2025 PLP 1553 (YLR)

Shujaat Ali Khan, J.

Unnecessary details apart, the facts, as spelt out in the instant petition, are that pursuant to scheme introduced by the Federal Government in the light of the decision of the Economic Coordination Committee, petitioner No.1 exported 58,786 M.Tons sugar to Afghanistan and as per policy, petitioner No.1 was entitled to payment of subsidy amount to the tune of Rs.314,505,100/- out of which Rs.184,040,000/- was paid whereas the remaining amount was withheld by the respondents. Being aggrieved of non-payment of outstanding amount, the petitioners have filed this petition.

2. Learned counsel for the petitioners submits that since approval in favour of petitioner No.1 to export sugar to Afghanistan was accorded on 03.06.2019, it was entitled for payment of subsidy amount in the light of Office Memorandum, dated 18.10.2018; that since Meezan Bank Limited (respondent No.6) forwarded the claim of the petitioners well within time to the State Bank of Pakistan, the latter had no option but to clear the same; that since State Bank of Pakistan was only regulatory body, it could not withhold payment of the petitioners on the basis of any internal circulation which had no backing of law; that since reasonable time is required for completion of shipment after approval by the relevant authority, no adverse opinion could be formed against the petitioners merely on the ground that they failed to export sugar to Afghanistan within 60 days; that reliance of the State Bank of Pakistan on the minutes meeting of the Committee is totally untenable as the recommendations of a committee could not assume the status of an order until and unless the same is properly notified; that mala fide on the part of the Provincial Authorities is evident from the fact that though payment of many other contractors/Mills have been cleared but the petitioners have been made scape goat; that in identical matter through order, dated 04.02.2020, passed in CP No.D-7163/2019, learned Sindh High Court has directed the government to release the outstanding amount on account of subsidy in favour of Sugar Mills but the petitioners are being discriminated by the respondents. Relies on Agro Tractors (Private) Limited v. Fecto Belarus Tractors Limited, Karachi and others (2019 SCMR 57), Sami Pharmaceuticals (Pvt.) Ltd. v. Federation of Pakistan and others (2019 PTD 718), Sugar Mills Limited and another v. Federation of Pakistan and others (2018 SCMR 1792), Al-Tech Engineers and Manufacturers v. Federation of Pakistan and others (2017 SCMR 673), Dr. Akhtar Hassan Khan and others v. Federation of Pakistan and others (2012 SCMR 455), Qazi Abdul Jalil v. N.-W.F.P. Forest Development Corporation through Chairman and others (2010 SCMR 1933), Azra Riffat Rana v. Secretary, Ministry of Housing and Works, Islamabad and others (PLD 2008 SC 476), Miss Shazia Batool v. Government of Balochist and others (2007 SCMR 410), Federation of Pakistan and others v. Ammar Textile Mills (Pvt.) Limited and others (2002 SCMR 510), Pakistan through Ministry of Finance Economic Affairs and another v. FECTO BELARUS Tractors Limited (PLD 2002 SC 208), Messrs M. Y. Electronics Industries (Pvt.) Ltd. through Manager and others v. Government of Pakistan through Secretary Finance, Islamabad and others (1998 PTD 2728), Al-Samrez Enterprise v. The Federation of Pakistan (1986 SCMR 1917), Dr. Shamsher Ali Khan and 27 others v. Government of Khyber Pakhtunkhwa through Secretary Finance and 2 others (2019 MLD 87), Zahid Hussain Qureshi v. Government of Sindh through Secretary and 4 others (2019 CLC 1568), Abdul Haleem Siddiqui and others v. Federation of Pakistan through the Law Secretary, Ministry of Law and Justice, Pakistan Secretariat, Islamabad and others (2019 PLC (C.S.) 238), Messrs Gaaza Broadcast System Pvt. Ltd. through Authorized person and others v. Federation of Pakistan through Ministry of Information and Broad Casting Pakistan and others (PLD 2019 Sindh 332), Mir Hassan v. Province of Sindh through Secretary and 3 others (2017 PLC (C.S.) 864), Muhammad Ibrahim v. Province of Sindh through Secretary Irrigation and Power Department and 3 others (2017 PLC (C.S.) Note 7), National Bank of Pakistan v. Iftikhar Rasool Anjum and others (2017 PLC (C.S.) 453), Safdar Mahmood and 2 others v. Federation of Pakistan through Secretary Establishment Division, Islamabad and 7 others (2016 PLC (C.S.) 936), Kaniya Lal and others v. Province of Sindh through Secretary and others (2016 YLR 1730), Dewan Salman Fiber Ltd. and others v. Federation of Pakistan, through Secretary, Ministry of Finance and others (2015 PTD 2304), Abdul Qayyum v. Chairman Capital Development Authority (CDA), Islamabad and another (2015 PLC (C.S.) 617), Messrs Asif Traders and another v. Collector of Customs through Assistant Collector and another (2014 PTD 1057), Province of Punjab through Collector and another v. Malik Shah Nawaz and others (2012 MLD 1045), Makhdoom Muhammad Mukhtar, Member Provincial Assembly, Punjab v. Province of Punjab through Principal Secretary to Chief Minister, Punjab, Lahore and 2 others (PLD 2007 LHR 61), Federation of Pakistan through Secretary, Ministry of Finance, Islamabad and others v. Messrs Balchem (Pvt.) Ltd., Balochistan (2002 PTD 967) and Messrs Lucky Cement Limited v. The Central Board of Revenue and others (PLD 2001 Peshawar 7).

3. Learned Deputy Attorney General, while opposing the submissions, made by learned counsel for the petitioners, states that since the petitioners failed to submit their claims with solid proof regarding export of sugar to Afghanistan-within prescribed period of limitation, no ill-will can be attributed to the government regarding non-payment of amount of subsidy.

4. Learned Additional Advocate General states that since subsidy was for the financial year 2018-2019, no claim after 30.06.2019 could be entertained; that after expiry of fiscal year 2018-2019, the matter in hand became infructuous.

5. Learned counsel for respondent-State Bank of Pakistan, states that since the payment, being claimed by the petitioners, offends against the decision of the Provincial Cabinet, taken in its meeting on 24.05.2019, no interference is called for by this Court; that as State Bank of Pakistan issued EPD Circular Letter No.4 of 2019, on 22.02.2019, relating to Freight Support on Export of Sugar, nothing in violation of the said Circular can be claimed by the petitioners; that any policy, issued by the State Bank of Pakistan, while exercising powers under Section 9 (A) of the State Bank of Pakistan Act, 1956 has binding force on all the concerned, the petitioners cannot claim anything from this Court; that bona fide of State Bank of Pakistan is evinced from the fact that more than Rs.18-crore have already been paid to the petitioners, no mala fide can be attributed to the authorities working in the State Bank; that subsidy cannot be claimed as right nor can be enforce through writ petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 rather claimant should fulfill the eligibility criteria, which is missing in the case in hand; that mere non-publication of any decision of the Provincial Cabinet in the official gazatte does not deprive the said decision as ineffective. To fortify his contentions, learned counsel has relied upon the cases of Bahadur Khan and others v. Federation of Pakistan through Secretary Ministry of Finance, Islamabad and others (2017 SCMR 2066), Azam Wazir Khan v. Messrs Industrial Development Bank of Pakistan and others (2013 SCMR 678), Messrs Bolan Steel Industries (Pvt) Ltd. through Managing Director and others v. Water and Power Development Authority (WAPDA) through Chairman and others (PLD 2014 Balochistan 173) and copy of judgment, dated 20.03.2024, passed by this Court in W.P.No.63273/2021.

6. Learned counsel for respondent No.6, while submitting report (Mark-A), states that sanction in favour of the petitioners for export of sugar to Afghanistan was accorded on 03.06.2019 and verified claims of the petitioners were referred to the State Bank of Pakistan well within time.

7. I have heard the learned counsel for the parties and have also gone through the documents, appended with this petition in addition to the case-law referred at the bar.

8. It is admitted position that approval in favour of the petitioners for export of sugar to Afghanistan was granted on 03.06.2019, meaning thereby that the same was before closing of fiscal year. Now the question is as to whether export of sugar by the petitioners to Afghanistan beyond 60 days could be treated as ineligibility. To appreciate the said question, we have to go through the Office Memorandum, dated 10.12.2018, issued by Ministry of Commerce and Taxation, Government of Pakistan, which for convenience of reference is imaged below:- From above, it is crystal clear that there was no stipulation of export of sugar within 60 days from the sanction. The said decision of the Ministry of Commerce and Taxation was notified by the State Bank of Pakistan through EPD Circular Letter No.22, dated 18.12.2018, which is also imaged below:- Even in the above circular, issued by the State Bank of Pakistan, there is no condition regarding export of sugar within specific period. In this background the assertion of learned counsel representing State Bank of Pakistan that petitioner No.1 was bound to export sugar within 60 days being contrary to record, cannot be given any weightage.

9. It is imperative to note that the statement, submitted by respondent No.6, shows that payments were made in favour of petitioner No.1 in the months of July, 2019 and August, 2019, thus assertion of learned counsel, representing respondent-State Bank of Pakistan, that no payment could be made after 30.06.2019, runs contrary to the record.

10. It is a matter of great concern that while filing report and parawise comments, respondent No.5, under preliminary objection No.3, pleaded as under:- "

3. That the State Bank of Pakistan is not a necessary and proper party in the effectual determination of the alleged dispute. As such, no relief can be claimed against it. The answering respondent is improperly impleaded and no valid legal cause of action is sustainable against the Central Bank of Pakistan." From the above, it is crystal clear that respondent No.5 claimed itself to be an unnecessary party but during arguments, learned counsel, representing respondent No.5, opposed this petition tooth and nail. This fact shows inconsistency on the part of State Bank of Pakistan.

11. It is a matter of record that subsidy claim was introduced, pursuant to the aforesaid Office Memorandum, issued by the Federal Government and the same could only be halted pursuant to decision of the competent authority which is properly notified. Though learned counsel for respondent No.5 has addressed the Court at reasonable length but has not given half a reason that as to how State Bank of Pakistan could withheld payment of the petitioners on the basis of a letter addressed by the Section Officer (W&M), Government of the Punjab, Finance Department to one Rana Salim Saleem, Deputy Director, State Bank of Pakistan especially when decision of the Provincial Committee, taken in its meeting, held on 04.12.2018, was not notified. Had the said decision been notified with specific condition that the export of sugar beyond 60 days after approval in favour of the sugar mills was not to be honoured by the government, perhaps, the petitioners might have not opted to avail benefit of the scheme.

12. Learned Additional Advocate General, while opposing the prayer made by the petitioners, took specific plea that since the subsidy was for financial year 2018-2019, no payment could be made after 30.06.2019. Perhaps, learned Additional Advocate General has raised such plea in oblivion of the fact that according to the report, submitted by respondent No.6, the payments were made in favour of petitioner No.1 in the months of July and August, 2019, thus the said argument cannot be given any weightage.

13. Now coming to the case-law referred by learned counsel for respondent No.5, I am of the view that the same is inapplicable to the facts and circumstances of the present case inasmuch as in the matters of Kashmir Sugar Mills Ltd. and M/s Hunza Sugar Mills (Pvt.) Ltd. (Supra) it was specifically mentioned in EPO Circular No.A/2015 that shipment should be made within 45 days from the date of approval by the State Bank of Pakistan which is not position in the case in hand. As far as case of M/s Bolan Steel Industries (Pvt.) Ltd) (Supra) is concerned, suffice it to note that in the said matter the question in pith and substance revolved around the Fuel Price Adjustment which has no connectivity with the payment of subsidy. Now coming to 3 Wazir Khan the case of Azam Wazir Khan (Supra), I am of the view that instructions, issued by the State Bank of Pakistan to the Financial Institutions, to stabilize the financial system are binding but when it is acting as a regulatory body it cannot withhold the amount due to any individual. So far as the case of Bahadar Khan Khan and others (Supra) is concerned, sufficie it to note that in the said case the apex Court of the country held that non-publication of Notification dated 20.11.1979 relating to pension and retirement benefits of officers/executive of the bank in the official gazatte do not render the said notification in-executeable whereas in the matter in hand when the State Bank made payment in line with the decision of the Federal Government, it was supposed to continue the said procedure till the time is receives any communication from the relevant authority viz. the Provincial Government or Federal Government. Mere issuance of letter by Section Officer without notification of the decision of the Provincial Cabinet cannot be considered as sufficient notice of public-at-large.

14. For what has been discussed above, I see no hesitation to hold that respondents failed to justify withholding of outstanding amount of the petitioners. Consequently, this petition is accepted and respondent No.5 is directed to release the outstanding amount in favour of petitioner No.1 to the tune of Rs. 184,040,000/- forthwith. No order as to costs. MQ/E-3/L Petition allowed.