Why should state profit from rising gold prices? IHC questions compensation offer

ISLAMABAD: The Islamabad High Court (IHC) has questioned why the government should profit from rising gold prices while a citizen is offered compensation based on 2023 rates for gold bars that authorities were ordered to return.

Expressing dissatisfaction with a proposal to pay approximately Rs4.8 million instead of returning the seized gold, the court issued a show-cause notice to the relevant collector, directing the official to respond within two weeks.

A division bench comprising Justice Sardar Ejaz Ishaq Khan and Justice Arbab Muhammad Tahir was hearing a contempt of court petition filed by Waqar-un-Nisa, who had previously secured an order for the return of the gold bars. Barrister Daniyal Sohail represented the petitioner.

The petitioner’s counsel argued that the authorities were offering compensation calculated at 2023 gold prices rather than current market rates, leaving the petitioner to bear the loss from the increase in value.

The bench questioned why the state should benefit from the appreciation in gold prices when the original court order required the gold itself to be returned.

Gold transferred to State Bank, court told

During the hearing, officials informed the court that the seized gold had already been transferred to the State Bank of Pakistan (SBP) and could no longer be retrieved.

They cited paragraph 34(2) of Customs General Order No. 12 of 2002 as the basis for the transfer.

The bench, however, questioned that explanation, observing that Section 169(4) of the Customs Act deals with the sale of seized goods and the safekeeping of the proceeds.

The court noted that the provision did not expressly require seized gold to be permanently transferred to the SBP without any possibility of its return.

It also questioned why the petitioner should be compensated at a rate below the gold’s current market value when the authorities had failed to return the bars. Finding the explanation unsatisfactory, the bench issued a show-cause notice to the collector and sought a response within two weeks.

Further proceedings were adjourned until November 2.