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KARACHI/ISLAMABAD: The Sindh High Court (SHC) on Thursday dismissed the petitions against the privatization of the Karachi Electric Supply Company (KESC), renamed as Karachi Electric (KE), and declared that the privatization of the power utility was completed in accordance with relevant provisions of the privatization law.

A division bench of the SHC, comprising Justice Aqeel Ahmed Abbasi and Justice Arshad Hussain Khan, gave the verdict in the petitions of the KESC Labour Union and others which were filed against the privatization of the power utility. The court in a detailed written judgment stated that the court, while exercising constitutional jurisdiction, particularly, in cases relating to public interest litigation, can take cognizance of subsequent events during pendency before this court, in order to do complete justice after notice to the parties, however, without changing the complexion of proceedings.

From perusal of the pleadings and the relief sought in the above petitions, the court noted that it is clear that petitioners have primarily challenged the process of privatization of KESC in respect of sale of shares and management control in KESC for being illegal and opposed to public policy, whereas, no relief has been sought to the effect that entire process of privatization may be reversed either in view of illegality, if any, committed in the process of privatization or on the basis of subsequent performance of K-Electric, by referring the matter to public audit through Auditor General of Pakistan etc.

In matters relating to policy decision of the executive authority, the court maintained that the scope of judicial review is limited to the extent of examining as to whether such policy decision of executive authority does violate the constitutional mandate, legal propriety and transparency.

“However, in the absence of any violation as referred to hereinabove, the Courts abstain from interfering in such policy decision on mere allegations or minor omission or lapses, if any, pointed out in the process of such policy decision, provided substantial compliance of the relevant constitutional and legal provisions has been made by the executive authority in such process,” the order stated.

The order stated that the lengthy process of privatization of KESC as discussed hereinabove appears to have been completed in accordance with the constitutional mandate, in compliance of the relevant provisions of Privatization Commission Ordinance, 2000 read with Privatization Commission (Modes and Procedures), Rules, 2001, “therefore, we are not inclined to record any finding with regard to effect and the consequences of privatization of KESC, and the performance of K-Electric, while issuing directions to the Auditor General of Pakistan for conducting scrutiny of their accounts.

“Nor we are inclined to examine the subsequent events or the acts of the executive authority towards granting subsidy to K-Electric or any relief in the tariff rates, if any, in these petitions, as it would amount to change the complexion of the proceedings in these petitions,” the court in its order observed.

Moreover, it will require a detailed scrutiny and verification of disputed facts and examination of different laws relating to economic and financial transactions including Company Law, Contract Act, Economic Reforms Act etc. as well as the contractual obligations between the contracting parties, which otherwise is not permissible under constitutional jurisdiction of this Court, the bench in its order ruled.

“We are of the opinion that this aspect of the matter can be agitated as a separate cause before the relevant forum/authority/Court of law, by filing appropriate proceedings, however, subject to all just exception and in accordance with law,” the court stated.

Accordingly, the plea of petitioners to refer the matter for scrutiny of accounts of K-Electric through Auditor General of Pakistan, and for that purpose, to any other independent forum, cannot be acceded in these proceedings, as it would amount to granting a relief to the petitioners beyond the pleadings, while changing the complexion of the proceedings, to the disadvantage of the respondents, the order declared.

Meanwhile, the KE on its official Twitter handle welcomed the decision by the SHC in favour of the power utility.

Spokesperson Ministry of Privatisation Samreen Zarah told Business Recorder that the SHC had dismissed all petitions challenging the privatisation of K-Electric.

“This is a landmark decision that will go a long way towards strengthening both local and foreign investors confidence in Pakistan’s investment regime,” she added.

She maintained that this showed court’s complete confidence and trust over the procedures adopted for privatisation of state-owned entities.

Copyright Business Recorder, 2021