SHAHID JAMIL KHAN, J.---This judgment addresses the issue of Price Control by Government, of Essential Commodities , as oppose to price determination by market forces on 'supply and demand' principle.
Price Control are restrictions, set in place and enforced by Government to manage affordability of certain goods and services. These are imposed in two primary forms, 'price ceiling' ; maximum price of the commodities essential for living a respectable life and 'price flooring' minimum price; like limiting increase in rent, minimum 'living wage' and minimum ' support price ' for growers, of an essential crop.
In open markets, prices are controlled by ensuring free competition. The Govern ment keeps check on potential anti-competitive behaviors, like cartelizatio n, hoarding etc. Conversely , imposition of restrictions, to control prices of essential commodities is necessary to ensure a respectable living for lower income class. After fixing minimum living wage , the Government is under an obligation to bring essential commodities within the fixed purchasing power . In developed countries like United Kingdom, 'subsistence allowance' is given to jobless eligible persons, to ensure that they are able to purchase the commodities essential for life. The 'subsistence allowance' , in some countries, is determined by working back an average indirect tax paid, or payable, by a jobless person, following the principle of not charging tax from a person, to whom job or opportunity to earn is not provided by the State.
Price control and competition laws, are meant to protect consumers' right, however , are required to be implemented by forging a balance, because a thriving stable economy is the backbone of a country , for which certainty in policy making and enforcement of law is a sine qua non. It is important to note that excessive price control may lead to disruptions in market like decrease in quality and losses for producers, which may result into flight of investment.
2. The price control and competition laws are not enforced effectively in Pakistan, as is discernable from pleadings and arguments during proceedings. Inevitable result of which is unpredictable price hike of essential commodities' and failure of the Government to bring the essential commodities within minimum purchasing power of lower income class, which is duty of the State, against fundamental rights, in particular , under Articles 9, 14 read with Article 38 of the Constitution of the Islamic Republic of Pakistan, 1973 ("the Constitution "). Unfortunately , a common man, earning minimum wage, is being subjected to indirect taxes equal to a rich man in the country .
3. Though laws for Price Control were available, however , till filing of these petitions, rules were not framed, under Price Control and Prevention of Profite ering and Hoarding Act, 1977 ("Act of 1977") and Punjab Foodstuf fs (Control) Act, 1958 (Act of 1958).
August Supreme Court took notice of Government's failure, on a letter against price hike of flour being essential commodity . Directions were given for taking necessary steps under the Act of 1977 to Federal Government and to Provincial Government under the Act of 1958 through judgment titled 'Regarding Enormous Increase in the Price of Flour ( 2014 SCMR 329 ). Relevant excerpt is reproduced:- "Learned Additional Attorney-General stated that it is job of the provincial governm ents to control prices in terms of The Price Control and Prevention of Profiteering and Hoarding Act, 1977 read with Foodstuf fs (Control) Act 1958 which is applicable to all the Provinces. There is no doubt that food security has to be ensured by the Federal Government and for this purpose a Ministry in the name of National Food Security and Research has been created and this Ministry has fixed the price of wheat as Rs. 1200 per 40 k.g. for the year 2012-2013 meaning thereby that ordinarily at the cost of. Rs.30 per k.g. wheat shall be made available and the Provincial Governments are also duty bound to ensure that the wheat/Ata is supplied and being sold at the subsidized rates. Section 3 of the Foodstuf fs (Control) Act, 1958 confers powers upon the Government to control supply , distribution etc. of foodstuf fs. It appears that this provision of the law is not being adhered to. Similarly , under the Price Control and Prevention of Profiteering and Hoarding Act, 1977, fixation of the prices is to be dealt with by the Federal Government but it seems that no such exercise has been-undertaken by the Federal or Provincial Governments under the relevant provisions of law. It may be noted that the Provincial Governments are duty-bound to control all the prices of foodstuf fs without any discrimination. We understand that presently there is a loose check on the profiteers and hoarders and the same is only possible by adopting a mechanism by the respective Provincial Governments by taking stringent steps otherwise it would be beyond the capacity of an ordinary labourer to provide bread to his family including children and old persons.
4. It is also to be noted that under Article 38 of the Constitution of Islamic Republic of Pakistan it is responsibility of the State to secure the well being of the people by raising their standard of living; by preventing the concentration of wealth and means of production and distribution in the hands of a few to the detriment of general interest and to make adequate livelihood with reasonable rest and leisure. Clause (d) of the same provides that the. State shall make available basic necessities of life, such as food, clothing, housing, educatio n and medical relief for all such citizens irrespective of sex, caste creed or race. But, prima facie , it appears that no such mechanism has been adopted so far by the Government in this respect.
5. Under the circumstances, we allow this petition. Copy of this order be sent to the Federal Government through Ministry of National Food and Research Division, Chief Secretaries of all Provinces, Commissioner ICT with directions to take necessary measures to make sure availability of the wheat/flour and other foodstuf fs to the public at the controlled/subsidized rate and to curb hoarding and profiteering and to make efforts for alleviating difficulties of the citizens / general, public by ensuring application of Article 38 of the Constitution in letter and spirit. They shall take necessary steps without any further delay and outcome of the meetings convened for the purpose and other steps taken in this behalf shall be intimated to the Registrar of this Court within 15 days for our perusal in Chambers. The petition is disposed of in the above terms."
4. In this backdrop, the captioned writ was filed, in public interest, highlighting the inaction on part of both the Governments. By referring to the prevailin g Sugar scam, during arguments, price hike of 'White Crystalline Sugar '
("the Sugar") was agitated. It was pointed out that instead of controlling price of the Sugar, as essential commodity , the farmers are restrained from manufacturing Gur (jaggery), even for their own consumption , and are forced to supply sugarcane to the factories, in the garb of Gur Control Order , 1948 ("the Order of 1948").
The Federal Government, through Attorney General office was put, under notice to justify the inaction and Barrister Ahmad Qayyum and Chaudhary Sultan Mehmood, Advocates were appointed as amicus , to assist on the legal position of the Acts of 1977 and 1958, after the 18th Amendment in the Constitutio n. Notices under Order XXVII-A of C.P.C. were issued to both the offices of Attorney General of Pakistan and Advocate General of the Punjab on 02.04.2021.
5. It was not controverted by any of the learned counsel, from both sides, that no change relating to food or food items was brought by the 18th Amendment.
Entry No.23 of the Rules of Business, 1973 with the caption `National Food Security and Research Division' was brought to the notice of this Court, apprising that it was incorporated after the 18th Amendment in the Constitution, which shows that, price control of essential food items is a primary responsibility of the Federal Government. It was also apprised that support price of wheat was used to be determined by the Federation before the 18th Amendment by Agriculture Price Commission, however , this responsibility has been abdicated without any apparent amendment in any law .
Mr. Shahzad Ata Elahi, Advocate, representing sugar mills, apprised that ratio of restrictions under the Order of 1948 is now 25% for manufacturing of Gur (jaggery). It was admitted that price of the Sugar is being determined by market force. Assisting the Court, he apprised that a Buffer Stock used to be mainta ined by the Trading Corporation of Pakistan, however , this practice has been abandoned by the Federal Government, apparently after the 18th Amendment. He explained that price of the Sugar was controlled by meeting the demand in market and to avoid any hasty decision of importing Sugar , in case of its shortage at an exorbitant price. He endorsed Federation's power of controlling price, under the Rules of Business, 1973, and referred to its Schedule II, Rule 3(3), Entry 23 (1, 2, 10 and 14).
It, however , surfaced that a Notification dated 14.09.2006 was issued by the Federation through which the powers, under the Act of 1977, were delegated to respective Provinces. To test vires of this notification, assistance was sought on the following question; "Whether after 18th Amendment in the Constitution of the Islamic Republic of Pakistan, 1973 ("the Constitution"), Act of 1977 remains intra vires?"
If answer to the question is in af firmative: "Whether laws promulgated by the Provinces, before or after 18th Amendment, if found in conflict with or repugnant to the Act of 1977 are void in view of Article 143 of the Constitution? and:-- Whether by delegating these powers to respective Provinces, has Federation not abdicated its duty under the Act of 1977 and Constitution?
6. During proceedings, ibid, Federal Government fixed ex-mill and retail price of the Sugar through Notification dated 02.04.2021, which in this Court's opinion is resumption of power , by Federal Government, under the Act of 1977 and admission that the 18th Amendment had not taken away its power to Control Price of Essential Commodities.
The price fixation Notification dated 02.04 .2021 and order dated 04.04.2021, by Cane Commissioner , for lifting of the Sugar at the fixed price were assailed, through separate petitions, by the Sugar Mills (Petitioners), mainly on the ground of absence of due process. Decision on these petitions is given in latter part of this judgment.
None of the petitioners raised objection, at least in their arguments before the Court, on Federal Government's power to fix price under the Act of 1977, which is treated by this Court as admission of the legal position.
Nevertheless, this Court is convinced on merits as well, for the reasons noted abov e, that the 18th Amendment has not taken away or af fected Federal Government's powers under the Act of 1977 and it is held accordingly .
7. Even otherwise, it is held by Full Bench (majority wise) of this Court in the judgment titled LPG Association of Pakistan through Chairman v. Federation of Pakistan through Secretary , Ministry of Petroleum and Natural Resources, Islamabad and others (2021 CLD 214), that inter-provincial issues or matters, spilling over territorial boundaries of a Province and affecting enforcement of fundamental rights are within competence of the Federation after the 18th Amendment, despite absence of its specific mention in the Federal Legislative List, because enforcement of fundamental right cannot be compromised due to any vacuum.
The issue of Price fixation and control has inter-provincial affect, particularly , when different prices, of essential commodities like Wheat and Sugar , are fixed differently by the Provinces. Necessary consequence of which is that Wheat or Sugar would be transported to the Province where the prices are high. Provinces cannot impose any restriction or tax, under Article 151(3) of the Constitution, on interprovincial trade. Additionally , when due to shortage of stocks, prices are out Of control, the power and decision making for import or export of the essential commodities is with the Federation. The Federal Government has to have control on the production, supply chain and stocks of essential commodities to know their exact statistics, to meet the demand in market. The policy of having Buffer Stock of essential commodi ties be reconsidered, to avoid expensive import on emergent basis, which is still within Federation's competence after the 18th Amendment.
8. So far wires of Gur Control Order , 1948 ("Order of 1948") is concerned, learned assistant Attorney General informed, through written submission, that it was issued under the erstwhile Essential Supplies (Temporary Powers) Act, 1946 ("Act of 1946") and after repeal, it is saved by Section 17 of the Essential Supplies (Continuance of Temporary Powers) Ordinance 1955 ("Ordinance of 1955"). However , it is stated, in writing, that the Province of Punjab has not adopted or applied the Order of 1948 till to date. On the contrary , petitioners' side pleaded that farmers are harassed by the Provincial Administration, whenever any farmer attempts to manufacture Gur or Shaker (raw sugar) out of his own grown sugarcane. The Federation has neither owned nor defended the Order of 1948.
In this Court's opinion, there is no apparent existing force of law behind the Order of 1948. Even if exist, it appears to be in violation of Article 18 of the Constitution, particularly when no suppor t price is fixed for purchase of sugarcane by Government to protect grower's interest. The Order of 1948 is held ultra vires hence void, being in violation of fundamental rights guaranteed by the Constitution. After this declaration and based on admission of not adopting or applying this law, all enforcement agencies, both Federal and Provincial are restrained from taking any action against farmers prohibiting manufacturing of Gur or Shaker (raw sugar).
9. During proceedings of the petitions, by Sugar Mills, Price Control and Prevention of Profiteering and Hoarding Order , 2021 ("Order of 2021") was issued through SRO 1062(1)/2021 by the. Federal Government. However , Government of the Punjab through Chief Secretary has submitted a written undertaking, signed by Secretary Industries (Mr. Wasif Khurshid), on instructions, ensuring that Rules under the Act of 1958 read with Act of 1977 shall be framed within 60-days from the date of this judgment. Therefore, prayer to the extent of inaction by both the Governments stands fructified. The other issues raised but not decided, can still be agitated in accordance with law.
The Provincial Government shall ensure that all essential commodities are sold at controlled and fixed rates on the retail outlets across the Province, which is its Constitutional duty. The practice of taking hold of any essential commodity and selling in through or under its administration shall be avoided, to restore dignity of consumers under Article 14 of the Constitution, who are compelled to stand in queues with proof of their identification.
10. Second limb of the controversy , relates to price fixation of the Sugar , as essential commodity , by Federal Government under the Act of 1977.
Three price fixation Notifications are assailed by Sugar Mills, (W.P.No.22977/21 and connected petitions), challenging fixation of ex-mill and market prices of Sugar , along with consequent orders of lifting Sugar from mill premises, on payment of the ex-mill price, under Section 8 of the Punjab Sugar (Supply-chain Management) Order , 2021 ("Order of 2021") for onward supply to the dealers, because of shortage in market on reluctance of Sugar Mills to sell the Sugar on the price so fixed.
11. First Notification for price fixation is dated 02.04.2021, which admittedly was issued in absence of Rules and without consultative process. Since Sugar Mills were not consulted, therefore, Court directed the Federal Secretary (Industries) for determination of price after consultation. In a meeting, convened on directions, a price was fixed but petitioners were not satisfied on the cost of Molasses , therefore, wanted to pursue the petitions. The Provincial Government pleaded urgency due to shortage of stocks in the Month of Ramadan, therefore, Sugar Mills were directed to allow lifting of a specific quantity of the Sugar on the rate so fixed.
Second Price fixation through Notification dated 30.07.2021, was again assailed. Matter went to Honorable Supreme Court of Pakistan against an interim order , which was amended and case was remanded with direction.
During hearing before this Court, after the remand order , Deputy Attorney General for Federation of Pakistan produced copy of SRO 1062(1)/2021 dated 24.08.2021, whereby Rules (Price Control and Prevention of Profiteering and Hoarding Order , 2021) were framed under the Act of 1977 and an appellate forum was provided.
Deputy Attorney General contended that price fixation through Notification dated 30.07.2021 is in accordance with the Rules. He was confronted that Authority for fixation of price is different under the Rules. It was undertaken, on instructions, that the price shall be determined afresh under the Rules. Needless to say that price determination under Notification dated 30.07.2021 had lost its ef ficacy after this undertaking.
Third exercise of price fixation through Notification dated 21.09.2021 was under the Order , 2021, relevant extracts of which are reproduced:- "In view of the above, it is, THEREFORE , decided that the costing of sugar needs to be worked out afresh after taking into account all important elemen ts of cost of production, as directed by the Hon'ble Lahore High Court, Lahore."
"WHEREAS, in the Order dated 30th July 2021 it is mentioned that the Ex-Mill Sale Price for Punjab worked out at Rs.72.22/kg, which is still higher than the declared average sale price of Rs.72.16/kg, and at which price most of sugar has already been sold by the mills. However , in this order the Ex-Mill Sale Price of Rs.72.37/kg is determined, considering all factors of cost calculations.
NOW THEREFORE, in exercise of the powers vested in me under section 6 of the Price Control and Prevention of Profiteering and Hoarding Act, 1977, and under the provisions of clauses 3 to 5 read with Part II of "Price Control and Prevention of Profiteering and Hoarding Order 2021"; I being the Controller General of Prices do hereby fix the maximum retail price of locally produced white crystalline sugar at Rs.89.75/kg at which it shall be made available to the general. public. This will mean an ex-mill price maximum of Rs.84.75/Kg. (inclusive of sales tax).
The provincial authorities/ICT are directed to implement this order under the powers delegated to them by SRO F.No.1(7)/2005-CA, Vol-III dated 14th September , 2006 and to take action against the mills, dealers, distributors and retailers, who do not comply with this order , as provided under the Price Contr ol and Prevention of Profiteering and Hoarding Act, 1977. Furthermore, a weekly compliance report shall be filed by authorities exercising the delegated powers of Controller General of Prices in the provincial and federal jurisdiction.
This order shall come into force immediately and will remain in force till 15.11.2021 unless rescinded or modified earlier .
Any producer , dealer or importer , if aggrieved by this order , may prefer an appeal before the appellant committee duly notified by the Government, within next three (3) working days under clause 6 of the Price Control and Prevention of Profiteering and Hoarding Order , 2021."
[emphasis supplied]
12. On being confronted that appeal is available against this Notification before Appellate Committee, under the Rules, the petitioners' side, on instruction s, wanted to argue the case against the exercise of power , prior to the promulgation of the Rules.
The Court is not convinced. Since the legal issues have already been resolved or settled, therefore, this court would not indulge itself in technicalities of price fixation, when a competent forum, for this purpose, has already been created under the law. The august Supreme Court, while remanding the case has given following observation on exercise of jurisdiction by this Court under Article 199 of the Constitution, which are binding under the Article 189:-- "2. The Constitutional Courts of the country have a duty to resolve legal disputes coming before them in accordance with the Constitution and the law. In the discharge of their duties and functions the Courts do not supervise pricing nor monitor profit and loss dealings by or between the stakeholders. In our view, the High Court has in the present case, entered the uncertain territory of monitoring commercial and policy terms regulating the supply of an edible commodity in the market. This endeavor is far removed from its jurisdiction vested by Article 199 of the Constitution and is likely to involve technical details that are outside the realm of judicial adjudication.
13. Since appeals have already been filed against Notification dated 21.09.2021, therefore, the all the petitions filed by the Sugar Mills, are infructuous.
Grievance, if any, prior to the date of SRO 1062, relating to price fixation, if raised before the Appellate Committee, be treated as a representation on Court's direction and decided through speaking order .
Any amount found to have been charged from the consumers, by the Sugar Mills, in excess of the price fixed through impugned Notifications and finalized after the appellate order shall be determined and its benefit shall be extended to the consumers of Sugar , while final determination of the price by Appellate Committee.
The captioned and all connected petitions, as listed in Annexure-A, are decided to the extent and in terms, noted in the judgment.
Disposed of accordingly .
Annexure-A Sr. No. Case No.
1. W. P. 17526 of 201 1.
2. W. P. 3832 of 2020.
3. W. P. 4539 of 2020.
4. W. P. 4919 of 2020.
5. W. P. 4920 of 2020.
6. W. P. 4922 of 2020.
7. W. P. 22936 of 2021.
8. W. P. 22970 of 2021.
9. W. P. 22977 of 2021.
10. W. P. 23318 of 2021.
11. W. P. 23990 of 2021.
12. W. P. 26019 of 2021.
13. W. P. 29114 of 2021.
14. W. P. 30575 of 2021.
15. W. P. 30577 of 2021.
16. W. P. 47100 of 2021.
17. W. P. 48537 of 2021.
18. W. P. 48555 of 2021.
19. W. P. 49213 of 2021.
20. W. P. 49551 of 2021.
21. W. P. 50981 of 2021.
22. W. P. 51043 of 2021.
23. W. P. 51045 of 2021.
24. W. P. 51050 of 2021.
25. W. P. 51051 of 2021.