SC refuses to suspend SHC order on sugar inquiry

ISLAMABAD:

The Supreme Court on Thursday refused to suspend the Sindh High Court’s (SHC) interim order restraining the federal authorities from taking action against around 20 sugar mills of Sindh on basis of the reports of a sugar inquiry commission.

The commission – led by the Federal Investigation Agency (FIA) chief – was formed by the federal government to probe into a sudden shortage of sugar that resulted in a steep hike in its prices in January.

In its preliminary report – unveiled on April 5 – the commission had claimed that sugar mills belonging to the country’s top politicians including PML-N’s Shehbaz Sharif’s, PTI’s Jahangir Tareen and Khusro Bakhtiar and PML-Q’s Moonis Elahi were among the beneficiaries of the crisis.

In its forensic report – issued on May 21 – the commission had accused the sugar mill owners of earning illegal profits to the tune of billions of rupees through unjustified price hikes, benami transactions, tax evasion, misuse of subsidy and purchasing sugarcane off the books.

The Pakistan Sugar Mills Association (PSMA) challenged the commission and its reports in the Islamabad High Court (IHC) which on June 12 stopped the government from taking action against sugar mills. However, on June 20 the IHC declared that the commission is legal and dismissed the PSMA petition.

On June 24, the Sindh High Court (SHC) restrained the federal authorities till June 30 from taking action against around 20 sugar mills of Sindh on basis of the reports. The federal government on June 29 challenged the SHC interim order in the apex court.

On Thursday, when a division bench comprising Chief Justice of Pakistan Gulzar Ahmed and Justice Ijazul Ahsan up the federal government petition, Counsels for sugar mills owners questioned the IHC’s “hasty” order and reiterated their stance that the commission was constituted by violating the legal procedures.

Earlier, Attorney General for Pakistan (AGP) Khalid Javed Khan objected to the SHC interim ordert.

The AGP submitted that regulators like the Federal Board of Revenue (FBR), Securities and Exchange Commission of Pakistan (SECP), and the Competition Commission of Pakistan (CCP) are under the influence of powerful commercial entities.

“Therefore, a commission of inquiry had become necessary as none of the government departments and agencies are doing their jobs properly,” he said.

He said the commission's report was merely in the nature of information. If anyone's reputation had been affected by this report they had the remedy to file a defamation suit. “However, they could not come to the court in its constitutional jurisdiction by filing writ petition in the high courts,” he said.

Justice Ijazul Ahsan also endorsed the AGP’s contentions and wondered how the SHC could intervene after the IHC decision, wherein the federal government is asked to follow due process in this case.

Justice Ahsan also wondered as why constitution of commission was not challenged at an initial stage. However, Makhdoom Ali Khan and Salman Akram Raja – counsels for sugar mills owners – strongly objected the AGP contentions.

Leading counsel Makhdoom Ali Khan said the IHC passed order in an accelerated ‘preponed’ hearing at “a feverish pace” but the failed to give reasons for the verdict even after passage of 11 days.

He submitted that the IHC had initially granted interim relief and adjourned the case till June 25. However, the court took up the case earlier on June 19 even without any request by the government.

“On that day, the IHC told the mills without any notice to argue their case. This they did till 2.30 pm on a Friday. The AGP then sought time to argue the case. Even without consulting counsel for the petitioners, the IHC adjourned the case till Saturday, which was not a working day.

“When the AGP concluded arguments on Saturday the petitioners [the sugar mills owners] requested that they too be granted a day to respond as the AGP had produced a new notification in the court the veracity of which they wanted to check.

“The request was declined. The mills then asked time to submit a written response but a short order was passed on that very day but the reasons are not available even today,” the counsel said.

He said the hurry to pass orders but delay in giving reasons was hard to understand.

Khan while referring to the Article 14 said the commission severely damaged reputation of the petitioners without hearing them. He submitted that gone were the days when the right to reputation was only a civil right which had no constitutional protection.

"This was a right which in the last 5 decades has received increasing recognition from constitutional courts in common law countries.” He cautioned against the danger of a narrow reading of the fundamental rights which may haunt posterity and blight the legal landscape for generations.

Khan urged the Supreme Court that fundamental rights should not be so narrowly interpreted that the specter of such interpretation haunts posterity for ages in a blighted legal landscape.

The leading counsel said the opposition and citizens can make arguments about regulatory capture of the government. It was not open to a government to plead that it had been captured and, therefore, it can only operate through inquiry commissions, he added.

“This is our case that the commission was appointed not by a decision of the government and it includes people who have already made up their minds in the matter,” he said.

He said the mills were not heard and no notification was published in the official gazette.

Justice Ahsan observed publication was unnecessary as everyone knew of the commission's existence. Khan disagreed and submitted that this was a statutory requirement.

“To rule against this view, the SCP will have to overrule decisions going back more than a hundred years,” he said, citing a number of cases to support his argument.

The CJP asked the counsel whether the commission’s report is piece of evidence.

The bench later did not suspend the SHC order as it adjourned the case till July 14 when a three-judge bench will hear the government appeal against the high court’s order.