Islamabad - The Islamabad High Court (IHC) Thursday suspended a notification of Khyber Pakhtunkhwa (KP) province for taking the charge of 19 subsidiaries/ motels of Pakistan Tourism Development Corporation (PTDC) in the light of the 18th amendment.
A single bench of IHC comprising Justice Noor-ul-Haq N Qureshi issued these directions in a petition of PTDC which was moved through its counsel Raja Saimul Haq Satti Advocate who had contended before the IHC that handing over these assets worth billions of rupees to the provinces is only possible en route companies ordinance 1984 that provides a liquidation process but the KP government issuing a notification has been bypassing the legal process.
The IHC bench suspended KP ministry of tourism notification dated September 01, 2014 for assuming administrative control, management of assets and employees of PTDC’s 19 hotels at the key recreational locations including PTDC’s motels in Saidu Sharif, Swat, Balakot, Chitral, Manshera, Dasu, Naran and Abbotabad.
Justice Qureshi also restrained the KP government from assuming charge of PTDC’s assets and also directed the respective ministries of the provinces not to proceed in this matter till its next order.
According to details in this matter, PTDC through managing director (MD) and its general manager (GM) Motels cited federation of Pakistan through joint secretary, all the five chief secretaries of the provincial governments and chief secretary Azad Jammu & Kashmir (AJK) government as respondents.
The petitioner maintained before the IHC that PTDC is a distinct legal entity owning and possessing billions of assets nationwide. Assets were owned by PTDC under the repealed Companies Act 1913 (Now the Companies Ordinance, 1984) as a Public Corporation Limited. By shares, the government of Pakistan own 88% of its share while remaining 12% shares are owned by its employees. That PTDC North (Pvt.) Ltd which is governed by its Board of Directors (BOD) with MD PTDC as its Chairman, it is currently running 35 motels and 4 restaurants all over Pakistan and all restaurants and 10 motels have been leased out to private parties.
The counsel informed the court that PTDC Motels South (Pvt) Ltd is running resorts located in Sindh and Balochistan including Keenjhar Lake resort, motels at Ziarat, Khuzdar and Moenjodaro.
The petitioner informed the court that on July 01, 2011 federal government passed the 18th amendment and tourism was included in the provincial list but some question remained unanswered like whether this amendment required winding up of this PTDC as corporation? Whether it can be transferred to the Provincial Governments free of cost and compensation despite of the fact that 88% shares are of federal government?
Advocate Satti said that in this transitional-period Ministry of Inter Provincial Coordination (IPC), and a joint secretary on July 22, 2014 issued a memorandum under which prime minister approved that the transfer of PTDC and its Subsidiaries to IPC to the cabinet division.
The petitioner PTDC made compliance of the above memorandum but legally speaking, winding-up PTDC and its subsidiaries cannot take place unless liquidator is appointed, assets are transferred to the provincial Governments, commercial viability of motel, restaurants or other assets of PTDC has to be ascertained, the service structure, benefits, emoluments and future of the present employees.
He added that in this state-of-affaires on October 23, 2013 PTDC BOD held its 78th meeting wherein it was decided that evaluation of the assets on market rates be carried out and concerned respondent were also present in the meeting.
Advocate Saim said that despite having knowledge of all these developments and regularly attending the PTDC’s BOD meetings, secretary KPK department of sports, tourism, youth affairs, archeology and museum, traveling beyond his power in order to take-over forcibly the possession / administrative control and management of all assets issued a notification that reads “in pursuance to the Constitution (Eighteen Amendment Act, 2010), the Federal Government parked the PTDC in the part of IPC Division for management in transition and transfer to the provinces vide Notification no 4-5/2011-Min.1: Dated April 5th, 2011.
Consequently, the board of directors of PTDC , vide 75, 76th and 77th meetings respectively approved the winding-up PTDC and transfer of its assets to the respective federating units, Govt of AJK & GB on location basis along with employees w.e.f. 01-07-2011.
Therefore, the Secretary Sports, Tourism, Youth Affairs, Archeology and Museum Department with the approval of the government of Khyber Pakhtunkhwa, hereby assume the administrative control, management of assets and employees of following PTDC devolved department located in the province of KP-K w.e.f. 1st September, 2014 through the managing director, tourism corporation Khyber Pakhtunkhwa for management of the affairs of the said properties”
The counsel told that a Peshawar High Cour bench on September 05, 2014 restrained secretary KPK Sports, Tourism, Youth Affairs, Archeology & Museum, and three others from taking over of the subsidiaries of PTDC located in the province of KP.
He said that the issuance of said notification also lured the other provinces as well to start menacing and threatening to take over forcibly the proprietorship or possession assuming administrative control, management of assets and employees.
The petitioner contended that the corporate sector in Pakistan is governed by the Companies Ordinance, 1984 and modes of winding up were defined in the said ordinance were either by the Court or companies Ordinance, 1984 voluntary or subject to the supervision of the court.
He argued that the 76th meeting of the PTDC BOD on April 04, 2013 proposed and suggested that a liquidator shall be appointed to determine the liabilities of the corporation, the salaries, benefits and other emoluments etc for the employees.
The petitioner told the court that the respondents are regularly paying visits to the PTDC and its subsidiaries located throughout in provinces creating harassment for the employees, guests and tourists.
Therefore, the petitioner prayed to the court to restrain provincial Governments from interfering the process of business activities by taking-over forcibly the proprietorship or possession assuming administrative control.