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Sham democracy?

According to a press report, a division bench of Lahore High Court in its order of March 2, 2017 observed that sugar mills owned by the ruling family have brazenly flouted court orders and disregarded the ban imposed by the government on the establishment of new mills. The Court has noted with dismay: “If so, what precedent are they setting for others in the country?” While hearing intra-court appeals filed by Haseeb Waqas Sugar Mills (Muzaffargarh), Chaudhary Sugar Mills (Rahimyar Khan) and Ittefaq Sugar Mills (Bahawalpur), the highest court of the Punjab province also observed that the mill owners had not even bothered to seek permission for relocation under the ‘Relocation Policy’.

The order states that the ban imposed on setting up new sugar mills was interpreted by these companies (appellants) themselves to their own advantage, they ignored the relocation policy by stating that it did not apply in their case and paid little attention to the Supreme Court judgement in the ‘Tariq Khan Mazari case’ in which the ban was upheld. “The appellants’ conduct amounts to taking the law into their hands or being the law unto themselves. This cannot be permitted in a democratic country governed by the Constitution and Rule of Law,” the verdict added. This is indeed a strong stricture against the rulers of the day and had it been passed in a true democratic country they would have had no option but to resign. However, in Pakistan, the rulers seem to have lost all values.

Supreme Court in the case of Tariq Khan Mazari & 3 Others v Government of Punjab & 3 Others PLD 2016 Supreme Court 778, referred to by Lahore High Court, observed: “It appears that there is a tussle between two different sugar mills’ owners regarding the relocation of an existing sugar mill, whereas the matter considered by us is the determination of the legality of the impugned Notification which has imposed a ban on the setting up of new sugar mills and also expanding the installed capacity of existing ones. Therefore, it would not be appropriate for us to express any opinion on this aspect of the matter which has as yet not been decided by the Lahore High Court where the said two writ petitions are pending adjudication”.

On October 10, 2016, the Lahore High Court decided all the pending writ petitions [JDW Sugar Mills Ltd etc. Versus province of Punjab etc 2017 PLD Lahore 68], including those, mentioned in PLD 2016 Supreme Court 778 in favour of the Petitioners who challenged that the Respondent sugar mills under the garb of shifting/relocation of a functional sugar mill were in fact establishing new sugar mills despite the ban imposed under the Punjab Industries (Control on Establishment and Enlargement) Ordinance, 1963 read with Notification No. AEA-III- 3-3/03 (VOL-III) dated 6.12.2006. This Notification was upheld by Supreme Court in PLD 2016 Supreme Court 778. The main defence of the Respondent sugar mills was that they were not establishing “new sugar mills” nor were they “enlarging the sugar production capacity of their existing sugar mills”. They were simply “relocating” their sugar mills from one area to another which was not “prohibited under the Ordinance or Notification dated 6.12.2006.

On October 28, a division bench of Lahore High Court, while hearing an intra-court appeal against the order [JDW Sugar Mills Ltd etc. Versus Province of Punjab etc 2017 PLD Lahore 68] maintained the status quo in the matter of shifting five sugar mills owned by Prime Minister Nawaz Sharif, Punjab Chief Minister Shahbaz Sharif and their relatives. Jahangir Tareen Khan, General Secretary Pakistan Tehreek-e-Insaf (PTI), representing JDW Sugar Mills Ltd, challenged this interim order allowing the crushing of sugar cane to ruling family in the current season before the Supreme Court. A three-member bench of Supreme Court in its order of February 8, 2017, held that High Court’s order of maintaining status quo was not sustainable as it did not give any reasons and therefore was “set aside”. The apex court asked Lahore High Court to hear the case by February 16, with the division bench preferably headed by the Chief Justice. It also directed the Sharif family’s counsel that the order to suspend operation of the mills should not be violated.

The bench, headed by Chief Justice of Lahore High Court, took up the matter as directed by Supreme Court and ordered immediate sealing of sugar mills of the ruling family, which were shifted to new locations despite a restraining order. During the hearing on March 2, 2017, the counsel for JDW Sugar Mills stated that the three sugar mills of the Sharif family completed the shifting in blatant violation of stay granted by different courts. He claimed that Chaudhary Sugar Mills had spent Rs 600 million on its relocation. He also presented bank documents and photographs of the mills’ shifting process to substantiate his argument. He argued that the relocation policy for sugar mills announced by the provincial government in 2015 was based on mala fide intention. Environmental laws, he said, were also ignored in shifting of the respondent mills. The bench observed that the two sugar mills would remain shut until further orders and sought further arguments in the case on March 28, 2017.

The court battle narrated above proves clash of interests of business magnates, Sharifs v Tareen, who are also enjoying political power. The intermingling of business with politics has created a bizarre situation in Pakistan. The businessmen-cum-politicians (robber barons) are engaged in a war that was aptly depicted by Matthew Parker, in his famous book, The Sugar Barons: Family, Corruption, Empire, and War in the West Indies. In this book he uses the rise and fall of the sugar dynasties of the West Indies as a framework for the intertwined histories of sugar, slavery, the industrial revolution, and Britain’s American colonies. The story narrated in this book, occasionally horrifying, portrays the worst period of exploitation during the colonial period. Unfortunately, many of its remnants still exist in Pakistan!

The ruling elites of Pakistan-militro-judicial-civil complex, businessmen-turned-politicians and absentee landowners sitting in parliaments-are solely responsible for pushing the country into a terrible mess. Their lust to amass wealth coupled with ambitions to control all institutions has made Pakistan a State-in-perpetual-crisis.

Pakistan has a sham democracy where the rulers flagrantly violate laws to expand their business empires. Democracy-if truly practised-embodies some vital elements that are: fair and just electoral process, sovereignty of parliament, separation of powers and independence of judiciary, public accountability and rule of law. Elections alone cannot guarantee these elements. Those at the helm of affairs must realise that democracy is not electioneering per se. At the heart of the concept of democracy is the assurance for the citizens that their affairs are going to be managed by a ‘Responsible Government’. The rule of law embraces at least three principles. The first principle is that the law is supreme over officials of the government as well as private individuals, and thereby preclusive of the influence of arbitrary power. The second principle requires the creation and maintenance of an actual order of positive laws which preserves and embodies the more general principle of normative order. The third principle requires that the relationship between the state and the individual be regulated by law. How rule of law is blatantly violated is highlighted in Para 6 of JDW Sugar Mills Ltd etc. Versus Province of Punjab etc 2017 PLD Lahore 68 which reveals the interest of ruling family in the business:

“One of the main arguments raised by the Petitioners was that Respondent sugar mills are owned by the Chief Minister, Punjab and the Prime Minister of Pakistan along with close family relatives. Hence the Impugned Notification has been issued to benefit their business interest. Further that the Impugned Notification has been issued simply to facilitate and legalise the establishment of new sugar mills owned by the families of the Chief Minister, Punjab as well as the Prime Minister given the ban on establishing sugar mills in the Province. In this regard, it is specifically alleged that Ittefaq Sugar Mills Limited and Chaudhary Sugar Mills Limited are owned by Mian Muhammad Nawaz Sharif, Hassan Nawaz Sharif, Hussain Nawaz Sharif, Mrs. Marriyam Nawaz, Mrs. Kalsoom Nawaz and Hamza Shahbaz along with other family members. Haseeb Waqas Sugar Mills Limited is owned by Haseeb Ilyas, Zakia Ilyas, Mrs. Shahzadi Ilyas and other family members. Abdullah Sugar Mills Limited is owned by Mian Mohammad Ejaz Miraj, Yasmin Riaz and other family members”.

It is pertinent to note that the order of High Court reveals that it has been alleged that the sons of Prime Minister, Hassan Nawaz Sharif and Hussain Nawaz Sharif, are still enjoying business interests in Pakistan [as owners of sugar mills]. While explaining their position vis-�-vis offshore companies, the Prime Minister in his addresses and speech before the National Assembly categorically said that his sons had no business links in Pakistan. Both of them were bound to file tax returns in Pakistan if they were recipients of dividends. Hussain Nawaz holds National Tax Number as well. Haroon Pasha, CEO Ittefaq Group, in a television interview purportedly misstated the law that being non-residents Hussain Nawaz was not obliged to file tax returns in Pakistan as his only source of income was dividends. He should have read section 115(4) of Income Tax Ordinance, 2001 which reads as under:

“Any person who is not obliged to furnish a return for a tax year because all the person’s income is subject to final taxation under sections 5, 6, 7, 148, 151 and 152, sub-section (3) of section 153, sections 154, 156 and 156A, sub-section (3) of section 233 or sub-section (3) of section 234A shall furnish to the Commissioner a statement showing such particulars relating to the person’s income for the tax year in such form and verified in such manner as may be prescribed”.

Hussain Nawaz was even required to file wealth statement as per section 116(4) of the Income Tax Ordinance, 2001, which says: “Every person (other than a company or an association of persons filing statement under sub-section (4) of section 115, falling under final tax regime (FTR) shall file a wealth statement along with reconciliation of wealth statement”.

(The writers, lawyers and partners in Huzaima, Ikram & Ijaz, are Adjunct Faculty at Lahore University of Management Sciences)

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Vision 21 is Pakistan based non-profit, non- party Socio-Political organisation. We work through research and advocacy for developing and improving Human Capital, by focusing on Poverty and Misery Alleviation, Rights Awareness, Human Dignity, Women empowerment and Justice as a right and obligation. We act to promote and actively seek Human well-being and happiness by working side by side with the deprived and have-nots.

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