SHC reserves order on sugar inquiry commission

The Sindh High Court (SHC) has reserved its verdict on a petition filed by the Pakistan Sugar Mills Association (PSMA) against an inquiry commission formed by the government to probe into a sugar crisis that hit the country earlier this year.

A SHC division bench comprising Justice KK Agha and Justice Omar Sail on Friday heard the final arguments of the counsel of sugar mills, Makhdoom Ali Khan, and the Additional Attorney General (AAG) Kashif Piracha, who represented the federal government.

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

A number of sugar mills had later challenged the commission in the Islamabad High Court (IHC) whose single bench on June 20 declared the commission “legal”. The PSMA challenged the June 20 order through an intra-court appeal.

The PSMA had also moved the SHC which on June 24 stopped the government agencies to crackdown against sugar mills operating in Sindh. However, the Supreme Court on July 14 vacated the SHC stay order and ordered the IHC and SHC benches to decide the PSMA petitions in three weeks.

During the hearing on Friday, the SHC bench asked the AAG as to under which law the federal cabinet had issued notification for constituting the commission.

The AAG replied that the commission of inquiry was formed under the relevant laws as the regulatory authorities were not performing their functions properly.

The bench noted that if the regulators – like the Securities and Exchange Commission of Pakistan (SECP) and the Federal Investigation Agency (FIA) – are not performing their functions than why the government does not disband them.

Justice KK Agha remarked that the inquiry commission and its reports not just concern the petitioners but the entire sugar industry. However, he noted that no one is above the law.

In his arguments, the AAG stated that the commission of inquiry not only probed into the role of sugar barons in the January 2020 sugar crisis but also figured out the role of state institutions and regulators.

He said the commission’s reports were not against the sugar mills and none of them had been stopped from doing business in the wake of the inquiry.

“The commission did not compile the reports while sitting in a room and interrogated all the stakeholders,” he said. The hike in sugar prices, he added, had impacted the entire nation. “We will first have to protect people's rights; the rights of sugar mills come later,” he added.

In his arguments, Makhdoom Ali Khan said the commission accused the entire sugar industry of minting billions of rupees by creating a shortage of the commodity. He said despite the sugar inquiry commission’s findings the government did not take any step to reform its institutions.

The bench also asked the AAG as to how the Special Assistant to the Prime Minister on Accountability Shahzad Akbar asked the National Accountability Bureau (NAB) to take actions on basis of the inquiry report. The bench later reserved its verdict.