EDITORIAL: Chief Justice Umar Ata Bandial while heading a three-judge bench hearing the Jamaat-i-Islami petition to declare privatisation of Karachi Electric Supply Company as unlawful acknowledged that judges are not economists and therefore will not interfere in economic affairs.
These remarks must overwhelmingly be supported as this country has suffered and continues to suffer major haemorrhaging of the economy due to past decisions that were tantamount to interfering in economic policy by the judiciary.
The list is exhaustive and includes the staying of the privatisation of Pakistan Steel Mills that continues to cost the exchequer even though the Mills have been non-operational since 2015, the Karkey rental power project that was resolved after many years of expensive litigation, and the Reko Diq litigation that has finally been resolved after decades of litigation through a settlement.
Today the three white elephants – Pakistan Railways, Pakistan International Airlines and Pakistan Steel Mills – as well as other loss-making state-owned entities continue to be a drain on the country’s budgets to the tune of one trillion rupees per annum, a sum that is no longer tenable given the unsustainably high budget deficits.
And while acknowledging that the current economic environment, domestically as well as internationally, is not conducive to privatization, yet the fact remains that after parliamentary debate the executive must be allowed to take decisions with the objective of unencumbering its finances without fear of a court ruling.
The higher judiciary must not lose sight of the fact that the legal fees incurred for litigation abroad as well as the consequent penalties payable by the government in hundreds of millions of dollars for breaching contractual obligations due to the decisions by our courts. Privatisation however is not the only instance of court ruling on economic matters.
In the past as well as in the present, courts take cognizance of a rise in inflation, which maybe understandable given the current runway inflation that the general public, particularly the poor and the vulnerable, obviously unable to withstand; however, a ruling that sought to set a maximum price for items of daily use simply was not implemented in the past (as in the case of sugar) and remains un-implementable to this day.
The honourable Chief Justice’s remark that courts will not interfere in economic matters must extend to first seeking all relevant information on the limitations of what an autonomous entity can be directed by the court to undertake, premised on its terms of reference.
The most recent case where relevant information was sought by the apex court prior to its ruling was when the three-member bench stated that the State Bank of Pakistan’s (SBP’s) Acting Governor, as the Governor was out of the country at the time, had presented a statement to the court setting out funds and monies of the federal government under the central bank’s custody, control and management.
The Acting Governor further noted that only the amount lying in Account 1, the federal consolidated fund, by far the largest component of the fund (constituting 98.77 percent) was not designated for any particular or special usage, with daily inflows and outflows as receipts flow in and funds are released to meet government expenditures.
This information prompted the court to direct SBP to release 21 billion rupees to the Election Commission of Pakistan (ECP) from this account to conduct elections in Punjab.
This directive could not be implemented and the SBP submitted the reasons behind its failure to implement the order – reasons due to the terms of reference of the central bank that disallow it to release government funds without explicit approval/directive from the federal government.
We hope that all institutions would draw lessons from the past and take appropriate mitigating measures not to repeat past mistakes.
Copyright Business Recorder, 2023
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