Judicial activism and Pakistan’s economy

Economic justice

Courts involvement in economic matters has once again triggered a debate over judicial activism versus judicial restraint


By Shahzada Irfan Ahmed

The recent orders by the Supreme Court for removal of former National Bank of Pakistan (NBP) president Ali Raza and the return of mobilisation advances to the government by the RPPs (Rental Power Projects) have once again triggered the debate over judicial activism versus judicial restraint.

There are quarters who laud the apex court’s role in purely economic matters, which they believe are being ruined due to state favouritism and corruption. However, there are those who believe the damage was bigger than the correction intended at. They cite the matters pertaining to fixing of sugar prices, cancellation of Pakistan Steel Mills’ privatisation and so on.

The NBP president was stopped by the court from continuing his fourth term in the office which the petitioner claimed had been awarded to him in violation of the Banking Nationalisation Act, 1994. Under this Act, a person can be appointed as NBP president for not more than two terms.

Raza’s supporters say the asset base of NBP crossed the Rs1 trillion mark in 2010, up from Rs372 billion when he joined ten years ago. The bank’s after-tax profits had also risen from Rs461 million to Rs18 billion over the same period.

This performance does impress his opponents, but they say the government should have given a corporate status to the bank if it wanted to bypass laws applicable on nationalised banks. Under the corporate status, the board of directors is authorised to approve decisions like these.

Jawad Hasan, Advocate Supreme Court and Additional Advocate General Punjab, backs SC’s involvement in purely economic cases. He tells TNS, “It’s the function of the executive to protect the rights of people and if it doesn’t, then the apex court can intervene.”

Jawad Hasan says the issue in question falls under the category of people’s right to trade and profession and the court can take action in cases of public importance under Article 184 (3) of the Constitution of Pakistan.

About the non-compliance of SC orders regarding sugar prices, Jawad says it’s binding on all courts and departments to obey its orders under Article 189. “Anyone not doing that can be proceeded against on charges of contempt under the Article 204. The apex court can proceed against sugar industry players under this article any time if it wants to.”

He does not agree that Article 175 (2) of the constitution limits the role of the apex court. This clause says no court shall have any jurisdiction except conferred upon it by the constitution or any ordinary law. He says it’s the constitution that awards SC the power to protect people’s right to trade, profession and life which are badly affected by wrong economic decisions.

A frequently given common argument against judicial activism is that it violates the sovereignty of parliament as declared by the Constitution of Pakistan and encroaches upon the domain of the executive. Those in support, however, assert that the sovereignty is vested in the constitution, and not the parliament. “The parliament can legislate against greater public interest and to benefit the privileged few,” they claim.

Chaudhary Fawad Advocate, a Lahore-based lawyer, does not support excessive involvement of judiciary in matters related to the country’s economy. He says the world has witnessed judicial activism in many countries and the Indian Supreme Court has taken judicial activism to new heights. “However, the Indian SC refrained itself from indulging into purely economic matters.”

Fawad says the SC has taken over the roles of policy-making, executive and legislature and its involvement in economic matters has harmed the economy. He says the Steel Mills case has laid down a precedent leading to end of the privatisation process in Pakistan. He disagrees with Jawad and says Article 175 (2) does limit SC jurisdiction. Fawad claims SC’s suo motu on major economic projects in the name of corruption has led to a complete breakdown of economic policy.

Fawad believes the SC mostly decides cases according to media perceptions and may not be correct always as judges are not economists. “The recent SC remarks on investment projects and on the conduct of investors have deterred foreign investor from investing in the existing environment,” he tells TNS.

However, Ahmad Rafay Alam, Advocate Supreme Court, says superior courts are not bound by any procedural limitations and the objective to provide justice to all becomes the driving force behind its proceedings. He tells TNS this suo motu jurisdiction is both a remarkable and controversial feature of public interest litigation. “Though it allows the superior courts to free themselves totally from the rules of procedure and precedent, this jurisdiction is too arbitrary and does not sit well within the scheme of Pakistani law.”

The explanation of what Rafay Alam says comes from a senior lawyer having sufficient experience of public interest litigation. He says it is believed where there is no provision of appeal, that law is of no value. “In case of SC decision, a person affected by it has nowhere to go.”

Secondly, he says, as time is too short in writ jurisdiction, judges have to decide immediately on the basis of supporting material provided by the petitioner(s). “It takes the respondents a long time to clear their position.” Citing an example, he says HBL was privatised in 2004, but its status is not clear even after the lapse of seven years as the matter was taken up by court.

“It is a common perception that every state actor is corrupt and inefficient per se which seems to have prompted the SC to intervene in so many cases,” the lawyer adds. He also holds the media responsible for creating hype and building pressure on the judiciary. Referring to Reko Diq case, he says the respondent was issued contempt notice for clarifying its position through a newspaper ad. On the other hand, the petitioner held a press conference just outside the apex court and discussed a sub-judice matter at length but no one took notice, the lawyer concludes.

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