SHAKEEL AHMED KAYANI vs THE MANAGING DIRECTOR/CHIEF EXECUTIVE OFFICER, ISLAMABAD

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SHAKEEL AHMED KAYANI VS THE MANAGING DIRECTOR/CHIEF EXECUTIVE OFFICER, ISLAMABAD. Section 4, Oil and Gas Development Corporation Ordinance (XXXVII of 1961)---Oil and Gas Development Corporation (Reorganization) Ordinance (XXVIII of 2001), Sections 4 & 5---Oil and Gas Development Corporation Employees (Service) Regulations, 1994, Regulation 265---General Clauses Act (X of 1897), Section 24---Constitution of Pakistan, Article 185(3)---Transition of Oil and Gas Development Corporation into public limited company---Autonomy of company in internal governance---Scope. Creation of Corporation under Ordinance, 1961 was not a mere bureaucratic arrangement but a deliberate legislative choice to insulate a vital economic sector from day-to-day ministerial interference. The statute empowered Board of Directors to conduct affairs of Corporation on commercial considerations having regard to public interest, whereas Federal Government directions were binding only in matters relating to policy. The Board itself was authorized to determine whether any matter constituted policy. This governance structure reflected legislative intention to provide institutional autonomy so that commercial decisions could be taken independently in the interest of enterprise and country. Conversion of Corporation into public limited company in 2001 strengthened rather than reduced such autonomy. By registration under Companies Ordinance, 1984, governance model was shifted towards private sector principles where independent Boards are entrusted with decision-making according to fiduciary duties and interests of company and stakeholders. Any statutory requirement regarding compliance with Government directives cannot be interpreted as compelling Board to mechanically implement every instruction. Board is required to examine whether a directive is commercially sound, consistent with fiduciary duties of directors, in furtherance of statutory purpose and in public interest. Public corporations are not extensions of Government departments but independent institutions entrusted with efficiency, autonomy and commercial discipline. Commercial autonomy of public sector companies is essential for economic development, good governance and rule of law. Independent functioning of Boards advances objectives of commercial viability and public interest. Reducing such institutions to administrative subordinates of executive authority defeats legislative intent and constitutional principles of institutional independence.

SHAKEEL AHMED KAYANI vs THE MANAGING DIRECTOR/CHIEF EXECUTIVE OFFICER, ISLAMABAD — 2026 SCMR 449 SUPREME-COURT

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