KARACHI: The Sindh High Court on Monday struck down the constitution of sugar inquiry commission and its report and directed the National Accountability Bureau (NAB), Federal Board of Revenue (FBR) and Federal Investigation Agency (FIA) to conduct independent and separate inquires into the sugar scam.

A two-judge SHC bench headed by Justice Mohammad Karim Khan Agha ruled that mandatory rules of business had not been followed while forming the commission and failure to gazette notification of the commission within due time.

The court observed that the composition of the commission was incomplete and biased as it denied the petitioners the opportunity of being heard, adding that the letters sent by the adviser to the prime minister on accountability and interior to various statutory bodies had caused prejudice to the petitioners.

Allowing a set of petitions moved by 20 sugar mills of Sindh against the formation of the commission and its report on cartelisation and price hike of sugar, the SHC bench declared the impugned notification issued on March 16 for constitution of the commission, its report and all subsequent and consequent actions and orders to be without lawful authority and of no legal effect and quashed the report as well as all such orders and actions.

The court also restrained the authorities concerned from taking any adverse action directly or indirectly on the basis of the impugned report against the petitioners.

Directs NAB, FBR and FIA to conduct separate inquiries into sugar scam, stops authorities from taking action against mill owners; AG says verdict will be challenged in Supreme Court

The court raised many questions about the correspondences of Adviser to the PM on Accountability and Interior Shahzad Akbar regarding the commission’s report, as well as his appointment and observed that the concept of so many unelected special assistants to the prime minister (SAPMs) was alien to the Constitution and parliamentary system of government.

The bench directed the NAB chairman to open an inquiry to be conducted in accordance with the NAB Ordinance to determine whether acts of corruption had been committed by the petitioners and others, unjustified subsidies granted and misuse of authority by government officials without reference to the report of the commission and include an independent expert with knowledge of sugar industry in the inquiry team.

The court asked the FBR chairman to launch a probe under the relevant taxation laws to establish whether illegalities regarding taxation had been committed and make an independent expert with knowledge of sugar industry part of the investigation team.

It directed the FIA director general to conduct an inquiry under the Anti-money Laundering Act 2020 to find out whether acts of money laundering were committed and include an independent expert in the inquiry team.

The court asked the Competition Commission of Pakistan, the Securities and Exchange Commission of Pakistan and the State Bank of Pakistan to fulfil their respective mandates as per law with respect to the petitioners and sugar industry without any reference to the impugned reports or letters sent to them.

The court in its order noted that the summary to establish the sugar inquiry commission was sent to the cabinet on March 10 by the interior ministry and not by the Cabinet Division as required under the rules.

“Thus, it is clear that the impugned notification which established the commission and the impugned report which flowed from the commission have not been established in accordance with the Rules of Business and as such the relevant law. The respondents were not able to place any document on record regarding the relaxation of the rules in this respect and even otherwise good reasons for such relaxation must be given as a relaxation of a rule cannot be relaxed in a whimsical or arbitrary manner as it concerns the exercise of a discretion which must be exercised reasonably,” it added.

The judgement said that initially the bench members were of the view to overlook the apparently minor legal technicality in the wider interest of accountability, but a deeper analysis of the rules of business and consequence of their non-compliance, the bench found a recent judgement of the Supreme Court on this issue and the apex court had ruled that non-compliance of rules of business was not a minor technicality which could be overlooked but rather a mandatory requirement that the rules be followed and in failing to do so the act would be of no legal effect.

Referring to the composition of the commission, the SHC bench said that six persons from particular organisations were stated to be members of the commission, but record revealed that a joint director of the SBP was also appointed as a member without cabinet approval contrary to the summary.

The membership of the commission had to be in accordance with the approved summary and notification of the commission and its composition could not be changed without proper approval, it observed, added that the additional attorney general remained unable to explain as to how the seventh member could be legally added to the commission at a belated stage.

Referring to the March 9 letter of the FIA director general to the PM’s secretary, the bench said it appeared from the letter that the inquiry committee had already been through the investigation and made up its mind that there were malpractices in the sugar sector and he wanted to further expose this; however, the committee members were also made part of the commission. Pursuant to the FIA chief’s letter, a summary was moved by the interior ministry, which led to the creation of the commission and since the DG requested to give legal cover to the actions of the committee, thus all three members of the committee were made part of the commission, it added.

The bench also raised questions over the handling of the commission’s report and observed that the 350-page report was present to the government on May 21 and the same day it was considered and digested by the PM’s adviser on accountability and placed before the cabinet which had approved the impugned report as well as the drafting of action plan.

“Whilst also keeping in view that this whole commission was established by virtue of summaries by the Ministry of Interior, ostensibly headed by the adviser and under which ministry the FIA also falls under and the DG FIA leads both the committee and the commission bypassing the cabinet division. This impression/perception is thus created in our minds that the mastermind behind the impugned report which was aimed to disparage certain organisations, including the petitioners, was the adviser which impression is further fortified by the action plan which he drew up and the letters which he sent to the heads of various organisations with a copy of the report which we will come to later in this order,” it added.

The bench was of the view that the letters sent by the adviser to statutory authorities to take action on an enclosed report of the commission was not in accordance with the law and Constitution since the executive had no legal authority to send such letters.

The court also expressed concern over a large number of persons attending cabinet meetings and observed that these unelected persons/SAPMs in some cases would not even qualify to be elected either MNA or senator and they were not accountable to the people and prima facie appeared to be contrary to Articles 91 and 92 of the Constitution.

“In addition, the presence of an adviser on accountability, in our view, only serves to undermine the independence and the credibility of NAB as this leads to the perception that the government is working hand in glove with NAB against the opponents…” it observed.

The bench said it was also difficult to understand the need for an adviser on interior when there is already a federal minister for interior and wondered how they could co-exist within the frame work of the rules of business in terms of allocation of business to the ministry and the rules made the minister head of the ministry.

Meanwhile, Attorney General Khalid Jawed Khan said the SHC judgement would be challenged in the Supreme Court.

Published in Dawn, August 18th, 2020