h1

1997 SCMR 641

MESSRS GADOON TEXTILE MILLS AND 814 OTHERS

V/S

WAPDA AND OTHERS


Frame 2

Per Ajmal Mian, J.

(a) Constitution of Pakistan(1973)Art. 153, 154, 155, 160, 161 & Fourth Schedule

Federal Legislative, Item No. 3 and concurrent Legislative List, Item No. 34–Council–Scope–Articles 153, 154, 155, 160 and 161 provide an inbuilt self-adujucatory and self-executory mechanism in the constitution set-up–council of common interest in not required to make decision as to the day to day working of the corporations mentioned in fourth sched, Part II of federal legislative list of the constitution of Pakistan and of the related institution but is supposed to formulate and regulate general policy matters as to their working, which may include general policy for the working of WAPDA–Electricity–fixation of tariff for the supply of electricity to consumers by WAPDA–council of common interests has no power to determine the tariff for distribution of electricity by WAPDA to consumers directly and there is no constitutional mandate that council of common interests, approval is to be obtained before enforcing any tariff– Words “formulate”, “regulate”, “policies”, “control” and “supervision” as employed in Art. 154(1) of the constitution– connotation–[Words and phrases].A perusals of clause (1) of Article 154 of the constitution indicates that it has there parts. The first two parts relate to the formations and regulations of policies i.e. it provides that the council shall formulate regulate policies–

(i) In relation to matters in Part II of the federal Legislative List;

(ii) In so far as it is in relation to the affairs of the federation, the matters in Entry 34 (electricity) in the concurrent Legislative List.

Whereas the third part envisages that the council shall exercise supervision and control over related institutions.

In the opening part of clause (1) of Article 154, three keywords are used namely “formulate”, regulate” and ” policies”. [p. 700]J

The effect of the incorporation of Article 154(1) and Article 161(2) of the constitution is not that C.C.I has the power to determine the tariff for distribution of electricity by WAPDA to the consumers directly. The object of the incorporation of clause (1) of Article 154 of the constitution is reflected inter alia in para. 33 of the constitution committee’s Report namely, “to conform to the spirit of federation, a new arrangement has been worked out to ensure effective participation of the provincial Government in sensitive and important spheres to national life”. To achive the above objective, C.C.I. consists of Chief Ministers of the four Federating units and an equal number of Members from the federal Governmnet which generally includes the prime Minister of Pakistan as provided under Article 153(2) of the constitution. [p. 703]K

Article 153, 154, 155, 160 and 161 of the constitution provide an inbuilt self-adjudicatory and self-executory mechanism in the constitution set-up. The object seems to be to generate sense of participation among the federating unnits on sensitive issues of national impotance referred to in the above Articles, and to ensure–
(i) resolving of any dispute arising between one or more federation Units inter see between the federation and a federating Unit;

(ii) Payment of the proceeds of federal duty excise on natural gas levied at well-heads and collected by the federal Government to the federating units in which the well-heads and collected by the federal Government to the federating Units in which the well-heads of natural gas are situated:

(iii) Payment of net profits earned by the federal Government or any undertaking established or administered by the federal Government from the bulk generation of power at a hydro-electric station to the federation Unit in which the hydro-electric station is situated:

(iv) Carrying out direction issued by the parliament in its joint session to C.C.I.

(v) Equitable distribution of federal taxes among the federating Units and resolve other financial issues (Article 160 of the constitution).

The matters referred to in part II of the federal Legislative List and Item 34 of the concurrent Legislative List (elecricity) are to be brought before C.C.I. for formualting policies. Before taking any action towards privatisation of WAPDA, it was mandatory to heve brought the above matter before C.C.I. The rationale being that hydro-power station were situated in N.W.F.P. which was then opposing privatisation of WAPDA. It would not have been proper on the part of the federation to privatise above hydro-powerstation and to create private interest in such sensitive installations situated in a federation Unit without the participation of the federation units. So the forum for ironing out scuh a controversy was C.C.I.
[p. 703]L

The words “formulate”, “regulate”, “policy”, “control” and “supervise” employed in clause (1) of Article 154 of the constitution carry wide connotations. The word “formulate” inter alia carries the meaning, set forth, reduce to a formula: whereas the word “regulate” inter alia connotes control, subject to guidance. The word “policy” inter alia carries meaning, as the general principles by which a Government is guided in its management of public affairs. the word “control” inter alia connotes to regulate or guiding or restraining power over; whereas the word “supervise” inter alia carries the meaning, to look over and to inspect. The above words cannot be construed in isolation, but the same are to be construed in the context in which they are employed. In other words, their colour and contents are to be derived from their context. C.C.I is not required to make decision as to the day to day working of the corporations mentioned in part II of the federal Legislative List and of the related institutions. It is supposed to formulate and regulate general policy matters as to their working, which may include general policy for the working of WAPDA. It may even include a guideline for the fixation of tariff by WAPDA but such guideline cannot be inconsistent with subsection (2) of section 25 of the WAPDA Act. Which lays down statutory parameters for fixation of tariff. The C.C.I is not required to determine tariff for the supply of electricity by WAPDA to the consumers and to vary the same from time to time as this comes within the ambit of day to day working. Fixation of tariff of electricity depends on various factors. Which regularly and frequently fluctuate warranting revision of tariff from time to time. There are a number of other corporations and related institutions under the administrative control of the federal Government, which deal with manufacture and sale of various goods/machinery. can it be urged that it is mandatory that C.C.I should fix the prices of the above items from time to time. The composition of C.I.I which comprises Chief Ministers of the four federating Units and four nominees of the federal Government, who generally include the prime Minister, militates against taking of above exercise which if taken in respect of all corporations and related institutions referred to in Article 154(1), will be a full time job. The prime Minister and the Chief Ministers instead of running the federation and the federating Units shall mostly be busy in the above exercise. The requirement under Rule 5 of the rules of procedure of C.C.I to summon a meeting at lease once in a year also lends support to the view. [p. 704]M

Last part of clause (1) of Article 154 of the constitution, namely and shall exercise supervision and control over related institution “does not cover WAPDA even of a related institution is not covered by the expression “supervision” and control.” for the foregoing reasons. furthermore, admittedly C.C.I had not laid down any guide-line for determining the electricity tariff for WAPDA and in the absence of any such guide-line, it cannot be urged that the tariff is question is violative of Article 154(1) of the constitution. Additionally, the aforesaid Articles including Article 154 were intended and designed for the protection of the federating Units interest. [p. 705]N
(b) Constitution of Pakistan(1973) Art. 153 & 154

Council of common interests–object and historical background of council’s creation, its functions and object and functions elaborated. [p. 767, 768]KK & LL

(c) Constitution of Pakistan(1973) Art. 153, 154 & Fourth Sched

Federal Legislative List–Rules of procedure of the council of common Interests, Rr. 10, 11 & 14–West Pakistan Water and power Deveplopment Authority Act (XXXI of 1958), preamble–council of common Interests–Domain –pivitol position occupied by council of common interests in the structure of constitution especially its executive and administrative authority in matters falling in part II of the federal Legislative List emphasized–Words “formulate and regulate policies” used in Art. 154, constitution of Pakistan –connotation–Article 154, constiuttion of Pakistan vests power in council of common Interests to formulate and regulate policies and exercise supervision and control over institution related to matters in Fourth Sched., Part II Federal Legislative List–WAPDA being in Part II Federal Legislative List of fourth Sched of the constitution of Pakistan, falls regulate its policies–Meaning of words “formulate”, “regulate” “policy” expounded–[Words and pharases].

Article 154 vests power in CCI to formulate and regulate policies and exercise supervision and control over institution related to the matters in Part II of the Federal Legislative List including WAPDA. This interpretation finds full support from the constitution Accord, clause 25 of which provides that in respect of railways, mineral oil natural gas; liquids and substances declared by federal law to be dangerously inflamable and the items now enumerated in Entry 3 in part II of hte federal Legislative List and the item of electricity in so far it ralates to federation, “the council shall exercise control on policy. The institutions relating to these items shall function under the control and supervision of this council”. This clearly indicates that the CCI has not only to formulate and regulate policy but shall also exercise supervision and control as well. Article 154 has to be read with part II of the federal Legislative List. For purpose of the case of WAPDA it must be read in conjunction with Entry 3 of part II. It seems anamolous that CCI shall formulate and regulate policies without having any control or supervision. The word regulate in this context must be given wider meaning. The word formulate and regulate policies used in Article 154 have great significance and their meaning and interpretation will define the jurisdiction, power and sphere of activity of CCI. The word “policy” mean general principles by which a government is guided in its management of public affairs or legislature in its measures. This term as applied to law, ordinance or rule of law, denotes its general purpose or tendency considered as directed to the welfare or prosperity of the state or community”. The dictionary meaning of the word ‘formulate’ is to “set forth systematically”. formulation of policies is a systematie act to provide rule, regulation, scheme, plan and principles is a systematic act to provide rule, regulation, scheme, plan and principles for managing, administering, orgnaizing, running, developing and controlling an organization, authority, corporation, institution or government. The dictionary meaning of the word ‘regulate’ is to control, govern or direct by rule or regulation (The New shorter oxford Dictionary, 1993) “to control, direct or govern according to a rule, principle or system; to make uniform, methodical, orderly”. (Webster’s New World Dictionary, Second College Edition. In Chambers’ Twentieth Century Dictionary at page1138 this world is defined to mean “to control, to adapt, or to adjust by rule”. It is synonymous with the word “control” or “govern”. Accordingly, in ordinary parlance it implies the right to prescribe and enforce all such proper and reasonable rules as may be deemed necessary and wholesome in conducting an avocation in a proper and orderly manner.

Any person authorised to regulate any matter will have the right to prescribe rule and enforce and govern by exercising control and supervision over it. Unless the context otherwise permits, word ‘regulate’ is capable of broad meaning and wide implication. So far WAPDA is concerned, CCI has the authority not only to lay down rules and chalk out plan for its development, finances and administrations but to supervise, control and oversee it. [p. 769] NN

(d) Constitution of Pakistan (1973) Arts. 154(5) & 184(1)

Council of Common Interests—Domain—Provision of Art. 154(4), Constitution of Pakistan (1973), indirectly affects the jurisdiction of the Supreme Court under Art. 184(1) only,—[jurisdiction]. [p. 771] QQ

(e) Constitution of Pakistan (1973) Art. 154

Interpretation of Art. 154 of the Constitution of Pakistan (1973)— Functions and rule of procedure of Council of Common Interests.

The heading of Article 154 is: “Functions and Rules of Procedure”. The expression ‘functions’ is a compendious expression; it comprehends the powers and duties of the Council. The power, coupled with a duty, of the Council is to formulate and regulate policies in relation to matters in Part II of the Federal Legislative List. To formulate means to make, or to prescribe a formula. To regulate is a power of governance continuing in its nature. The power to formulate and regulate policies is in relation to matters in Part II of the Federal Legislative List. The expression ‘matters’ obviously means all the matters mentioned therein. [p. 831] YYY

From the guidance to be gleaned from the Parliamentary history of Article 154, position that emerges is—

(i) that the matters dealt with in Article 154 are matters in which the Provinces have a crucial and vital interest;

(ii) that the purpose of the creation of the Council of Common Interests was to enable the participation of the Provinces in the policy decision-making in respect of these matters;

(iii) that the Council of Common Interests is an independent constitutional body, with an important constitutional role to play, answerable directly to the parliament without any interference from the cabinet or the executive Government of the Federation;

(iv) That authority of the federation stands, to the extent defined in Article 154, abridged, and to that extent, it stands vested in the council; and

(v) that the provision of Article 154 are mandatory in character. The consequences that inevitably flow from the provisions of Article 154 are: First, that if a matter falls within the powers of the council of common interests under Article 154, it must be placed before it must be placed before it. It is wrong to think that the function of the council is to resolve disputes and that it is to be activated only when there is a dispute to be resolved. Secondary, the policy decision by the council of common Interests must precede any decision by the federal Government or for that matter any of its instrumentalities such as the Authority for instance if it is a policy decision to be taken by the council of common interests whether or not the Authority should obtain a loan from a foreign agency, then that decision must be taken by the council before the loan is obtained. Thirdly, if the council has made a policy decision in the performance of its functions under Article 154. it is binding upon the federal Government and the Authority. This is the necessary result of Article 154 being a constitutional provision and it being of mandatory character. [p. 830]XXX

(f) Constitution of Pakistan(1973) Art. 154

Word “policy” as used in Article. 154 of the constitution–connotation — [Word and phrases] [p. 83]AAAA

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