In a startling revelation, billions of rupees have been illicitly withdrawn from Pakistan’s Federal Consolidated Fund without the knowledge or approval of the federal government. This breach came to light following the suspension of a lower court order by the Peshawar High Court, which had directed the attachment of funds from the Consolidated Fund. Investigations suggest that certain groups exploited judicial compensation mechanisms, filing court cases in the names of disaster victims or accident survivors without their consent, and obtaining compensation orders without informing the federal authorities. These orders were allegedly processed by the State Bank of Pakistan (SBP) without verifying their legality, raising serious concerns about constitutional violations and institutional oversight.
Nature of the Scheme
The fraudulent activities appear to have been conducted under the guise of judicial compensation. By targeting grieving families of natural disaster victims or road accident survivors, these groups filed court cases in their names, often without their knowledge or consent. Subsequently, they secured compensation orders from local courts, which were issued directly to the federal government for payment. The SBP, in turn, processed these orders and disbursed funds without verifying their authenticity or obtaining prior approval from the National Assembly, in direct violation of Article 78 of the Constitution of Pakistan.
Violation of Constitutional Provisions
Article 78 of the Constitution mandates that no money shall be withdrawn from the Federal Consolidated Fund without the authorization of the National Assembly. The unauthorized withdrawals circumvented this constitutional safeguard, highlighting significant lapses in financial oversight and accountability. The SBP’s role in executing these transactions without due diligence has raised questions about its internal controls and adherence to legal protocols.
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Implications for Governance and Accountability
This incident underscores critical weaknesses in Pakistan’s financial management and judicial processes. The exploitation of legal mechanisms for personal gain not only undermines public trust but also exposes the vulnerabilities in the system that allow such fraudulent activities to occur. The lack of proper verification and oversight by the SBP and other involved institutions calls for a comprehensive review and strengthening of internal controls to prevent recurrence.
Legal and Institutional Responses
In response to the scandal, the Peshawar High Court suspended the earlier order directing the attachment of funds, signaling judicial awareness and intervention. However, the broader institutional response remains to be seen. There is an urgent need for thorough investigations to identify all parties involved and to implement corrective measures. Strengthening the legal framework governing financial transactions and enhancing the accountability mechanisms within institutions like the SBP are essential steps to restore public confidence and uphold constitutional integrity.
