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You Are Here: Home» Babar Sattar , The News , Todays Top English » Babar Sattar: Price-fixing fixation

 Part II

If political questions are allowed to fester long enough they transform themselves into legal questions. In a polity where the system of governance crumbles, proliferation of legal disputes is natural. And courts can’t be faulted for adjudicating legal disputes brought before them merely because they emerged from political questions. It is indisputable that the Supreme Court has the final word in declaring rights and obligations of citizens and the state. It is also indisputable that the SC has the final word in interpreting the constitution. But the fact that the SC is the ultimate arbiter of disputes and interpreter of the law does not mean it doesn’t get things wrong.

Critiquing the SC’s rulings neither amounts to questioning the validity nor the authority of the court. But just because rulings of the apex courts are binding doesn’t mean they are right. And just because the judiciary is vested with constitutional authority doesn’t mean it is being discharged unerringly. The law being developed and the manner in which the judiciary approaches its constitutional mandate are matters of public importance that must be debated vigorously since it affects all of us.

The interim rulings of the SC in the CNG case and the Balochistan law and order case highlight problems inherent in the exercise of the apex court’s now-dilated powers under Article 184(3) of the constitution. The popular argument (that a vacuum has been created due to failure of governance in the country, which by necessity has to be filled by other state institutions) used to justify the inflated role of the SC is neither a legal argument nor a useful guide to interpreting the scope of Article 184(3)’s powers.

Starting with the CNG case, the argument that the SC didn’t fix the reduced CNG price in its order but only recorded the federal government’s statement on the estimated reduced price is disingenuous. Even if we disregard the atmosphere in Court 1, where pushing a line disagreeable to the court can become very unpleasant for the summoned civil servants, why did the court need to record the reduced price as part of its order that had been predicted by the ministry, when the operative part of the order was a direction issued to Ogra to determine what the CNG sale price ought to be?

Once such indicated price made it into the SC order could Ogra exercise any discretion or exhibit the audacity to reach a different conclusion? And when Ogra goes ahead and underwrites the price that has the SC’s tacit approval, what legal remedy will those CNG station operators have who are aggrieved by such a decision of the regulator? More importantly, in ordering Ogra to determine a reasonable price as part of its interim order, did the SC not prejudge the underlying legal issue: does Ogra have the legal authority to determine the sale price of CNG?

Let’s recall the CNG price issue. Prior to the execution of the MoU between Ogra and CNG station operators, which fixed the sale price of CNG and allowed an obnoxious profit to CNG retailers, the price of CNG was determined through open competition between CNG stations. In the recent hearing before the SC, the federal government submitted that the MoU with CNG stations was illegal and was being suspended by the government. It didn’t say why it had been entered into in the first place or who was responsible for authorising and executing such a pernicious agreement that produced windfall for CNG station owners at the cost of consumers.

The obvious questions that come to mind are: By entering into this MoU did Ogra exercise its public authority unfairly? Has Ogra been in a state of regulatory capture unduly benefiting CNG station owners and, if so, who are the public servants who ought to be held to account? Does Ogra have the legal authority to fix CNG retail prices? Was this MoU a prohibited agreement under competition law that manipulated prices and restricted competition? The SC, with its zealous focus on the sale price of CNG, didn’t get into any of these questions.

Ogra has been issuing CNG sale price notifications under Section 43B of the Ogra Ordinance. This was introduced through the Ogra Amendment Ordinance 2009, which was laid before the parliament on April 10, 2009, but never became an act of parliament and consequently lapsed. With its lapse, amendments were hurriedly introduced in the 1992 CNG Rules (issued under a 1948 mines and oilfields control law), to reclaim CNG retail price-fixing authority for Ogra. The legal validity of these rules remains dubious. But Ogra hasn’t been fixing prices pursuant to these rules. It has been doing so under Section 43B of the Ogra Ordinance that simply doesn’t exist anymore.

So why order Ogra to fix CNG retail price without first determining if it has the legal authority to do so and what legal recourse does anyone who is aggrieved by the order now have? This highlights the twin problems of Article 184(3): when the SC elects to become the court of first instance, legal infirmities easily creep into its orders compromising the law being produced by our apex court; and more than producing bad jurisprudence, the decision of the SC to act as a court of first instance, while also being the ultimate court of the land, robs aggrieved parties of their right to appeal and consequently of their due process rights.

The Balochistan law and order ruling raises questions not only about the approach of the court to constitutional interpretation but also a flawed doctrine of democracy being propounded by the court. The SC has continued to emphasise more recently that none of the state institutions, including the judiciary, have any inherent powers. The only power they have flows from the text of the constitution. And yet in many rulings produced by the SC, including the Balochistan ruling, there is hardly any mention or interpretation of the text of the constitutional provision upon which the order relies.

Which provision of the constitution vests in the SC the authority to declare that if public office holders serving in a provincial government fail to discharge their obligation to uphold fundamental rights of citizens, the entire government loses its ‘constitutional authority’ to govern? In the Asghar Khan case, where the army chief and DG ISI were found to have violated the constitution and fundamental rights, the court is at pains to explain that their acts were personal and the institution they represented wasn’t culpable. So why are the acts or omissions of Balochistan government’s officials not personal?

While the SC can affix the legal responsibility of individual public office holders, does the constitution empower it to affix collective responsibility of an elected government or rule that such government has lost its legitimacy? In the 18th Amendment cases we saw the SC wading into the province of the legislature, despite clear prohibition in Article 239 to the contrary. We have also seen the SC reduce the role of the parliamentary committee on judicial appointments to a post office. Don’t these rulings when viewed together project a disconcerting judicial approach to democracy and trichotomy of state power?

The wisdom of the idea that democracy and rule of law go hand in hand is as relevant for the judiciary as it is for parliament and the executive. Khaki-rule doesn’t become representative because people yield to martial law. Likewise our SC cannot presume to possess representative credentials merely because a popular movement backed its restoration. The authority that the SC claims or the orders that it passes cannot be grounded in public expectations but must spring from the text of the law and the constitution. By definition, commitment to rule of law demands fidelity to legal texts, which is seen wanting in Article 184(3) jurisprudence of the SC.

(Concluded)

The writer is a lawyer based in Islamabad. Email: sattar@post.harvard.edu


Published in The News , November 10th, 2012.

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