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Petitioner: Pakistan Sugar Mills Association & 17 others VS Respondent: Federation of Pakistan JUDGMENT
Court Name: Islamabad High Court Judge(s): Athar Minallah Title:Pakistan Sugar Mills Association & 17 others vs Federation of Pakistan
JUDGMENT
Reported As: 2020 IHC 102 Result: Petition disposed off Judgment JUDGMENT ATHAR MINALLAH, C.J. The constitutional jurisdiction of this Court, vested under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973 (hereinafter referred to as the 'Constitution' ), has been invoked by eighteen juridical persons. Petitioner no.1 is the Pakistan Sugar Mills Association (hereinafter referred to as the 'Association' ), which is a recognized legal representative body of entities engaged in the business of manufacture/production and sale of 'sugar'. Petitioners no.3 to 18 are juridical persons who own, operate and manage respective facilities which they have established for manufacturing / production of sugar (hereinafter referred to as 'Sugar Mills' ). Respondent no.2 is a shareholder of one of the petitioner companies. (Collectively they shall be referred to as the 'petitioners' ). The petitioners have challenged the notification dated 16-03-2020, whereby the Federal Government, in exercise of powers conferred under the Pakistan Commissions of Inquiry Act 2017 (hereinafter referred to as the 'Inquiry Act of 2017' ), had constituted a 'Commission of Inquiry'. The petitioners have further assailed the proceedings/actions of the Commission of Inquiry , including its report dated 21-05-2020, titled "Report of the Commi ssion of Inquiry constituted by the Ministry of Interior To Probe into the increase in Sugar Prices" (hereinafter referred to as the 'Report' ). The decisions taken by the Federal Cabinet in its meeting held on 21-05-2020 and the pursuant thereto "Action Matrix' recommended by Mr Shahzad Akbar , Special Assistant to the Prime Minister on Accountability and Interior (hereinafter referred to as 'Respondent no.4' ) and its approval by the Prime Minister of Pakistan, dated 07-06-2020, have also been questioned by urging this Court to declare them illegal, without lawful authority and jurisdiction. In a nut shell, the petitioners are seeking a writ to quash the report of the Commission of Inquiry and restrain the Federal Government from giving effect to its recommendations or to proceed and take action pursuant thereto. Background of the case.
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2. The importance of 'sugar' in the daily life of a common man in Pakistan cannot be overstated. 'Sugar' is indeed one of the essential commodities for the general public. Historically shortages and price increases of 'sugar' have remained a matter of great concern for the executive authorities because such factors in the past have led to strong reactions by non commercial consumers of sugar having adverse consequences for the governments. During the proceedings, this Court was informed that only 30% of the total manufactured/ produced sugar in the country is sold to and consumed by the general public while the remaining is utilized by comm ercial consumers. Any shortage or price hike in the market affecting the non commercial consumers is thus a 'definite matter of public importance' giving rise to a 'direct and vital conce rn' for the public. Moreover , factors which cause unease, distress or disillusionment amongst sugarcane growers also becomes a matter of public importance for the executive authorities. The sugar industry is one of the major industries in the country . Sugar , therefore, is an integral part of the quality of life for the general public and its availability in the market at an affordable price inevitably attracts the constitutional guaranteed right to life under Article 9 of the Constitution. 3. The current government was voted in by the people of Pakistan in the general elections held in 2018. The court has been informed that there was a sharp hike in the price of sugar during the past two years. This increase in the price of sugar and its consequent ramifications for the non commercial consumers i.e the general public was and, indeed, ought to have been a cause of serious concern for the executive authorities. It led to the ordering of a preliminary inquiry by the Prime Minister of Pakistan on 20-02-2020. The latter constituted a committee headed by Mr Wajid Zia, Director General, Federal Investigation Agency (hereinafter referred to as 'Respondent no.5' ), for this purpose. A preliminary report was submitted on behalf of the committee on 04-04-2020. On the basis of the preliminary inquiry , the constitution of a Commission of Inquiry under the Commissions of Inquiry Act 2017 was recommended for verification of the preliminary findings and further thorough probe. Respondent no.5 informed vide letter , dated 09-03-2020, that further verification of the preliminary inquiry was needed. The preliminary report was considered and, thereafter , the Federal Government i.e. the Federal Cabinet approved the constitution of a Commission of Inquiry under the Inquiry Act of 2017 and the decision was given effect by issuing a notification, dated 16-03-2020. The Commission of Inquiry was headed by Respondent no.5 and included five other members. The Terms of Reference of the Commission of Inquiry were explicitly stated in the notification. Later , vide notification dated 25-03-2020, another member was included in the Committee. The Commission of Inquiry , after concluding its proceedings, submitted its Report i.e the report dated 21-05-2020. The report was placed before the Federal Cabinet in its meeting held on 21-05-2020 and after deliberations the following decisions were taken; "In view of the above, the Cabinet decided/directed as under: i. Special Assistant to the Prime Minister on Accountability and Interior , as per recommendations of the Commission, shall identify actions (Action Matrix) that are to be taken in each of the above category , assign responsibility for such actions along with timelines for implementation. Approval for the same (Action Matrix) would be taken by the SAPM, from the Prime Minister , and subsequently follow up on the decision so that recommendations of the Commission are implemented. ii. The report of the Commission of Inquiry to probe into the increase in sugar price be made public. iii. Conflict of Interest Law must be promulgated to obviate elite capture of the state' s resources. iv. Advisors to the Prime Minister and Special Assistants to the Prime Minister should also declare their assets to the Cabinet Secretary on the same pattern as is being done by the Ministers. v. A Committee, under the Minister for National Food Security and Regulation, was constituted to conduct a review of existing sugar policy in the light of the findings of this report and present recommendations to be Cabinet, within four weeks." Pursuant to the aforementioned decision, Respondent no.4 proposed the 'Action Matrix' and the Prime Minister was pleased to give his approval. The Petitioners have attached with the petition an unauthenticated copy of a document at pages 902 and 903 (Annexure L-4) asserting it to be approval of the 'Action Matrix'. Perusal of the record shows that Respondent no.4, through a press conference, announced the filing of a reference by the Federal Government under the National Accountability Ordinance 1999 (hereinafter referred to as the 'Ordinance of 1999' ) besides sending the matter to other authorities. It is noted that the 'Action Matrix ' was not placed before
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the Federal Cabinet for approval. In the present proceedings an injunctive order , dated 11-06-2020, was passed with the consent of the parties. On behalf of the Association it was assured that sugar will be sold to the non commercial consumers i.e the general public at a reduced price. Applications were also filed by sugarcane growers seeking to become parties to the proceedings. ARGUMENTS 4. Mr Makhdoom Ali Khan, Sr. ASC, Mr Salman Akram Raja, ASC and Mr Shahzad Atta Elahi, ASC were heard on behalf of the petitioners. The latter had joined the proceedings through the video link facility . The gist of their arguments is; the members of the Commission of Inquiry were neither independen t nor impartial; the Commission of Inquiry was not constituted in accordance with the mandate of the Inquiry Act of 2017 and that the report has been signed by a stranger/alien to the proceedings; the member who was later nominated was not notified in accordance with the mandatory provisions; the adhoc committee which had initiated the preliminary inquiry was also headed by Respondent No.5; the latter had proposed the constitution of the Commission of Inquiry under the Inquiry Act of 2017; the Prime Minister was not empowered to constitute a non-statutory adhoc committee; the relevant laws such as the Securities and Exchange Commission of Pakistan Act 1997 expressly ousts the jurisdiction of any other Federal or Provincial agency or body; likewise, under the Competition Act 2010 it is the exclusive jurisdiction of the Competition Commission of Pakistan to initiate proceedings; the constitution of an adhoc committee and its recommendation regarding the constitution of the Commission of Inquiry under the Inquiry Act of 2017 was without lawful authority and jurisdiction and hence void; the request made by Respondent no.5 was illegal and raises grounds of bias; Respondent no.5, before the constitution of the Commission of Inquiry , had already pre-judged the matter which is evident from the fact that vide letter , dated 09-03-2020, he had reached the conclusion that the supply of sugar was controlled by a few sugar mills and that they were involved in manipulating the market sale price; the adhoc committee and its members had already formed their opinion and, therefore, they could not have conducted proceedings in a fair manner as members of the Comm ission of Inquiry; the discretion exercised by the Prime Minister and the Federal Cabinet was not in consonance with the settled principles; reliance has been placed on 'Saiyyid Abdul A'la Maudoodi v. The State' [PLD 1964 SC 673], 'Federation of Pakistan v. Muhammad Saif Ullah Khan' [PLD 1989 SC 166], 'Mian Muhammad Nawaz Sharif v. President of Pakistan others' [PLD 1993 SC 473]; there was no material before the Federal Government in order to justify the constitution of the Commission of Inquiry; it is implicit in section 3 of the Inquiry Act of 2017 that the Federal Government is under a statutory obliga tion to exercise its discretion after making an independent decision; Respondent no.5 and members of the committee were not competent to embark upon the inquiry on the touchstone of the test of 'likelihood of bias'; reliance has been placed on 'Syed Akhlaque Hussain v. Pakistan' [PLD 1969 SC 201], 'The President vs. Mr. Justice Shaukat Ali', [PLD 1971 SC 585], 'Mr. Zulfiqar Ali Bhutto vs. The State', [PLD 1978 SC 125], 'Ms. Benazir Bhutto vs. The President of Pakistan and another ' [1992 SCMR 140], 'Asif Ali Zardari and another v. The State' [PLD 2001 SC 568], 'Qazi Abdul Jalil v. NWFP Forest Development Corporation' [2015 SCMR 1020 ], 'Dr Arsalan Iftikhar v. Malik Riaz Hussain and others' [PLD 2012 SC 903]; the Federal Government had no authority to reconstitute the Commission of Inquiry; reliance has been placed on the case titled 'State of Madhya Pradesh, Appellant v. M/s A. & A. Enterprises and others' [AIR 1993 SC 825]; the report and the recommendations made therein have no legal sanctity because the Commission of Inquiry had failed to observe the standards of fairness and the principles of natural justice were violated, as adverse findings have been given in the impugned report against the sugar mills without the latter being confronted or put to notice; reliance was placed on the precedent law in support of the contention that the principles of natural justice must strictly be followed where the proceedings are likely to affect a person, property or reputation; damage to reputation is a crucial factor which requires strict compliance of the principles of natural justice; reliance has been placed on the judgments from various jurisdictions; the Federal Cabinet i.e. Federal Government, had given approval of the recommendations made in the Report without application of mind and in undue haste; the delegation of powers to Respondent no.5 and the Prime Minister were not in consonance with the law laid down by the august Supreme Court in the case titled 'Messers Mustafa Impex, Karachi and others v. The Government of Pakistan through Secretary Finance, Islamabad and others' [PLD 2016 SC 808] and an
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unreported judgment rendered by a Divis ion Bench of this Court in the case titled 'Federation of Pakistan v. Ms Vadiyya S. Khalil and 2 others' [ICA No.36/2020]; the 'Action Matrix' was repugnant and in violation of the respective statutes; no authority is vested in the Federal Government to direct the Federal Board of Revenue to conduct the audit of a tax payer; Respondent no.5 nor the Federal Government are empowered to dictate actions to other independent statutory authorities; the Federal Government has no legislative authority in respect of matters relating to sugar nor the executive authority extends thereto; the Federal Government lacks the authority to constitute the Commission of Inquiry into matters which otherwise are within the domain of the provinces. 5. Mr Khalid Javed Khan , the learned Attorney General for Pakistan, has argued that; the Prime Minister of Pakistan, in his capacity as the chief executive office holder of the State, was competent to order a preliminary inquiry; the Association and its members function as a strong lobby and individuals having interest in the business wield political influence; the Federal Government headed by the Prime Minister was compelled to initiate an inquiry on account of the unexplained and sharp increase in the price of sugar , because it had inevitably affected the constitutional rights of the general public; protecting consumers from anti competitive behavior falls within the exclusive domain of the Federation; the abuse of dominant position is prohibited under a federal statute i.e. the Competition Act 2010 and, therefore, the constitution of the Commission of Inquiry under section 3 of the Inquiry Act of 2017 was within the competence of the Federal Government; the other relevant federal statutes i.e. the Sales Tax Act 1990, the Competition Act 2010, the Companies Act 2017, the Income Tax Ordinance, 2001, the Benami Transactions (Prohibition) Act 2017, the National Accountability Ordinance, 1999 or the Federal Investigation Agency Act 1974 are all federally enacted statutes; the Terms of Reference related to matters within the competence of the Federal Governme nt; the Commission of Inquiry and its recommendations are not binding; the scope of inquiry was broad and did not target any individual and thus the question of bias does not arise; Respondent no.5 is one of the most reputed officer and the proceedings of the Commission of Inquiry were conducted in the most transparent and fair manner; the fact finding report, by no stretch of the imagination, prejudices any right of the petitioners; the principles of natural justice are not attracted in case of the proceedings of the Commission of Inquiry constituted under the Inquiry Act of 2017; reliance has been placed on 'Government of Sindh through Secretary Health Department and others v. Dr Nadeem Rizvi and others' [2020 SCMR 1], 'Tasleem Akhter v. Pakistan through Secretary Revenue, Islamabad and 3 others' [2010 PLC (CS) 795], 'Zaibtun Textile Mills Ltd. V. Central Board of Revenue and others' [PLD 1983 SC 358], 'Justice Khurshid Anwar Bhinder and others v. Federation of Pakistan and another ' [PLD 2010 SC 483], 'Shri Ram Krishna Dalmia v. Shri Justice S. R. Tendolkar & others' [AIR 58 SC 538], 'State of Karnataka v. Union of India and another ' [AIR 78 SC 68], 'Syed Saleemul Haq and another v. Pakistan through Secretary , Ministry of Interior , Islamabad and 2 others' [PLD 1990 Kar 439], 'Messrs Sui Southern Gas Company Ltd. And others v. Federation of Pakistan and others' [2018 SCMR 802], 'ABP Private Limited and another v. Union of India and others' (2014) 3 SCC 327, 'M/s. Allen Berry and Co. Private Ltd. And another v. Vivian Bose, and others' [AIR 60 Punjab 86], 'Saleem Malik v . Pakistan Cricket Board (PCB) and 2 others' [PLD 2008 SC 650 ]. 6. The learned counsels for the Petitioners and the learned Attorney General for Pakistan have been heard and the record perused with their able assistance. Judgment 7. The sugar crisis, its implications for non-commercial consumers i.e the genera l public and the fall out for the executive branch of the State are not disputed. It is also not disputed that 'sugar' is one of the most essential commodities for the general public, partic ularly the low income strata of the population and the working classes. It is also an admitted fact that shortages and increase in the price of sugar has historically remained a cause of alarm and concern for the executive branch of the State because, as representatives of the people, they remain responsible and thus accountable to them for implementing policies that would ensure availability of essential commodities at affordable prices. Whenever there is a shortage of an essential commodity in the market or there is an increase in its price, the executive branch is not only expected to fulfill its constitutional obligations but it becomes a duty to discover the reasons and to take appropriate measures in order to alleviate the sufferings and hardships of the people to whom it is accountable. Any matter that affects the general public is indeed a matter of
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public importance. The sugar crisis, which had led the Prime Minster to order a preliminary inquiry and appoint an ad hoc committee followed by notification of a statutory Commission of Inquiry by the Federal Government were exclusively executive functions. It was indeed a definite matter of public importance, besides being a matter of general interest and of direct and vital concern for the general public. The questions that have arisen out of the arguments advanced at the bar may be summarized as (i) the competence of the executive authorities to order a preliminary inquiry without resorting to constitution of the Commission under the Inquiry Act of 2017, (ii) the status of the Commission of Inquiry , its proceedings and recommendations, (iii) whether the power vested in the Commission of Inquiry constituted under the Inquiry Act of 2017, its proceedings and final outcome, in the form of the Report, attracted observance of the principles of natural justice; (vi) if the answer to the last question is in the affirmative, then the consequences regarding the Report, (v) whether the Commission of Inquiry in the instant case was constituted in accordance with the provisions of the Inquiry Act of 2017, (iv) whether the Federal Cabinet was empowered to delegate its decision making authority to the Prime Minister and Respondent no.4 and, lastly , (vii) whether the press conferences and statements made by Respondent no.4 or other public office holders results in prejudicing the right to fair trial of the petitioners. In order to answer these questions it would be beneficial to examine the relevant law and the precedents. The Inquiry Act of 2017. 8. The preamble of the Inquiry Act of 2017 describes the object of its promulgation as 'to provide for the constitution of Commissions of Inquiry'. Section 3 empowers the Federal Government to constitute a Commission of Inquiry for the purposes of conducting an inquiry into a definite matter of public importance. The explanation elaborates the scope of the expression 'matter of public importance' as a matter of general interest or direct or vital concern to the public. Sub section (2) of section 3 provides that the appointment of the members of the Commission shall be made through a notification in the official gazette. If more than one member are appointed, then one of them shall be designated as chairman of the commission. Sub section (3) expressly confines the scope of the inquiry to the Terms of Reference specified in the notification. Moreover , sub section (5) provides that the Federal Government shall specify the time period within which the inquiry is to be concluded and it can be extended on the request of the chairman of the commission. On conclusion of the inquiry , the commission ceases to exist as has been provided under sub section (6). Sections 4, 5, 6, 7, 8, 9, 10 and 11 describe the extensive powers of the Commission of Inquiry . It is noted that section 11, by way of a fiction, declares the proceedings of the Commission of Inquiry to be judicial in nature within the meaning of section 193 and 228 of the Pakistan Penal Code, 1860 (hereinafter referred to as the 'PPC' ). Section 14 unambiguously provides that the Commission shall have the power to regulate its own procedure, to fix the place and time for its settings and whether its proceedings shall be open or in camera. Sub section (3) of section 14 explicitly provides that temporary absence of any member or existence of a vacancy amongst its members shall not prejudice or affect the proceedings of the Commission of Inquiry nor its validity . 9. A plain reading of the provisions of the Inquiry Act of 2017 as a whole makes it obvious that the Commission of Inquiry , constituted under section 3 ibid, is a mere fact finding statutory entity and its scope of jurisdiction for this purpose is strictly confined to the Terms of Reference specified in the notification issued by the Federal Government. The role of a fact finding statutory entity is not restricted to obtaining record, collecting facts through various means such as conducting interviews, examining relevant persons etc. It would be a futile exercise if its role is confined to the above only. After the facts and information have been collected it is followed by the next stage of its collation i.e. managing the data. This involves the stage of analysis and examination thereof. It is implicit in performing this important function to adopt the various means available for this purpose, such as conducting an audit in any form, including forensic. After the evaluation and analysis the final stage is to form an opinion and to make recommendations in accordance with the Terms of Reference specified in the notification issued by the Federal Government. The Commission of Inquiry , under the Inquiry Act of 2017, is constituted on a temporary basis because it ceases to exist after the time specified by the Federal Government. It is not more than a fact finding entity vested with recommendatory functions. Its proceedings are regulated by the Commission of Inquiry . It does not have an appearance of a court nor can it exercise any power to make a final determination. It is
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only one of the modes available to the executive branch i.e the government to inquire into matters of public importance to enable formulation of policies or assist in the decision making process. By no stretch of the imagination can the proceedings of a Commission of Inquiry , constituted under the Inquiry Act of 2017, be construed or treated as judicial or quasi judicial because it is neither empowered nor mandated to determine civil or criminal liabilities. Its recommendations to the Federal Government in the context of the specified Terms of Reference are not even binding. The Federal Government may or may not act pursuant thereto. The ordinary rules of evidence are not applicable to the proceedings of a Commission of Inquiry because it does not conduct a trial nor is in any manner vested with jurisdiction to make a determination of a criminal or civil liability . The Inquiry Act of 2017 and the constitution of the Commission of Inquiry there under enables the Federal Government to identify systemic governmental failures, supplement government departments and institutions, formulate policies and propose legislation for consideration of the Majlis-e-Shoora (Parliament). The purpose of constituting a Commission of Inquiry can either be broad or narrow in nature. It is narrow in natur e when it is regarding a specific incident e.g. a particular criminal incident which may have shocked or terrorized the public or it may be broad, such as the spread of a disease throughout the country or prevalence of factors af fecting the economy . 10. The Terms of Reference in the case in hand cannot be characterized as narrow. They are definitely broad in nature. As will be discussed later, this distinction is relevant in the context of the extent of applicability of principles of procedural fairness to the proceedings of the Commission of Inquiry constitute d under the Inquiry Act of 2017. Unlike statutes promulgated in foreign jurisdictions, in the Inquiry Act of 2017 there is…
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