IHC seeks record of consultation held to form NFC

Updated June 05, 2020

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This file photo shows the prime miister with chief ministers of all four provinces after successful consultation on the 2019 NFC award. — PM's office /File
This file photo shows the prime miister with chief ministers of all four provinces after successful consultation on the 2019 NFC award. — PM's office /File

ISLAMABAD: The Islam­abad High Court (IHC) on Thursday sought the detailed record of consultation held for constitution of the 10th National Finance Commission (NFC).

IHC Justice Miangul Hassan Aurangzeb resumed hearing of a petition filed by former defence minister Khurram Dastagir Khan that challenged the 10th NFC and sought to set aside the May 12 notification about the commission’s composition and authorisation to Adviser to the Prime Minister on Finance and Revenue Dr Hafeez Sheikh for presiding over NFC meetings.

The Ministry of Finance had notified the constitution of the 11-member commission.

The Ministry of Law and Justice submitted a one-page reply to the court that did not explain whether or not provinces were taken on board for the constitution of the NFC.

Justice Aurangzeb expressed displeasure and asked the respondent authorities of the Finance Division and the Law and Justice Division to produce the entire record related to consultation held for constitution of the NFC.

The petitioner’s counsel, Mohsin Shahnawaz Ranjha and Barrister Umer Gillani, sought the court’s permission to place the letter of Sindh Chief Minister Murad Ali Shah in which he expressed reservations for not holding consultation by the federal government on the 10th NFC.

Barrister Ranjha argued that the terms of reference (TOR) set for the commission were also contradictory to the law.

The assistant attorney general told the court that the Finance Division and the Law and Justice Division would file the reply in due course, requesting the court to grant some time for filing the detailed reply.

Subsequently, the hearing was adjourned till June 18.

The Ministry of Finance had notified the constitution of the 11-member commission after approval of its terms of reference by President Arif Alvi as was required under Article 160 (1) of the Constitution.

The commission will have four provincial finance ministers and four non-statutory members representing the provinces and the federal finance secretary as an official expert.

The petition said that President Alvi who is purported to have issued the notification under Article 160 of the Constitution had a duty to “constitute a National Finance Commission consisting of the minister of finance of the federal government, ministers of finance of provincial governments and some other persons as may be appointed by the president after consultation with governors of the provinces.

The petition further said that “a close reading of the aforesaid will bear out that the Commission is supposed to have two kinds of members: (i) Statutory Members; (ii) and Co-opted Members”.

Statutory Members, the petition said, were the five members whose presence was essential for the commission, including the federal minister for finance and four provincial ministers for finance.

Co-opted members, the petition said, included five statutory members and more members could be added. However, it said, a co-opted member might only be added after “consultation with governors of the provinces”.

The petition further said that “any co-opted member may be added only if there is consensus among the President and governors of the provinces (acting on the advice of their respective cabinets) that the expertise of such co-opted member is necessary for the NFC”.

“However, the impugned notification does not make reference to any consultations whatsoever which the President held with governors of the provinces regarding the selection and appointment of each one of the Co-opted Members of the NFC,” the petition said, adding that it might be assumed that no such consultations were held.

Moreover, the petition said, the president also authorised the PM adviser on finance to chair meetings of the NFC.

The petition further said that “any co-opted member may be added only if there is consensus among the President and governors of the provinces (acting on the advice of their respective cabinets) that the expertise of such co-opted member is necessary for the NFC”.

“However, the impugned notification does not make reference to any consultations whatsoever which the President held with governors of the provinces regarding the selection and appointment of each one of the Co-opted Members of the NFC,” the petition said, adding that it might be assumed that no such consultations were held.

Published in Dawn, June 5th, 2020