Is Pakistan paying an economic cost for judicial delays?


At this moment in time, an estimated number of one trillion rupees is reportedly parked in unwarranted litigation. Cases are left undecided for years and we are left taking funding from different donor agencies, whilst simultaneously increasing tariffs and devaluing our own currency to meet requirements for this funding. The recent deal on the Bahria Town case i.e. the Supreme Court accepting the offer of 460 billion rupees (approximately 3.5 billion US dollars) from a property tycoon is a clear example. Considering that the offer for a deal had been available for almost a year, and keeping in mind currency devaluation, had the case been decided sooner, the deal would have been equivalent to 4.6 billion US dollars. Cases such as these or the Avenfield case are poised to create massive revenue for Pakistan, but only once they are decided and enforced on time.  

How does judicial delay cause poverty? Is it possible that while there are millions in Pakistan who have never even been to the courts, still suffer due to other people’s legal battles and subsequent delays in justice? Simply put, any funds lost due to judicial delay are funds that could have instead been spent on healthcare, education and infrastructure. Hence, if one thinks of judicial delay from a certain economic perspective, it can be stated that it is a phenomenon that directly affects the masses. This article below by advocate Malik Altaf Javaid addresses the particular nexus between judicial delay and mass poverty. 

How judicial delays negatively impact Pakistan’s economy – Malik Altaf Javaid

Pakistan’s Supreme Court recently accepted an offer worth 460 billion rupees from a property tycoon in the Sindh government/Bahria Town illegal land exchange case. The option to reach this deal was available since the 4th of May 2018, when the Supreme Court formed an implementation bench in its judgement on the same day. During this period, which is a little under a year, the Pakistani Rupee has further devalued to 38 rupees against the US Dollar. The amount of 460 billion rupees is now estimated around 3.5 US billion dollars.

The exchequer could have gained a further one billion dollars, had the matter been dealt with expeditiously. We need not to pay any markup/ interest on the gains made from this amount. There is no need to increase the electricity tariff or any imposition of taxes. Notwithstanding to the legality or otherwise of the decision of the Supreme Court, we lost more than 1 billion US Dollars owing to the delayed decision of the case. Meanwhile, Pakistan approached UAE, KSA and other friendly countries for economic packages and assistance. While Pakistan succeeded in getting such assistance from both Saudi Arabia and UAE, it would have also come with certain “geo-political” conditions.

One can argue that there was certain wisdom in including the provision of expeditious justice as a fundamental right in the 1973 Constitution of Pakistan.  However, the question which arises here is: how does judicial delay cause poverty? Millions of Pakistanis neither have litigation nor have they ever been to any courts in the country. Then, how can judicial delays caused in the cases of third parties affect them?

Unlike common perception, a brief answer to this question is: it does affect them, one way or the other! This is true! It might sound ridiculously far-fetched, but it is true. To put it simply, a substantial amount is incurred on the provision of expeditious justice. This issue is prevalent all over the world. As such, it can be said that there is “some” correlation between judicial delay and poverty.

This prompts one to think as to why the provision of expeditious justice has been placed at a paramount pedestal by the founders/creators of Pakistan’s 1973 Constitution. Almost similar, but differently worded rights have been bestowed on the citizens in every literate society. This fact also takes us a step further in believing that judicial delay is a phenomenon which directly affects the masses. The judicial delay seriously affects the socioeconomic and sociopolitical situation of the country. Let us discuss various examples in this regard.  The government’s chief source of income, which then becomes a major source of spending, is tax collection. Both the “payer” and the “payee” often end up with certain “issues”, leading to the filing of cases. In order to avoid judicial delay in such cases, separate tribunals have been established for tax related litigation. However, these tribunals are hardly functional for a sizable period of time. The political bickering and massive impact of the business community seriously hampers the functioning of these tribunals, which ultimately leads to a colossal delay in the disposal of such cases. The essential impact of these delays is that what could have been added to the national exchequer in a month or two, is instead crucified at the altar of judicial delay, which subsequently results in less spending on health, education and infrastructure.

At present, the revenue collecting authorities are lamenting that more than a trillion rupees of revenue are parked in litigation. This amount has gradually piled up owing to chronic cases, which have not reached their logical conclusion for years. Hence, while these revenue amounts are trapped in unwarranted litigation, Pakistan is seeking to get finances from various sources, such as the IMF. Whenever Pakistan succeeds in getting these finances or loans, the country needs to devalue its currency, increase electricity prices and/or impose new taxes to satisfy the requirements of the donor agency. However, if some attention is paid to the recovery of owed taxes, specifically those ensnared in litigation, the country can succeed in avoiding certain adverse circumstances.

The taxpayer in Pakistan, after original assessment, has four different appellate forums; starting from appeal before the departmental appellate authority to the Supreme Court. It is unfortunate to point out that two out of these four appellate forums, the Commissioner Appeals and Appellate Tribunal, normally take 2 to 5 years to decide on a single case. After this delay, the case may be taken to the High Court and then finally to the Supreme Court. This then takes an additional 2 to 5 years, or even more in some cases, for its decisions. Reportedly, the Appellate Tribunals in Pakistan have to decide cases involving some 460 billion rupees of revenue money. Roughly speaking, this amount is more than 3 billion US dollars in our present situation.

Reportedly, the tax cases pending before the High Court and Supreme Court have a potential of more than 1200 billion rupees (an amount in excess of 8 billion US dollars), while the commissioners of Inland Revenue have to decide the fate of cases involving an amount in excess of 250 billion rupees (an amount slightly under 2 billion US dollars).

In recent years, the National Accountability Bureau (NAB) has also surfaced as a potential source of recovery of public money. An example can be cited from the Bahria Town case, where the housing society has agreed to pay more than 3 billion US dollars in exchange for non-filing of NAB references and regularization of swapped land. We often hear the Federal Minister for Information, Fawad Chaudhry, alluring offenders to enter into plea bargains and enjoy their freedom. Though this proposition might seem ridiculous in western societies, it is also a legal proposition in Pakistan. According to NAB figures, the bureau is currently dealing with 179 inquiries related to mega corruption cases. In these cases, which are at different stages, 6 Voluntary Return applications and 4 plea bargain applications have been accepted by NAB. Besides these cases, from a period commencing from 01-07-2016 and ending at 30-06-2016, approximately 215 individuals under investigation have entered plea bargains with NAB and paid amounts ranging from PKR 27000 to 33 million. Since its inception, NAB has recovered an amount in excess of 323 billion rupees.

Currently, NAB is engaged with many major cases involving whooping amounts, however, again, amongst other factors, a serious bottle neck is judicial delay. To elaborate this fact, consider the Avenfield case, where our ex-PM Muhammad Nawaz Sharif and his daughter Maryam Safdar have both been sentenced and fined with a penalty of 10 million British Pounds. However, their sentence has been suspended in an appeal, which is likely to remain pending adjudication for an unidentifiable period. During this period, no steps were taken for the recovery of the imposed penalty and ultimately, this case, like others, might also fail to reach its logical conclusion. The most painful impact is the entrapment of 10 million British Pounds of public money; which, owing to the lack of interest by the government, will remain confined in a court file.

It should be kept in mind that these are only two important sources that are highlighted above, with other major sources such as bank loans or personal disputes not even discussed. It is not only the failure of recouping public money that adds to poverty but also all kinds of judicial delays have a similar effect. In the recent past, there has been substantial litigation wherein various persons, prompted by personal interests, challenged the establishment of industries on the pretext of its impacts on the environment. Alas, the entrepreneur ultimately had to flee from Pakistan, owing to non-disposal of injunction applications and/or the appeals. Pakistan never catered for this fact and silently kept on adding to growing poverty in the country, mainly because of lack of litigation and judicial reforms.

Even skillful entrepreneurs confined in prisons and their matters not decided expeditiously leave an overall negative impact on the economy. Let alone the financial impact, the emotional impact of fighting legal battles in Pakistan can be overwhelming. Being a lawyer, I heard people yearning in the courts: “Sahib please mera case resolve kar do, ab tu mera bacha bhi school nahi ja pa raha” – Sir please resolve my case, my son can’t even go to school anymore. Hence, such delays, while impacting the economic situation, also negatively affect the social dynamics of a society. These impacts can be summarized in the words of Ranil Wickremesinghe, the Sri Lankan Prime Minister. Mr. Wickremesinghe, speaking at the 14th SAARC Law Conference, lamented that in South Asia, five generations fight for a mere 120 yards of land. He pointed out judicial delays and the poverty caused by such abnormal delays.

There is no denying of the existing problems, such as neglected judicial infrastructure, lack of human resources and availability of skilled and trained labor force. Yet some panacea must be introduced to decide the cases involving public money. Perhaps additional benches can be constituted. The availability of judicial and technical members in Appellate Tribunals may also be ensured. This must be done to ensure that this factor be eliminated and the public money be recovered at the right time, which could provide substantial support to the national exchequer.  

The author is a practicing advocate and can be reached at

Leave a Reply

%d bloggers like this: