section 11(3)(d) of the Act of 1974, which 
related to the appointment of Chairman, President and members of the 
NBP Board, could have been amended by the Finance Act, 2007 
[Money Bill] passed in terms of Articles 73 and 75 of the Constitution. 
Therefore, for better understanding to determine this question, it will 
be pertinent to reproduce below Article 73 of the Constitution, which 
defines Money Bill, and section 11(3) of the Act of 1974 before and 
after amendment brought about in its clause (d) by way of the Finance 
Act, 2007: -  
 
 
Article 73 of the Constitution  
 
“73. Procedure with respect to Money Bill.  
 
(1) 
Notwithstanding anything contained in Article 
70, 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 seven 
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 purpose 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;  
Const. P. 58 of 2010 
 
 
8 
(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.”   
 
 
 
“Section 11 of the Act of 1974: 
(1) 
………………………………………………………………………………….  
(2) 
………………………………………………………………………………….  
(3) 
The 
Chairman, 
the 
President, 
and 
other 
members 
of 
the 
Board 
representing 
the 
Federal 
Government’s direct and indirect shareholding” –  
(a) 
Shall be appointed by the Federal Government, 
in consultation with the State Bank, for a term 
of three years, on such terms and conditions 
as may be fixed by the General Meeting of the 
bank; provided that the Chairman and the 
President shall be appointed from amongst 
professional 
bankers 
whose 
names 
are 
included in a panel of bankers qualified to be 
maintained and varied, from time to time, by 
the State Bank;  
(b) 
May be removed for misconduct or physical 
and mental incapacity before the expiry of the 
Const. P. 58 of 2010 
 
 
9 
three years’ term by the Federal Government 
in consultation with the State Bank;  
(c) 
Shall stand removed if he becomes ineligible 
on any of the grounds specified in subsection 
(12); and  
(d) 
May 
be 
reappointed 
by 
the 
Federal 
Government, in consultation with the State 
Bank of Pakistan, for a further period of three 
years. 
 
 
 
 
Clause (d) after amendment by the Finance Act, 2007  
 
“(d) may 
be 
reappointed 
by 
the 
Federal 
Government, in consultation with the State 
Bank of Pakistan, for such further term or 
terms as may be determined.”  
 
Article 73(2) of the Constitution, reproduced above, reflects that a Bill 
or amendment shall be deemed to be a Money Bill if it contains 
provisions dealing with all or any of the matters enumerated in clauses 
(a) to (g) of Paragraph 2 of this Article. In our opinion, reappointment 
of Chairman, the President and other members of the Board of NBP 
does not fall within ambit of clauses (a) to (g) ibid. Thus, it is crystal 
clear that the amendment in question could not have been introduced 
in clause (d) of subsection (3) of section 11 of the Act of 1974 by way 
of Finance Act, 2007, as it lacked constitutional requirement envisaged 
by Article 70 of the Constitution, i.e. approval by two Houses of 
Parliament. Be that as it may, when confronted with the definition of 
the Money Bill reproduced above, Mr. Abid Zubairi, ASC for respondent 
No.3 candidly conceded that the subject matter of amendment of 
section 11(3)(d) of the Act of 1974 was not covered by Money Bill, 
therefore, the amendment on that score, in the light of the law laid 
down in Sindh High Court Bar Association's case, was unconstitutional 
and could not be upheld. However, his submission was that as was 
done in the precedent case, the instant matter be also referred back to 
the appropriate legislature. The learned Attorney General for Pakistan, 
Const. P. 58 of 2010 
 
 
10 
who appeared in response to the notice issued to him in terms of 
Order XXVIIA Rule 1 CPC submitted that in such eventuality the 
danger was that the other legislation carried out under the Finance Act 
might be affected by such a declaration, therefore, restraint ought to 
be exercised. As for the fear expressed by the learned Attorney 
General, suffice it to say that no other provision either of the Act of 
1974 or of any other law amended by a Finance Act having been 
challenged by anyone before us, this judgment will be confined to the 
issue involved in the present case, namely, the unconstitutionality of 
the amendment of section 11(3)(d) of the Act of 1974 brought about 
by the Finance Act, 2007. We are afraid the submission of Mr. Zubairi 
that the instant matter be also referred back to the appropriate 
legislature, as was done in the Sindh High Court Bar Association's 
case, has no force. As a matter of fact, the learned counsel has not 
appreciated the law laid down in the said case, wherein this Court, 
after having held that the amendment in the Supreme Court (Number 
of Judges) Act, 1997, effected by the Finance Act, 2008 was 
unconstitutional and illegal, further held that the appointments of 
Judges over and above the strength as already determined under the 
Act of 1997 could not be sustained on that score as well, and as a 
result, certain Judges of the Supreme Court were made to relinquish 
office. In the instant case, we are confronted with almost a similar 
situation. Since, admittedly, the amendment made in section 11(3)(d) 
of the Act of 1974 by the Finance Act, 2007 was unconstitutional and 
illegal, the appointment of respondent No.3 made under an 
unconstitutional and illegal legislation would not remain unaffected as 
the foundation on which its superstructure rested stood removed. The 
argument of the learned counsel for respondent No. 3 that the 
Const. P. 58 of 2010 
 
 
11 
appointment of respondent No.3 was made by the Federal Government 
in exercise of the power conferred upon it by a legislative instrument 
passed by the concerned legislature, therefore, the same was not 
liable to be interfered with being a past and closed transaction is not 
tenable. If the appointments of Judges were affected on account of a 
similar defect in legislation, how the appointment of respondent No.3, 
who, too, was appointed under such an unconstitutional and illegal 
amendment could be protected.  
12.   
As for the submission of the learned counsel for the 
petitioners that a large number of loans had been written off during 
the tenure of respondent No.3, we would not like to go into the said 
question in the instant case as the said matter is sub judice before this 
Court in another case.  
13.   
For the foregoing reasons, the instant Constitution Petition 
is allowed. The reappointment of respondent No.3 Syed Ali Raza as 
President NBP by way of notification dated 10.04.2010 is declared to 
be unconstitutional and he shall cease to hold office as President NBP 
with immediate effect.  
14. 
 
CM No. 3387 of 2010 is disposed of. 
 
 
 
 
 
 
 
 
 
 
CHIEF JUSTICE 
 
 
 
 
 
 
 
 
 
 
 
 
JUDGE 
 
 
 
 
 
 
 
 
 
 
 
 
JUDGE 
ANNOUNCED ON  _14th _January, 2011  
At Islamabad.   
 
 
 
 
 
CHIEF JUSTICE 
APPROVED FOR REPORTING  
  
