In a landmark decision, the Supreme Court of Pakistan has instructed the State Bank of Pakistan (SBP) to release funds amounting to Rs21 billion for the upcoming elections in Punjab and Khyber Pakhtunkhwa provinces. The court has directed the SBP to communicate this decision to the finance ministry by Monday, April 17.
According to the court order, the Rs21 billion shall be made immediately available to the Election Commission of Pakistan (ECP) as releasable and utilisable funds for the purpose of conducting general elections in Punjab and KP assemblies.
The court further emphasized that there were no financial or procedural difficulties, and no constitutional authorization issues that could hinder the immediate release of the funds in question. In fact, the court noted that the funds could be made available to the ECP within a day.
This directive for the release of funds was initially issued by a three-member bench of the Supreme Court, which included Chief Justice of Pakistan Umar Ata Bandial, Justice Ijazul Ahsan, and Justice Munib Akhtar, in a verdict dated April 4.
The government was given until April 10 to provide the Rs21 billion to the ECP, and the ECP was directed to report to the court on the government’s compliance with the order on April 11.
However, the ECP submitted a report earlier this week informing the court that the government had been unwilling to release the required amount for the elections. In response, the government referred the matter to Parliament for a decision, and Parliament defied the Supreme Court’s order by refusing to release the funds.
As a result, the Supreme Court issued notices to the finance secretary, SBP governor, Attorney General for Pakistan (AGP) Mansoor Awan, and the ECP, instructing them to appear before the judges’ chamber on April 14.
The SBP was also directed to provide records and details of all federal government funds under its control.
In accordance with the court’s directives, AGP Awan, SBP Deputy Governor Sima Kamil, finance secretaries, and ECP officials briefed the Supreme Court in an in-chamber hearing today on the government’s failure to disburse the Rs21 billion in funds for the elections in Punjab and KP.
The briefing, which lasted for over an hour, took place in the chamber of Chief Justice Bandial, with Justices Ijazul Ahsan and Munib Akhtar in attendance.
The Court Order
Hours later, the Supreme Court issued a unique written order regarding the statement presented by the acting governor of the State Bank of Pakistan (SBP) in court. The statement outlined the funds and monies of the federal government that were under the custody, control, and management of the central bank.
The court order, which was quoted in the statement, mentioned that the SBP acting governor clarified that the funds in Account No. I (Non-Food) constituted the largest component of the Federal Consolidated Fund, amounting to 98.77% as of the date provided.
The order further explained that the funds in Account ‘I’ were not designated for any specific usage and were subject to regular inflows and outflows to meet government expenditures.
The SBP acting governor also stated that the other 16 accounts were for special and designated purposes, carrying different amounts, as mentioned in the order.
Following this briefing, the court order cited the Supreme Court’s April 4 verdict, stating that an amount of Rs21 billion was required for holding elections in Punjab and KP. The acting governor confirmed that this amount could be made available from the federal government’s funds with the SBP if directed by the court.
The order also mentioned that Finance Ministry Special Secretary Awais Manzur Sumra, with the assistance of the Auditor General of Pakistan, gave a presentation to the court regarding the financial position of the government, including international obligations to the IMF.
The judges noted in the order that based on the figures presented, the disbursement of Rs21 billion for the general elections would have minimal impact on the federal government’s obligations.
The order further stated that the Finance Division confirmed that the government regularly raised funds through bond markets, and the amount in question would not have a significant impact in that context. The Finance Division also confirmed that if ordered by the court, the process of making Rs21 billion available to the Election Commission of Pakistan (ECP) would be concluded rapidly by April 17, 2023.
Based on these briefings, the three judges observed in the order that the required Rs21 billion could be made available to the ECP immediately and within a day.
The order also referenced Article 84 of the Constitution, which authorized the federal government to make expenditures from the Federal Consolidated Fund for new services not included in the Annual Budget Statement, subject to ex post facto approval from the National Assembly as per the procedure laid down in the Constitution.
After thoroughly considering all relevant factors, we are of the firm opinion that there are no obstacles or difficulties, whether financial, procedural, or constitutional, in immediately releasing Rs21 billion to the Election Commission of Pakistan (ECP) to fulfill its constitutional mandate of conducting general elections in the Punjab and Khyber Pakhtunkhwa (KP) Assemblies.
The court has directed the State Bank of Pakistan (SBP) to allocate and release Rs21 billion from “Account I” under its control and management, which constitutes the main component of the Federal Consolidated Fund, for the purpose of elections in Punjab and KP.
The SBP is instructed to promptly communicate with the Ministry of Finance/Division in this regard, and the finance ministry is to issue immediate and proper directions to the Accountant General Pakistan Revenues (AGPR) to increase the ceiling limit with respect to the ECP’s ID No. 2826 by the said amount of Rs21 billion.
The finance ministry is also directed to confirm this position to the ECP without delay and ensure that the AGPR provides proper intimation and confirmation to the election commission. All of these actions must be completed no later than the close of business on Monday, April 4, 2023.
This will make the sum of Rs21 billion available to the ECP as immediately releasable and usable funds for the purpose of conducting general elections in the Punjab and KP assemblies.
The court further directs the SBP, finance ministry, AGPR, and ECP to work together and fully coordinate to ensure compliance with the court’s order within the specified timeframe. The finance ministry is required to submit a compliance report, including confirmation from AGPR, by April 18 (Tuesday). The ECP is also directed to submit a report by Tuesday confirming that Rs21 billion has become available to it as stated above.
Regarding the federal government, the court states that this order shall be deemed sufficient authority for all purposes of authorizing expenditure from the Federal Consolidated Fund.
The federal government is expected to obtain ex post facto approval and sanction from the National Assembly in accordance with Article 84 and other applicable provisions of the Constitution.
The court clarifies that the matter stands adjourned only in relation to the funds for elections in Punjab and KP, but may be taken up again as deemed appropriate by the court if the need arises.
The AGP Submits Report
The AGP (Accountant General Pakistan Revenues) has submitted a report on behalf of the government, outlining their stance on the release of funds from the Federal Consolidated Funds. The report, which has report states that the release of funds is subject to approval by parliament as per the Constitution. The government had presented a bill in parliament seeking the release of funds, but it was rejected.
The report further explains that the government has fulfilled its legal obligations, but it is not authorized under the Constitution to request the SBP (State Bank of Pakistan) to release the funds.
Meanwhile, ECP (Election Commission of Pakistan) Secretary Umar Hameed has stated that the hearing was held in a pleasant atmosphere and he presented the commission’s stance on the release of funds to the judges.
He also mentioned that the ongoing census in the country was discussed, as it would require four to five months for the demarcation of constituencies after its completion. The ECP is now waiting for the court to issue its order.
Parliament Rejects Bill for Election Funds
Yesterday, a historic event took place in the National Assembly of Pakistan as a money bill tabled by the government to seek funds for conducting elections in Punjab and Khyber Pakhtunkhwa was rejected by a majority vote.
Finance Minister Ishaq Dar informed the house that the bill, called the Charged Sums for General Election (Provincial Assemblies of the Punjab and the Khyber Pakhtunkhwa) Bill 2023, had been recommended for disapproval by the standing committee after being introduced on April 10.
According to the bill, the funds required for conducting elections in both provinces would be considered as an expenditure charged upon the Federal Consolidated Fund (FCF), which includes all revenues received by the federal government, all loans raised by the government, and all money received by it in repayment of any loan.
The bill also stated that it would override other laws and have effect notwithstanding anything contained in any other law, rules, and regulations while it was in force.
Furthermore, the bill mentioned that the proposed law would stand repealed once elections for both assemblies were held, and it was not necessary for general elections and polls in Sindh and Balochistan assemblies to be held for the repeal to take effect.
The rejection of the bill in the National Assembly has significant implications for the government’s plans to conduct elections in Punjab and Khyber Pakhtunkhwa, and the situation is likely to evolve further in the coming days.
Supreme Court Warns Government of Consequences for Delaying Election Funds
During a recent summons of the Attorney General for Pakistan (AGP) and other officials to the Chief Justice of Pakistan’s chambers, the Supreme Court issued a warning to the federal government regarding the consequences of failing to comply with the April 4 directive for the release of funds for elections.
“The consequences of defying the court are well-established and known,” the court stated in its order.
The court further emphasized that individuals who initiate or encourage disobedience or defiance of the court can be held liable and accountable.
The current prima facie disobedience by the government puts the timely holding of general elections, as mandated by the Constitution, at risk, the order noted. It further highlighted that the provision of funds for such a vital constitutional purpose requires immediate attention and takes precedence over proceeding against those who may have committed contempt of court.