SC orders SBP to allocate Rs21b for Punjab, KP polls

ISLAMABAD    -    The Supreme Court of Pakistan Friday direct­ed the State Bank of Pa­kistan (SBP) to allocate Rs21 billion for holding of general elections in Punjab and Khyber Pa­khtunkhwa assemblies by April 17.

The apex court also ordered the State Bank and the Finance Minis­try/ Division to file the compliance reports on 18-04-23, while the fi­nance ministry report shall also include a con­firmation in relation to the AGPR. The Elec­tion Commission of Pa­kistan was asked to file a report on 18.04.2023 confirming that Rs21 billion have become available to it.

A three-member bench of the SC head­ed by Chief Justice of Pakistan Justice Umar Ata Bandial and com­prising Justice Ijaz ul Ahsan and Justice Mu­nib Akhtar heard in the chamber the imple­mentation of its April 4 order regarding the provision of funds to the Election Commis­sion of Pakistan (ECP).

Besides Attorney General for Pakistan (AGP) Usman Mansoor Awan, Special Secretary Finance Owais Man­zoor Samra, Addition­al Secretary Finance Amar Mehmood and Additional Secretary Finance Tanveer Butt, SBP officials including Acting Governor See­ma Kamil, Deputy Gov­ernor Inayat Hussain Chaudhry, Director Qa­dir Baksh and Proto­col Officer Mohsin Afzal and the ECP DG-Law appeared before the bench in the chamber.

The court order said; “The State Bank of Pakistan shall from Account I lying under its control and management (and which constitutes the princi­pal component of the Federal Consolidated Fund) forthwith allocate and release Rs21 Bil­lion for purposes of the general elections to the Punjab and KP Assemblies.”

It added that the State Bank shall in this regard immediate­ly send an appropriate commu­nication to the Finance Minis­try/ Division. 

The order said that the Minis­try/Division shall immediately issue a proper direction to the AGPR to increase the limit of the ceiling with respect to the Elec­tion Commission’s ID No.2826 by the said sum of Rs21 billion. It added that this position shall also immediately be confirmed to the Election Commission by the said Ministry/ Division which shall also ensure that AGPR also forthwith gives prop­er intimation and confirmation to the Election Commission. All this must be done at the earliest and at the absolute latest not later than the close of business on Monday i.e. 17.04.2023.

The order said that the sum of Rs21 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. All the entities i.e. the State Bank, Finance Ministry/Division, AGPR and the Election Commis­sion must act together and co­ordinate fully so that the order and direction of the Court is im­plemented within the stipulated timeframe.

The Court noted 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.

It continued that in compli­ance with the court direction, the Acting Governor, State Bank of Pakistan presented a state­ment setting out the funds and monies of the Federation/Fed­eral Government which are un­der the custody, control and management of the State Bank. It added that the Acting Gov­ernor explained about the 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% there­of as of the date for which the data was provided). It was fur­ther explained that the amount lying in Account I is not desig­nated for any particular or spe­cial usage whatsoever.

Furthermore, the bench said that the funds therein are not static in as much as there are regular (it seems almost dai­ly) inflows into, and outflows therefrom, as government re­ceipts flow in, and monies are released to meet Govern­ment expenditures. The Act­ing Governor stated that oth­er than Account I, the other 16 accounts were for special and designated purposes, carrying different amounts as set out in the table above.

It was explained to the Act­ing Governor that as per para 5 of the order dated 04.04.2023 made in a sum of Rs21 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.

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.

The bench said that 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 Rs21 Billion to the Election Commission for fulfilling its constitutional mandate for the holding of general elections to the Punjab and KP Assemblies.

The Secretary, with the assis­tance of the Attorney General, briefed the bench about the fi­nancial position of the feder­al government, with particu­lar reference also to the present and/or pending international obligations to the IMF.

It said that 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 trillion 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 maintained that 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 Rs21 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.

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.

AGP Usman Mansoor Awan submitted a written statement on behalf of the federal govern­ment, which said the National Assembly has rejected the Bill on 13-04-2023. Issuance of any monies from the Federal Con­solidated Fund is subject to par­liamentary approval, which has been denied to the federal gov­ernment, by the Parliament for the purpose of holding general elections to the Punjab and Khy­ber Pakhtunkhwa Assemblies. 

He also said, “As a conse­quence, the federal government is not authorized, under the constitution to ask either the State Bank of Pakistan, which is the custodian of funds in terms of Agreement dated 23-05-1949 entered into between the Presi­dent of Pakistan and the State Bank of Pakistan, or for that matter, any other officer and/or authority to release the funds so directed by the apex court.”

The bench on 4th April order inter alia said; “The federal gov­ernment shall forthwith and in any case by 10.04.2023 release and provide to the Commission funds i.e. Rs21 Billion for the general elections to the Punjab and Khyber Pakhtunkhwa As­semblies.”

As the government did not re­lease funds to the ECP, the Court therefore on April 12 issued no­tices to Governor and next most senior official of State Bank of Pakistan, Secretary and next most senior official of Minis­try of Finance and the Secretary and Director General (Law) of the Commission for April 14.