KE can’t collect utility charges via power bills, amicus curiae tells SHC

KARACHI: Senior lawyer Munir A. Malik, who was appointed as an amicus curiae, on Tuesday informed the Sindh High Court that the government was required to follow the contract rules and could not nominate K-Electric to collect the Municipal Utility Charges and Taxes (MUCT) for the Karachi Metropolitan Corporation (KMC) through electricity bills.

The senior lawyer submitted that under the relevant laws, the KE also may not use coercive powers to collect such tax.

“In fact, the provincial legislation directing the disconnection of electricity on account of failure to pay MUCT would run afoul the provision of Article 143 of the Constitution,” he maintained.

Mr Malik made such submissions before a two-judge bench headed by Justice Nadeem Akhtar during the hearing of a set of petitions filed last year against the provincial government’s move to outsource the collection of the controversial charges to the KE.

Munir Malik says SLGA and Nepra Act don’t empower KE to disconnect supply of any tax defaulter; hearing adjourned to Jan 16

The senior lawyer argued that the notification dated Jan 21, 2022 to authorise the engagement of the KE to collect such a tax was issued by the provincial government in violation of the Sindh Local Government Contract Rules, 2001.

He submitted that the KE was not the only utility service providers in the provincial metropolis and being more than one service providers the contract for the collection of “income” ought to have been awarded in the manner provided in the contract rules.

Mr Malik was of the view that the power utility may not use its coercive powers under the Electricity Act since the disconnection of power by a distributor was regulated by a federal law.

“Neither the Sindh Local Government Act, 2013 nor the National Electric Power Regulatory Authority (Nepra) Act 1997 or Consumer Service Manual authorise or empower KE to disconnect power connection on the account of failure of compulsory taxation,” he maintained.

The amicus curiae also submitted that the MUCT could not have been revised except upon previous publication of the taxation proposal and in the manner prescribed by the imposition rules.

The bench asked that the copy of the written synopsis filed by the amicus curiae be provided to Karachi Mayor Murtaza Wahab, who was also present during Tuesday’s proceedings, as well as to lawyers for other parties.

By consent of the parties concerned, the bench adjourned the hearing till Jan 16 for further arguments.

Jamaat-i-Islami-Karachi chief Hafiz Naeemur Rehman and others had petitioned the SHC citing the ministry of energy (power division), Sindh chief secretary, local government secretary, city administrator and KE as respondents.

In Sept last year, the SHC through an interim order had restrained the power utility from collecting MUCT through electricity bills and appointed former attorneys general Mr Malik and Khalid Jawed Khan as amici curiae to assist the court on the subject issue and advance their opinion.

The petitioners had argued that after the approval of the then Sindh chief minister, the chief secretary had issued a notification on Jan 21 last year allowing the provincial energy department and KMC to engage KE for collection of MUCT under the Sindh Local Government Act (SLGA), 2013, and in furtherance of this notification, the provincial government issued another notification on April 12.

The maintained in the petitions that the MUCT was imposed in the light of a resolution, passed by the Karachi administrator, which was illegal and without following the provision of law.

They also contended that the power utility was “known for its poor performance, faulty and overbilling and extortion of money in different names and accounts and now MUCT has also been outsourced to the KE”.

They maintained that KE was a private company and had a limited licence for generation, transmission and distribution of power only and the agreement between ministry of energy and KE had nothing about collection of different charges and it could not be indulged in collection of taxes on behalf of the KMC.

Earlier this month, the City Council had passed a resolution with majority vote allowing the KMC to engage the KE for collection of the controversial charges via electricity bills.

Published in Dawn, December 20th, 2023