IHC stops action against sugar mills

Updated June 12, 2020

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Mills ordered to sell commodity at Rs70 per kg till 25th. — AFP/File
Mills ordered to sell commodity at Rs70 per kg till 25th. — AFP/File

ISLAMABAD: The sugar industry heaved a sigh of relief as the Islamabad High Court (IHC) on Thursday stopped a possible crackdown against it for misuse of public money and cartelisation leading to massive price hike of the commodity.

IHC Chief Justice Athar Minallah granted a stay order against the recommendation of the inquiry commission on the sugar scam that has called for registration of criminal cases against sugar mill owners on the condition that they would supply the commodity to consumers at the rate of Rs70 per kilogram till June 25, the next date of hearing.

The petitioners in this matter are the leading sugar mill owners and known political figures.

Besides the Pakistan Sugar Mills Association (PSMA), sugar mills owned by Jahangir Tareen and his son Ali Tareen, Salman Shahbaz, the son of opposition leader Shahbaz Sharif, Makhdoom Omer Shehryar, brother of Federal Minister for Economic Affairs Makhdoom Khusro Bakhtiar, PTI leader Sardar Ali Raza Khan Dreshak and others have challenged the inquiry report of the commission constituted to probe the sugar scam.

Mills ordered to sell commodity at Rs70 per kg till 25th

According to the report, Pakistan exported more than four million tonnes of sugar and over Rs29 billion was granted to sugar mills in terms of export subsidy over the past five years.

The counsel for the petitioners, Makhdoom Ali Khan, argued before the court that the commission was neither properly constituted nor it remained confined to its limits but went beyond its jurisdiction and exceeded its mandate.

He said that crucial aspect of increase of sugar prices was ignored by the commission.

He argued that the proceedings and recommendations of the inquiry commission were not in consonance with the Act of 2017.

In response to a court query, the lawyer said that about 30 per cent of the sugar produced in the country was consumed by people and the rest was sold to commercial consumers. The price for these categories is the same.

When the counsel was asked whether this crucial aspect was investigated by the inquiry commission and whether any relief had been recommended in the report for common man i.e. the non-commercial consumer, his answer was in negative.

The court observed: “It appears from the report that the inquiry commission was constituted to inquire into the increase in sugar prices to ensure relief to the common man.”

It noted that alleged cartelisation or monopolistic fixation of prices affected the common man i.e. the non commercial consumer the most therefore it appeared to be a case of exploitation of the 30pc non-commercial consumers.

“Sugar is the basic need of the common man, particularly those belonging to the lowest income groups. [Neither] the Association (PSMA) nor the State can treat them at par with the commercial consumers. For the non-commercial consumer the price of sugar has a direct nexus with the right to life guaranteed under the Constitution,” the court observed.

Referring to the report of the inquiry commission, Justice Minallah observed that it did not explain the reasons for conducting a selected forensic audit. “The status of the report of the inquiry commission viz-a-viz the other statutes i.e. the National Accountability Ordinance, 1999, the State Bank of Pakistan Act, 1956 and the Income Tax Ordinance, 2001, needs consideration.”

The question regarding scope of the Act of 2017 that empowered the constitution of the commission in relation to the authority of the provincial governments had been raised by the PSMA, the court order read. “It is the case of the Association that the proceedings were conducted in a non-transparent manner and target a few.”

“Till the next date fixed status quo shall be maintained and no further action or proceedings pursuant to the inquiry report shall be taken or conducted. However, this order shall be subject to selling the sugar to the non-commercial consumer at the rate of Rs70 per kilogram”, the court order said.

Additional Attorney General Tariq Mehmood Khokhar submitted that he had no cavil with the public purchasing at a lower price but was against any restraining order.

He would assist the court after getting a notice, he said and added that the case could be fixed as early as Monday or even on Friday (today). He reiterated again and again that no restraining order should be passed with hearing the federation.

However, the counsels for the petitioners agreed that sugar would be sold at the rate of Rs70 per kg till June 25 in return for a restraining order.

Published in Dawn, June 12th, 2020