Justice beyond timelines

LAHORE: Financial systems the world over tend to protect the crooks more so in developing economies with weak currencies and prolonged judicial delays.

The declining value of the rupee penalises domestic depositors, but protects deposits in dollars. The ever-increasing real estate rates benefit litigating defaulters and erode equity of concerned banks.

Take for instance the cases of fines-imposed years back by the Competition Commission of Pakistan (CCP) on the cement cartel. The fine of Rs6 billion imposed in 2003 is still pending in courts.

If the courts agreed with the CCP decision, the cement cartel and its members would pay the imposed penalty. In 2003, Rs6 billion were equivalent to $103.45 million. At the current dollar rate, Rs6 billion would fetch only $36.36 million.

Some experts would object to the comparison with other currencies, but gold is a universal standard.

The price of one tola gold in 2003 was Rs8,650 and one could have procured 693,641 tolas of gold from Rs6 billion at that time.

On the current gold price, Rs6 billion would buy only 54,644 tolas of gold. In case of dollars, the value depreciated by three times, while in case of gold the value of Rs6 billion in 2003 declined by over 12 times.

This means that if the case is decided in favour of CCP today, the state would practically get 12 times lower value (in gold terms) than it would have gotten had the case been decided in few months.

There are many cases of revenue departments pending in courts for years that are diluting the value of claims by the state. The delay in cases of house rents is also decided after years of litigation and dilutes the value of the landlord’s recovery.

In many cases the delayed verdicts angers the victor. There was a case of an owner of brand-new Toyota Corolla, who proved in the consumer court that his car was lifted with the connivance of the tracker company he was registered with.

The company was asked to pay the penalty. The tracker company appealed the verdict. By the time the appeals were rejected the price of the car doubled. The aggrieved owner could not buy the same car from that amount.

The delayed verdict in case of defaults invariably benefits the defaulters. In case of defaults the banks seek court permission to auction the mortgaged assets of the defaulter.

It should not take more than a month to grant that permission and in many cases the banks are permitted. But the defaulters have many tricks to delay auctions.

Take the case of Ittefaq Foundry owned by the family of former Prime Minister Nawaz Shariff. After the 1998 bomb blasts, Nawaz Shariff conceded that his family owed Rs2.5 billion to the banks and he is handing over Ittefaq Foundry to the banks so that they could recover that amount.

When the banks sought permission from the court for auction, some cousins of Nawaz objected. The case lingered on for more than a decade with one of the several family members pitching in with his objections.

When the final auction date was announced by the court in 2018, the assets value of the foundry increased manifold and the defaulter ended up getting some money after auction while the banks received only the amount owed to them. The banks are not allowed to charge interest once the amount comes under default category.

In 1998, when the property was handed over to the banks, the rate of dollar was Rs54, while gold was Rs4,750 per tola. In 2018, dollar was traded at Rs124 and gold was valued Rs64,750 per tola.

The recovery of Rs2.5 billion in 1998 would have fetched the banks 526,315 tolas of gold. The same amount in 2018 was worth 38,610 tolas only.

The banks thus lost net worth of 487,705 tolas when they got their defaulted amount in 2018. The worth of 48,775 tolas in 1998 was Rs3.16 billion.

The importance of resolution of monetary disputes cannot be underscored. The judiciary must play its due role in ensuring quick and fair disposal of monetary cases that are in the best interest of the oppressed parties.

The dream to attract foreign investment in the country would remain unfulfilled until the investors are ensured of quick and fair disposal of all their disputes relating to their businesses.

There have been circumstantial injustices in the past, but not relating to delay in justice. For instance, a person loaned his friend money to buy a Vauxhall Beatle before World War II. When the friend returned the money after the defeat of the Germans the money could buy only a match box.