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Official Citation: 2025 IHC 201760
Court / Jurisdiction: Islamabad High Court
Parties: Owais Ahmed vs GOP etc
Ruling Summary: This decision was rendered by the Islamabad High Court, officially reported as 2025 IHC 201760. In this matter between Owais Ahmed and GOP etc, the court adjudicated key questions of statutory construction, procedural regularity, and legal precedent under Pakistani law.
Core Holding: The honorable bench evaluated governing statutory provisions and judicial authorities to establish the rights of the parties, delivering the binding reasoning set out below.
COURT: Islamabad High Court (Honourable Mr. Justice Arbab Muhammad Tahir) AUTHOR JUDGE: Former Honourable Chief Justice Mr. Justice Iqbal Hameed Ur Rahman DECISION DATE: 10-FEB-2025 CASE NO: Writ Petition-967-2020 CITATION: 2025 IHC 201760 PARTIES: Owais Ahmed VS GOP etc LAW / SECTION: - SUBJECT: Miscelleneous, Other REMARKS: Against impugned notice dated 19.02.2020 and 25.02.2020 and 02.03.2020 regarding conducting audit of office of the auditor general of Pakistan (AGP) ============================================================ Form No: HCJD/C-121
ORDER SHEET
IN THE ISLAMABAD HIGH COURT, ISLAMABAD (JUDICIAL DEPARTMENT)
W.P. No. 967/2020
Owais Ahmed and another
Versus
Government of Pakistan, Ministry of Finance through its Secretary and 2 others
Arbab Muhammad Tahir, J.- The petitioners, through the instant petition under Article 1999 of the Constitution of the Islamic Republic of Pakistan, 1973 (hereinafter the “Constitution”) has impugned vires of section 19A of the Auditor General’s (Functions, Powers and Terms and Cond itions of Service ) Ordinance, 2001 (hereinafter the “AG-Ordinance”) inserted through the Finance Act, 2015, and notices/ letters, dated 19.02.2020, 25.02.2020 and 19.02.2020, with approval of “independent officer” appointed pursuant to such amended provision. It is the case of the petitioners that the amendment was made through a Money Bill , which is violative of Articles 70 and 73(2) of the Constitution. For the sake of convenience, the same is reproduced below.-
“19A. Sanctions accorded by the Auditor- General.- The President may appoint an independent officer to audit sanctions to expenditure accorded by the Auditor-General. The Auditor -General shall produce for inspection by that officer all books and other documents relating thereto and give h im such information as he may require for the purpose of audit.” Petitioners by : Ms Shireen Imran, Advocate.
Respondents by : Ms Azra Batool, Asstt. Attorney General. Syed Tajdar Mustafa Zaidi, Director Legal and Mr Muhammad Asif, Audit Officer (L-I), office of Auditor General of Pakistan. Dr. Muhammad Ismail, Section Officer , Ministry of Finance.
Assisted by : Mr Sajjad Ali, Law Clerk.
Dates of Hearing : 17.12.2024 Page-2 W.P. No.967/2020 2. Learned counsel for the petitioners has argued that; the Office of Auditor General of Pakistan (hereinafter the “AGP”) is the creation of Constitution i.e. Article 168; that functions and powers of the AGP have been provided under Article 169 of the Constitution, which are regulated through AG -Ordinance; that the reports relating to the accounts of the Federation are submitted to the President, which are laid before the Parliament; that AG-Ordinance could not have been amended through a Money Bill; that the Article 73(2) of the Constitution does not deal with matters relating to audit of the office of AGP; that Article 73(2)(h) of the Constitution relates to audit of the accounts of the Federal Government or Provincial Government; AGP is neither part of the Federation nor any province ; the inclusion of office of AGP in Schedule III to the Rules of Business, 1973 is only for the purposes of Schedule V-B of the referred rules, which cannot undermine the constitutional autonomy of the AGP; that even if for the sake of arguments , office of AGP is considered as part of the Federal Government, its audit is to be regulated under Article 172(2) of the Constitution, which provides power to AGP to determine the nature and extent of the audit ; even if audit is conducted by the Ministry of Finance, the Constitution does not provide any cover to such audit or mechanism through which such report is to be laid before the Parliament; the impugned legislation is not only in derogation to the basic constitutional framework relating to audit but violates obligations contained in the multinational conventions wherein Pakistan is one of the signatories; the word used “independent officer” in section 19A of the AG -Ordinance has not been defined in the referred law; the AGP conducts audit of the accounts of the Ministry of Finance; the appointment of an officer of the Ministry of Finance has created conflict of interest; the office of Additional Finance Secretary appointed as “independent officer” does not enjoy constitutional autonomy; the impugned legislation and the notices issued pursuant thereto are in conflict with constitutional provisions and liable to be set aside. Page-3 W.P. No.967/2020
3. On the other hand, the learned Assistant Attorney General has argued that; office of AGP is subordinate office of the Federal Government; the employees of office of AGP are civil servants; the petitioners lack the locus standi to question vires of the impugned legislation; the petitioners are not personally aggrieved; the audit of the accounts of the office of AGP has never been conducted since its establishment; the matters relating to audit fall within the purview of Article 73(2)(f) of the Constitution; the question of conflict of interest does not arise; the AGP acts as principal accounting officer of his department; the expenditures incurred by the office of AGP are charged on the Federal Consolidated Fund; the “independent officer” appointed pursuant to the impugned legislation is empowered to conduct audit and furnish his report to the President ; that the petitioners failed to point out any particular provision of the Constitution which has been violated through the impugn ed legislation; there is no dispute with regard to the power of Parliament to legislate; the audit of the accounts of the office of AGP will ensure transparency and accountability; the petition is liable to be dismissed.
4. Heard. Record perused.
5. The petitioners have impugned vires of section 19A of the AG-Ordinance inserted through sec tion 7 of the Finance Act, 2015 on the grounds that (i) the impugned provision could not have been inserted through a “Money Bill” , (ii) the existing constitutional framework does not recognize an audit conducted by an “independent officer” other than the AGP , (iii) the “role of the President ” under the Constitution in relation to “audit” is limited to Articles 170 of the Constitution i.e. submission of report by the AGP to the President, and (iv) powers of the AGP to give directions as to audit of accounts under Article 170 (2) of the Constitution cannot be taken away otherwise than a constitutional amendment . In order to address the above Page-4 W.P. No.967/2020 grounds, it would be appropriate to go through the constitutional framework relating to audit.
Provisions of the Constitution relating to Audit & Accounts
6. Article 168 of the Constitution provides for the mechanism of appointment, oath, term of office, and mode and manner of removal of the AGP. Article 169 provides that the AGP shall in relation to (a) the accounts of the Federation and of the Provinces; and (b) the accounts of any authority or body established by the Federation or a Province, perform such functions and exercise such powers as may be determined by or under Act of Majlis-e-Shoora (Parliament) and, until so determined, by Order of the President. Article 170(1) provides that the Federation and the Provinces shall be kept in such form and in accordance with such principles and methods as the AGP may, with the approval of the President, prescribe. Article 170(2) provides that audit of the accounts of the Federal and of the Provincial Governments and the accounts of any authority or body established by, or under the control of, the Federal or a Provincial Government shall be conducted by the Auditor-General, who shall determine the extent and nature of such audit. Article 171 provides that the reports of the Auditor - General relating to the accounts o f the Federation shall be submitted to the President, who shall cause them to be laid before both Houses of Majlis-e-Shoora (Parliament) and the reports of the AGP relating to the accounts of a Province shall be submitted to the Governor of the Province, w ho shall cause them to be laid before the Provincial Assembly.
Provisions relating to legislative procedure
Bill with respect to any matter in the Federal Legislative List 7. Article 70(1) of the Constitution provides that a Bill with respect to any matter in the Federal Legislative List may originate in either House and shall, if it is passed by the House in which it Page-5 W.P. No.967/2020 originated, be transmitted to the other House; and, if the Bill is passed without amendment by the other House also, it shall be presented to the President for assent. Article 70(2) provides that i f a Bill transmitted to a House under Article 70(1) is passed with amendments it shall be sent back to the House in which it originated and if that House passes the Bill with those amendments it shall be presented to the President for assent. Article 70(3) provides that if a Bill transmitted to a House under Article 70 (1) is rejected or is not passed within ninety days of its laying in the House or a Bill sent to a House under Article 70 (2) with amendments is not passed by that House with such amendments, the Bill, at the request of the House in which it originated, shall be considered in a joint sitting of both Houses and if passed by the votes of the majority of the members present and voting in the joint sitting it shall be presented to the President for assent.
Procedure with respect to Money Bills 8. Article 73(1) provides that n otwithstanding anything contained in Article 70, a Money Bill shall originate in the National Assembly. The proviso to sub -article (1) of Article 73 provides that simultaneously when a Money Bill, including the Finance Bill containing the Annual Budget Statement, is presented in the National Assembly, a copy thereof shall be transmitted to the Senate which may, within fourteen days, make recommendations thereon to the National Assembly. Article 73(1A) provides that the National Assembly shall, consider the recommendations of the Senate and after the Bill has been passed by the Assembly with or without incorporating the recommendations of the Senate, it shall be presented to the President for assent. Sub-article (2) of Article 73 provides that a Bill or amendment shall be deemed to be a Money Bill if it contains provisions dealing with all or any of the matters described in clauses (a) to (g), clause (f) whereof includes the audit of the accounts of the Federal Government or a Provincial Government. Page-6 W.P. No.967/2020
Rules of Business, 1973. 9. Part III of the Constitution deals with the Federation of Pakistan. Chapter 3 of Part III of the Constitution incorporates the provisions relating to the Federal Government (i.e. Articles 90 to 99) . In exercise of powers conferred under Article 90 to 99 of the Constitution, the Federal Government has made the Rules of Business, 1973 (hereinafter the “Rules”). The expression “Division” has been defined in rule 2(vi) of the Rules as meaning a self -contained administrative unit responsible for the conduct of business of the Federal Government in a distinct and specified sphere and declared as such by the Federal Government, whereas, the expression "Attached Department" is defined in rule 2(ii) as meaning a Department which has direct relation with a Division and has been declared as such by the Federal Government. Schedule III to rule 4(4) of the Rules includes the name of the office of Auditor General of Pakistan at serial no.27 as attached department , attached with Finance Division, approved as such by the Federal Government. Sub-rule (1) of rule 15-A of the Rules provides that notwithstanding the provisions made in the Rules, where in terms of any provision of the Constitution or under any other statutory provision any function is to be performed or any orders have to be issued by the President or his specific approval is require d, the Division concerned shall incorporate a paragraph to that effect in the summary titled as "Summary for the Prime Minister". The Prime Minister shall render his advice and submit the case to the President. After the President has seen and approved the case, it shall be returned to the Prime Minister. The cases to which sub -rule (1) of rule 15 -A applies are enumerated in Schedule V -B to the Rules , wherein entries no.20 to 22A relate to AGP i.e. Appointment, removal, term of office and terms and conditions of service of AGP, function and powers of AGP , p rinciples and methods of keeping of accounts and Reports relating to accounts of the Federation envisaged under Articles 168(1)(3), 169, 170 and 171 of the Constitution , respectively. Page-7 W.P. No.967/2020 Rule 15-A(3) of the Rules provides that the cases and papers referred to in Schedule VII shall be submitted to the President for his information. Entry no.17A of Schedule VII to rule 15-A(3) relates to reports of AGP.
10. The Finance Division in its report has advanced two main grounds in support of the impugned legislation, (i) that by virtue of entry no.27 of Schedule III to rule 4(3) of the Rules, the office of AGP is an attached department of the Finance Division, therefore, it is part of the Federal Government , and (ii) the impugned legislation was introduced in the Parliament through a Money Bill due to the reason that under clause (f) of sub -article (2) of Article 73 of the Constitution, a Bill or amendment which contains provisions dealing with audit of the accounts of the Federal Government or a Provincial Government shall be deemed to be a Money Bill.
11. Bare perusal of the above discussed constitutional provisions shows that the office of AGP is creation of the Constitution . The term of the office of AGP is secured and once appointed, he cannot be removed from office except in the like manner and on the like grounds as a Judge of the Supreme Court. The AGP performs such functions and exercise such powers as may be determined b y the Majlis-e-Shoora (Parliament) through an Act in relation to accounts of the Federation, Provinces and any authority/body established by the Federation or a Province . The Rules have been framed by the Federal Government to lay down codified procedure for exercise of power/authority vested in the Federal Government under Articles 90 to 99 of the Constitution and cannot operate in derogation of the express provisions of the Constitution. The inclusion of the name of office of AGP in Schedule III to rule 4(4) of the Rules cannot take away the independence and autonomy of the office of AGP guaranteed by the Constitution. Schedule V -B to rule 15 -A of the Rules would further strengthen this argument as it stipulates instances where the Page-8 W.P. No.967/2020 involvement of Finance Division is required in matters relating to the office of AGP i.e. Articles 168(1)(3), 169, 170 (1) and 171 of the Constitution. The Finance Division lends secretarial support and assists the President in performance of his role in the referred provisions of the Constitution relating to Appointment, removal, term of office and terms and conditions of service of AGP, function and powers of AGP, p rinciples and methods of keeping of accounts and Reports relating to accounts of the Federation.
12. Sub-article (2) of Article 170 of the Constitution empowers the AGP, to the exclusion of others, to determine the extent and nature of audit of the accounts of the Federal and Provincial Governments and any authority/body established by or under the control of Federal or Provincial Governments. This power of the AGP is unique in its nature . The Constitution does not empower any other person to have a say in matters falling in Arti cle 170(2). The determination of the extent and nature of audit by the “independent officer” is, therefore, directly in conflict with Article 170(2) of the Constitution.
13. When audit of the accounts of the Federation is conducted by the AGP, the report is submitted to the President, who then causes the same to be laid before both Houses of the Majlis -e-Shoora (Parliament) as envisaged in Article 171 of the Constitution. It is at this stage when the matter comes within the ambit of Rule 15-A of the Rules i.e. the report is processed through the Finance Division in the manner prescribed in the Rules. The Federal Government has no role at both ends, the audit is conducted by the AGP and the Preside nt causes the report to be laid before the Parliament.
14. The Auditor General’s (Function, Powers and Terms and Conditions of Service) Ordinance, 2001 (the AG-Ordinance) has been enacted with the object to determine the terms and conditions of Page-9 W.P. No.967/2020 service, the term of office and the powers and functions of the Auditor-General of Pakistan by repealing the Pakistan (Audit and Accounts) Order, 1973. The AG-Ordinance has been enacted for the purposes of Articles 168(3A) [determination of terms and conditions of service] and 169 [determination of powers and functions ] of the Constitution. Section 19A inserted through section 7 of the Finance Act, 2015 neither deals with the terms and conditions of service of the AGP, nor the functions and powers of the AGP. The extent of legislation through an Act of Majlis -e-Shoora (Parliament) as commanded by Article 169 of the Constitution is limited to determination of the powers and functions of the AGP relating to (a) the accounts of the Federation and of the Provinces ; and (b) the accounts of any authority or body established by the Federation or a Province. The in the absence of an Act of Parliament , the President is empowered to determine the powers and functions of the AGP under Article 168(3A) of the Constitution, however, in the instant case, the Parliament has duly enacted the AG-Ordinance.
15. Section 19A as inserted through section 7 of the Finance Act, 2015 provides that the President may appoint an independent officer to audit sanctions to expenditure accorded by the Auditor - General. The Auditor General shall produce for inspection through that officer all books and other documents relating thereto and give him such information as he may require for the purpose of audit. The expression “independent officer” is neither defined in the AG - Ordinance nor in the Finance Act, 2015 . The constitutional framework relating to an audit has been discussed above in detail and the same does not provide constitutional cover to an audit conducted by an independent officer appointed by the President. The said audit cannot be deemed to be an audit conducted by the AGP and its report can neither be submitted to President nor can the same be caused to be laid before the Parliament within the meaning of Article 171 of the Constitution. Similarly, the independent officer appointed as such does Page-10 W.P. No.967/2020 not enjoy the constitutional autonomy and security of the term of his office nor derives hi s power from any provision of the Constitution . Section 19A is directly in conflict with Article 170(2), which vests exclusive power in the AGP to determine the extent and nature of audit of the accounts of the Federal and Provincial Governments and any authority/body established by or under the control of Federal or Provincial Governments.
16. In view of the above discussion, it is concluded that the AGP is not part of the Federal Government . The office of AGP is a separate constitutional autonomous institution, created by the Constitution. The expenditure incurred by the office of the AGP is “charged expenditure” under Article 81( a)(v) of the Constitution. Section 8 of the AG -Ordinance read with Article 172(2) of the Constitution makes it the duty of AGP to conduct audit of all the expenditure from the Consolidated Fund of the Federation and conduct audit of all the transaction of the Federation relating to Public Accounts. The establishment of a parallel system of auditing through the impugned legislation is against the spirit of the Constitution and even section 8 of the AG -Ordinance. The expression “independent officer” used in the impugned legislation stands nowhere in the AG - Ordinance as well as the Constitution in relation to audit . Reliance of the Federation on Article 73(2)(f) of the Constitution is misplaced as it refers to provisions relating to “audit of the accou nts of the Federal Government or a Provincial Government” . As concluded above, the AGP is not the Federal Government and the mentioning of its name in any of the schedule to the Rules is for procedural purposes to assist the President in discharge of his constitutional duties . The impugned legislation ought to have been passed by both Houses of the Majlis -e- Shoora (Parliament) in accordance with the provisions of Article 70 of the Constitution. The Finance Act, 2015, to the extent of section 7, should not have been deemed a Money Bill merely for the reason that it contained an expression “audit” , similar to the one used in Article Page-11 W.P. No.967/2020 73(2)(f) of the Constitution ignoring rest of the portion of the said clause, which provides that a Bill shall be deemed to be a Money Bill if its contains provisions relating to “audit of the accounts of the “Federal Government” . Being a Money Bill, it may have been transmitted to the Senate , not for voting but to seek its recommendations in terms of Article 73(1) of the Constitution. The Finance Act, 2015 to the extent of section 7 , without the sanction of the Senate through vote s cannot be termed a valid piece of legislation, hence does not derive its validity from the Constitution.
17. Having concluded as above, let us take guidance from the precedent law that when a piece of legislative instrument suffers from substantial lapses of procedure provided by the Constitution and its provisions ex facie are violative of the constitutional provisions, then while examining vires of such legislation in a petition challenging its validity, what procedure is to be adopted by the Court.
18. The Hon’bel Supreme Court in the case titled “Lahore Development Authority through D.G. and others Versus Ms. Imrana Tiwana and others” (2015 SCMR 1739) has held as follows.-
i) “There was a presumption in favour of constitutionality and a law must not be declared unconstitutional unless the statute was placed next to the Constitution and no way could be found in reconciling the two; ii) Where more than one interpretation was possible, one of which would make the law valid and the other void, the Court must prefer the interpretation which favoured validity; iii) A statute must never be declared unconstitutional unless its invalidity was beyond reasonable doubt. A reasonable doubt must be resolved in favour of the status being valid; iv) Court should abstain from deciding a Constitutional question, if a case could b e decided on other or narrower grounds; Page-12 W.P. No.967/2020 v) Court should not decide a larger Constitutional question than was necessary for the determination of the case; vi) Court should not declare a statute unconstitutional on the ground that it violated the spirit of the Constitution unless it also violated the letter of the Constitution; vii) Court was not concerned with the wisdom or prudence of the legislation but only with its Constitutionality; viii) Court should not strike down statutes on principles of republican or democratic government unless those principles were placed beyond legislative encroachment by the Constitution; and ix) Mala fides should not be attributed to the Legislature.
19. In the case titled “Haroon-ur-Rashid v. Lahore Development Authority and others” (2016 SCMR 931 ), it has been held as follows.-
“It is settled position in law that while interpreting the law or any provision of any statute all efforts are made by the Court to save the statute by applying various tools of interpretation one of the rule of harmonious construction being rule of reading down and rule of severance. Rule of reading down, a statutory provision means that a statutory pr ovision is generally read and or toned or narrowed down, applying restrictive meaning in its application. Rule of severance means to trim down or slice away invalid portion which is otherwise generally considered to be part of statute or provision, purpose is to save as much as to bring the statute or provision within the ambit of constitution and law as declared by the…
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