Is the saying: "Whoever possesses the power to punish possesses the power to pardon" correct, and does it mean that pardon is not valid except for one who has the ability to punish or exact retribution?

The saying "Whoever possesses punishment possesses forgiveness" is not absolutely true. True forgiveness is the forgiveness of one who is able to punish, not the forgiveness of one who is incapable. This also applies to one who has accustomed himself to forgiveness, such that if he were to gain power, his state would not change. For the Prophet, peace and blessings be upon him, said: "A servant whom Allah has granted knowledge but has not granted wealth, he is sincere in intention, saying: 'If I had wealth, I would do as so-and-so does.' He is rewarded according to his intention, so their rewards are equal."