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Petitioner: Messrs SHAHEEN COTTON MILLS, LAHORE and another VS Respondent: FEDERATION OF JUDGMENT
Court Name: Lahore High Court Judge(s): Sh. Azmat Saeed Title:Messrs SHAHEEN COTTON MILLS, LAHORE and another vs FEDERATION OF
JUDGMENT
Reported As: PLD 2011 Lahore 120 Result: Petition dismissed Judgment JUDGMENT ' SH. AZMAT SAEED, J.---Through this judgment, it is proposed to decide the Writ Petitions Nos. 4396, 6158, 7760, 7320, 7321, 7577, 7579, 7578, 4833, 5595, 7029, 7030, 5477, 5479, 4831, 6155, 4835,5495, 4836, 4837, 6157, 4397, 7031, 7272, 7229, 5496, 8023, 8024, 4832, 6154, 6159, 6156, 6160, 6223, 6222, 4834, 4398 and 7023 of 2010 involving identical questions of law and fact. 2. Brief facts necessary for the adjudication of the lis at hand are; that the writ petitioners in all the above-mentioned Constitutional Petitions are manufacturers and exporters of cotton yarn who have filed these petitions to call into question the validity of the order/notification NoS.R.O. 26(I)/2010 dated 14-1-2010 issued by the Government of Pakistan purportedly under section 3(1) of the Import and Export (Control) Act 1950 placing embargo on the export of cotton yarn by imposing a ceiling on the export thereof. It is provided in the said order/notification that cotton yarn shall only be exported up to 50 Million K.G. Per month from the date of notification till 30th of June, 2010. The writ petitioners have also challenged the subsequent order/notification No S.R.O. No119(I)/2010 dated 25-2-2010 whereby the aforesaid ceiling was further reduced from 50 Million K.G. To 35 Million K.G. Per month till the 30th of June, 2010. 3. It is contended by the learned counsel that the petitioners are engaged in the business of manufacturing and/or export of yarn for the last many years and prior to the issuance of the notification/order dated 14-1-2010, firm commitments have been made and contracts entered into
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with various foreign importers by the petitioners. Such commitments have been made in view of the long-standing policy of the Federal Government whereby no restrictions were imposed on the export of yarn and as a consequence of the issuance of the two orders/notifications in dispute the present writ petitioners are likely to suffer huge financial losses upon their failure to meet with their foreign commitments. The petitioners also run risk of being embroiled in international litigation with all its attending complications including financial costs and loss of foreign market. It is further contended by the learned counsel that the orders/notifications in dispute are in fact mala fide and have been issued merely to further depress the yarn prices in the local market for the benefit of the local manufacturers of finished goods. In fact, it is contended the sole purpose appears to be to give unfair advantage to one sector of the textile industry at the expenses of the other. It is contended in this behalf that the said order/notifications are not only discriminatory and, therefore, offends against Article 25 of the Constitution of Islamic Republic of Pakistan, 1973 but also in violation of the fundamental rights of freedom of trade and business guaranteed by virtue of Article 18 of the Constitution. In the above context, it is contended that the right guaranteed under Article 18 of the Constitution can only be curtailed or limited either for the benefit of a State monopoly or through a licensing regime and thirdly in order to nurture and promote free competition. The order/notifications on the face of it does not appear to be for the establishment of the State monopoly for the export of cotton yarn nor create a licensing regime. The said order/notifications do not promote free competition, but in fact, curtails competition. The learned counsel further contended that the fundamental rights guaranteed under. Article 18 of the Constitution is not illusionaty and no interpretation thereof is permitted whereby the same can be taken away by the Government by issuance of a notification or for that matter enactment of a Law. Such right is Fundamental in nature and any unwarranted impediment to freedom of trade is not acceptable to the Constitution. It is added that while interpreting Article 18 the fairness or otherwise of the trade is irrelevant and in this day and age businesses must live or die by the natural rules of universally accepted free market economy. Hence, the order/notifications in question are ultra vires the Constitution and liable to be struck down and in this behalf this Court is vested with the jurisdiction of judicial review to examine the same and also to enforce the fundamental rights. 4. In the alternative, it is further contended that nevertheless the order/notifications in question are delegated legislation, hence, subject to judicial review including by employing the erstwhile test of reasonableness. In this behalf it is the case of the petitioners that promoting one sector of the industry at the expense of the other is not reasonable by any stretch of imagination. It is added that the mode and method employed in practice would cause disruption of the trade, as it does not discriminate between manufacturer and speculators. 5. It is further contended that several of the writ petitioners have established export-oriented spinning units for manufacturing and export of yarn under various notifications/S.R.Os issued by the Government of Pakistan which enjoin the said writ petitioners to export their products and by way of the impugned order/notifications the said writ petitioners would be forced to commit a default of the terms and conditions of the notifications where under the units were established having unpleasant and far-reaching consequences for the writ petitioners. In fact the order/ notifications in issue, it is contended, are in contradiction to the notifications/S.R.Os whereunder such export-oriented units of the writ petitioners have been established. It is the case of the writ petitioners that in fact the notifications would have an adverse effect in this behalf. Messrs Athar Minallah and Salman Akram Raja Advocates, learned counsel for the petitioner in support of their contention relied upon the judgments reported as Arshad Mehmood and others v. Government of Punjab through Secretary Transport Civil Secretariat, Lahore and others (PLD 2005 SC 193) Director Food, N.-W.F.P. And another v. Messrs Madina Flour and General Mills (Pvt.) Ltd. And 18 others (PLD 2001 SC 1), Muzaffar Khan and others v. Evacuee Trust Property through Deputy Administrator (2002
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CLC 1819), Messrs Airport Support Service v. The Airport Manager, Quaid-e-Azam International Airport, Karachi and others (1998 SCMR 2268), Saleh Muhammad v. Traffic Manager, Port Trust, Karachi (PLD 1961 (W.P.) Karachi 349) Hashwani Sales and Service Limited v. Karachi Building Control Authority and 15 others (PLD 1986 Karachi 393), Messrs East and West Steamship Company v. Pakistan, through the Secretary-Government of Pakistan, Ministry of Commerce, Karachi and others (PLD 1958 SC (Pak.) 41), Jibendra Kishore Achharyya Chowdhury and 58 others v. The Province of East Pakistan and Secretary, Finance and Revenue (Revenue) Department, Government of East Pakistan (PLD 1957 SC (Pak.) 9) Pakistan Muslim League (N) through Kh. Muhammad Asif, MNA and others v. Federation of Pakistan through Secretary, Ministry of Interior and others (PLD 2007 SC 642) In re: v. Abdul Azeez and another (AIR 1954 Madras 62) Indian Express Newspapers (Bombay) Private Ltd. And others v. Union of India and others (AIR 1986 SC 515), The State of Madras v. V.G. Rom (AIR 1952 SC 196), LA. Sharwani and others v. Government of Pakistan through Secretary, Finance Division, Islamabad and others (1991 SCMR 1041), Zaheeruddin and others v. The State and others (1993 SCMR 1718), Government of Balochistan through Additional Chief Secretary v. Azizullah Memon and 16 others (PLD 1993 SC 341) Federation of Pakistan and others v. Amar Textile Mills (Pvt.) Limited and others (2002 SCMR 510) and Messrs M.Y. Electronics Industries (Pvt.) Ltd. Through Manager and others v. Government of Pakistan through Secretary Finance, Islamabad and others (1998 SCMR 1404). 6. Ch. Aamir Rehman, learned Deputy Attorney-General for Pakistan entered appearance pursuant to notice issued by this Court in terms of Order 27-A, C.P.C. And also to represent the respondents. 7. The learned Deputy Attorney-General for Pakistan has strongly controverted the contentions raised on behalf of the writ petitioners. It is contended that the textile industry is the backbone of the economy of the country, which provides substantial portion of employment and earns substantial foreign exchange. It is the case of the respondents that the orders/notifications were issued in view of the peculiar situation pertaining to yarn. There was a dramatic increase in the export of yarn from Pakistan. It was noticed that yarn export in the month of January, 2010 was 50% more than the yarn exported in January, 2009. Similarly, it was also noticed that the export of value-added textile products declined. The indicators of the export of yarn revealed that unless remedial measures were taken by the Government restricting the export of yarn, the local value- added textile industry would be faced with a huge shortage of its raw material i,e,, yarn, thereby forcing them out of business. Thus, it was believed the uncontrolled export of yarn would not only adversely effect the balance of payment but would also lead to wide spread unemployment. In the above perspective initially the quantum of cotton yarn permitted to be exported per month was fixed at 50 million Kg. Even with the said ceiling it appeared that the local value added textile industry would run short of yarn, and consequently the said ceiling was further reduced to 35 million Kg per month vide the second order/notification. It is contended that the amount of yarn now being permitted to be exported is more than the yarn that in fact was exported in the preceding year. In the above context, it is further contended that the aforesaid action was taken by the Federal Government after extensive discussion with stakeholders including the APTMA (All Pakistan Textile Manufacturing Association). It was contended that said order/ notifications were necessary and in consonance with the best economic and social interest of Pakistan. 8. On the legal plane it is contended that these Constitutional Petitions are not maintainable as Article 18 of the Constitution only confers rights on citizens and not the companies. It is further added that the said Article protects only the lawful trade or business, and after the issuance of the order/notifications in question, the export of yarn in violation thereof would be unlawful, hence, not protected by Article 18 of the Constitution. The order/notifications are a valid exercise of powers vested in the Federal Government in this behalf which have been exercised by it in accordance with its policy and in the best interest of the people of Pakistan. Learned DAG submits that these
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notifications are the manifestations of the policy of the Government of Pakistan, hence, perhaps beyond the pale of Judicial Review. It is further contended that said order/notifications issued are not only intra vires the parent statute i,e,, the Import and Export (Control) Act 1950 but also withstands the test of reasonableness. In the above perspective, it is prayed that these Writ Petitions be dismissed. 9. During the course of the hearing of these petitions, various applicants, who are engaged in the manufacturing and export of Value Added Textile, filed civil miscellaneous applications through Messrs Ali Sibtain Fazali and Raashid Anwar Advocates. Both the learned counsel supported the stand taken by the learned Deputy Attorney-General for Pakistan in defence of the order/notifications in question. It was contended that fundamental rights guaranteed under Article 18 of the Constitution of Islamic Republic of Pakistan, 1973, in its application was limited to citizens, and did not extend to companies, hence, the Constitutional Petitions on behalf of various public and private limited companies were not maintainable, and liable to be dismissed on this short point alone. It was further contended that the rights so granted under the aforesaid Article 18 was limited to the conduct of any lawful trade or business. That section 3 of the Import and Export (Control) Act, 1950 empowered the Federal Government to issue order published in the official Gazette to prohibit, restrict or otherwise control the export of any goods outside Pakistan. In exercise of the said powers, the Federal Government has issued the order/notification under reference. And upon issuance whereof, by Virtue of section 5 of the Import and Export (Control) Act 1950, any export in violation thereof, would be a crime and therefore also illegal and unlawful. Consequently, upon issuance of the order/notification in question, the export of yarn in violation thereof, would cease to be a lawful business, and therefore, the provisions of Article 18 of the Constitution of Islamic Republic of Pakistan 1973 would cease to be applicable. It is further contended that it is settled law that issuance of order/notifications under section 3 of the Import and Export (Control) Act, 1950 is a matter of the Policy, which is in the executive domain of the Government. And that this Court cannot sit in appeal upon such policy matters so as to substitute its findings or views for that of the Government, and therefore, these petitions are not maintainable, and any order passed by this Court in favour of the petitioners would transgress into the realm of the Executive and therefore offends against the tracheotomy of powers as envisaged by Constitution of Islamic Republic of Pakistan, 1973. Learned counsel have further added that unlike the parallel Article in the Constitution of India i,e,, Article 19, the concept of 'Reasonable Restrictions' is conspicuous by its absence in Article 18 of the Constitution of Islamic Republic of Pakistan, 1973. Therefore, the order/notifications in question cannot be subjected to Judicial Review on the ground of Reasonableness as is being canvassed by the learned counsel for the writ petitioners. 10. In the alternative, learned counsel have further argued that even if the test of reasonableness is to be applied in the instant cases, the only aspect thereof which this Court may examine is whether the person making the policy or issuing the order/notifications had the relevant material before him or took any action which a man of ordinary prudence would not have taken in similar circumstances. It is not the subjective test of reasonableness which is to be employed in such a situation. Further added that the obvious purpose of the notifications/order was to ensure that the entire yarn produced in the country is not exported leaving the value added textile sector starved of yarn, and forced to import the same at higher prices, and thereby becoming uncompetitive in the international market. Such a course of action would result in wide spread unemployment reduction in the export of the country further widening the trade deficit. It is contended that about 18.4 million people are employed in the value added textile sector, while in the spinning sector represented by the writ petitioners only 0.2 million people are employed. It is also contended that 1 Kg yarn exported by writ petitioners on an average fetches return of USD 2.03, while on an average finished product exported by value added textile sector earns an average of 5.38 USD per Kg. It is
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contended that in the last year value added textile exported goods worth 7.72 billion USD, while the spinning sector only earned 1.13 billion USD. In the above context, restrictions imposed by notifications/order in question are not only reasonable in every sense of the word, but also in the national interest. Learned counsel have further argued that the notifications/order did not apply to processed or fine yarn which fetches higher rates in the international market thereby earning foreign exchange for the country. It is also contended that such spinning units that were export oriented and were under obligation to export their product in view of the notifications' issued by the Federal Government have been catered for -in the orders/notifications in issue. 11. That it is the case of the applicants that the notifications/order in question was prompted by sudden increase in the export yarn from Pakistan which forebode an impending shortfall. Said yarn is being exported to countries which compete with Pakistan in the value added textile sector in the international market, hence, the restrictions imposed was imperative. 12. Messrs Ali Sibtain Fazli and Mr. Raashid Anwar Advocates for the applicants also relied on the judgments reported as PLD 1975 SC 667, Government of Pakistan v. Zamir Ahmed PLD 1958 SC 437, The Tariq Transport Company Lahore v. Sargodha Bhera Bus Service Sargodha, 1986 SCMR 680, Muhammad Iqbal Rafi v. The Province of Punjab, PLD 2002 Lahore 359, Nisar-ul-Haq v. Tehsil Municipal Administrator City, 1978 SCMR 327, Zamir Ahmed Khan v. Government of Pakistan, 1995 CLC 1687(Lahore), MD Tahir v. Chief Secretary Government of Pun jab, 2006 YLR 229, Shehzad Riaz v. Federation of Pakistan, 2004 MLD 1372, Rehmat Filling Station v. Government of Pakistan, 2003 MLD 1133 (Lahore), Muhammad Saleem v. Federal Public Service Commission of Pakistan, 2008 SCMR 17, New Shaheen Trading Company v. Government of Pakistan, 2007 PTD 1005, Molasses Trading and Export Co. v. Government of Pakistan, 2005 PTD 1670, Cynamid Pakistan Ltd. v. Collector of Customs, PLD 1988 SC 670 Abdul Rahim Allah Ditta v. Federation of Pakistan PLD 1993 Lahore 752, Ahmad Abdullah v. Government of Punjab 1999 SCMR 412, Collector of Customs v. Ravi Spinning- Mills Ltd., 1947 (2) All ER 680, Associated Provincial Picture House Ltd. v. Wednesbury Corporation, 1984(3) All ER 935 In the Council of the Civil Service Unions and others. 13. Heard. Record perused. 14. Learned counsel for the Interveners and the learned Deputy Attorney-General for Pakistan relying upon the judgment reported as Progress of Pakistan supra has contended that the right guaranteed under Article 18 is available only to the citizens and does not to companies, hence, the petitioners who are limited companies cannot maintain the instant Constitutional Petitions. In the instant case and several connected Writ Petitions citizens i,e,, the shareholders of the company also appeared and figured as the petitioners. Moreover in all the connected Writ Petitions challenge to the orders/notification in question is not limited to the alleged violations of Article 18 but encompasses other grounds pertaining to the vires, legality and validity of the said orders which are available to the company's independent of Article 18, consequently this Court is persuaded to sustain the said objections or dismiss these petitions on account thereof. 15. The main thrust of the arguments of the learned counsel for the petitioners was that the impugned order/notification issued under section 3(1) of the Import and Export (Control) Act 1950 offends against the fundamental rights of the petitioners as guaranteed by Article 18 of the Constitution of Islamic Republic of Pakistan. Said Article reads as follows:-- "(18) Freedom of, trade, business or profession-Subject to such qualifications, if any, as may be prescribed by law, every citizen shall have the right to enter upon any lawful profession or occupation, and to conduct any lawful trade or business: Provided that nothing in this article shall prevent - (a) the regulation of any trade or profession by a licensing system, or (b) the regulation of trade, commerce or industry in the interest of free competition therein, or
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(c) the carrying on, by the Federal Government or a Provincial Government, or by a corporation controlled by any such Government, of any trade, business, industry or service, to the exclusion, complete or partial of other persons." 16. In pith and substance, petitioners' case appears to be that every citizen inter alia has been granted a fundamental rights to carry on any trade or business subject only to regulation either by a licensing system or for the interest of free competition. Said right may be curtailed by creation of State Monopoly for such trade or industry. No other restriction can be imposed upon the conduct of any trade or business by a citizen, and the word 'lawful' as mentioned in the said Article is controlled by the (a)(b) and (c) of the Proviso. In the above perspective, it is the case of the petitioners that the offending Order/notification under section 3(1) of the Import and Export (Control) Act, 1950 neither envisages a licensing system nor creates a State Monopoly for the export of yarn, and also by no stretch of the imagination can be in the interest of free competition, hence are ultra vires Article 18 of the Constitution. 17. If the contentions of the learned counsel for the petitioners are accepted, the expression 'lawful' in Article 18 of the Constitution would become meaningless and of no legal consequence. If said Article is be as is being advanced and canvassed by the learned counsel for the interpreted without reading the word 'lawful', the effect perhaps would petitioners, i,e,, that a citizen can carry on any trade or business (lawful or otherwise) subject only to the limitations mentioned in the provisions i,e,, the licensing system advancing of free competition and by way of State monopoly. Such an interpretation would make the word 'lawful' irrelevant and superfluous. It is settled law that surplusage is not to be easily imputed or attributed to any Statutory instrument least of all a Constitutional documents. This Court cannot be persuaded that the word 'lawful' in Article 18 is a surplus age and has been inserted therein by the Framers of the Constitution accidentally and not attending it to be read therein. Article 18 must necessarily be interpreted so as to give effect to it in its entirety by giving meaning to every word and expression used therein including the expression 'lawful trade or business'. 18. That incidentally the said expression 'lawful trade or business' were also mentioned in Article 12 of the erstwhile Constitution of 1956. In fact said Article 12 of the Constitution of 1956 is legally identical to Article 18 of the Constitution of 1973. Said Article reads as under:-- "(12) Every citizen, possessing such qualifications, if any, as may be prescribed by law in relation to his profession or occupation, shall have the right to enter upon any lawful profession, or occupation, and to conduct any lawful trade or business: Provided that nothing in this Article shall prevent --- (a) the regulation of any trade or profession by a licensing system, or (b) the carrying on, by the Federal or a Provincial Government or by a corporation controlled by any such Government, of any trade, business, industry or service, to the exclusion, complete or partial of other persons. 19. The expression 'lawful trade or business' as used in Article 12 of the Constitution of 1956 came up for interpretation before this Court in the case reported as PLD 1958 (W.P.) Lahore 887. The Progress of Pakistan Co., Ltd. v. Registrar Joint Stock Companies, Karachi, 2) the Islamic Republic of Pakistan wherein Mr.Justice BZ Kaikaus (as he then was) held as follows:-- (41) For my part, I have never had any doubt as regards the effect of the word "lawful" in Article 12 and the extent of the guarantee granted by this Article. The Article entitles the citizens of Pakistan to carry on any business, trade, or profession with this condition only that the individual acts involved in it are not unlawful. If an act involved in a business, trade, profession or occupation, is such that if performed otherwise than as a part of a business trade, profession or occupation, it is unlawful, then it cannot become lawful just because it is performed as a part of a business, trade or profession, that is, as a part of activity indulged in for the purpose of profit or income That is the
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meaning of saying that the citizens can carry on any lawful business etc. It is lawful if the activity involved in it, is not, apart from its being carried on as a profession, unlawful. 20. In another case reported as PLD 1958 (W.P.) Lahore 929 Mehtah Jan and another v. Municipal Committee Rawalpindi, this Court while dilating upon the same expression 'lawful trade or business' as used in Article 12 of the Constitution of 1956 was interpreted by Mr.Justice Kayani (as he then was) in the following terms: "(9) Next in Part III, the Constitution laid down the "Directive Principles of State Policy". The State which includes the Legislature, was to guide…
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