IN THE SUPREME COURT OF PAKISTAN 
(APPELLATE JURISDICTION) 
 
 
PRESENT: MR. JUSTICE MIAN SAQIB NISAR 
 
 
MR. JUSTICE MUSHIR ALAM 
 
 
MR. JUSTICE MAQBOOL BAQAR 
 
 
CIVIL APPEAL NO.1313 OF 2014 
(Against the judgment dated 15.5.2014 of 
the Peshawar High Court, Peshawar 
passed in W.P.No.1882-P/2013) 
 
 
Muhammad Zaman etc. 
 
…Appellant(s) 
VERSUS 
 
Government of Pakistan through Secretary, Finance Division 
(Regulation Wing), Islamabad etc. 
 
…Respondent(s) 
 
For the appellant(s): 
Mr. Abdul Rahim Bhatti, ASC 
Mr. Abdul Rehman Khan, ASC 
 
 
For respondent No.1: 
Syed Nayab Hassan Gardezi, Standing 
Counsel 
Mr. M. S. Khattak, AOR 
Abid Hussain Channa, S.O. Finance 
 
 
For respondents 2 to 4: 
Kh. Muhammad Farooq, Sr. ASC 
Raja Abdul Ghafoor, AOR 
 
 
Date of hearing: 
14.12.2016 
… 
JUDGMENT 
 
 
MIAN SAQIB NISAR, J:- This appeal with the leave of 
this Court is to decide whether the State Bank of Pakistan Officers 
(Pension-cum-Gratuity) Regulations, 1980 
(the 
Regulations) are 
statutory or non-statutory after the amendment whereby the 
phrase “subject to the approval of the Federal Government” was omitted.  
2. 
 
The brief facts of the case are that the appellants are 
retired employees of the State Bank of Pakistan (SBP). Following the 
direction of the Federal Government issued on 30.11.1977, SBP 
introduced a pension scheme for its employees vide letter dated 
Civil Appeal No.1313 of 2014 
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10.1.1978. Thereafter, the Central Board of Directors of SBP 
(Board), in exercise of its powers under Section 54 of the State Bank 
of Pakistan Act, 1956 (the Act), framed the Regulations with the 
approval of the Federal Government. The appellants, being 
aggrieved of SBP’s failure to grant them periodical increases in 
pension in line with those granted by the Federal Government 
since 1997, filed representations before SBP but to no avail. The 
petitioners then filed a constitutional petition before the learned 
High Court which (petition) was dismissed vide impugned judgment. 
Leave was granted on 3.10.2014 for the reasons recorded in the 
order dated 2.9.2014, the which latter order reads as under:-  
 
“The petitioners before us are retired employees of 
the State Bank of Pakistan. They claim to be entitled 
to the same retirement benefits, which are applicable 
to Federal Government employees of similar nature. 
The petitioners, however, have been non-suited by the 
High 
Court 
vide 
impugned 
judgment 
dated 
15.05.2014. It has been observed by the High Court 
as under:- 
 
“Initially, the Central Board had been 
vested 
with 
powers 
to 
make 
regulations consistent with the Act to 
provide for all matters which are 
necessary and for the purpose of 
giving effect to the provision of the Act 
but subject to the approval of the 
Federal Government by virtue of 
section 54 of the Act. In compliance 
therewith, the SBP Officers (Pension-
cum-Gratuity) Regulations 1980 were 
framed in exercise of power conferred 
by section 54 of the ibid Act, by the 
Civil Appeal No.1313 of 2014 
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Central Board of Directors of SBP, 
with the approval of the Federal 
Government. In view of this statutory 
backing and support, the said Rules 
were statutory which were in vogue 
since its coming into force till 
amendment effected in section 54 of 
the Act. The phrase “subject to the 
approval of the Federal Government” 
was omitted from Section 54 of the 
Act, vide Act-ii of 1994. After the 
omission of the said phrase, the 
absolute power has been vested win 
the Central Board of the Bank to make 
Regulations for giving effect to the 
provisions of the Act without any 
approval of the Government.” 
 
2. 
Learned counsel for the petitioners has 
argued that in view of the law laid down by this 
Court in the cases of Oil and Gase (sic) Development 
Company v. Nazar Hussain (2010 SCMR 1060) and 
Masood Ahmed Bhatti v. Federation of Pakistan 
(2002 SCMR 152) the reasoning of the High Court is 
erroneous. 
3. 
Let notice issue to the respondents for a date 
after 30 days.” 
 
3. 
 
Learned counsel for the appellant argued that in the 
light of the judgments reported as Muhammad Tariq Badrah29 
and another Vs. National Bank of Pakistan and others (2013 
SCMR 314), Shafique Ahmed Khan and others Vs. NESCOM 
through Chairman, Islamabad and others (PLD 2016 SC 377), 
Pakistan Defence Officers’ Housing Authority and others Vs. 
Lt. Col. Syed Jawaid Ahmed (2013 SCMR 1707), Zarai Taraqiati 
Civil Appeal No.1313 of 2014 
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Bank Limited and others Vs. Said Rehman and others (2013 
SCMR 642) and Pakistan Telecommunication Employees Trust 
(PTET) through M. D., Islamabad and others Vs. Muhammad 
Arif and others (2015 SCMR 1472) the Regulations were 
statutory and thus the learned High Court had wrongly dismissed 
the appellants’ writ petition. In this context he also relied upon 
Section 6 of the General Clauses Act, 1897 (the General Clauses Act) and 
Article 264(c) of the Constitution of the Islamic Republic of 
Pakistan, 1973 (the Constitution) to argue that omission of the phrase 
“subject to the approval of the Federal Government” did not render the 
earlier statutory Regulations non-statutory. He further submitted 
that the learned High Court could not non-suit the appellants on 
the ground of laches as the denial of pension is a recurring cause 
of action. In this regard he relied upon the judgments reported as 
S. A. Jameel Vs. Secretary to the Government of the Punjab, 
Cooperative Department and others (2005 SCMR 126), Umar 
Baz Khan through L.Hrs. Vs. Syed Jehanzeb and others (PLD 
2013 SC 268), Masooda Begum through Legal Heirs Vs. 
Government of Punjab through Secretary Forest, Lahore and 9 
others (PLD 2003 SC 90), State Bank of Pakistan and others 
Vs. Mst. Mumtaz Sultana and others (2010 SCMR 421), Ali 
Muhammad Vs. Commissioner Afghan Refugees, N.W.F.P. and 
another (1995 SCMR 1675) and Chief Executive Progressive 
Paper Limited/The Chairman National Press Trust, Islamabad 
Vs. Sh. Abdul Majeed and another (2005 PLC(CS) 1439). 
4. 
 
Learned counsel for the respondent stated at the very 
outset that to follow the pension rates of the Federal Government 
is not a part of the Act or the service/pension rules/regulations 
Civil Appeal No.1313 of 2014 
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framed pursuant thereto and there is no obligation on SBP to 
follow and abide by the rules of increase given by the Federal 
Government to its employees. While referring to the circular dated 
30.11.1977, he stated that initially there was a Banking Council 
constituted under Section 9 of the Banks (Nationalization) Act, 
1974 which controlled the banks on behalf of the Federal 
Government. The Banks (Nationalization) (Amendment) Ordinance, 
1996 brought about a sea change which eventually matured into 
the Banks (Nationalization) (Amendment) Act, 1997 (the Amendment 
Act) pursuant to which the banks were made almost completely 
autonomous: the Banking Council was abolished and the boards 
of directors of the banks were made independent. From 1977 to 
1997 though SBP abided by the directions of the Federal 
Government but every circular received from the Federal 
Government was either republished or adopted through a separate 
circular issued by the Board. The Federal Government’s directives 
did not ipso facto become effective unless given effect through a 
board resolution. Further, that after the Amendment Act, SBP 
devised its own wage structure which it announced on 1.6.1999. 
Learned counsel put forward the following propositions:- 
i. 
After the amendment in Section 54 of the Act, the new 
Regulations could be framed without the sanction or 
permission of the Federal Government; 
ii. 
The 
instructive 
direction 
given 
by 
the 
Federal 
Government in 1977 that in future all increases in 
wages or pension in the case of civil servants or 
Federal Government employees would apply to SBP 
employees 
does 
not 
enjoy 
the 
status 
of 
a 
rule/regulation having a binding effect because the 
regulation-making power under Section 54 of the Act 
Civil Appeal No.1313 of 2014 
-: 6 :-
vests exclusively with the Board. Therefore the 
provisions of Section 54 would be relevant for 
determining whether any change brought about by the 
Regulations could be examined in light of the directive 
issue by the Federal Government in 1977; 
iii. 
With regard to determination of quantum, learned 
counsel relied upon Akram Ul Haq Alvi Vs. Joint 
Secretary (R-II) Government of Pakistan, Finance 
Division, Islamabad and others (2012 SCMR 106) to 
argue that SBP was vested with the power to fix the 
amount of, or increase in pension; 
iv. 
Regarding the appellants’ claim that SBP ceased to 
increase their pension in line with the Federal 
Government since 2003, whereas the writ petition was 
filed in 2014 – he stated that it is not a recurring 
cause of action – when they stood retired, pension or 
commuted portion of their pension was paid to them 
immediately in 2004, 2005 and 2006 and that was the 
time the cause of action accrued because they knew 
precisely the rate they were being paid; 
v. 
Notwithstanding the change in law, the Regulations 
are statutory, as according to the Pakistan Defence 
Officers’ Housing Authority’s case, the approval of 
the Federal Government has ceased to be a relevant 
factor in order to determine whether rules/regulations 
are statutory or non-statutory.  
 
5. 
 
Heard. In order to answer the proposition identified in 
the opening paragraph of this opinion, we find it expedient to first 
discuss the object and purpose of SBP. After the creation of 
Pakistan in 1947, SBP was created as the central bank of Pakistan 
to take over the management of the currency from the Reserve 
Bank of Indian (Section 3(1) of the Act). The Preamble of the Act 
postulates the reasons for the constitution of SBP as the regulator 
Civil Appeal No.1313 of 2014 
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of the monetary and credit system of Pakistan and to foster its 
growth in the best national interest with a view to securing 
monetary stability and fuller utilisation of the country’s productive 
resources. The business and functions of SBP have been provided 
for in detail in Chapter IV of the Act (Sections 17 to 40). Broadly 
speaking, SBP’s functions include, amongst other things, issuance 
of notes, regulation and supervision of the financial system, to act 
as the Government’s bank, to conduct the monetary policy of 
Pakistan, management of public debt and foreign exchange, 
advising the Government on policy matters, liaising with 
international financial institutions, development of a financial 
framework for Pakistan and institutionalization of savings and 
investment. 
SBP is a body corporate having perpetual succession and a 
common seal and the ability to sue and be sued [Section 3(2) of the 
Act]. 
The 
Board 
has 
been 
entrusted 
with 
the 
general 
superintendence and direction of the affairs and business of SBP 
and its (Board’s) functions and responsibilities have been provided 
in detail in Section 9A of the Act. The Board comprises of a 
Governor (Chairman of the Board), the Secretary, Finance Division, 
Government of Pakistan and eight directors (at least one from each 
Province) who are eminent professionals from the field of economics, 
finance, banking and accountancy (Section 9 of the Act). There is also a 
Board for the co-ordination of fiscal, monetary and exchange-rate 
policies (See Section 9B of the Act) and the Monetary Policy Committee 
(See Sections 9D and 9E of the Act). 
Civil Appeal No.1313 of 2014 
-: 8 :-
6. 
 
Like many other statutory bodies, SBP has also been 
given the power to frame regulations. In this regard Section 54 of 
the Act is relevant which reads as follows:- 
 
“54. Powers of the Central Board to make 
regulations. 
(1) The Central Board may make regulations 
consistent with this Act to provide for all matters for 
which provision is necessary or convenient for the 
purpose of giving effect to the provisions of this Act: 
 
Provided that the terms and conditions of 
service of Governor and Deputy Governor shall be 
determined by the Federal Government. 
 
(2) In particular and without prejudice to the 
generality 
of 
the 
foregoing 
provision, 
such 
regulations may provide for all or any of the 
following matters, namely:- 
 
: 
 
(j) recruitment of officers and servants of the Bank 
including the terms and conditions of their service, 
constitution of superannuation, beneficial and other 
funds, with or without bank’s contribution, for the 
officers and servants of the Bank; their welfare; 
providing amenities, medical facilities, grant of loans 
and advances, their betterment and uplift; 
 
: 
 
(3) 
……………………………………………………………” 
 
According to Section 54(1) of the Act, the Board is empowered to 
make regulations consistent with the Act to provide for all matters 
for which provision is necessary or convenient for the purpose of 
Civil Appeal No.1313 of 2014 
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giving effect to the provisions of the Act. It is pertinent to mention 
that previously SBP could only make regulations with the approval 
of the Federal Government, however by virtue of Act II of 1994, the 
words “subject to the approval of the Federal Government” were omitted. 
We are of the view that this omission is significant, conferring 
greater autonomy on the Board as the Federal Government was 
removed from the regulation-making process, and full authority 
came to vest in the Board to make such regulations. Indeed this 
was the view of a two-member bench of this Court in the judgment 
reported as Chief Manager, State Bank of Pakistan, Lahore and 
another Vs. Muhammad Shafi (2010 SCMR 1994) wherein, 
while considering whether the State Bank of Pakistan Staff 
Regulations, 1999 were statutory or non-statutory, it was held as 
follows:- 
 
“7. The words "subject to the approval of the Federal 
Government" were omitted vide Act II of 1994. The 
regulations were framed under section 56 in the year, 
1999 as is evident from the source on the basis of 
which the said regulations were framed which is to 
the following effect:- 
  
"In exercise of the powers conferred by section 54 of 
the State Bank of Pakistan Act, 1956 (XXXIII of 
1956) the Central Board of Directors, hereby makes 
the following Regulations, to define the conditions of 
service of the employees of the Bank." 
  
8. The omission of the aforesaid words subject to the 
approval from section 54 is meaningful. Rules framed 
by the Central Board of Directors which does not 
require approval of the Government, therefore 
aforesaid regulations may be termed as internal 
Civil Appeal No.1313 of 2014 
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instructions or domestic rules/regulations having no 
status of statutory rules/regulations as law laid down 
by this Court in various pronouncements…” 
 
We are of the opinion that the above view applies to and is correct 
vis-à-vis the Regulations in the instant matter as well. 
Furthermore, as matters stand (since the omission by Act II of 1994), and 
as mentioned above, the regulation-making power lies solely in the 
hands of the Board with no intervention or approval of the Federal 
Government, and this reflects the intention of the Legislature. In 
this context, as highlighted above, even the structure of the Board 
as provided for in the Act renders it autonomous, with the 
Members, save for the Secretary, Finance Division, Government of 
Pakistan, being private individuals, independent from the Federal 
Government. In fact, where the legislature wanted the intervention 
of the Federal Government, it has specifically provided for the 
same, and in this regard the proviso to Section 54(1) of the Act is 
relevant which states that “the terms and conditions of service of Governor 
and Deputy Governor shall be determined by the Federal Government”, clearly 
suggesting that the Legislature’s intention was to exclusively 
clothe SBP with the power to frame regulations to carry out the 
objects and purpose of the Act. Furthermore, Section 46B(2) of the 
Act [inserted by the State Bank of Pakistan (Amendment) Act, 1997 (Act No.XIII of 
1997)], provides that “the Bank, the members of the Board or the staff of the 
Bank, shall not take instructions from any other person or entity, including the 
government or quasi-government entities. The autonomy of the Bank shall be 
respected at all times and no person or entity shall seek to influence the members 
of the Board and Monetary Policy Committee or the staff of the Bank in the 
performances of their functions or interfere in the activities of the Bank.” It may 
Civil Appeal No.1313 of 2014 
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be added that to give maximum autonomy to SBP, Section 52(1) of 
the Act which empowered the Federal Government to supersede 
the Board and entrust the general superintendence and direction 
of the affairs of SBP to such agency as it (Federal Government) may 
determine 
was 
omitted 
by 
the 
State 
Bank 
of 
Pakistan 
(Amendment) Act, 2012 (Act No.IX of 2012 dated 13.3.2012). All 
the above aspects point towards the growing autonomy of SBP. 
7. 
 
According to the judgment delivered in Civil Appeal 
No.654/2010 etc. titled Shafique Ahmed Khan, etc. Vs. NESCOM 
through its Chairman, Islamabad, etc. the test of whether 
rules/regulations are statutory or otherwise is not solely whether 
their framing requires the approval of the Federal Government or 
not, rather it is the nature and efficacy of such rules/regulations. 
It has to be seen whether the rules/regulations in question deal 
with instructions for internal control or management, or they are 
broader than and are complementary to the parent statute in 
matters of crucial importance. The former are non-statutory 
whereas the latter are statutory. In the case before us, the 
Regulations were made pursuant to Section 54(1) of the Act and 
Section 54(2) thereof goes on to provide the particular matters for 
which the Board can frame regulations [while saving the generality of the 
power under Section 54(1) of the Act]. Out of all the matters listed in 
Section 54(2) of the Act, clause (j) is the most relevant which 
pertains to the “recruitment of officers and servants of the Bank including the 
terms and conditions of their service, constitution of superannuation, beneficial 
and other funds, with or without bank’s contribution, for the officers and servants 
of the Bank; their welfare; providing amenities, medical facilities, grant of loans 
and advances, their betterment and uplift”. A perusal of the Regulations 
Civil Appeal No.1313 of 2014 
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suggests that they relate to pension and gratuity matters of the 
employees of SBP and therefore it can be said that the ambit of 
such Regulations is not broader but narrower than the parent 
statute, i.e. the Act. Thus the conclusion of the above discussion is 
that the Regulations are basically instructions for the internal 
control or management of SBP and are therefore non-statutory. 
Hence the appellants could not invoke the constitutional 
jurisdiction of the learned High Court which was correct in 
dismissing their writ petition.  
8. 
 
Since it has been held above that the Regulations are 
non-statutory, therefore we do not find it necessary to dilate upon 
the point of laches. 
9. 
 
In light of the above, this appeal is dismissed.  
 
 
JUDGE 
 
 
JUDGE 
 
 
 
JUDGE 
Announced in open Court 
on 21.2.2017 at Islamabad 
Approved For Reporting 
Ghulam Raza/* 
