It rejected the appeals and said the mill owners would not be allowed to do business in the shifted setup after two months from Thursday (September 13, 2018). They were ordered to remove installation and machinery from the mills within two months. The short order also ruled that the mills building and setup shall remain intact, while the building could be used for any other lawful business.
The owners of Haseeb Waqas Sugar Mills, Abdullah Sugar Mills, Chaudhry Sugar Mills and Ittefaq Sugar Mills had filed an appeal against the Lahore High Court (LHC) decision. The Punjab government in 2006 had issued a notification that banned the shifting of the mills from one district to other.
However, on December 4, 2015 through another notification the Punjab government, regularized the relocation of the factory by clarifying that the ban notification does not cover the relocation of the sugar crushing units. It allowed the owners of Chaudhry Sugar Mills, Ittefaq Sugar Mills in Sahiwal, Haseeb Waqas Sugar Mills in Nankana Sahib, Abdullah (Yousaf) Sugar Mills in Sargodha and Abdullah Sugar Mills in Depalpur to move the units to other districts.
Former secretary general of Pakistan Tehreek-e-Insaf, Jahangir Khan Tareen and the owners of Indus Sugar Mills and RYK Sugar Mills had challenged the relocation of mills from Central Punjab to South Punjab in the LHC. They had slammed a 2015 notification through which the Sharif family had managed to obtain permission to move sugar mills despite a ban.
Their stance was that the relocation of a sugar mill is not only violation of the Punjab Industries (Control on Establishment and Enlargement) Ordinance 1963, but also the Punjab government notification 2006, which had banned the shifting of the mills. A single bench of LHC Justice Ayesha A Malik on October 11, 2016 had stopped the Sharifs from shifting the sugar mills to new locations.
The division bench of LHC on September 13, 2017 not only upheld the verdict of Justice Ayesha but also directed the mills to dismantle and remove their plant and machinery within three months and move to the locations where they were when the court had issued its first stay order in the case.
During the proceedings, Ali Sibtain Fazli, representing Haseeb Waqas and Abdullah Sugar Mills, contended that the relocation policy had not violated the ban on establishing new sugar mills. The relocation of a functional sugar mill is not the same as setting up a new one, he stated.
The Chief Justice remarked it is the misconstruction of the law. He said a thing which could not be allowed to do directly can't be done indirectly. He argued that the relocation of the factories in question had not enhanced overall sugar production capacity. There was no violation of a ban or damage to the national interest. He argued that that the policy had aimed to allow relocation in order to protect the sugar industry.
The bench ruled that relocating the mills was not different from setting up new sugar mills, while the relocation notification was ultra vires of the ordinance. The bench observed the appellants (sugar mills) had not only established new mills by relying on a misconceived interpretation of the ban and Section 3 of the ordinance, but they had also disregarded the court's restraining orders.
"This is the bleakest aspect of the case, which tells tales of how court orders have been repeatedly flouted and rule of law trampled upon by the appellants," it added. The bench ruled that the appellants, in disregard of the law and stay orders, had relocated and completed the construction of the mills and began operations at the new locations in southern Punjab. He said that the high court's judgement has usurped the fundamental right to carry out trade and business at a location of its choice and it is against the Article 18 of Constitution.
The lawyer contended that the ban was applicable to the case of setting up of a new sugar mill as well as enhancement in the existing capacity. Therefore, the petitioner's case being of relocation does not cover under the ban notification. He argued that the 2006 notification does not impose a restriction on relocation of existing sugar mills since such a move would leave the total crushing capacity installed in Punjab unchanged. He also argued that the LHC judgement had usurped its fundamental right to carry out trade and business, including production of sugar, at any location of its choice.
Malik Abdul Qayyum and Makhdom Ali Khan also argued on the behalf of the Sharif family's sugar mills. Aitzaz Ahsan representing JDW, a sugar mill of Jehangir Tareen, argued that the mills were constructed at new locations. He said over the years, the provincial and the federal governments had prohibited the establishment of new sugar mills in Bahawalpur, Muzaffargarh, Rajanpur and Rahim Yar Khan in order to protect the cotton crop.