The Supreme Court on Friday directed the State Bank of Pakistan (SBP) to release funds worth Rs21 billion for elections in Punjab and Khyber Pakhtunkhwa and send an “appropriate communication” to this effect to the finance ministry by Monday (April 17).
“The sum of Rs21bn shall be and become available to and with the election commission in immediately releasable and utilisable funds for the purposes of holding the general elections to the Punjab and KP assemblies,” the court order read.
The court also observed that the required funds could be made available to the Election Commission of Pakistan (ECP) “immediately and within a matter of a day”. It also noted that there was “absolutely no difficulty or hitch, either financially or procedurally or in terms of the relevant authorisation by and under the Constitution” in the immediate release of the funds in question.
The directives for the release of the said funds were earlier issued by a three-member SC bench, comprising Chief Justice of Pakistan (CJP) Umar Ata Bandial, Justice Ijazul Ahsan and Justice Munib Akhtar, in an April 4 verdict. The government was directed to provide Rs21bn to the ECP to conduct elections in Punjab and Khyber Pakhtunkhwa by April 10, and directed the ECP to provide a report to the court on whether or not the government complied with the order on April 11.
The ECP, in a one-page report submitted earlier this week, informed the court about the government’s reluctance to issue the amount needed for elections.
Subsequently, the top court issued notices to the finance secretary, SBP governor, Attorney General for Pakistan (AGP) Mansoor Awan and the ECP, directing them to appear before the judges’ chamber on April 14. It also directed the SBP to submit the record and details of all monies whatsoever of the federal government lying with or under the control, custody or management of the bank.
In line with the court’s directives, AGP Awan, SBP Deputy Governor Sima Kamil, finance secretaries and officials of the ECP in an in-chamber hearing today briefed the SC on the government’s failure to disburse Rs21 billion in funds for elections in Punjab and KP.
The briefing — which lasted for more than an hour — was held in the chamber of CJP Bandial, with Justices Ijazul Ahsan and Munib Akhtar in attendance.
The court order
Hours later, the SC issued a written order that said the SBP acting governor had presented to a court a statement setting out funds and monies of the federal government which were under the central bank’s custody, control and management.
The order, a copy of which is available with Dawn.com, also contained the said statement.
Referring to it, the judges observed that the SBP acting governor had explained that these amounts constituted the Federal Consolidated Fund.
“The amount lying in Account No.I (Non-Food) (“Account I”) constitutes by far the largest component of the Fund (being 98.77 per cent thereof as of the date for which the data was provided),” the court order read.
It added that the SBP official further explained that the “amount lying in Account I is not designated for any particular or special usage whatsoever.
“Furthermore, the funds therein are not static inasmuch as there are regular (it seems almost daily) inflows into, and outflows therefrom, as government receipts flow in, and monies are released to meet government expenditures.”
The order further quoted the SBP acting governor as saying that “other than Account I, the other 16 accounts were for special and designated purposes, carrying different amounts”.
Following this briefing, the order added, the top court’s April 4 verdict was cited to the SBP official and he was told that an amount of Rs21bn was required for holding elections in Punjab and KP.
“It was queried as to whether this sum could be made available from the funds aforementioned of the federal government lying with and under the custody, control and management of the State Bank, with particular reference to Account I.”
In response, the acting governor confirmed that this would be done if the court so directed and ordered, the SC order said.
It added that the SBP “further confirmed that the necessary transaction for the transfer of funds to the commission (ECP), so that Rs21bn become immediately available and utilisable for the latter, could be done within the shortest possible time, and at the latest by the close of business on Monday i.e. April 17, 2023”.
Moreover, Finance Ministry Special Secretary Awais Manzur Sumra, with the AGP’s assistance, also gave a presentation to the court. This presentation, in broad terms, was given with regard to the “financial position of the Government of Pakistan, with particular reference also to the present and/or pending international obligations to the IMF (International Monetary Fund)”, the order said.
The judges observed in the order that keeping in view the figures presented to the court, “of which even the smallest ran to several hundreds of billions of rupees, it became clear that the disbursement of Rs21bn for fulfilling the constitutional mandate of holding the general elections would, at most, amount to a minuscule increase in the obligations of the federal government.
“Indeed, viewed from certain financial perspectives and contexts, which were stated by the team from finance, the amount would be so insignificant as to not even amount to a rounding off error.”
The order further stated that the team from the Finance Division informed the court that the government regularly went into bond markets to borrow and raise funds “which in the aggregate in any given financial year ran into trillions of rupees”.
The order said it was stated that in this regard, “treasury bills were issued by the SBP on behalf of the federal government on a regular and ongoing basis and that, even in this perspective, taking the amount now under consideration into account would not have any meaningful impact or effect”.
Moreover, “it was also confirmed by Finance that if the court so ordered and directed the process of making the funds to the tune of Rs21bn available to the commission (ECP) on an immediately utilisable basis would be concluded rapidly, and by the close of business on April 17,2023”.
On the basis of these briefings, the three judges made the following observation: “In our view, on an assessment of the presentations made by the State Bank and the Finance Ministry/Division, there can be no doubt that the Rs21bn required by the commission and ordered to be made available in terms of para 5 of the [April 4] order can be done immediately and within a matter of a day.”
The order further said finance ministry officials confirmed to the court that in terms of Article 84 of the Constitution, the federal government was “fully authorised to make expenditures from the Federal Consolidated Fund for, inter alia, ‘expenditure upon some new service not included in the Annual Budget Statement’ for the relevant financial year here being the year ending on June 30, 2023”.
The order stated that for such an expenditure, the federal government “obtains ex post facto approval and authorisation” from the National Assembly in terms of the procedure laid down in the articles of the Constitution immediately preceding Article 84.
“On a consideration of all of the foregoing, it is our view that there is absolutely no difficulty or hitch, either financially or procedurally or in terms of the relevant authorisation by and under the Constitution, for the immediate release of Rs21bn to the election commission for fulfilling its constitutional mandate for the holding of general elections to the Punjab and KP Assemblies.”
The court directed the SBP to allocate and release Rs21bn from “Account I lying under its control and management (and which constitutes the principal component of the Federal Consolidated Fund)” for elections in Punjab and KP.
“The State Bank shall, in this regard, immediately send an appropriate communication to the Finance Ministry/ Division,” the court instructed, adding that the finance ministry “shall forthwith and immediately issue a proper direction to the AGPR (Accountant General Pakistan Revenues) to increase the limit of the ceiling with respect to the election commission’s ID No.2826 by the said sum of Rs21bn”.
This position should also immediately be confirmed to the ECP by the finance ministry, “which shall also ensure that AGPR also forthwith gives proper intimation and confirmation to the election commission,” the court directed.
It said, “All this must be done at the earliest and at the absolute latest not later than the close of business on Monday i.e. April 4, 2023. In this manner, the sum of Rs21bn shall be and become available to and with the election commission in immediately releasable and utilisable funds for the purposes of holding the general elections to the Punjab and KP assemblies.”
The court further directed the SBP, finance ministry, AGPR and ECP to “act together and coordinate fully so that the order and direction of the court is implemented within the stipulated timeframe”.
The apex court also sought a compliance report from the finance ministry by April 18 (Tuesday), which “shall also include a confirmation in relation to AGPR”. Moreover, it directed the ECP to also submit a report by Tuesday that Rs21bn has “become available to it in terms as stated above”.
With regards the federal government, the court stated: “We may also note that this order shall be deemed sufficient authority for all purposes for the authorisation of expenditure on the Federal Consolidated Fund and the federal government shall thereupon obtain the ex post facto approval and sanction from the National Assembly for authorisation of this expenditure in terms of Article 84 and other applicable provisions of the Constitution”.
The court said that matter “stands adjourned” to the extent of the funds for elections in Punjab and KP, “but should any need arise it will be taken up again in such terms as deemed appropriate by the court”.
AGP submits report
Earlier, the AGP submitted on behalf of the government a two-page document to the court detailing the federal coalition’s stance on the matter.
In the document, which Dawn.com has seen, Awan said that the release of funds from the Federal Consolidated Funds — which includes all revenues received by the federal government, all loans raised by that government and all monies received by it in repayment of any loan — was subject to the parliament’s approval.
It pointed out that the government had subsequently presented a bill in the parliament seeking the release of funds, but it was rejected.
The document added that the government had fulfilled its legal obligations, but it was not authorised under the Constitution to ask the SBP to release the funds.
Separately, talking to reporters outside the SC, ECP Secretary Umar Hameed said that the hearing was held in a “pleasant atmosphere”, revealing that he presented the commission’s stance on the release of the funds to the judges.
“We also talked about the census underway across the country,” he said, pointing out that once the census was completed, four to five months were required for the demarcation of the constituencies.
“We are now waiting for the court to issue its order,” Hameed added.
Parliament turns down bill for poll funds
Yesterday, perhaps for the first time in the country’s parliamentary history, the National Assembly rejected a money bill that the government had tabled to seek funds for conducting polls in Punjab and KP.
The house rejected the Charged Sums for General Election (Provincial Assemblies of the Punjab and the Khyber Pakhtunkhwa) Bill 2023 with a majority vote after Finance Minister Ishaq Dar informed the house that the standing committee had recommended not to approve the bill he introduced on April 10.
The bill stated that funds required for conducting elections in both the provinces shall be “an expenditure charged upon the Federal Consolidated Fund (FCF)”, which it said comprises all revenues received by the federal government, all loans raised by the government and all money received by it in repayment of any loan.
The bill said that it shall “override other laws” and have effect “notwithstanding anything contained in any other law, rules and regulations” when it was in force.
It added that the proposed law would stand repealed once elections for both the assemblies were held, noting that the general elections and polls to the Sindh and Balochistan assemblies need not be held for it to be repealed.
SC warns govt of consequences over delaying poll funds
As it summoned the AGP and other officials to the CJP’s chambers earlier this week, the apex court warned that the failure of the federal government to comply with the April 4 direction regarding the release of funds for polls could have consequences.
“The consequences that can flow from such prima facie defiance of the court are well settled and known,” it said.
The court order said that every person who embarks upon, encourages or instigates disobedience or defiance of the court can be held liable and accountable.
The result of the present prima facie disobedience is that yet again, the holding of general elections in a timely manner as mandated by the Constitution may be put in jeopardy, the order said, adding that question of the provision of funds for such a vital constitutional purpose is something that requires immediate attention which takes priority over proceeding against those who may have committed contempt of the court.