LHC dismisses pleas against CCP establishment

LAHORE: The Lahore High Court on Monday dismissed a long pending set of petitions filed by almost all the industries challenging the establishment of the Competition Commission of Pakistan (CCP) and the competence of parliament to enact a law on the subject of competition.

Initially, the LPG (liquefied petroleum gas) Association of Pakistan had filed a petition before the high court in 2009 when the CCP started taking action in terms of price regulation. On May 27, 2009, a single bench had granted stay to the association and suspended the CCP proceedings.

Later, other industries, including cement, sugar, oil and gas, power, fertiliser, healthcare, education, telecom, real estate and infant milk/juices also approached the high court on similar grounds and got stay against the commission’s actions.

The litigation went to the Supreme Court, which had on June 25, 2009, remanded the matter back to the high court with a directive to decide it afresh at the earliest. The petitions were last heard in June 2017.

First petition filed in 2009 when commission started taking action in terms of price regulation

Lately, a full bench comprising Justice Ayesha A. Malik, Justice Shahid Jamil Khan and Justice Sajid Mahmood Sethi resumed the hearing on the petitions in June this year and reserved its judgement on July 16.

The main questions before the bench were whether parliament had the legislative competence to enact Competition Act 2010 and earlier ordinances from 2007 to 2009, whether the impugned legislation created a parallel judicial system in violation of Articles 175 and 203 of the Constitution and whether the only appellate jurisdiction before the Supreme Court against the CCP’s actions was constitutional.

The petitioners’ case was that there was no entry in the Federal Legislative List (FLL) which allowed parliament to enact law on the subject of competition. They argued that parliament did not have the power to make laws on matters which were not enumerated in the FLL as the residue power was vested with the provinces after the 18th Constitution Amendment.

They said the FLL did not contain any entry on the subject of competition or monopolies or in any manner with reference to anti-trust restrictions.

The attorney general argued that competition was a federal subject and fell within parliament’s legislative authority under the provisions of the Constitution.

The bench in its judgement authored by Justice Malik did not agree with the petitioners and observed that parliament could legislate on the subject of trade, commerce, industry and intercourse so as to keep it ‘free’ throughout the country and in the interest of free competition.

It ruled: “Neither the Ordinances nor the Act are ultra vires of the Constitution for want of legislative competence nor can the constitutional mandate be read down limiting the application of the Act to interprovincial matters. The federal legislature is therefore competent to enact law on the subject of competition under the Constitution.”

Deciding the question of parallel judicial system in terms of Competition Appellate Tribunal (CAT), the judgement observed that the establishment of administrative courts and tribunals for federal subjects was provided for in the FLL of the Constitution, which authorised parliament to establish administrative courts and tribunals in relation to federal subjects.

“We do not agree with the petitioners’ contentions that a parallel judicial system has been created or that administrative tribunals cannot be established for any other purpose other than Article 212 of the Constitution or that CAT is a ‘court’ under Article 175 of the Constitution,” it added.

About the appellate jurisdiction of the apex court, the bench remarked that the subject of enlargement of jurisdiction of the Supreme Court under the FLL was a subject which exclusively fell within parliament’s domain, so parliament could confer jurisdiction on the SC, by law, if the Constitution permitted it.

The bench also observed that the show-cause notices and proceedings by the CCP would remain intact as legal cover had been given to them under Section 62 of the Act.