Syed ALI JAVAID HAMDANI vs The FEDERATION OF PAKISTAN through Cabinet Secretary Ss

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Syed ALI JAVAID HAMDANI VS The FEDERATION OF PAKISTAN through Cabinet Secretary Ss. 186 & 187---Chief Executive Officer (CEO) of a company---Role---CEO of a company is the most important person in the sense that law confers responsibility of administration and management of company to CEO---This is full time role and responsibility as executive head of a company. Citation Name: 2025 CLD 1398 LAHORE-HIGH-COURT-LAHOREBookmark this Case Syed ALI JAVAID HAMDANI VS The FEDERATION OF PAKISTAN through Cabinet Secretary Ss. 186, 187 & 190---State-Owned Enterprises (Governance and Operations) Act (VII of 2023), Ss.18 & 22---Public Sector Companies (Corporate Governance) Rules, 2013, R. 5 (2)---Constitution of Pakistan, Art. 199---Constitutional petition---Appointment of Chief Executive Officer (CEO) of State owned company---Curtailing of powers---Acting CEO, appointment of---Petitioner was appointed as CEO of respondent / Sui Northern Gas Pipelines Company Limited, (SNGPL) by Federal Government for a period of three years---Petitioner / CEO was aggrieved of withdrawal of power of attorney issued in his favour by the Company and also appointment of an Acting CEO---Petitioner / CEO contended that he was not appointed by Board of directors, instead was nominated by Federal Government---Validity---Power of nomination of CEO vested with Federal Government under S.187(4) of Companies Act, 2017---Federal Government did not exercise power of nomination regarding petitioner / CEO of SNGPL and followed the process of appointment of CEO prescribed under S.187(1) of Companies Act, 2017 read with Public Sector Companies Guidelines and Public Sector Companies (Corporate Governance) Rules, 2013---Board of SNGPL followed an advertised competitive process through which petitioner / CEO was shortlisted and his name was included in a panel of three shortlisted candidates recommended by the Board to Federal Government seeking its concurrence to one of the three candidates---Federal Government concurred with the name of petitioner whose name was second in priority, whereafter, notification was issued by Federal Government---Board, thereafter, issued letter of appointment to petitioner / CEO and upon its acceptance, the service contract was duly executed between SNGPL and petitioner / CEO---Procedure adopted by the Board in appointment of petitioner / CEO was in conformity with S. 18(1) of State Owned Enterprises (Governance and Operations) Act, 2023 which dealt with appointment of petitioner / CEO and ordained that the Board, in the case of a company would appoint the CEO of the state-owned enterprise under a performance contract for a specified period---High Court repelled contention of petitioner / CEO that he was not appointed by the Board but nominated by Federal Government---Process of appointment and removal of petitioner / CEO was regulated by specific mandatory legal provisions which preempted general role of oversight, supervision and control of the Board over petitioner / CEO---Notwithstanding that power of nomination of CEO vested with Federal Government under S. 187(4) of Companies Act, 2017 the Federal Government did not exercise the power of nomination regarding petitioner as CEO of SNGPL and followed the process of appointment prescribed under S. 187(1) of Companies Act, 2017 read with Public Sector Companies Guidelines and Public Sector Companies (Corporate Governance) Rules, 2013---Petitioner / CEO was also a Director of SNGPL and as a member of the Board had the same powers, functions and responsibilities as any other member of the Board---Processes of appointment and removal of the CEO were separate and distinct and did not have any co-relation with each other---There was no role of Federal Government in removal of petitioner / CEO of SNGPL as Federal Government did not hold more than 75% shares in SNGPL as ordained by S. 190(2) of Companies Act, 2017---Petitioner / CEO of SNGPL could only be removed in accordance with mandatory provisions of section 190 of Companies Act, 2017 requiring three fourth of total membership of the Board and it was not inconsistent with S. 22 of State Owned Enterprises (Governance and Operations) Act, 2023---Board was obligated to delegate such powers to petitioner / CEO as were necessary to enable him to perform statutory duty of administration and management of the Company---Such powers could be withdrawn and petitioner / CEO could be removed even without inquiry under S. 190 of Companies Act, 2017---If Board deemed appropriate, it could initiate an inquiry against petitioner / CEO before removing him from office but without seizure of his powers---If immediate measures were required to be taken against petitioner / CEO, the only course available was to follow procedure of removal of CEO under S. 190 of Companies Act, 2017---There was no provision in law for appointment of Acting CEO in the presence of existing CEO---High Court declared that acts of Board of SNGPL of suspending petitioner / CEO and / or withdrawing his powers, and appointing Acting CEO and conferring him powers of CEO were unlawful, illegal and void-ab-initio as the same were in violation of S.190 of Companies Act, 2017---High Court further declared that manner and conduct of emergent meeting of Board of SNGPL with less than one day notice under a vague and generalized agenda infringed various principles of good governance under the applicable law and as such the same was unlawful and not held in accordance with law---Constitutional petition was allowed accordingly. Citation Name: 2025 CLD 1398 LAHORE-HIGH-COURT-LAHOREBookmark this Case Syed ALI JAVAID HAMDANI VS The FEDERATION OF PAKISTAN through Cabinet Secretary Ss. 2(14), 183, 188 & 192---Offices of a Company---Status---Offices of Chief Executive Officer (CEO), Chairman and member of Board are separate and independent in terms of appointment, removal, role, powers and functions which are regulated by mandatory provisions of law and the same cannot be circumvented or made redundant by exercise of discretionary and general powers vested in any of such offices.

Syed ALI JAVAID HAMDANI vs The FEDERATION OF PAKISTAN through Cabinet Secretary Ss — 2025 CLD 1398 LAHORE-HIGH-COURT-LAHORE

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