P L D 2026 Lahore 54
P L D 2026 Lahore 54
Before Shahid Kharim, J
GHARIBWAL CEMENT LIMITED through Chief Coordination Officer
and another---Petitioners
Versus
The PROVINCE OF PUNJAB through Secretary, Mines and Minerals
Department
and 3 others---Respondents
Writ Petition No. 7572 of 2024 (and other connected petitions), decided
on 4th July, 2025.
(a) Punjab Mining Concession Rules, 2002---
----Rr.68(2) & 73(3)---Regulation of Mines and Oil-fields and Mineral
Development (Government Control) Act (XXIV of 1948), S.2---
Constitution of Pakistan, Art.24---Failure to pay an amount of royalty
and rentals, allegation of---Issuance of demand notice for compound
payment of markup on outstanding amount of royalty and rentals,
challenge to---Vires of law---Imposition of surcharge as other charges
when parent statute not providing a specific provision for imposition
of that surcharge---Legality and scope---The challenge in the present
case concerned the legality/vires of sub-rule (2) of R. 68 and sub-rule
(3) of R. 73 of the Punjab Mining Concession Rules, 2002, under which
markup was imposed on unpaid royalties and rentals---The question
before the Court was whether the Provincial Government, under its
delegated rule-making authority derived from the Regulation of Mines
and Oil-fields and Minerals Development (Government Control) Act,
1948, was empowered to introduce such a financial burden when the
parent statute itself contained no express provision authorizing the
levy of markup ?---Held: Provincial Government was not vested with
the powers to impose markup if in its opinion a person had failed to
make payment of the amount of royalty or rental as required by either
R. 68 or 73 of the 2002 Rules---The imposition of markup was strictly
not covered by the power to determine rates by the Provincial
Government and was in excess of that power---It had been assumed to
vest in the Provincial Government by the 2002 Rules---Such a power
related to taking of property which was a fundamental right enshrined
in the Constitution and could not be assumed to vest in the Provincial
Government by virtue of rules which specifically did not confer such a
power to inhere in the Provincial Government---If the legislature
intended to include the imposition of mark up in the broader power to
determine rates, a precise clause could have been added to S. 2---It was
noticeable that various clauses of S. 2 enjoined clear and specific
powers which did not include the levy of markup---Such a power, therefore, could not be derived unilaterally to enrich the Provincial
Government---Sub-rule (2) of rule 68 and sub-rule (3) of R. 73 of the
Rules 2002were declared ultra vires and illegal and they were struck
down---Consequently, the impugned order and the demands issued
under these rules were non est and were declared without lawful
authority and of no legal effect---The notices were also quashed---
Constitutional petitions were allowed, in circumstances.
(b) Constitution of Pakistan---
----Art.24---Punjab Mining Concession Rules, 2002, Rr. 68(2) & 73(3)---
Constitutional protection of property rights---Scope---Payment of mark-
up on outstanding amount of royalty and rentals---Constitu-tionality---
Clause (1) of Art. 24, without equivocation, states that no person shall
be deprived of his property save in accordance with law---The right to
hold on to property, thus, is a fundamental right and can only be
infringed if the law so permits---If the rule-making power of the
Provincial Government does not extend to the impost of mark-up then
Art. 24 is triggered and judicial review must be employed to undo the
essential wrongness of the action.
(c) Punjab Mining Concession Rules, 2002---
----Rr.68(2) & 73(3)---Regulation of Mines and Oil-fields and Mineral
Development (Government Control) Act (XXIV of 1948), S.2(8)---
Imposition of mark-up as other charges ---Imposition of mark-up was
not specifically authorized under the law---In order to justify
imposition of mark-up authorities attempted to bring the charge of
mark-up within the ambit of the term any matter ancillary or
incidental to the matters set out in the for going clauses ---Legality---
Ancillary and incidental powers---Ambit and scope---Clause (8) of S. 2
provided making of rules on any matter ancillary or incidental to the
matters set out in the forgoing clauses of S. 2---It was argued by the
respondent authorities that the payment of markup would be covered
by any matter ancillary or incidental to the matters set out in the other
clauses of S. 2---Validity---This argument had no legal basis---There was
no doubt that the term any matter ancillary or incidental to the
matters set out in the for going clauses did not cover the imposition of
markup in case of failure to pay the principal amount of royalty or
rentals---The reliance of the respondents was on clause (8) of S. 2 to
cull out a power to fix a penalty---That clause concerned with ancillary
and incidental powers---The precise argument, if accepted without
demur, would be that under the garb of this clause, the Provincial
Government was empowered to make rules to confer upon itself broad
and polycentric powers which could go beyond the permissible limits--
-This argument was constitutionally invalid and had no legal basis---
Sub-rule (2) of R. 68 and sub-rule (3) of R. 73 of the Rules 2002 were declared ultra vires and illegal and they were struck down---
Consequently, the impugned order and the demands issued under
these rules were non est and are declared without lawful authority
and of no legal effect---The notices were also quashed---Constitutional
petitions were allowed, in circumstances.
(d) Interpretation of statutes---
----Delegated legislation---Scope---Delegated legislation is intended to
advance the purpose of primary legislation and if a rule goes beyond
the rule-making power conferred by the statute or if a rule supplants
any provision for which power has not been conferred it becomes
invalid---So the rule is that a charge must be imposed by clear and
unambiguous language in the statute itself---If there is none, then no
power vests in the delegatee to do so by implication through Rules---
Delegated power to make rules is circumscribed by the strict periphery
of powers defined in the statute itself which cannot be exceeded to
assume more powers than granted by the delegator.
Sindh Revenue Board through Secretary Government of Sindh
Karachi and others v. Messrs Quick Food Industries (Pvt.) Ltd. and
others 2023 SCMR 1776; Sanam Javaid Khan through Attorney v.
Election Appellate Tribunal, Punjab and others 2024 SCMR 819; Messrs
Usman Enterprises v. Federation of Pakistan and 2 others 1997 MLD
3161; PLD 1988 SC 370 and Pakistan Electronic Media Regulatory
Authority v. Pakistan Broadcasters Association and others PLD 2023 SC
378 rel.
(e) Interpretation of statutes---
----Fiscal statute---Imposition of surcharge as other charges when
parent statues does not specifically authorize levy of that specific
surcharge---Legality---Fiscal statutes are to be interpreted strictly and
there is no room for any intendment---Surcharge cannot be levied
under the category of other charges .
(f ) Unjust enrichment---
---Definition, concept and scope---Unjust enrichment means any
unequal transfer of value without an adequate legal basis ---There are
three elements to the cause of action on the basis of unjust
enrichment; i) an enrichment of the defendant; ii) a corresponding
deprivation of the plaintiff; and iii) an absence of juristic reason for
the enrichment---For a claim of unjust enrichment to succeed, there
must be enrichment at the expense of the plaintiff and this enrichment must be unjust in such a way that there should be no lawful
justification for the same.
Orient Power Company (Pvt.) Ltd. through Authorized Officer v. Sui
Northern Gas Pipelines Limited through Managing Director 2021 SCMR
1728; Haider Industries through Managing Partner and others v.
Federation of Pakistan through Secretary, Law Division at Islamabad
and others 2016 PTD 2004 and Sui Northern Gas Pipelines v. Deputy
Commissioner Inland Revenue and others 2014 PTD 1939 rel.
Garland v. Consumers Gas Co. (2004) 1 SCR 629 and Supreme Court
of United Kingdom 2015 UKSC 66 ref.
Imtiaz Rasheed Siddiqui, Shahryar Kasuri, Raza Imtiaz Siddiqui, Ali
Umrao, Haider Aziz, Muhammad Saeed Anjum, Ms. Kanwal Tariq,
Shahzad Hassan Pervaiz, Irfan Dawood, Salman Ejaz, Ms. Ayesha Qazi,
Asad Abbas Butt, Ashiq Ali Rana, Muhammad Adil, Salman Alam Khan,
Arslan Amir Tarar, Faisal Anwar and Qari Habib ur Rehman Zubairi
for Petitioners.
Hassan Ijaz Cheema, A.A.G. with Rashid Bhatti, Law Officer and
Asad Ameer, Deputy Director for Respondents.
Date of hearing: 10th June, 2025.
JUDGMENT
SHAHID KARIM, J.---This petition and connected petitions W.P
No.7608 of 2024, W.P No.14788 of 2024, W.P No.15450 of 2024, W.P
No.14678 of 2024, W.P No.16877 of 2024, W.P No.51664 of 2024, W.P
No.12805 of 2024 and W.P No.33359 of 2025, challenge various orders
passed by the Secretary Mines and Minerals, Govt. of the Punjab. Prior
to that the challenge before the Secretary was to the order passed by
the Director General Mines and Minerals of different dates which were
upheld by the Secretary. The petitioners had challenged notices for
payment of certain amounts which included a demand for payment of
markup calculated under sub-rule (2) of rule 68 of the Punjab Mining
Concession Rules, 2002 ( the 2002 Rules ) as well as a markup on
purported outstanding rentals and renewals under sub-rule (3) of
rule 73 of the Rules. The legality of these rules was challenged before
the lower forums which did not find favour with the Secretary who
was of the opinion that these rules did not offend the primary
enactment, that is, the Regulation of Mines and Oil-fields and Minerals
Development (Government Control) Act, 1948 ( the 1948 Act ). These
petitions were argued primarily on the question of legality of the rules
to analyze whether these rules contravened the primary law, that is,
the 1948 Act and travelled beyond that law. It is contended that the
1948 Act does not confer power on the rule-making authority to impose markup in terms of rules 63(2) and 73(3) (the impugned rules).
It is common ground that as regards primary demand raised in these
notices, the petitioners are not in default and the dispute merely
revolves around the payment of markup in terms of the impugned
rules. This petition seeks the setting aside of order dated 14.11.2023
(by D.G Mines and Minerals) as well as order dated 26.12.2023 (by
Secretary Mines and Minerals). Similar orders have been passed in the
other petitions based on similar set of facts and legal propositions.
(They shall all be referred to as the Impugned Orders).
2. Learned counsel for the petitioners submitted that the impugned
rules are outwith the authority of the Government which is
empowered by section 2 of the 1948 Act to make rules. Section 2
provides that:
2. Power to Make Rules.---It is hereby declared to be expedient in the
public interest that the appropriate Government shall have the
power to make rules to provide for all or any of the following
matters, namely:-
(1) the matter in which, and the authority to whom application for
the grant or renewal of an exploration or prospecting license, a
mining lease or other mining concession shall be made, and the
prescribing of the fees to be paid on such application;
(2) the conditions in accordance with which the grant or renewal of
an exploration or prospecting license, and mining lease or other
mining concession may be made, and the prescribing of forms
for the execution or renewal of such license, lease, and
concessions;
(3) the circumstances under which renewal of a license, lease or
concession as aforesaid may be refused, or any such license,
lease or concession whether granted or renewed may be
revoked;
(4) the determination of the rates at which, and the conditions
subject to which, royalties, rents and taxes shall be paid by
licensees, lessees and grantees of mining concessions;
(5) the refinement of ores and mineral oils;
(6) the control of production, storage and distribution of minerals
and mineral oils;
(7) the fixation of the prices at which minerals and mineral oils may
be bought or sold; and
(8) any matter ancillary or incidental to the matters set out in the
foregoing clauses of this section, and the appropriate Government may, by notification in the official Gazette, make
rules accordingly.
3. By section 6 the appropriate Government means:
In this Act, " appropriate Government" means, in relation to mines
of nuclear substances, oilfields and gas fields, and development
of such substances, mineral oil and gas, the Central Government
and, in relation to the other mines and mineral development, the
Provincial Government.
4. In the present cases there is no cavil that the 2002 Rules have
been made by the Govt. of the Punjab. Section 68 relates to the
payment of royalty and provides that:
68 Payment of royalty.---(1) Royalty in respect of any mineral or
group of minerals won, mined or found as provided in rule 65
and disposed of shall be payable not later than 30 days after the
end of calendar month in which the mineral or group of
minerals is disposed of.
(2) Where any person has failed to pay an amount of royalty as
required by sub-rule (1). mark up calculated at the rate of one
per centum per day on the amount or any part thereof from time
to time remaining unpaid, shall be payable from the due date of
payment until all outstanding amount is paid.
(3) The holder of a mineral title shall submit, in respect of each
month and in such form and detail as the Licensing Authority
may determine, a return showing the amount of royalty to be
paid in respect of any mineral or group of minerals disposed of
in the month.
5. Similarly rule 73 relates to rentals and renewals and provides
that:
73. Rentals and renewals.--
(1) Annual rent in respect of a mineral title shall be paid in respect
of the category of mineral title in accordance with Schedule 2
and sub- rule (2).
(2) Payment of the annual rental pursuant to sub-rule (1) in respect
of a mineral title shall be made within thirty days after the date
of the issue of the mineral title and thereafter shall be made on
the same date of each year.
(3) Where any person has failed to pay any amount of annual rental
mark-up calculated at the rate of one per centum per day on the
amount or any part thereof, from time to time remaining unpaid, shall be payable from the due date of payment until all
outstanding amount is paid.
(4) A renewal fee in respect of the mineral title shall be paid in
accordance with column 3 of Schedule I.
6. Sub-rule (2) of rule 68 and sub-rule (3) of rule 73 are similarly
worded and impose a markup calculated at the rate of one per centum
per day on the amount or any part thereof from time to time
remaining unpaid which shall be payable from the due date of
payment until all outstanding amount is paid. Therefore, these rules
not only grant power to levy markup calculated at the rate of one per
centum but also compounds the payment of markup until all
outstanding amount is paid. But the essence of challenge of the
petitioners relates to the very power to levy markup on any amount of
royalty or rentals that remain unpaid by the petitioners.
7. We must begin by reminding ourselves the well-worn rule that
every action must have a legal pedigree. Section 2 which has been set
out above gives power to the appropriate Government to make rules to
provide for all or any of the matters delineated in section 2. Doubtless,
the power to make rules is circumscribed by the matters stated in
section 2 of the 1948 Act and, therefore, the rule-making authority
cannot travel beyond those matters and its hands are tied in this
respect. Clause (4) of section 2 grants power to the Provincial
Government to make rules regarding determination of the rates at
which and the condition subject to which royalties, rentals and taxes
shall be paid by the licensees, lessees and grantees of mining
concessions. There is no contention that rates have been determined
by the Provincial Government and this is a power peculiar to the
Provincial Government to do so. The petitioners do not contest this
basic enumeration regarding determination of rates by the Provincial
Government. The determination of rates however does not mean that
the Provincial Government is further vested with the powers to
impose markup if in its opinion a person has failed to make payment
of the amount of royalty or rental as required by either rule 68 or 73 of
the 2002 Rules. Certainly, the imposition of markup is strictly not
covered by the power to determine rates by the Provincial
Government and is in excess of that power. It has been assumed to
vest in the Provincial Government by the 2002 Rules. Such a power
relates to taking of property which is a fundamental right enshrined in
the Constitution of Islamic Republic of Pakistan, 1973 and cannot be
assumed to vest in the Provincial Government by virtue of rules which specifically do not confer such a power to inhere in the Provincial
Government. Article 24 provides that:
24. Protection of property rights: (1) No person shall be deprived of
his property save in accordance with law.
(2) No property shall be compulsorily acquired or taken possession
of save for a public purpose, and save by the authority of law
which provides for compensation therefor and either fixes the
amount of compensation or specifies the principles on and the
manner in which compensation is to be determined and given.
(3) Nothing in this Article shall affect the validity of
(a) any law permitting the compulsory acquisition or taking
possession of any property for preventing danger to life,
property or public health; or
(b) any law permitting the taking over of any property which has
been acquired by, or come into the possession of, any person by
any unfair means, or in any manner, contrary to law; or
(c) any law relating to the acquisition, administration or disposal of
any property which is or is deemed to be enemy property or
evacuee property under any law (not being property which has
ceased to be evacuee property under any law); or
(d) any law providing for the taking over of the management of any
property by the State for a limited period, either in the public interest or in order to secure the proper management of the
property, or for the benefit of its owner; or
(e) any law providing for the acquisition of any class of property for
the purpose of
(i) providing education and medical aid to all or any specified class
of citizens; or
(ii) providing housing and public facilities and services such as
roads, water supply, sewerage, gas and electric power to all or
any specified class of citizens; or
(iii) providing maintenance to those who, on account of
unemployment, sickness, infirmity or old age, are unable to
maintain themselves; or
(f) any existing law or any law made in pursuance of Article 253.
(4) The adequacy or otherwise of any compensation provided for by
any such law as is referred to in this Article, or determined in
pursuance thereof, shall not be called in question in any court.
8. Clause (1) of Article 24, without equivocation, states that no
person shall be deprived of his property save in accordance with law.
The right to hold on to property, thus, is a fundamental right and can
only be infringed if the law so permits. If the rule-making power of the
Provincial Government does not extend to the impost of mark-up then
Article 24 is triggered and judicial review must be employed to undo
the essential wrongness of the action.
9. The rule-making power does not encompass the granting of power
to levy mark up in the Rules. The making of Rules is a circumscribed
and derived power. It can neither be expanded nor enlarged to impose
additional burdens which are not contained in the main enactment.
The determination of rates only has been left to the Provincial
Government owing to peculiar and varying nature of transactions in
each case for which recourse to the legislature may be cumbersome. It
is more efficient to do so by means of rule-making or by agreements as
determined by the Government. Apart from determination of rates, the
Provincial Government may prescribe conditions subject to which
royalties, rentals and taxes shall be paid. The term conditions does not
clothe the Provincial Government with power to amplify the amount
of royalty etc. by levying mark up on any unpaid amount. The two
concepts viz. determination of rates and the condition subject to which
royalties etc. shall be paid, are distinct concepts and cannot be
confused one with the other. If the legislature intended to include the
imposition of mark up in the broader power to determine rates, a
precise clause could have been added to section 2. It will be noticed
that the various clauses of section 2 enjoin clear and specific powers which does not include the levy of mark up. Such a power, therefore,
cannot be derived unilaterally to enrich the Provincial Government.
10. The power to make rules relates to the determination of rates at
which royalties, rentals and taxes shall be paid and the payment of
markup is certainly not covered by the term rates as used in the 2002
Rules. Clause (8) of section 2 provides making of rules on any matter
ancillary or incidental to the matters set out in the forgoing clauses of
section 2. It has been argued by the respondents that the payment of
markup would be covered by any matter ancillary or incidental to the
matters set out in the other clauses of section 2. This argument has no
legal basis. There is no doubt in my mind that the term any matter
ancillary or incidental to the matters set out in the forgoing clauses
will not cover the imposition of markup in case of failure to pay the
principal amount of royalty or rentals. These matters would perhaps
have connection with the powers of the Government to recover the
amount of royalty, rentals and for this purpose provisions have been
made in rules 70 and 71 which give power to the Provincial
Government to recover the amount of royalty in case of failure by any
person to make the payment. Clause (8) of section 2 cannot be
extended or interpreted to mean that by rule-making power an
additional levy of markup can be imposed on a person whereas the
primary enactment does not authorize such a payment to be made.
11. Two legal issues would be engaged in these cases on the basis of
which it has been argued that the Rules are inconsistent with the
parent statute and thus the respondents have exceeded the powers
conferred by way of delegated legislation. It is a rule vouched by
respectable authority that delegated legislation is intended to advance
the purpose of primary legislation and if a rule goes beyond the rule-
making power conferred by the statute or if a rule supplants any
provision for which power has not been conferred it becomes invalid.
Two recent judgments of the Supreme Court of Pakistan would suffice
to be referred which reiterate this proposition.
12. In Sindh Revenue Board through Secretary Government of Sindh
Karachi and others v. Messrs Quick Food Industries (Pvt.) Ltd. and
others (2023 SCMR 1776) the following statement would be relevant
for our purposes:
Delegated legislation is intended to enforce the law and advance the
purpose of the underlying legislature, without overriding it and
while minutia could be filled in, the parent statute could neither
be added to nor subtracted from (Muhammad Amin Muhammad
Bashir Limited v. Government of Pakistan, 2015 SCMR 630). The
Rules were framed to set out for the process and procedure to
levy and collet the sales tax on services, which can only be
charged on the value of taxable service. However, the sales tax
demanded by SRB on the salaries of security and manpower is
inconsistent with mandate of the Act. The legislature s intent to
levy tax on services under the Act has always been clear, and a
deviation from it by use of the Rules cannot be justified (Collector of Central Excise and Sales Tax v. Rupali Polyester Limited, 2002
SCMR 738) as the intent of the Rules is only to give effect to the
mandate of the Act. It is clear that the scope of the tax as provided
under the Act cannot be altered by the Rules. It is settled law that
if a rule goes beyond what the parent statute contemplates, it
must yield to the statute. Especially in tax cases, where a tax
could not be levied through a delegated legislation until and
unless it was leviable under the charging provision of the fiscal
statute, which in the instant case it was not. Hence, the scope or
value of the tax could not be expanded than what the Act has
proscribed through the Rules
13. In the above case, the legal effect of the amendments to the
rule 42E of the Sindh Sales Tax on Services Rules, 2011 was under
consideration. By that rule, the Sindh Revenue Board intended to
include salaries in the gross amount charged or taxed. This was
beyond the mandate under the primary legislation and so the Supreme
Court of Pakistan held that this was ultra vires and struck it down.
14. Similarly, in Sanam Javaid Khan through Attorney v. Election
Appellate Tribunal, Punjab and others (2024 SCMR 819) the issue
related to the rule-making power of the Election Commission of
Pakistan and in that context it was said that:
A delegated power to legislate by making rules cannot be exercised
to bring into existence substantive rights, obligations or
disabilities not contemplated by the provisions of the statute.
The Commission, as a rule making body has no inherent power
of its own to make rules but derives such power only from the
Act, and so, it necessarily has to function within the purview of
the Act. In light of above, it appears, the stipulation in Rule 51
that the bank account so opened or dedicated should not be a
joint signatory account is inconsistent with the express
provision of section 60(2)(b) of the Act. Since this rule travels
beyond the ambit of the Act, it is ultra vires and cannot be given
any effect, and resultantly, based on it the nomination papers
could not be rejected.
15. The Supreme Court of Pakistan held that stipulation in rule 51 of
the Election Rules 2017 is inconsistent with the express provision of
section 60(2)(b) of the Elections Act, 2017. The Supreme Court
emphasized the basic principle that power to make rules cannot be
exercised to bring into existence substantive rights, obligations or
disabilities not contemplated by the primary statute from which the
power flows. Two more judgments involving similar facts would shed
further light on the legal issues. In Messrs Usman Enterprises v.
Federation of Pakistan and 2 others (1997 MLD 3161) the Supreme Court of Pakistan was dealing with the claim of surcharge under
Section 83(2) of the Customs Act, 1969. With respect to imposition of
penalties and other charges the following rule of construction was
iterated:
At this juncture it is worth to note that the fiscal statute which also
imposes and if statute itself does not contain any advisable to
presume that on account of failure in payment of outstanding
dues, such and such penalty can be imposed.
In other words if there is any deficiency in the statute it cannot be
made good by implication nor a fiscal statute admits extension
on the basis of analogies.
16. It was held that there was no scope of implication or presumption
in the case of penalties. As regards interpretation of pecuniary burdens
the following extract from PLD 1988 SC 370 was stated:
There are three principles of interpretation of statutes which have
to be kept in view in resolving the controversy raised in this
appeal. The first of these has been expressed in Maxwell on the
Interpretation of Statutes, 12th Edition, p.256 in the following
words:-
"Statutes which impose pecuniary burdens are subject to the same
rule of strict construction. It is a well-settled rule of law that all
charges upon the subject must be imposed by clear and
unambiguous language, because in some degree they operate as
penalties: the subject is not to be taxed unless the language of
the statute clearly imposes the obligation, and language must
not be strained in order to tax a transaction which, had the
legislature though of it, would have been covered by appropriate
words, "In a taxing Act," said Rowlatt J., "one has to look merely
at what is clearly said. There is no room for any intendment.
There is no equity about a tax. There is no presumption as to a
tax. Nothing is to be read in, nothing is to be implied. One can
only look fairly at the language use."
17. So the rule is that a charge must be imposed by clear and
unambiguous language in the statute itself. If there is none, then no
power vests in the delegatee to do so by implication through Rules. As
stated above, the reliance of the respondents is on clause (8) of section
2 to cull out a power to fix a penalty. That clause concerns with
ancillary and incidental powers. The precise argument, if accepted
without demur, would be that under the garb of this clause, the
Provincial Government is empowered to make rules to confer upon
itself broad and polycentric powers which go beyond the permissible
limits. This argument is constitutionally invalid and has no legal basis. Under similar circumstances, the Supreme Court dealt with a like
provision viz. other charges used in sections 29A and 30(1)(a) of the
PEMRA Act. It was emphatically held that:
It is settled law that the rules made under a parent statute cannot go
beyond the scope of the said statute and nor can they enlarge
the scope of the statutory provisions therein. The power of rule-
making is an incidental power that must follow and not run
parallel to the parent statute. Furthermore, regulations must be
made by the authority of the parent statute and regulations that
do not draw their power from the parent statute are also ultra
vires to the said parent statute. Therefore, Rule 30 of the 2002
Rules, going beyond the scope of the Ordinance, was ultra vires
to the Ordinance and the 2002 Regulations were void ab initio,
having been made without any lawful authority, and hence, of
no legal effect.
10. Even otherwise, without prejudice to the above, the Ordinance
as it stood before it was amended through the Amendment Act
of 2007 and as it stands after it has been amended through the
Amendment Act of 2007, there was and is no specific provision
that empowers PEMRA to impose a surcharge on the late
payment of annual fee. The Ordinance only contemplates the
levy of a licence fee and annual fee but does not empower
PEMRA to levy any surcharge over and above the annual fee.
The contention of the learned counsel for the appellant that
after the Ordinance was amended through the Amendment Act
of 2007, the power to levy and recover surcharge was included
in the term "other charges" as appearing in Sections 29-A and
30(1)(a), is without any force. It is trite law that fiscal statutes
are to be interpreted strictly and there is no room for any
intendment therein. It is underlined that despite the Ordinance
being amended through the Amendment Act of 2007, the power
to levy and recover surcharge was still not provided therein by
the legislature. Even otherwise, Section 29-A of the Ordinance
only caters to recovery of dues as arrears of land revenue and
Section 30(1) provides that PEMRA may revoke or suspend a
licence on one or more of the grounds mentioned therein,
including, as stipulated under Section 30(1)(a), if the licensee
fails to pay the licence fee, annual renewal fee or any other
charges including any fine, if any. Therefore, it is apparent that
there is no definition of "other charges" under the Ordinance
and no specific charging provision whereby the "other charges" are levied on a licensee or any provision that empowers PEMRA
to levy and recover surcharge even as "other charges".
Pakistan Electronic Media Regulatory Authority v. Pakistan
Broadcasters Association and others (PLD 2023 SC 378).
18. While stating the above, the Supreme Court reminded of the
entrenched rule that fiscal statutes are to be interpreted strictly and
there is no room for any intendment. The argument that surcharge
could be levied as other charges was soundly rejected.
19. In short, the delegated power to make rules is circumscribed by
the strict periphery of powers defined in the statute itself which
cannot be exceeded to assume more powers than granted by the
delegator. In particular, no such power can be deemed to have been
conferred on the delegatee which brings into existence additional
obligations such as in the present case whereby substantial amount of
markup is sought to be levied and recovered by the respondents on the
misplaced notion that rule-making power included the power to enact
such additional burdens. This cannot be countenanced and is out with
the authority conferred on the respondents while making rules.
20. Another principle which flows out of the above rule against
excessive delegation would be the concept of unjust enrichment. There
is a substantial body of case law in our jurisprudence which has not
only accepted but also applied this concept of unjust enrichment
which is a species of the law of restitutionary remedies. There is a
discussion regarding concept of unjust enrichment in Orient Power
Company (Pvt.) Ltd. through Authorized Officer v. Sui Northern Gas
Pipelines Limited through Managing Director (2021 SCMR 1728) and
the recent decisions of the superior courts have also been referred.
The judgment of the Canadian Supreme Court in the case Garland v.
Consumers Gas Co. [2004] 1 S.C.R 629 was referred which laid down
that there were three elements to the cause of action on the basis of
unjust enrichment; i) an enrichment of the defendant; ii) a
corresponding deprivation of the plaintiff; and iii) an absence of
juristic reason for the enrichment. On the basis of above criteria it was
held by the Supreme Court that:
96. Upon analysis of the above cases, it must be seen that for a claim
of unjust enrichment to succeed, there must be enrichment at
the expense of the plaintiff and this enrichment must be unjust
in such a way that there should be no lawful justification for the
same
21. Similarly, there is an erudite discussion regarding unjust
enrichment in Haider Industries through Managing Partner and others
v. Federation of Pakistan through Secretary, Law Division at Islamabad and others (2016 PTD 2004) and Sui Northern Gas Pipelines v. Deputy
Commissioner Inland Revenue and others (2014 PTD 1939). The
definition of unjust enrichment given in the American Restatement
(Third) of Restitution and Enrichment (AM LAW INST.) 2011 states that:
Any unequal transfer of value without an adequate legal basis
The general principles can also be gleaned from a judgment of the
Supreme Court of United Kingdom 2015 UKSC 66.
22. From the above discussion it flows that if the rule is ultra vires
and illegal, there is absence of juristic reason for enrichment and thus
on this basis too, the respondents cannot claim to such unjust
enrichment at the cost of the petitioners.
23. In view of the above, these petitions are allowed. As a result;
i. Sub-rule (2) of rule 68 and sub-rule (3) of rule 73 of the Rules are
declared ultra vires and illegal. They are struck down.
ii. Consequently, the Impugned Order and the demands issued
under these rules are non est and are declared without lawful
authority and of no legal effect. The notices are also quashed.
UN/G-8/L Petitions allowed.
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