September 16, 2008	Tuesday	Ramazan 15, 1429

ISLAMABAD, Sept 15: The Supreme Court allowed the Competition Commission of Pakistan on Monday to proceed against the Pakistan Banks Association on its appeal against a Sindh High Court order restraining it (CCP) from taking action against the PBA for acting as a cartel.

A bench, comprising Chief Justice Abdul Hameed Dogar, Justice Ijaz-ul-Hassan and Justice Chaudhry Ejaz Yousaf, that had taken up the appeal of the CCP and a complaint of the Islamabad Stock Exchange against the Karachi Stock Exchange for creating monopoly and discouraging investment, decided to resume hearing on October 16.

The dispute between the CCP and the PBA, a group of scheduled banks, erupted after the commission issued a show-cause notice to the association under the Competition Ordinance, 2007, for floating a savings scheme called Enhanced Saving Account (ESA).

Under the ESA, an account-holder with a balance of Rs20,000 was offered four per cent interest, but if the amount went down to Rs5,000 the depositor had to lose Rs50 per month.

The commission imposed a fine of Rs30 million on the PBA and Rs25 million on each of the ‘guilty’ banks because the scheme was in violation of Sections 4(1) (2 a, c and f) of the ordinance.

The PBA comprised Habib Bank Ltd, Allied Bank Ltd, United Bank Ltd, Saudi Pak Commercial Bank Ltd, Atlas Bank Ltd, National Bank of Pakistan, MCB Bank, ABN AMRO Bank (Pakistan) Ltd, NIB Bank Ltd and the Hong Kong and Shanghai Banking Corporation of Pakistan Ltd.

Instead of availing itself of the statutory remedy available under the ordinance of instituting an appeal before the commission, the PBA challenged the order before the SHC on May 27 that restrained the CCP from taking any punitive action against the association.

In its appeal, the commission contended that the SHC being in Karachi had no jurisdiction to entertain and grant an interim relief to the association when the penalty had been imposed in Islamabad.

By granting the relief, the CCP contended, the high court had acted against the settled principle declared by the apex court in many cases.

Moreover, it said, the petition was also not maintainable since the PBA had failed to avail itself of the adequate remedy of filing an appeal before the appellate bench of the commission under Section 41 of the ordinance.

Former attorney general Malik Mohammad Qayyum is the legal counsel for the CCP, while senior advocates Khalid Anwar, Makhdoom Ali Khan and Babar Awan are representing the PBA.

The CCP was established by the government to stimulate free competition in all spheres of commercial and economic activity by enhancing economic efficiency while protecting consumers from anti-competitive actions.

The law prohibits situations which tend to lessen competition such as actions constituting an abuse of market dominance, competition restricting agreements and deceptive market practices.