By Nasir Iqbal
ISLAMABAD: The Supreme Court seized with the sticky issue of sugar price expressed keenness on Thursday to authorise the Competition Commission of Pakistan (CCP) to fix the price of sugar instead of leaving it to market forces.
A three-judge bench comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Jawwad S. Khawaja and Justice Ghulam Rabbani hearing identical appeals of the Pakistan Sugar Mills Association and the Punjab Sugar Association against the Lahore High Court verdict requiring Punjab government to ensure the sale of sugar at Rs40 per kg in the province, said it would frame guidelines to supervise the CCP and safeguard interests of all sections, especially consumers, instead of leaving them at the mercy of the commission.
During the period the commission would be listening to the stakeholders, including sugarcane growers, to determine the price, the government would make arrangements to sell sugar at Rs40 as fixed by the high court, the court ordered.
It also directed Attorney General Sardar Latif Khosa to submit Rules of the Business of the Chamber of Commerce.
‘We have to strike equilibrium as the entire nation is standing at one side while the government is on the other,’ the Chief Justice observed, adding that instead of strictly implementing orders of the high court the government had filed the appeal.
The bench made it clear that it was not its job to fix prices but its job was to ensure that the executive machinery started functioning.
In exceptionally lengthy proceedings that continued till late evening, the court dismissed the appeal of the Punjab Sugar Dealers for lacking jurisdiction to file the petition after Advocate Farooq Amjad Mir expressed willingness to withdraw it.
The bench also criticised PSMA chairman Iskander Khan for submitting a fake document showing how a meeting of the association that took place in Lahore empowered its secretary general Ali Qazalbash to institute the appeal before the apex court.
Though the court spared the chairman after his admission of guilt since the one-page document faxed from the association’s zonal office in Lahore bore the seal of Islamabad office, but ordered Mr Khan to produce Vice Chairman Javed Kiani on Friday for questioning who, with his signature, had authorised the secretary general to move the court.
Haphazard functioning of the association stunned many in the court room when it transpired during proceedings that the appeal had been filed in the Supreme Court without any resolution being adopted by members of the association as required under relevant rules.
Advocate Shahid Kareem, representing the PSMA, informed the court that the central executive committee of the association had passed a resolution, the copy of which was available in Lahore though the registered office was in Islamabad.
When asked to produce the same, which later turned out to be fake inviting ire of the court, Iskander Khan conceded that no minutes had been recorded and the document was produced in emergency. Secretary General Qazalbash did not attend the meeting which authorised him to file the appeal.
The court expressed its dismay that the appeal was filed without proper authorisation and the PSMA dared to submit the document which prima facie is forged.
‘An attempt has been made to misguide the court by producing a fake document and thus guilty of criminal offence to undermine the authority of the court only to get relief on a petition which is not maintainable,’ the court observed, adding that no concession could be extended to the litigants because of their attitude.
Advocate Farooq Bajwa, who is a grower, briefed the court how mill-owners earned windfall profits at the cost of sugarcane growers by selling by-products and evading taxes. He was asked to submit detailed formulations to substantiate his claims.
The AG told the court that it was not possible to sell sugar at Rs40 as it would have ‘catastrophic’ affect on the agriculture system that would eventually ‘collapse.’
Meanwhile, the CCP in a preliminary report said that prima facie the PSMA and its members were in a serious and continuous violation of Section four of its ordinance which encouraged competition.
‘It appears, prima facie, that the sugar mills under the flag of PSMA are engaged in setting sugarcane price, territorial division for sugarcane procurement, bid, rigging in the TCP (Trading Corporation of Pakistan) tenders, establishing entry barriers by advocating and resisting the opening of new mills and setting sugar prices by making estimates and indulging in collective price negotiation,’ the report said.
The PSMA can no longer be called just a representative of the sugar mills but an organisation which functions as a business decision-making body. The association by the approval of its members has prima facie exceeded its mandate, the report alleged.
There is ample documentation that showed the existence of a buyers’ cartel in the industry, the report said, adding that instead of competing in the open market the sugar mills preferred a closed and protected market which was easily manageable.