The Supreme Court of Pakistan on Friday ordered the State Bank of Pakistan to release funds worth Rs 21 billion to the Election Commission of Pakistan for holding election to the provincial assembly of Punjab.
A three-member of SC bench passed the orders while conducting in-chmaber hearing of the case. The bench was headed by Chief Justice of Pakistan Umar Ata Bandial and comprised of Justice Ijaz ul Ahsan and Justice Munib Akhtar.
On April 4, a three-member bench of the SC ordered the government to provide funds to the ECP for holding the elections in Punjab and KP. However, the ECP submitted a report in the court stating that the government had refused to release the funds.
The government also referred the matter to the Parliament to decide upon the release of the funds which however refused by the latter. Eventually, the SC issued notices to the finance secretary, SBP governor, Attorney General for Pakistan (AGP) Mansoor Awan and the ECP, directing them to appear before the judges’ chamber on April 14.
Attorney General for Pakistan (AGP) Mansoor Usman Awan, Acting SBP Governor Ms Sima Kamil, Deputy Governor Inayat Hussain Chaudhary and Director Qader Bakhsh, Special Secretary Finance Awais Manzur Sumra, Additional Secretary Amer Mehmood and Additional Secretary Tanveer Butt, and ECP Secretary Omer Hamid Khan, Director General Law Muhammad Arshad, Special Secretary ECP Zafar Iqbal and Additional Director General (Budget) Tafakhur Ali Asdi briefed the court about the government’s failure to release the funds during today’s proceedings which held in chamber.
Meanwhile, the SC issued a written order in this regard saying “the court also examined the relevant provisions of the Constitution relating to the allocation of these funds.”
“It was confirmed by the officials of the Finance Ministry that in terms of Article 84 of the Constitution, the Federal Government was fully authorized to make expenditures from the Federal Consolidated Fund for, inter alia, “expenditure upon some new service not included in the Annual Budget Statement” for the relevant financial year here being the year ending on 30.06.2023. For such expenditure the Federal Government obtains ex post facto approval and authorization from the National Assembly in terms of the procedure laid down in the Articles of the Constitution immediately preceding Article 84.”
“On a consideration of all of the foregoing it is our view that there is absolutely no difficulty or hitch, either financially or procedurally or in terms of the relevant authorization by and under the Constitution, for the immediate release of Rs 21 billion to the Election Commission for fulfilling its constitutional mandate for the holding of general elections to the Punjab and KP assemblies.”
The SC ordered the SBP to immediately send an appropriate communication to the Finance Ministry/Division to this effect by Monday (April 17).
It said “the said Ministry/ Division should forthwith and immediately issue a proper direction to the AGPR (Accountant General Pakistan Revenues) to increase the limit of the ceiling with respect to the Election Commission’s ID No.2826 by the said sum of Rs 21 billion.”
“In this manner, the sum of Rs 21 Billion shall be and become available to and with the Election Commission in immediately releasable and utilizable funds for the purposes of holding the general elections to the Punjab and KP assemblies.”
The SC said all the institutions mentioned above must act together and coordinate to implement the court orders within the stipulated timeframe.
The SC order further said, “The State Bank and the Finance Ministry/ Division shall by 18.04.2023 file compliance reports with this court to the effect that order of the court has been complied with, and the report of the Finance Ministry/Division shall also include a confirmation in relation to AGPR.”
“Likewise, the Election Commission shall on 18.04.2023 file a report with this court confirming that Rs 21 billion have become available to it in terms as stated above,” it added.
“We may also note that this order shall be deemed sufficient authority for all purposes for the authorization of expenditure on the Federal Consolidated Fund and the Federal Government shall thereupon obtain the ex post facto approval and sanction from the National Assembly for authorisation of this expenditure in terms of Article 84 and other applicable provisions of the Constitution,” the order stated.
It said the court would like to record appreciation for the assistance that was provided to the court by each of the officials that appeared today and the respective teams led by them.
“This matter stands adjourned but should any need arise it will be taken up again in such terms as deemed appropriate by the court. Insofar as the matters identified in paras 6 and 7 of the order, those matters will be taken up once the report required to be filed by the Federal Government in terms of para 6 thereof has been filed and considered by the Election Commission,” it added.
The SC further stated,”In our view, on an assessment of the presentations made by the State Bank and the Finance Ministry/Division, there can be no doubt that the Rs 21 billion required by the
Commission and ordered to be made available in terms of para 5 of the order can be done immediately and within a matter of a day. As to the exact mechanism for the transfer, the team from the Commission, ably led by the Secretary Mr. Omar Hamid Khan explained that the funds made available to and utilized by the Commission lay with AGPR. That agency had allocated an ID number (bearing No.2826) for the funds available to the Commission. To this ID number there is
associated a ceiling determined by the Finance Division and within that ceiling the funds allocated to the aforesaid ID number are readily and immediately available to and utilizable by the Commission.
“Of course, as expected and confirmed by the Election Commission, any utilization of any funds whatsoever would be for the specific and properly assigned purpose (here the holding of general elections to the Punjab and KP assemblies) and always in terms of the applicable accounting rules and procedure, and ultimately subject also to proper audit.
“It was further confirmed to the court by all the officials and teams that on its order, the State Bank would send an appropriate communication to the Finance Division to the effect that Rs 21 billion from Account I stood allocated to the Commission for purposes of the general elections as aforesaid and that the Finance Division would then immediately send an appropriate communication (on the same day) to the AGPR directing it to raise the ceiling of the limit associated with ID No.2826 by Rs 21 billion. In this way the Election Commission would immediately have access to, and be able to utilize, the said funds for purposes of the general elections.”
The court stated, “The team from the Ministry of Finance/Finance Division (“Finance”) was led by the Special Secretary, Mr Awais Manzur Sumra. The Secretary, with the assistance of the learned Attorney General, also gave a presentation to the court, in broad terms, with regard to the financial position of the Government of Pakistan, with particular reference also to the present and/or pending international obligations to the IMF. From the figures presented to the court, of which even the smallest ran to several hundreds of billions of rupees, it became clear that the disbursement of
Rs 21 billion for fulfilling the constitutional mandate of holding the general elections would, at most, amount to a minuscule increase in the obligations of the Federal Government. Indeed, viewed from certain financial perspectives and contexts, which were stated by the team from Finance, the amount would be so insignificant as to not even amount to a rounding off error. The team from Finance also informed the court that the Federal Government regularly went into the bond markets to borrow and raise funds which in the aggregate in any given financial year ran into trillions of rupees.
“It was stated that in this regard Treasury bills were issued by the State Bank on behalf of the Federal Government on a regular and ongoing basis and that, even in this perspective, taking the amount now under consideration into account would not have any meaningful impact or effect.
“It was also confirmed by Finance that if the court so ordered and directed the process of making the funds to the tune of Rs 21 billion available to the Commission on an immediately utilizable basis would be concluded rapidly, and by the close of business on 17.04.2023.”
It stated,”It was explained to the Acting Governor that a sum of Rs 21 billion was required for the purposes of general elections to the Punjab and Khyber Pakhtunkhwa assemblies and it was queried as to whether this sum could be made available from the funds aforementioned of the Federal Government lying with and under the custody, control and management of the State Bank, with particular reference to Account I. The Acting Governor confirmed that this would be done if the court so directed and ordered. The State Bank further confirmed that the necessary transaction for the transfer of funds to the Commission, so that Rs 21 billion become immediately available and utilizable for the latter, could be done within the shortest possible time, and at the latest by the close of business on Monday i.e. 17.04.2023.”
The court stated that the Acting Governor SBP had presented a statement setting out funds and monies of the Federal Government which were under the central bank’s custody, control and management.
Referring to it, the court observed that the SBP Acting Governor had explained that these amounts constituted the Federal Consolidated Fund. “The amount lying in Account No.I (Non-Food) (“Account I”) constitutes by far the largest component of the Fund (being 98.77 per cent thereof as of the date for which the data was provided),” the court order read.
It added that the SBP official further explained that the “amount lying in Account I was not designated for any particular or special usage whatsoever.
