In its historic judgement, announced here on Friday, the nine-member full Bench of the Supreme Court cancelled the sell-off deal of Pakistan Steel Mills, and declared the Letter of Acceptance (LOA) dated March 31, 2006 and the Share Purchase Agreement dated April 24, 2006 as "void and of no legal effect".
Disposing of the petitions against the privatisation of PSM, the Court has directed the Federal Government to expeditiously make the Council of Common Interests (CCI) functional and refer the matter of PSM privatisation to it.
In its short order issued after four-week hearing of the petitions, the Court said: "While exercising the power of judicial review, it is not the function of this Court, ordinarily, to interfere in the policy making domain of the Executive, which in the instant case is relatable to the privatisation of State-owned projects, as it has its own merits reflected in the economic indicators".
However, the Court said that the process of privatisation of Pakistan Steel Mills Corporation stood vitiated by acts of omissions and commissions on the part of certain State functionaries reflecting violation of mandatory provisions of law and the rules framed thereunder, which adversely affected the decisions qua pre-qualification of a member of the successful consortium (Mr Arif Habib), valuation of the project and the final terms offered to the successful consortium which were not in accord with the initial public offering given through advertisement. The Court said that for these reasons, the Letter of Acceptance (LOA) dated March 31, 2006 and Share Purchase Agreement dated April 24, 2006 "are declared as void and of no legal effect".
1."Conscious of the mandate of Article 153 and 154 of the Constitution, we hold that the establishment and working of the Council of Common Interests (CCI) is a cornerstone of the Federal structure providing for protection of the rights of the Federating units. Mindful that this important institution is not functioning presently and taking note of the statement made by the counsel for the Federal Government Mr Abdul Hafeez Pirzada that the process for making it functional is underway, we direct the Federal Government to do the needful expeditiously as far as possible but not later than six weeks.
2."The approval for the privatisation of Pakistan Steel Mills Corporation by the Council of Common Interests on 29th May 1997 continues to hold the field. But in view of the developments having taken place during the intervening period and the divergent stand taken by the counsel for the Federal Government to the effect that the afore-referred order was never recalled and the stand taken by the counsel for the P.S.M.C. that the matter of its privatisation was dropped subsequently, by way of propriety, it would be in order if the matter is referred to the Council of Common Interests (CCI) for consideration.
3. "The Privatisation Commission Ordinance No LII of 2000 is not ultra vires of the Constitution." The Bench comprised Chief Justice Iftikhar Mohammad Chaudhry, Justice Rana Bhagwandas, Justice Javed Iqbal, Justice Abdul Hameed Dogar, Justice Mohammad Nawaz Abbasi, Justice Tassaduq Hussain Jillani, Justice Saiyed Saeed Ashhad, Justice Hamid Ali Mirza and Justice Karamat Nazir Bhandari.
The petitioners, Wattan Party and Pakistan Steel People''s Workers Union, were represented by Zafarullah Khan and Abdul Mujib Pirzada. Sharifuddin Pirzada, Abdul Hafeez Pirzada, Wasim Sajjad, Khalid Anwar, Attorney-General Mohammad Makhdoom Ali Khan and AG Sindh Anwar Mansoor Khan appeared for the respondents.