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Petitioner: Pakistan Sugar Mills Association and others VS Respondent: Federation of Pakistan and JUDGMENT
Court Name: Islamabad High Court Judge(s): Aamer Farooq, Miangul Hassan Aurangzeb Title:Pakistan Sugar Mills Association and others vs Federation of Pakistan and
JUDGMENT
Reported As: 2020 IHC 132 Result: Appeal dismissed Judgment JUDGMENT MIANGUL HASSAN AURANGZEB, J. Through the instant intra Court appeal, the appellants impugn the judgment dated 20.06.2020 passed by the learned Judge-in-Chambers whereby writ petition No.1544/2020 filed by the appellants was disposed of with certain directions. FACTUAL BACKGROUND:- 2. The facts essential for the disposal of the instant appeal are that the adverse effects on the common man caused by the dearth in the availability of sugar as well as a sharp increase in its price caused the Prime Minister of Pakistan to constitute a three-member Inquiry Committee on 20.02.2020. The Convener of this Committee was the Director General, Federal Investigation Agency ("F.I.A.") , and its mandate was to probe into the "sugar crises in the country ." The terms of reference ("TORs") for the said Committee are set out in "Schedule-A" hereto. 3. On 09.03.2020, the Convener of the Inquiry Committee addressed a letter to the Prime Minister informing the latter that the information thus far collected by the said Committee showed that the whole information system used for decision making by the Government departments was totally dependent on the information provided by the sugar mills about the pricing of sugarcane, the amount of sugarcane crushed, recovery ratio, the sugar produced, the sugar sold, lifted, and pledged etc. It was also conveyed that the said Committee had been able to form a reasonable picture of the possible ways in which "the malpractices in sugar sector can be used to hide the real production and possible off the record sales," and that as per some source reports, the supply of sugar is controlled by a few sugar mills for manipulation of the market sale price. 4. In the said letter dated 09.03.2020, it was suggested inter alia that the strength of the said Committee be expanded to include a Grade-21 or equivalent officers from the Securities and Exchange Commission of Pakistan ("S.E.C.P ."), the Federal Board of Revenue ("F.B.R.") and the State Bank of Pakistan ("S.B.P ."). Furthermore, it
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was suggested that the TORs for the said Committee should also include (a) the verification of the sales of sugar in order to find out the malpractices of hoarding and manipulation of sugar supply to the market for maximum profiteering, and (b) the physical verification of the stock to find out whether there was any excess/shortage of stock as shown in the books and verification of the genuineness of the sale records. It was also suggested that in order to carry out onsite forensic audit and to deploy technical teams to carry out this exercise, "the legal cover" be provided. 5. On 10.03.2020, a summary was moved by the Interior Division for the Cabinet proposing that a Commission of Inquiry be constituted under the provision s of the Pakistan Commissions of Inquiry Act, 2017 ("the 2017 Act") to "probe into the increase in sugar prices." The composition of the Inquiry Commission and the TORs were also proposed in the said summary . In the said summary , reference was made to the suggestions that had been made by the Convener of the Inquiry Committee constituted by the Prime Minister . 6. On 10.03.2020, the Cabinet approved the proposals made by the Interior Division in the said summary . Furthermore, the Cabinet directed that the Interior Division should immediatel y issue the notification for the constitution of the Inquiry Commission without waiting for the formal communication of the decision. 7. Vide notification No.F.5/14/2020-FIA, dated 16.03.2020, the Federal Government, in exercise of its powers conferred by Section 3 of the 2017 Act, constituted a six-member Inquiry Commission. This notification was issued by the Interior Division. The composition of the Inquiry Commission was as follows:- i. Mr. Wajid Zia, Director General, FIA Chairman ii. Mr. Gohar Nafees, DG, Anti-Corruption Establishment Punjab Member iii. Mr. Ahmad Kamal, DDG, IB Member iv.Mr. Bilal Rasool, Executive Director (SECP) Member v.Mr. Majid Hussain Chaudhry , Joint Director SBP Member vi. Dr. Bashirullah Khan, DG, Directorate General of Intelligence and Investigation, FBR, IslamabadMember 8. The Inquiry Commission was required to submit its report to the Prime Minister within a period of forty days after the issuance of the said notification. The TORs for the Inquiry Commission were the same as the ones framed for the Inquiry Committee. Additionally , the Inquiry Commission was also mandated to identify the role of the Competition Commission of Pakistan ("C.C.P .") in the sugar crises as well as to identify the benami transactions and profits earned during such crises. 9. On 17.03.2020, the Cabinet directed that a representative of the Inter-Services Intelligence ("I.S.I.") be included as a member of the Inquiry Commission. 10. On 24.03.2020, the Inquiry Committee submitted its report. This report was submitted seven days after the constitution of the Inquiry Commission through notification dated 16.03.2020. In the said inquiry report, it is explicitly mentioned that the Inquiry Comm ittee had requested for the constitution of an Inquiry Commission under the provisions of the 2017 Act. It was also mentioned that the Inquiry Commission had started its work and the forensic analysis of ten sugar mills was being carried out. The Inquiry Committee recommended inter alia that in order to keep a check on the market retail price of sugar , the Provincial Departments should be required to take measures for immediate crackdown on the satta players who were known well to the Provincial Special Branch and intelligence agencies, and to ensure that the sold sugar is lifted in appropriate quantity so that the supply remains adequate. 11. On 25.03.2020, another notification was issued by the Interior Division whereby a seventh member , namely Col. Muhammad Faisal Gul, a representative of I.S.I., was added to the Inquiry Com mission. The said notification is stated to have been issued pursuant to the Cabinet' s decision dated 17.03.2020. 12. On 21.05.2020, the Inquiry Commission submitted its 253-page report. It is not disputed that the said report has findings and recommendations adverse to the interests of appellant No.1 (Pakistan Sugar Mills Association) and its members.
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13. The said report was considered by the Cabinet in its special meeting held on 21.05.2020. In the said meeting, it was decided inter alia to make the said report public. It was also decided that the Special Assistant to the Prime Minister on Accountability and Interior ("Special Assistant") shall identify actions that are to be taken with respect to the following recommendations of the Inquiry Commission:- "a. Recommendations related to improving government systems and regulatory regimes; b. Recommendations related to taking penal actions and initiating penal processes; c. Recommendations related to effecting recoveries; and d. Recommendations related to policy ." 14. The Cabinet also decided that the Special Assistant shall also assign responsibility for such actions along with timelines for implementation. Approval of the actions to be taken was required to be taken by the Special Assistant from the Prime Minister . After such approval, the Special Assistant was to follow up on the decisions so that the recommendations of the Inquiry Commission are implemented. On 07.06.2020, the Prime Minister approved the 7- point action matrix proposed by the Special Assistant. 15. On 10.06.2020, writ petition No.1544/2020 was filed by the appellants before this Court impugning (i) the notification dated 16.03.2020, (ii) the Inquiry Commission's report dated 21.05.2020, (iii) the Cabinet's decision dated 21.05.2020, and (iv) the action matrix proposed by the Special Assistant and the Prime Minister's decision dated 07.06.2020. Furthermore, the appellants sought a prohibition against Government Departments etc. from taking any adverse action against the appellants on the basis of the Inquiry Commission's report. As an interim relief, the appellants had also sought the suspension of the Inquiry Commission's report. 16. Vide ad-interim order dated 11.06.2020 passed in W.P. No.1544/2020, this Court directed status quo to be maintained. It was also ordered that no further action or proceedings be taken pursuant to the Inquiry Commission's report. The said ad-interim order was made subject to the selling price of sugar to non-commercial consumers to be at the rate of Rs.70 per kilogram. Furthermore, the Federal Government was directed to ensure that sugar was made available and sold to non-commercial consumers at the rate of Rs.70 per kilogram . The learned Judge-in-Chambers recorded his expectation that the Federal Government would advise the respective Provincial Governments to take appropriate measures so that sugar is not hoarded and is made available for sale to non-commercial consumers at the rate of Rs.70 per kilogram. 17. After a detailed inter-parte hearing, the learned Judge-in-Chambers disposed of writ petition No.1544/2020 through the short order dated 20.06.2020 . The instant intra Court appeal was filed on 29.06.2020. After this Court issued notices to the respondents, the learned Additional Attorney-General informed the Court on 09.07.2020 that the Interior Division's notifications dated 16.03.2020 and 25.03.2020 had been published in the official gazette on 06.07.2020 and 07.07.2020, respectively . 18. On 13.07.2020, the learned Judge -in-Chambers issued the detailed reasons for the short order dated 20.06.2020. This caused the appellants to amend their appeal by adding additional grounds. CONTENTIONS OF THE LEARNED COUNSEL FOR THE APPELLANTS:- 19. Learned counsel for the appellants, after narrating the facts leading to the filing of the instant appeal, submitted that since under the provisions of the 2017 Act an Inquiry Commission has wide ranging powers, including certain powers of a Court, the decision of the Federal Government to appoint an Inquiry Commission has to be with a proper and independent application of mind; that the Federal Government had constituted the Inquiry Commission on the basis of the suggestion made by the Convener of the Inquiry Committee in his letter dated 09.03.2020 addressed to the Prime Minister; that other than the said letter , there is no docum ent on record which forms the basis of the Federal Government' s decision to constitute the Inquiry Commission; that this Court cannot go into the question whether there was sufficient material before the Federal Government necessitating the constitution of an Inquiry Commission but it can see whether there was any material on the basis of which the Federal Government could take a decision; that the Inquiry Commission could have been constituted only after the Federal Government had determined that it was expedient to conduct an inquiry into a definite matter of public importance; and that this essential pre-requisite prescribed in Section 3(1) of the 2017 Act for constitutin g an Inquiry Commission was lacking in the instant case.
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20. Learned counsel for the appellants further submitted that the Inquiry Com mission had not been lawfully constituted; that the pre-requisites prescribed in Section 3(1) and (2) of the 2017 Act for constituting an Inquiry Commission and appointing members of the Inquiry Commission had not been satisfied; that even though Section 3(1) of the 2017 Act empowered the Fede ral Government to constitute an Inquiry Commission "by notification in the official gazette" and Section 3(2) of the said Act required the Federal Government to appoint members of the Inquiry Commission "by notification in the official gazette," such notifications were not published in the official gazette until after the Inquiry Commissio n had submitted its report; that between 16.03.2020 and 21.05.2020, no notification had been published in the official gazette in accordance with the requirements of Section 3(1) and (2) of the 2017 Act; that the Inquiry Commission could have been constituted only in the manner as prescribed in Section 3(1) and (2) of the 2017 Act; that upon the submission of its report on 21.05.2020, the Inquiry Commission had been rendered functus officio; that since the notifications constituting the Inquiry Commission were published in the official gazette after the submission of its report, the proceedings of the Inquiry Commission were coram non-judice and without lawful authority; that the members of the Inquiry Commission could not enter upon office without publication of a notification in the official gazette; that in the instant case, the Government had sent the notifications dated 16.03.2020 and 25.03.2020 drawn by the Interior Division for publication in the official gazette between 06.07.2020 and 07.07.2020, respectively; and that the constitution of the Inquiry Commission without a notification in the of ficial gazette was not a procedural error that could be corrected. 21. Learned counsel for the appellants further submitted that the notification for the constitution of the Inquiry Commission could only have been issued by the Cabinet Division; that item No.81 in paragraph 2 of Schedule-II to the Rules of Business, 1973 ("Rules of Business") shows that the Cabinet Division has to deal with all matters concerning and related to the 2017 Act; that strict adherence to the Rules of Business has been emphasized upon by the Superior Courts in several judgments; that the notifications dated 16.03.2020 and 25.03.2020 were drawn and issued by the Interior Division which was not authorized or competent under the Rules of Business to issue such notifications; that even the summary for the constitution of the Inquiry Commission was moved by the Interior Division and not by the Cabinet Division; that the decision of the Cabinet to constitute an Inquiry Commission on the basis of a summary moved by an unauthorized Division/Ministry would be of no legal consequence; and that it is well settled that when the foundation of a transaction is unlawful, the entire superstructure raised on such a foundation is liable to crumble. 22. Furthermore, it was submitted that the provisions of the 2017 Act do not empower the Federal Government to reconstitute an Inquiry Commission; that the independence of the members of the Inquiry Commission would be jeopardized if the Government was to appoint additional members after it had begun to function; that the power to appoint additional members could be misused and motivated to make the report of an Inquiry Commission palatable and congenial to the Governme nt; and that the Federal Government had added a seventh member to the Inquiry Commission after it had worked for nine days. 23. It was further submitted that the report of the Inquiry Commission is accusatory to the appellants; that although there are 82 sugar mills in Pakistan, notices were issued by the Inquiry Commi ssion on 06.05.2020 only to 10 sugar mills; that in paragraph 100 of the inquiry report, the appellants were alleged to have committed daylight robbery; that the publication of the said report had adversely affected the appellants' reputation; that even if the Federal Government does not refer the said report to the regulatory bodies or the National Accountability Bureau, the said report would remain a stigma on the appellants' reputation; that the Inquiry Commission had performed a condemnatory function and had referred the appellants to be a part of a mafia; and that the said report casts a slur on the sugar mills' owners who had not been af forded an adequate opportunity to defend themselves. 24. Learned counsel for the appellants further submitted that the report of the Inquiry Commission was tainted with bias since three members of the Inquiry Commission had pre-conceived notions and were pre-disposed against the appellants; that in the Inquiry Committee's report dated 24.03.2020, and in particu lar paragraphs 7, 25, 27, 47, 68 and 69 thereof, remarks adverse to the interests of the appellants had been given; that the Convener of the Inquiry Committee, who was also the Chairman of the Inquiry Commission, had also disclosed his mind in his letter dated 09.03.2020 to the Prime Minister wherein he had remarked that "malpractices in sugar sector can be used to hide
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the real production and possible off the record sales" ; that the Inquiry Commission had been constituted nineteen days after the Inquiry Committee had worked for; that the Inquiry Committee's report dated 24.03.2020 had been made public on 04.04.2020; that the said report of the Inquiry Committee shows that the said Committee had formed some tentative views and some final views about the sugar industry; that in the said report, definite findings were given on cartelization and satta ; that given the said observations of the Inquiry Committee, the Federal Government ought not to have included the members of the Inquiry Committee in the Inquiry Commission; and that the Inquiry Commission's report is liable to be quashed on the ground of bias. Learned counsel for the appellants prayed for the appeal to be allowed and for the relief sought in writ petition No.154 4/2020 to be granted. In support of his submissions, learned counsel for the appellants referred to numerous judicial precedents, reference to some of which will be made at a later stage in this judgment. CONTENTIONS OF THE LEARNED ATTORNEY -GENERAL FOR P AKIST AN:- 25. On the other hand, learned Attorney-General for Pakistan submitted that the constitution of the Inquiry Commission had been necessitated by the sharp increase in the price of sugar which is an essential commodity affecting the public at large; that the Federal Government, instead of taking cosmetic steps for media consumption decided to take robust action in order to get to the root of the problem and alleviate the plight of the public at large; that the decision to constitute an Inquiry Commission with elaborate TORs was taken by the Federal Government even though it had the potential to destab ilize or even jeopardize the Federal Government; and that the members of the Inquiry Commission are public servants with unimpeachable reputations. 26. Furthermore, it was submitted that the essential purpose of requiring a notification to be published in the official gazette is to make the public aware of what is being notified; that where the law does not provide any consequence for the non-publication of a notification in the official gazette, then such non-publication would not be fatal; that the notifications dated 16.03.2020 and 25.03.2020 did not impose any direct liability or entail any adverse consequences for any identified party; that the appellants cannot question the proceedings of the Inquiry Commission on the ground that the notifications had not been published in the official gazette since they had ample knowledge of the notifications constituting the Inquiry Commission when they were initially issued; that the appellants are simply agitating a technical objection in order to avoid the consequences of the recommendations made in the inquiry report; that the appointment of the Inquiry Commission is only one of many stages of the actions/proceedings on the subject of curbing a sharp rise in sugar prices; that keeping in view the objectives of the 2017 Act as well as the relevant facts and circumstances, it would not be equitable or in the public interest for this Court to hold that the requirement of prior publication of the notification in the official gazette to be mandatory resulting in the invalidation of the action taken pursuant to the notifications constituting the Inquiry Commission; and that since information regarding the constitution of the Inquiry Commission was available in print and electronic media as well as on social media, the appellants have no reason to question the constitution of the Inquiry Commission simply on the ground that the notification for the constitution of such Commission had not been published in the of ficial gazette until after the Inquiry Commission had submitted its report. 27. Furthermore, it was submitted that the summary for the appointment of the Inquiry Commission had been moved by the Interior Division since the Inquiry Committee had been headed by the Director General, F.I.A., and the administrative control over F.I.A. is with the Interior Division; that the summary for the constitution of the Inquiry Commission under the provisions of the 2017 Act should have been moved by the Cabinet Division; that the moving of the summary by the Interior Division instead of the Cabinet Division was a mere irregularity and not an illegality; that the summary moved by the Ministry of Interior merged into the final decision of the Cabinet; that in terms of Article 90 of the Constitution, the Federal Government is a complete Constitutional entity and it is only for the convenience of the conduct of business that it is divided into various Divisions in terms of the Rules of Business; that such Rules are internal Rules and confer no rights on anyone to demand action to be taken in terms of a particular Rule of the Rules of Business; that in paragraph 51 of the judgmen t in the case of Mustafa Impex Vs. Government of Pakistan (PLD 2016 S.C. 808), it was held inter alia that for compelling public interest, inadvertence, negligence or incompetenc e, departure from the requirements of the Rules of Business could be made; that the moving of the summary by the Interior Division was an innocent mistake which ought to be ignored;
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that even otherwise under Rule 58 of the Rules of Business, the Prime Minister can relax the provisions of the said Rules; that the moving of a summary by the wrong Division is simply a procedural irregularity which could be overlooked or cured; that substantial compliance with the law had been made in the process for the appointment of the Inquiry Commission; that Section 3(1) of the 2017 Act mandates that the Inquiry Commission is to be appointed by the Federal Government but does not require the summary for the appointment of an Inquiry Commission to be moved by a particular Division; and that the Cabinet could have appointed the Inquiry Commission without any summary having been moved by any Division. 28. Furthermore, it was submitted that the decision of the Cabinet to appoint one additional member to the Inquiry Commission was taken on 17.03.2020, i.e. one day after the issuance of the notification for the appointment of the Inquiry Commission; that the appointment of the additional member was conducive for a comprehensive inquiry to be carried out; that the Federal Cabinet had taken guidance from the judgment of the Hon'ble Supreme Court in the case reported as PLD 2017 S.C. 265, commonly known as the Panama case, in which an officer from the I.S.I. had been appointed by the Hon'ble Supreme Court as a member of a Joint Investigation Team; that the notification for the appointment of the additional member to the Inquiry Commission should have been issued soon after the Cabinet's decision dated 17.03.2020 but it was issued on 25.03.2020; that the provisions of the 2017 Act do not prohibit the Federal Government from adding members to an Inquiry Commission; that the appointment of an additional member to the Inquiry Commission did not prejudice any party; that the said appointment had been made at a very early stage; and that the decision to appoint an additional member was not for any oblique purpose. Learned Attorney-General very fairly submitted that members cannot be added to an Inquiry Commission at a stage after the existing members had formed an opinion about the subject matter . He also submitted that a member of an Inquiry Commission cannot be dropped or removed unless he voluntarily resigns or is incapacitated. 29. Furthermore, it was submitted that the proceedings before the Inquiry Commission are not quasi judicial; that the Inquiry Commission cannot impose a penalty; that at best, the report of an Inquiry Commission is akin to a complaint with allegations or an F.I.R. or a report in the nature of preliminary inquiry; that such a report is by no means a final determination; that simply on the basis of a report of an Inquiry Com mission, any person cannot be considered as guilty of any offence or malpractice; that the doors of the principles of natural justice are not completely shut in the proceedings before the Inquiry Commission; that the appellants/Associations interacted with the Inquiry Commission, and the sugarcane growers were also heard; that the Commission, however , has a duty to act fairly in that its findings should be based on…
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