President Alvi prohibits retroactive effect on savings certificate profit rates

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ISLAMABAD: Pakistan’s President Dr. Arif Alvi, while rejecting the retroactive effect of the government’s decision, has ordered the authorities to pay the profit rate on savings certificates at prevailing rates.

While accepting representation from an aggrieved citizen against a decision by Wafaqi Mohtasib, President Dr. Arif Alvi ordered the Central Directorate of National Savings (CDNS) to pay profit on Special Savings Certificates (SSC) according to the rate of profit in force at the time of the purchase of the certificates.

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He said that CDNS had committed maladministration by revising the profit rates retrospectively and contrary to the existing law, thereby causing the citizen a loss of Rs 5.3 million.

The President issued these instructions while deciding on a preferred representation by Mrs. Yasmeen Merchant, who had purchased six SSCs from CDNS on 01.11.2019 at a profit rate of 12.7% for five certificates and 13.9% for the sixth certificate.

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Four days later, on 05.11.2019, however, the Finance Division issued a notification reducing the profit rates from 12.7% to 11% and from 13.9% to 11.8% with retroactive effect from the 01.11.2019, causing him a loss of Rs 5.3. million.

The President accepted her representation and held that the complainant was entitled to the rate of profit in effect on the date of issuance of the certificates and that the change made by the notification did not apply to her retroactive investment and, therefore, she could not assign it duly acquired right to the benefit nor cancel it to its disadvantage.

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He indicated that the notification issued had the character of subordinate or delegated legislation and took effect from the date of its publication in the Official Gazette and not from an earlier date.

The Speaker added that the underlying reasoning was that only Parliament/legislative bodies could enact a law from a date before its enactment, i.e. retrospectively, and the government by itself , unless authorized by law, had no authority or power of enactment. a notification taking effect on a date different from that of its publication in the Official Journal.

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The President further pointed out that a person can feel seduced by the inducements given by the government and act accordingly, and it is not the responsibility of the government to renege on its commitment as this can erode the confidence of the general public in the government bodies and can also damage the credibility of the government.

He further stated that this law was based on established legal principles and Quranic injunctions according to the 1st verse of Surah Al-Maida “O you who believe! Keep your promises”.

The President believed that it was not only logical, fair and just to keep promises, commitments and agreements, but also a universally accepted norm. He further stated that both parties were bound by the undertakings given at the time of the issuance of the certificates and ordered CDNS to pay the profit according to the promised profit rates of 12.7% and 13.9% on the certificates. purchased.

According to the details, the citizen’s grievance was that she purchased the SSCs due to the prevailing profit rate while the notification gave retroactive effect to the profit rates and was issued after an investment to her disadvantage.

She approached CDNS and later Wafaqi Mohtasib for redress of her grievance, but to no avail. She then filed a complaint with the president, which he accepted.

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