Anwaar Hussain, J. Through this consolidated judgment, the present as well as connected constitutional petitions detail whereof is provided in Schedule "A" appended hereto, are being decided as they involve common questions of law and facts.
2. The core issue in these petitions pertains to the actions of the respondents--specifically, the Agriculture Department, Government of Punjab, and its subordinate offices--relating to the collection and testing of the fertilizer samples, and the penal measures taken pursuant to such testing. In some of the cases, act of the Punjab Government directing the petitioners therein to obtain license from the Pakistan Standards and Quality Control Authority ("PSQCA"), under the Pakistan Standards and Quality Control Authority Act, 1996 ("Act 1996") or compliance thereof is challenged on the ground that the Punjab Government has no authority under the Federal Law.
These actions are challenged in the light of the applicable legal framework, particularly, the Punjab Essential Articles (Control) Act, 1973 ("the Act"), the Punjab Fertilizers (Control) Order, 1973 ("the Control Order") and the Act, 1996.
3. Learned counsel for the petitioners have raised multiple issues regarding the interpretation and application of the aforementioned laws, as well as the conduct of the respondents in general and the Provincial Government and its officials in particular, which are articulated as under: i. That the laboratories to which the samples are referred for analysis are not certified in accordance with law; ii. That while the laboratories are accredited by the Pakistan National Accreditation Council ("PNAC"), such accreditation is limited to specified number of products/fertilizers and this specificity is ignored when the fertilizer samples are tested; iii. The sampling process lacks transparency, particularly because the samples are not dispatched to the laboratories within the stipulated timeframe i.e., 72 hours as per petitioners' contentions; iv. The Control Order does not itself prescribe any penalty for substandard fertilizer(s). The petitioners argue that the invocation of the Act is misplaced, since the Act primarily governs aspects of storage and transport, and not quality control of the articles/products--the fertilizer in present case, particularly, when no Notified Order is passed under Section 3 of the Act; v. The petitioners contend that in some of the cases the manufacturers are not associated in the testing process or informed of results of tests carried out by the laboratories and results are sent and/or shared only to dealers or distributors, from whom samples are collected, but criminal proceedings are initiated against the manufacturers without affording them a hearing, thereby violating the principle of audi alteram partem; vi. When an appeal is filed against a test report, issued under Section 22(4) of the Control Order, the sample sent to the reference laboratory is one retained by the department, rather than the sealed portion of sample given to the distributors/dealers from whom it is collected, which undermines the fairness of the appellate process; and vii. That some of the petitioners are importers and in case of imported items standards are set by the PSQCA under the Act 1996 and the Provincial Government has no jurisdiction in respect of enforcement of Act, 1996.
4. Dr. Abdul Khan Niazi, Director Headquarter, Punjab, Lahore, one of the officials, from the respondents' side, mainly argued the matter and primarily relied on the pronouncement of the Hon'ble Supreme Court of Pakistan in case reported as Province of Punjab through Secretary, Agriculture Department, Lahore v. Saleem Ijaz and others (2023 SCMR 774), to contend that the petitioners have no case concerning the certification of the laboratories. He contends that accreditation by PNAC is not confined to specific fertilizer types and the laboratories all over Punjab are accredited to test all types of fertilizers. Further submits that the sampling and testing procedures are followed in accordance with law, and assured this Court of strict compliance, in future. Clarifies that per their Standard Operating Procedure ("SOPs"), in vogue, sample is sent to the laboratory within 10-days and assures the compliance thereof. Respondents maintained that the Control Order was issued under the authority of the Act, and hence, any breach of the standards prescribed under the Control Order is punishable under the Act. However, it was conceded that while the report is issued to the dealer/distributor etc., from whom the sample is collected, the manufacturer is not associated with the process as the law presently does not provide for such association or for preference of an appeal by a party who is not directly issued the report. Nonetheless, the officials agreed that, since the legal and factual issues regarding certification of the laboratories has been settled by the Supreme Court of Pakistan in case of Saleem Ijaz supra, the matter may be remitted to the concerned authorities for reconsideration in accordance with law, with due assurances of the procedural compliance.
5. Arguments heard. Record perused.
6. Most of the issues articulated hereinabove have either been settled in terms of the decision in case of Saleem Ijaz supra or the same are of such nature that can be decided in the light of submissions of the departmental representative who have assured strict adherence to SOPs etc., qua period of submission of sample. Hence, this leaves the Court to deal with the nub of the matter as to interplay of the Federal and Provincial Laws and the status of the Control Order in relation to the Act.
7. Insofar as the contention of learned counsel for the petitioners that the laboratories--whether primary or reference--are not certified is concerned, the same is found to be devoid of merit in light of the authoritative pronouncement of the Hon'ble Supreme Court in case of Saleem Ijaz supra wherein the august Supreme Court read down Rule 22 of the Rules by holding that the ISO is not a certificate awarding institute, rather, the same merely sets and issue international quality standards, which are to be adhered to and enforced by National Accreditation Institutes/bodies.
Notably, this position was not disputed by the petitioners during the hearing. It is also established on record that the laboratories involved in testing are duly accredited by the PNAC. No credible material has been placed from the petitioners' side before this Court to show that any laboratory acted beyond the scope of its accredited authority, either in terms of the product type or the procedure. The assurance by the officials that all testing is conducted within the confines of the laboratories' accreditation is significant and cannot be ignored. The assurance of the respondents that samples are sent within 10-days to the primary laboratory also addressed issue No. (iii).
Hence, the first three issues raised by the petitioners' side do not have force.
8. Adverting to the issue related to interplay of the Federal and Provincial laws in general and role of the Provincial Government in particular, it is imperative to note that the regulatory landscape for fertilizers in Pakistan involves a layered mechanism where federal and provincial regimes operate in tandem. At the federal level, the PSQCA, operating under the Act 1996, is responsible for issuing licenses to manufacturers, including importers, for products that fall under the Compulsory Certification Scheme. Fertilizers, especially those imported into Pakistan, must conform to the PSQCAmandated standards before being cleared for sale. The issuance of a license, under the Act, 1996 follows a rigorous process that includes product testing, factory audits, and compliance with prescribed Standards. Complementing this framework is the PNAC, which accredits laboratories for testing such products. Accreditation under PNAC is valid for specific parameters and product categories and is subject to periodic reassessment to ensure technical competence and compliance with ISO/IEC 17025. Once cleared through the federal mechanism, the distribution and retail of fertilizers within a province are regulated by the respective provincial agriculture departments under laws--the Act and the Control Order. This Control Order, framed under the Act, mandates that dealers, distributors, and sellers of fertilizers--whether imported or locally produced --must adhere to the regulatory framework of the Provincial Authorities. The Provincial Government, in exercising its regulatory powers, ensures that fertilizers distributed within its jurisdiction-- irrespective of their origin--meet the standards notified under the federal framework. This dual framework is not only legally permissible but necessary to ensure continuity of compliance: PSQCA addresses conformity at the import stage, while the provincial authorities ensure that quality is maintained during storage, sale, and application, especially given the perishable or chemically sensitive nature of such products The presence of PSQCA standards for imported fertilizers does not displace the regulatory authority of the provincial government under the Control Order. Both Federal and Provincial frameworks operate in distinct but complementary spheres, ensuring a robust system of quality control. Thus, imported fertilizers may lawfully be subjected to sampling, testing, and penal action by the provincial authorities if found to be sub-standard post-import. In this way, the existence of PSQCA and PNAC oversight does not displace or oust the authority of the Provincial Governments. Instead, both frameworks work in synergy. Moreover, the adherence to PSQCA and PNAC ipso facto does not stand as a guarantee that counterfeit, substandard and/or fake fertilizers would not penetrate into the market. This check is ensured through the Provincial laws the obliteration whereof would amount to leaving the market unchecked. This cooperative model reflects the constitutional structure of Pakistan and ensures that regulatory objectives are met without duplication or jurisdictional conflict. Therefore, it is misconceived on part of the petitioners that Provincial Government has no authority in cases where standards prescribed by PSQCA are applicable.
9. Before further delving into the matter, it will be imperative to observe that the Control Order and the Act establishes a regulatory framework to ensure the quality of fertilizers, which are an essential agricultural input and therefore, subject to special regulatory scrutiny. However, it must be underscored that regulatory oversight must not come at the cost of procedural safeguards and the due process rights of all stakeholders including the manufacturers, therefore, it will be imperative to analyse the relevant provisions of the Act as also the Control Order. Preamble of the Act reads as under: "WHEREAS it is expedient in the public interest to provide for powers to regulate and control the production, acquisition, prices, keeping, storage, movement, transport, supply, distribution, disposal, use or consumption of, and trade and commerce in, certain essential articles in the Province of the Punjab;"
Section 3 of the Act reads as under:
3. Power to control production, supply, distribution, etc. of essential articles.-- (1) Government, so far as it appears to it to be necessary or expedient for maintaining or increasing supplies of any essential article, or for securing its equitable distribution and availability, or for controlling and fixing the prices of an essential article may, by notified order, provide for regulating or prohibiting the production, acquisition, treatment, keeping, storage, movement, transport, supply, distribution, availability at fair price, disposal, use or consumption thereof, and trade and commerce therein.
(2) Without prejudice to the generality of the powers conferred by sub-section (1), an order made thereunder may provide--
(a) for regulating by licences, permits or otherwise, the production, manufacture, acquisition, treatment, keeping, storage, movement, transport, supply, distribution, disposal, use and consumption of any essential article;
(b) for prohibiting the withholding from sale of any essential article ordinarily kept for sale;
(c) for controlling and fixing the prices at which any essential article may be bought or sold in any area;
(d) for displaying in a prominent place of business premises a list of prices fixed for sale and of the quantity of stock of essential articles available at the time of start of business on a day;
(e) for requiring any person holding stock of an essential article to sell the whole or a specified part of the stock to such person or class of persons or in such circumstances as may be specified in the order;
(f) for regulating or prohibiting any class of commercial or financial transactions relating to any essential article which, in the opinion of Government, officer or authority making the order are, or if unregulated are likely to be detrimental to public interest;
(g) for collecting any information or statistics with a view to regulating or prohibiting any of the aforesaid matters;
(h) for requiring persons engaged in the production, supply or distribution of, or trade or commerce in, any essential article, to maintain and produce for inspection such books, accounts and records relating to their business and to furnish such information relating thereto as may be specified in the order; and
(i) for any incidental and supplementary matters including, in particular, the entering and search of premises, vehicles, vessels and aircrafts, the seizure by a person authorised to make such search of any article in respect of which such person has reason to believe that a contravention of the order has been, is being, or is about to be committed or any records connected therewith, the grant or issue of licences, permits or other documents, and the charging of fees therefor.
(j) for marking of fertilizer bags with the name of fertilizer, nutrient contents, and net weight of bag.
(3) Government, so far as it appears to it to be necessary for maintaining or increasing the production and supply of an essential article, or for controlling and fixing of price of an essential article, may, by notified order, authorise the Controller to exercise with respect to the whole or any part of any such undertaking engaged in the production and supply of the articles as may be specified in the order such function of control as may be provided by the order.
(4) So long as an order is in force with respect to any undertaking or part thereof, the undertaking or the part thereof shall be carried on in accordance with any direction given by the Controller in accordance with the provisions of the order and any persons having any functions or management in relation to the undertaking or part thereof shall comply with any such direction.
Whereas the preamble and important terms in the Control Order read as under: "Preamble In exercise of the powers conferred by Section 3 of the Punjab Essential Articles (Control)
Ordinance, 1973 (Punjab Ordinance No.VII of 1973), the Governor of the Punjab is pleased to make the following order:- 1........
2. Definitions.
(a) "adulterated" when used with reference to a fertilizer means fertilizer the nutritional strength or purity of which falls below the professed mansard or quality mentioned on its label or under which it is sold;
(b) "dealer" means a person or an association of persons carrying-on the business of selling any brand of fertilizer, whether wholesale or retail.
(ab) "fertilizer" means any material, organic or inorganic, or mixture used to supply one or more of the essential plant nutrient elements.
(c) "importer" means a person or an association of persons importing into the Punjab whether under an import licence or otherwise, any brand of fertilizer from outside the Punjab and includes a buying agent, an indenter and a manufacturers agent; and
(d) "producer" means a person or an association of persons engaged in the manufacture or production of any brand of fertilizer.
Perusal of the Control Order in general and above quoted provision in particular indicates that not only the fixation of maximum price has been dealt with under the Control Order but also information to be furnished by the importers as also the distributors alongwith disposal of the fertilizers and the maximum quantity is dealt with in various provisions thereof. Section 18 prohibits sale of adulterated and fake fertilizers whereas Section 20 pertains to testing laboratories. Similarly, dispatch of samples for test or analysis has been dealt with under Section 19 read with Section 21.
The power of the Controller to search and inspect has been envisaged under Section 17 of the Control Order. Section 19 pertains to the procedure of sampling, which contemplates that it should be in the prescribed form and the person from whose possession it is taken is provided one portion thereof with effective seal and suitable marks. The said provision read as under:
19. Procedure of Sampling:- Where a Controller takes a sample of a fertilizer for the purpose of test or analysis, he shall intimate such purpose in writing in Form-I to the person from whose possession he takes it and, in the presence of such person (unless he willfully absents himself), shall divide the sample into three portions and effectively seal and suitably mark the same and permit such person to add his own seal and mark to all or any of the portions so sealed and marked: Provided that:-
(1) Where the fertilizer is packed in containers of small volume, i.e. 1 Litre or less, instead of dividing a sample as aforesaid, the Controller, shall take three of the said containers after suitably marking the same and, where necessary, sealing them; and
(2) the Controller shall restore one portion of a sample so divided or one container, as the case may be, to the person from whom he takes it, and shall retain, the remainder and dispose of the same as follows:-
(i) He shall forthwith send one portion or container to the Government fertilizer testing laboratory for test or analysis; and
(ii) He shall send the second portion or container to the Director Soil Fertility, Punjab, Lahore.
Finally, the report of the testing laboratory is dealt with under Section 22, which also confers the right of appeal before the Additional Secretary (Task Force), Government of Punjab Agriculture Department. Section 22 of the Act reads as under:
22. Report of result of analysis:-
(1) After the test or analysis have been completed, the Agricultural Chemist of the laboratory shall forthwith supply to the Controller a report in triplicate in prescribed form of the result of the test or analysis, together with the test method applied.(2) The report of the test or analysis shall be signed by the Agricultural Chemist himself [and such report shall be conclusive proof of the particulars stated therein, and]
(3) The Controller shall deliver one copy of the report received by him to the person from whose possession the sample was taken and shall send one copy to the Director, Soil Fertility, Punjab.
(4) The person to whom the report has been delivered under sub-clause (3) may challenge the correctness of the analysis conducted by the Agricultural Chemist within thirty days of the delivery of report to him before the Additional Secretary (Task Force), Government of the Punjab, Agriculture Department, and produce such evidence which in his opinion contravenes the correctness of such analysis.
(5) Where the evidence produced under sub-clause (4) is such as in the opinion of Additional Secretary justified a further investigation, he may cause it second portion of the same sample to be analyzed at the Reference Fertilizer Testing Laboratory.
(6) After analysis of the sample, the Reference Fertilizer Testing Laboratory shall report the result of test or analysis and such report shall be conclusive evidence of the facts stated therein.
(7) The Reference Fertilizer Testing Laboratory shall send the report of test or analysis to the Controller concerned.
Having above referred legal analysis in sight and adverting to the nub of the matter, it is imperative to observe that the regulation of fertilizers, being the matter of vital public interest linked to agriculture productivity and food security, as historically being recognized in both Pakistan and comparable jurisdiction like India, requires control under special legislation, such as the Act and the Control Order.
10. The Supreme Court of Pakistan has recognized the binding character of the Control Order and a wide regulatory scope available under the Act in case of Saleem Ijaz supra. The above referred analysis of Section 3 of the Act read with Preamble of the Control Order indicates that the latter legislation is the Notified Order under the law and the argument raised by the petitioners that penal provisions of the Act are inapplicable in the absence of a specific Notified Order is not tenable. The Control Order itself constitutes a valid and operative legislation under the parent statute--the Act.
Its issuance satisfied the requirement of Section 3, which enables the Provincial Government to regulate or prohibit the production, supply, movement, distribution of essential articles--fertilizer in present cases, through Notified Orders. In case of "Union Of India & another v. Cynamide India Ltd. & another" [(1987) 2 SCC 720], the Indian Supreme Court held that once the Control Orders are notified, the same possess the full force of law and the regulatory actions--including quality control, price regulation and penal consequences, arising from them are legally sustainable.
Although the case of Cynamide India Ltd supra is not directly on the point in terms of fertilizer quality control or the penal actions based on sample testing and the said case primarily dealt with price control of essential commodities under the Indian Essential Commodities Act, 1955 ("the Act 1955"), the Supreme Court of India held that price fixation under a Control Order is a valid legislative function and affirm the validity of delegated legislation under Section 3 of the Act 1955, which is a pari materia legislation to that of the Act, in present case. The case of Cynamide India Ltd supra does affirm the legal character and binding force of the Control Orders. Therefore, this Court is of the opinion that once such Control Orders are notified and are enforceable legal instruments, they are not required to be repeatedly re-notified for every regulatory action. The Control Order is a valid instrument of delegation and regulation under the statutory scheme of the Act and any violation of standards, procedures, requirements prescribed under the Control Order can always be lawfully penalized under the framework of the Act as the same are part of a cohesive legal regime governing the import, manufacturing, sale, purchase of the fertilizers and the same enables the Government to regulate or prohibit production, supply, distribution of the fertilizer. Therefore, this Court holds that the Control Order i.e., the Punjab Fertilizers (Control) Order, 1973 qualifies as a Notified Order within the meaning and contemplation of the Act and hence, provides the legal foundation for regulatory actions including penal consequences arising from its breach.
11. Adverting to the remaining issues, this Court is of the opinion that the authority of the respondents to regulate the quality of fertilizers under the Act and the Control Order is not in dispute, however, the procedure adopted must ensure fairness. The lack of association of the manufacturers--against whom the ultimate penal action is taken--raises a serious concern regarding compliance with the principles of natural justice. This undermines the guarantees as to due process assured under Article 10-A of the Constitution of Islamic Republic of Pakistan, 1973 as the manufacturer is denied right to be associated with the testing procedure and is, ultimately, roped in the consequences of such procedure.
12. It is imperative to note that the Control Order does not envisage automatic culpability of the accused unless test report is submitted. While it is well understood that in cognizable offences, the law enforcement agencies may register an FIR without prior notice, the scheme under the Control Order operates differently. Per contentions of the respondents' side, the FIR is registered after a negative test report is received, not contemporaneously with the seizure or transportation of the fertilizer. Therefore, ends of justice require that such manufacturers be given a notice at the time the sample is collected from its distributors/dealers and the former is not implicated solely on the basis of batch identification or presumption that the goods seized in respect of which the samples are taken in fact belong to the manufacturers. This procedural safeguard becomes even more pertinent in the light of submission made by the departmental representative before this Court that, as a matter of internal standard operating procedure, the respondents do wait for initiating a criminal action even against the dealer/distributor/seller until the expiry of the appeal period. Such practice should be adopted and formalized so as to uphold fairness and prevent undue prejudice, more particularly, to the parties, who are not initially involved in sampling collection process.
Moreover, the practice of relying solely on the department-retained sample in appeals, rather than the third sample to be handed over to the manufacturer or dealer, undermines the integrity of the appellate process under Section 22(4) of the Control Order.
13. In view of the above discussion, it is held as under: i. Control Order has the status of Notified Order under Section 3 of the Act; ii. The existence of regulatory oversight by the PSQCA under the Act, 1996 does not oust or exclude the regulatory jurisdiction of the Provincial Government under the Control Order and both the Federal and Provincial Law conjunctively provide a robust system of quality control of the fertilizers; iii. The challenge of the petitioners to the status of the laboratories and reports issued thereof is without any substance; iv. The department must strictly comply with the process of taking samples from the stakeholders (dealers, distributors, shopkeepers and/or manufacturers, as the case may be) and the same shall be dispatched within the time settled under the SOPs and in case of any deviation, reasons should be given in writing; v. The manufacturer should be associated with the taking of samples where the manufacturer itself is not the distributor/dealer; and iv. The third part/portion of the seized samples shall be used for the purpose of test by the reference laboratory at the appellate stage.
14. In view of the above discussion, the present as well as connected petitions listed in Schedule "A" appended hereto are disposed of with the direction to the respondents to reconsider the case of each petitioner individually and proceed strictly in accordance with the applicable law/procedure in terms of this judgment. Before the matter is concluded afresh, no adverse action shall be taken against the petitioners.