ISLAMABAD: The Supreme Court ordered on Friday immediate removal of National Bank President Syed Ali Raza who has been holding the post for over a decade.

“The reappointment of Syed Ali Raza as President of the NBP by way of a notification dated April 10, 2010, is declared to be unconstitutional and he shall cease to hold the office with immediate effect,” said a seven-page order issued by a three-judge bench comprising Chief Justice Iftikhar Mohammad Chaudhry, Justice Ghulam Rabbani and Justice Khalilur Rehman Ramday.

The bench issued the order on a joint petition filed by Mir Muhammad Idris and others challenging the validity of reappointment of Mr Raza who was on an extension for the fifth time. His appointment for three years was made in July 2000 and extended in July 2003 for another three years. The tenure was extended for another three years, from July 2006 to July 2009. He was given another extension till July 2010 and yet another till July 2011.

The petition alleged that Mr Raza was holding the lucrative post illegally and unlawfully. Advocate Manzoor Qadir, the counsel for the petitioners, accused Mr Raza of writing off during his tenure loans of billions of rupees of influential borrowers. “There is no justification for his reappointment as the bank's annual profit has been declining since 2007.”

Under section 11(3)(d) of the Banks (Nationalisation) Act 1974, the counsel said, a person could be appointed as bank's president for not more than two terms, but Ali Raza had been reappointed from time to time by the successive governments through illegal amendments to the act. Eventually, the amendment was incorporated unconstitutionally by way of the Finance Act 2007 during the Musharraf government.

Advocate Qadir argued that the banks' act could not be amended through a finance act because the latter only dealt with fiscal matters. As a consequence, a notification issued in April last year to reappoint Ali Raza for another year was awarded through an invalid law, he argued.

The counsel placed the July 31 Supreme Court judgment holding Nov 3, 2007, emergency illegal in his support.

The order, authored by the chief justice, said: “The amendment in question could not have been introduced through the Finance Act 2007 and, therefore, lacked constitutional requirement envisaged by Article 70 of the Constitution that asks for approval by the two houses of parliament in such matters.

“Since, admittedly, the amendment made in section 11(3)(d) of the Act of 1974 through the Finance Act 2007 was unconstitutional and illegal, the appointment of Ali Raza made under an unconstitutional and illegal legislation would not remain unaffected as the foundation on which its superstructure rested stood removed.”

The court, however, preferred not to discuss allegations relating to written off loans during Mr Raza's period because the case is seized with a similar matter in a different case.