IN THE SUPREME COURT OF PAKISTAN 
(Original Jurisdiction) 
 
 
Present: 
Mr. Justice Iftikhar Muhammad Chaudhry, HCJ. 
Mr. Justice Jawwad S. Khawaja 
Mr. Justice Anwar Zaheer Jamali 
 
 
Suo Moto Case No.9 of 2012 
(Regarding irregularities and illegalities in PIA) 
 
And  
 
Constitution Petition Nos. 109-110 of 2012  
 
Zafar Iqbal Jhagra  
Marvi Memon 
…Petitioners 
Versus 
 
Federation of Pakistan etc. 
….Respondents 
 
 
Petitioners: 
 
 
Mr. Zafar Iqbal Jhagra & 
(In person)  
 
 
Ms. Marvi Memon 
 
For the Federation: 
 
Mr. Zafar Mehmood Mughal, DAG 
 
 
 
 
 
Mr. M. S. Khattak, AOR 
 
For the PIA: 
 
 
Raja Muhammad Bashir, Sr. ASC 
 
 
 
 
 
Mr. Mehr Khan Malik, AOR 
 
 
 
 
 
Mr. Haroon Abbasi, Sr. Law Officer 
 
 
 
 
 
Mr. Asif Rauf, Manager Legal 
 
 
 
 
 
Mr. Waqar A.Siddique,G.M. Accounting 
Mr. Tahir Niaz, G.M. Marketing 
 
 
 
 
 
Mr. Aamir Ali, Chief Engineer 
 
 
 
 
 
Mr. Rashid Ahmad, G.M. (P/R) 
 
For CAA:  
 
 
Mr. Afnan Karim Kundi, ASC 
 
 
 
 
 
Mr. Mehmood A. Sheikh, AOR 
 
 
 
 
 
Mr. Obaid-ur-Rehman Abbasi, 
Sr. Law Officer 
 
Date of hearing:  
 
14.12.2012 
 
 
 
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2 
 
O R D E R 
 
          
 
We have heard the petitioners in both the constitution petitions 
and the learned counsel for PIA, and have also examined the record 
made available to us. The issues of losses and shake down in the PIA 
were examined with the assistance of GM Marketing, GM Accounting, 
GM Legal and Chief Engineer. We were apprised that PIA Fleet consists 
of 38 aircrafts, out of which 28 are fully operational within or outside 
the country whereas 10 aircrafts are undergoing overhauling, repairs, 
etc.  
2. 
We have also been apprised of the current financial position of 
the Corporation. Office has downloaded a report titled “Unconsolidated 
Financial Statement”. We confronted the officers of PIA with the 
contents of the said report. The learned counsel for the PIA handed 
over a booklet containing the same material, which indicates that it is 
meant only for the shareholders. The said report is made part of the 
proceedings. A perusal of the report suggests that during the year 
2012, PIA has sustained losses after taxation to the tune of Rs.22.43 
billion comparing to the losses for the year 2011 of Rs.19.29 billion, 
meaning thereby that for each year the losses are increasing and also 
accumulating on year to year basis. It is also of concern to note that 
according to G.M. Human Resources, at present the number of the 
employees, both regular and on contract basis in PIA, exceeds 18000. 
Essentially their salaries etc. have to be paid out of the income, not 
profit of business, which the Corporation is undertaking on monthly or 
annual basis. So the ratio of employees to each aircraft approximately 
comes to 450 even without taking into account work which is 
SMC 9/2012 
3 
outsourced to contractors. G.M. Finance/Accounts, however, stated 
that this could not be the reason of losses as according to him for this 
purpose only 17/18% of the Revenue is spent. He further stated that 
the main reason for not making the profit is the increase of the fuel 
price from time to time. It has also been informed by the Chief 
Engineer that cost of flying in terms of consumption of fuel, etc. has 
also increased because of aging of the aircrafts, however, now PIA is 
planning to purchase or hire 8 aircraft, which are likely to join the fleet 
in the months of February/March, 2013. 
3. 
  
It is surprising to note that PIA administration had never 
planned to induct new aircraft otherwise out of 28 functional aircrafts, 
being 26 years old, they could have replaced the same, either by 
purchasing new aircraft or by getting the same on lease as it is done 
by other renowned airlines. We are of the view, prima facie, that on 
account of such mismanagement a profit-earning organization, being 
the only official airline, is making loss year to year.  
4. 
  
We inquired from the General Manager, Marketing as to 
how the income is generated, but he could not answer satisfactorily, 
however, we informed him that one of the sources of income is 
ticketing within and outside the country. On this, he stated that GSAs 
for the foreign countries and within Pakistan are appointed in a 
transparent manner. On our query, he could not furnish the list of such 
agents appointed outside the country except pointing out that in the 
month of June, 2012, a GSA had been appointed in Norway. We 
inquired from him as to whether appointment of the said agent was 
SMC 9/2012 
4 
made in a transparent manner, to which he responded that proper 
procedure was adopted, but he had no details of the same. 
5. 
  
We have painfully noted that seven senior officers had 
flown from Karachi to Islamabad to attend the court proceedings  but 
no one amongst them was fully aware of the affairs of the Corporation 
and whenever questions were put to them, they stated that they had 
to get figures and they would inform the court in that behalf on the 
next date of hearing. It clearly indicates mismanagement in the 
organization otherwise efficient staff members having been posted 
against lucrative packages should have ensured that an organization 
which is making losses should be turned into profit-earning 
organization.  
6. 
  
Raja Muhammad Bashir, learned counsel for PIA stated 
that on 22/24 October, 2012 new management headed by Lt. General 
(R) Asif Yaseen Malik has taken charge, and is planning to make 
reforms but is not responsible for the massive financial indiscipline, 
bad-governance, illegalities and irregularities committed in the past. 
This submission is not tenable because only such reforms process 
would work, which takes measures to put the house of PIA in order, 
including taking of such action against those who may be responsible 
for the wrongs committed in the past, and turning a profit-earning 
organization into a loss making enterprise, which is suffering huge 
losses. The reform process must also provide a system of checks and 
balances for the proper running of the affairs of the organization. 
However, the learned counsel stated that some time be given to the 
new management to enable it to introduce its reforms.  
SMC 9/2012 
5 
7. 
  
Mr. Iqbal Zafar Jhagra and Ms. Marvi Memon petitioners 
have stated that PIA management is talking about long term 
measures, whereas they should immediately take some short term 
measures for the purpose of providing facilities to the passengers, as 
invariably the flights are delayed and passengers have to wait for 
hours at times, at airports; sometimes they are made to sit inside the 
craft without ventilation and air-conditioning etc. and whenever the 
crew is contacted, they simply show their helplessness. Ms. Marvi 
Memon stated that today she had to sit and wait for more than two 
hours at Karachi Airport and there was no one to explain as to why the 
flight was late. According to her, sometimes, the PIA crew do offer 
explanations but many they do not bother to explain the reason of 
delay. She stated that such irregularities are required to be taken 
notice of by this Court as these directly impinge on fundamental rights 
like those mentioned in Article 14 of the Constitution. She stated that 
at least direction be issued to the Managements of PIA as well as the 
Civil Aviation Authority that they should take steps for ensuring that 
flights are operated in time. When we inquired from Raja Muhammad 
Bashir, Sr. ASC, as to whether anyone of the aforesaid seven officers, 
who had travelled from Karachi to attend the court proceedings was in 
a position to implement the order of this Court, he stated that he 
cannot say that anyone of them would be able to do the needful. This 
answer on his behalf is sufficient to explain the mismanagement 
prevailing in PIA.  
8. 
  
Be that as it may, we adjourn this case for a period of two 
weeks with directions to the Chairman PIA as well as DG, CAA to 
ensure that pending decision of the case no flight is delayed and if 
SMC 9/2012 
6 
there 
are 
unavoidable 
circumstances, 
they 
must 
inform 
the 
passengers, well in time. On the next date of hearing the Chairman 
PIA and DG CAA will put up a comprehensive plan which they intend to 
initiate for the purpose of improving the condition of PIA, airports, etc. 
In the meanwhile, all the officers including General Managers, 
Marketing and Accounts shall file complete documents in respect of 
appointments of GSAs outside the country and the local agents within 
the country and the manner in which the tenders are given and the 
procedure, adopted for the same. Similarly, GM Human Resources 
shall also place on record complete record of the employees who were 
appointed by following the procedure in a transparent manner, which 
has been laid down for making recruitment and those who were 
appointed without following the procedure by using the phrase 
“contract employees” etc. and they should also ensure that in future 
no such appointment shall take place.  
 
Chief Justice 
 
 
Judge 
 
 
Judge 
Islamabad 
14th December, 2012 
Nisar/*