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Petitioner: Shaheen Freight Service (SFS) through General Manager VS Respondent: MOL Pakistan JUDGMENT
Court Name: Islamabad High Court Judge(s): Saman Rafat Imtiaz Title:Shaheen Freight Service (SFS) through General Manager vs MOL Pakistan
JUDGMENT
Reported As: 2023 CLD 1189 Result: Order accordingly Judgment JUDGMENT SAMAN RAFAT IMTIAZ, J. 1. Through the instant judgment, I propose to decide both the above titled cases as similar questions of law and facts are involved. W.P. No. 3024/2022 2. The Petitioner [Shaheen Freight Service] in W.P. No.3024 of 2022 (hereinafter referred to as the "Petitioner") is a registered partnership firm engaged in the business of providing transportation services. 3. A Petroleum Concession Agreement (hereinafter referred to as the "Petroleum, Concession Agreement") for Tal Block located in Karak, Kohat and Bannu Districts, Khyber Pakhtunkhwa was executed by the President of the Islamic Republic of Pakistan and Respondent No.1 [MOL Pakistan Oil and Gas Co. B.V.]; Respondent No. 2 [Oil and Gas Development Company Limited]; Respondent No. 3 [Pakistan Petroleum Limited]; and Respondent No. 5 [Government Holdings (Private) Limited] as Working Interest Owners who subsequently assigned some rights thereunder to Respondent No.4 [Pakistan Oil Fields Limited]. Under the terms of the Petroleum-Concession Agreement, the Working Interest Owners have been granted Petroleum concessions and other rights including but not limited to conducting or causing to be conducted petroleum exploration, development and production operations including the transportation (whether by pipeline or otherwise), storage, export and sale of petroleum. The Petroleum Concession Agreement envisages designating an "Operator" to carry out joint operations thereunder. The Respondent No.1 has been appointed as the Operator pursuant to a Joint Operating Agreement executed by and between the Working Interest
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Owners. As such the Respondent No.1/MOL Pakistan caused an advertisement to be published in the newspaper on 21.02.2021 soliciting Expressions of Interest from experienced contractors for the purpose of hiring their services for transportation of crude oil and condensate from its processing facilities in Khyber Pakhtunkhwa to refineries located in different areas of Pakistan. 4. The Petitioner was one of the successful bidders as per the technical evaluation criteria whereas the financial bids were allegedly not opened publically as required but were evaluated in a clandestine and non-transparent manner. The Petitioner learned from market sources that Respondents Nos. 7 to 10 have been declared the lowest Financial Bidders despite the fact that the Petitioner claims to have issued the lowest bid. 5. Respondents Nos. 2, 3 and 5 collectively hold 65% of the major shareholding in Tal Block. It has been alleged that they are beneficially owned by the Federal Government hence any procurement by them for Tal Block comes within the ambit of public procurement. Consequently the Petitioner filed a complaint vide letter dated 25.01.2022 titled 'Redressal of Grievance Against Finalization of Bid Tender Number SA/24943/21' to the Manager Procurement of Respondent No. 1/MOL Pakistan which was rejected vide Ref: MOL/20127/2022 dated 15-02-2022 ("Grievance Redressal Committee/GRC Order") as being without merit. 6. Being aggrieved of the rejection, the Petitioner filed an appeal under Rule 48(7) of the Public Procurement Rules, 2004 ("Procurement Rules") before the Respondent No. 6 [Public Procurement Regulatory Authority] ("PPRA") which has been decided vide Order dated 16.03.2022. The Respondent No. 6 vide the said Order has held that Procurement Rules are applicable as alleged by the Petitioner nevertheless the Order fails to substantively decide the grievance of the Petitioner or the dispute between the parties. 7. The Petitioner has invoked the Constitutional jurisdiction of this Court under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 praying for a declaration that the GRC Order dated 15.02.2022 passed by the Respondent No. 1/MOL Pakistan is null and void. The Petitioner also seeks a direction to Respondent No. 1/MOL Pakistan to award the contract to the lowest bidder or in the alternate to declare the subject procurement as mis-procurement with direction for fresh bidding process to be initiated. W.P. No.3175/2022 8. The Petitioner in W.P. No.3175/2022 is the Respondent No. 1 in W.P. No.3024/2022 (for the sake of convenience herein after referred to as "Respondent No. 1/MOL Pakistan"). According to the Memo of Petition in the instant writ, the Respondent No. 1/MOL Pakistan invited Expressions of Interest for hiring services of contractors for transportation of crude oil and condensate from its processing facilities in Khyber Pakhtunkhwa to different refineries in Pakistan. After completion of prescreening process/pre-qualification, Respondent No.1/MOL Pakistan issued private tender documents to six contractors including the Petitioner. 9. Six bidders including the Petitioner submitted their bids. In accordance with the Tender Documents, Respondent No. 1/MOL Pakistan firstly opened the Technical Bids. After thorough evaluation, all six bidders were found technically qualified. Thereafter, Respondent No. 1/MOL Pakistan opened the Financial Offer envelopes of all six bidders including that of the Petitioner. The following Bid Prices were received by Respondent No. 1/MOL Pakistan from the bidders: Name of BidderBid Price (PKR/BBL)ScoreRanking Pakistan Tankers Company (Respondent No.7 in W.P. No.3024/2022)193.00 100% 1 Said Ullah Shah (Respondent No.9 in W.P. No.3024/2022) 200.00 96.37%2 Malik Associates (Respondent No.8 in W.P. No.3024/2022) 210.00 91.19%3
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Rasch Private Limited (Respondent No.10 in W.P. No.3024/2022)234.21 78.65%4 Shaheen Freight Services (Petitioner in W.P. No.3024/2022) 235.84 77.80%5 National Logistics Cell 244.71 73.21%6 10. The financial offer/bid price of the Petitioner ranked fifth. Thereafter, Respondent No. 1/MOL Pakistan received a letter dated 17.01.2022 from the Petitioner stating that the bid price offered by it included the provincial sales tax and its bid price was actually Rs.205.07. It has been emphasized that nowhere in its financial bid/offer, did the Petitioner mention that its bid price was inclusive or exclusive of the provincial sales tax. Respondent No. 1/MOL Pakistan vide letter dated 24.01.2022 informed the Petitioner that Respondent No. 1/MOL Pakistan had already opened and evaluated the financial bids of all bidders and the bidding process had been finalized. It was further informed that after evaluation of the financial bids no clarification of price or negotiations of rates could take place with the Petitioner at the belated stage, which would change the original ranking. 11. Respondent No. 1/MOL Pakistan received another letter dated 25.01.2022 titled 'Redressal of Grievance Against Finalization of Bid Tender Number SA/24943/21' addressed to the Manager Procurement of Respondent No. 1/MOL Pakistan from the Petitioner wherein it is again reiterated its position and tried to offer an explanation and clarification regarding its bid price. Respondent No.1/MOL Pakistan vide letter dated 15.02.2022 informed the Petitioner that its grievance was devoid of merits. (This response from the Respondent No. 1/MOL Pakistan has been described as GRC Order by the Petitioner in W.P. 3024 of 2022). 12. The Petitioner filed an appeal before the Respondent No.3 [Public Procurement Regulatory Authority, who is the Respondent No. 6 in W.P. 3024/2022] (for the sake of convenience herein after referred to as "Respondent No. 6 /PPRA"). Respondent No. 1/MOL Pakistan filed an application for rejection of the said appeal for want of jurisdiction which was also replied to by the Petitioner. However, vide Order dated 22-06-2022 (referred to as "Impugned Order" in W.P. 3175 of 2022) Respondent No. 6/PPRA has accepted the appeal by holding that the Procurement Rules do apply. 13. Being aggrieved of the Impugned Order Respondent No. 1/MOL Pakistan has invoked the Constitutional jurisdiction of this Court under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 through Writ Petition No.3175/2022 praying for setting aside of the Impugned Order and declaration that the Respondent No.6/PPRA has no jurisdiction and lawful authority to regulate the private tender and procurement of the Respondent No. 1/MOL Pakistan and has no authority or jurisdiction to entertain, hear and adjudicate the appeal filed by the Petitioner under Rule 48 (7) of the Procurement Rules and to quash the appellate proceedings pending before the Respondent No.6/PPRA being coram non judice, without lawful authority, without jurisdiction and abuse of process of law. 14. The learned counsel for the Petitioner contended that the GRC Order dated 15.02.2022 is a decision by the Grievance Redressal Committee of the Respondent NO. 1/MOL Pakistan and as such an appeal was filed before Respondent No.6/PPRA which has been decided vide the Order dated 22.06.2022. He submitted that the Order passed by Respondent No.6/PPRA is correct and in favour of the Petitioner to the extent that it holds that the Public Procurement Rules are applicable. The learned counsel for the Petitioner submitted that under the Petroleum Concession Agreement Respondents Nos. 1 to 3 are Working Interest Owners who collectively hold 70% of the Working Interest. The Petroleum Concession Agreement envisages 'Joint Operations' to be conducted by the Respondents Nos. 1 to 3 which by definition includes `transportation'. The expenditure incurred in connection with or incidental to the conduct of 'Joint Operations' is to be shared and borne by the Working Interest Owners in proportion to their Working Interest. The Respondent No.1/ MOL Pakistan is the 'Operator' defined as the entity designated to carry out the 'Joint Operations'. In view of the
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foregoing, he argued that the expenditure on transportation was being incurred proportionally by all the Working Interest Owners i.e. Respondent No.1/MOL Pakistan, Respondent No.2/OGDCL, Respondent No.3/PPL. The learned counsel submitted that Respondent No. 2/OGDCL and Respondent No.3/PPL are undisputedly public procurement agencies, therefore, he argued that the funds of Respondent No. 2/OGDCL and Respondent No. 3/PPL utilized for expenditure on transportation fall within the ambit of 'Public Funds' as defined in the Public Procurement Regulatory Authority Ordinance, 2002 ("PPRA Ordinance"). The contention of the Petitioner is that the advertisement issued by Respondent No. 1/MOL was within the purview of public procurement laws due to the involvement of public funds. To that extent the Order dated 22.06.2022 passed by Respondent No.6/PPRA validates the position of the Petitioner and as such the Petitioner is not aggrieved by the said Order, which is why no relief has been claimed against the same by the Petitioner in the prayer clause of its writ petition. However, despite holding that PPRA Rules apply, Respondent No.6/PPRA has failed to decide the dispute between the parties and to that extent the Petitioner has challenged the Order dated 22.06.2022 passed by Respondent No.6/PPRA being deficient in granting relief. In support of such contention he referred to the contents of the Memo of Petition which explicitly state that the Petitioner has challenged the Order dated 22.06.2022 passed by Respondent No.6/PPRA being deficient in granting appropriate relief to the Petitioner. 15. On the other hand the learned counsel for Respondent No. 1/MOL Pakistan raised two preliminary arguments challenging the maintainability of W.P. 3024 of 2022: (i) that the petition has not been filed and instituted by an authorized person; and (ii) that the Petitioner has only challenged the letter dated 15.02.2022 sent by Respondent No.1/MOL Pakistan, which is not' a person performing functions in connection with the affairs of the Federal Government and as such not amenable to writ jurisdiction. He argued that the letter dated 15.02.2022 sent by Respondent No.1/MOL Pakistan termed as the GRC Order by the Petitioner has not been passed by a 'procuring agency' whereas Petitioner has neither impugned the Order passed by the Respondent No. 6/PPRA nor prayed for any relief against the same, therefore W.P. 3024 of 2022 is not maintainable. 16. On merits the learned counsel for Respondent No.1/MOL Pakistan argued that the PPRA laws only apply to public companies owned and controlled by the Federal Government whereas Respondent No.1/MOL Pakistan is not a 'procuring agency' as defined in the PPRA Ordinance as it is neither owned nor controlled by the Federal Government. He relied upon Ghani Gases Limited v. Federation of Pakistan, PLD 2016 Lahore 207, wherein it was held that PARCO was not a 'procuring agency' despite the fact that 60% of its shareholding was owned by Federal Government simply because it was not controlled by the Federal Government. In view-thereof, he argued that none of the provisions of the PPRA Ordinance or Rules apply to Respondent No.1/MOL Pakistan as they all envisage a 'procuring agency'. He stressed on the fact that the tender was called by Respondent No.1/MOL Pakistan alone and all acts pursuant to the tender were undertaken by Respondent No.1/MOL Pakistan which is private company whereas under the public procurement laws it is a 'public procurement agency' that enters into negotiations and contracts etc. Therefore he argued that the subject procurement is a private procurement which is not covered by PPRA Ordinance and its Rules. He referred to clause 14.2 of the Joint Operating Agreement whereby each Working Interest Owner shall be individually responsible only for his own obligations. He submitted that merely because they are Working Interest Owners and conducting 'joint operations' together does not mean that 'public funds' as defined in PPRA laws are involved in carrying out individual obligations under the Petroleum Concession Agreement. By way of example he submitted that the Working Interest Owners are not responsible for the salaries of the employees of the other Working Interest Owners. As such, he vehemently argued that the Respondent No. 6/PPRA has erred in holding vide the Impugned Order that PPRA Rules apply and as such is liable to be set aside. Lastly he submitted that in any event the Petitioner was not the lowest bidder and to that extent W.P. 3024
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of 2022 involves disputed questions of fact which cannot be adjudicated upon in exercise of Constitutional jurisdiction. The learned counsel for Respondent No.1/MOL Pakistan relied upon Salahuddin v. Frontier Sugar Mills and Distilery Ltd. PLD 1975 SC 244, Pakistan International Airlines v. Tanveer ul Islam PLD 2010 SC 676, Pakistan Olympic Association v. Nadeem Aftab Sindhu 2019 SCMR 221, Dr. Muhammad Khan Shar v. President, Pakistan Medical Association Center 2022 MLD 626, Abdul Wahab v. Habib Bank Ltd. 2013 SCMR 1383, Noor Badshah v. United Bank Limited 2015 PLC (C.S.) 468, Anoosha Shaigan v. Lahore University of Management Sciences PLD 2007 Lahore 568, Aown Abbas Bhatti v. Forman Christian College PLD 2018 Lahore 435, Salman Rashid v. University of Management and Technology 2002 CLC 1328, Printing Corporation of Pakistan v. Province of Sindh PLD 1990 SC 452, Creative Electronics (Pvt.) Limited v. Government of Pakistan PLD 2020 Islamabad 319, National Institutional Facilitation Technologies (Pvt.) Ltd. v. The Federal Board of Revenue PLD 2020 Islamabad 378, West Bengal Electricity Board v. Patel Engineering AIR 2001 SC 682. 17. The learned counsel for Respondent No.2/QGDCL, Respondent No.7/Pakistan Tankers Company, Respondent No.8/Malik Associates, Respondent No.9/Said Ullah Shah and Co. and Respondent No.10/Rasch Private Limited adopted the arguments advanced by the learned counsel for Respondent No.1/MOL Pakistan. 18. Arguments advanced by the learned counsel for the parties have been heard and the record has been examined with their assistance. I will start by addressing the preliminary objections raised by the Respondent No. 1/MOL Pakistan in respect of the maintainability of W.P. 3024/2022 filed by the Petitioner. Preliminary Objection No.1: W.P. 3024/2022 filed by Unauthorized Person 19. The Petitioner is stated to be a registered partnership firm, which has not been denied or disputed by the Respondents. The petition has been filed through its G.M., Mr. Nizar Ahmed under the authority of a Board Resolution dated 04.08.2022 purportedly signed by all three partners of the Petitioner. It has not been denied that Mr. Nizar Ahmed and the signatories of the Board Resolution are partners of the Petitioner. The objection raised on behalf of Respondent No.1 is that a partnership firm does not have a board and as such the so called Board Resolution dated 04.08.2022 has no legal significance. He argued that the Petitioner has not attached the partnership deed with the Memo of Petition without which it cannot be established whether or not the signatory of the Memo of Petition is the G.M as claimed and whether G.M. is empowered to institute legal proceedings on behalf of the partnership firm. He further highlighted that the so called Board Resolution is neither attested nor notarized and as such does not even constitute a power of attorney. 20. The Petitioner on the other hand submitted that the Board Resolution dated 04.08.2022 is signed by all the partners and is therefore sufficient authority for purposes of a Constitutional petition but that even otherwise it qualifies as a power of attorney. He argued that in any event the same constitutes a curable defect and in this regard relied upon Rana Basit Rice Mills Private Limited v. Shaheen Insurance Company 2021 SCMR 1413. 21. I have considered the arguments in light of the Partnership Act, 1932 ("Partnership Act"). Under Section 18 thereof, a partner is an agent of the firm. According to section 19, a partner enjoys implied authority as agent of the firm. The said provision is reproduced herein below: 19. Implied authority of partner as agent of the firm: (1) Subject to the provisions of section 22, the act of partner which is done to carry on, in the usual way, business of the kind carried on by the firm, binds the firm. The authority of a. partner to bind the firm conferred by this section is called his "implied authority".
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(2) In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to - (a) submit a dispute relating to the business of the firm to arbitration, (b) open a banking account on behalf of the firm in his own name, (c) compromise or relinquish any claim or portion of a claim by the firm, (d) withdraw a suit or proceeding filed on behalf of the firm, (e) admit any liability in a suit or proceeding against the firm, acquire immoveable property on behalf of the firm, (g) transfer immoveable property belonging to the firm, or (h) enter into partnership on behalf of the firm. 22. As may be seen from the above, an act of a partner binds the partnership firm except that such implied authority does not empower him to take the steps as are listed under subsection (2) of the section 19 of the Partnership Act. Filing of a Constitutional petition is not included amongst the steps which a partner is not empowered to take pursuant to his implied authority. I am fortified in my view by the judgment passed in Creative Electronics and Automation v. Commissioner Lahore 2013 CLC 1547 in which it was held as follows: "The partners are the owners of the firm and the rights and liability of the firm are the rights and liability of the partners. Each partner is an agent of the firm under section 18 of the Partnership Act, 1932. Under section 19 of the said Act, each partner has the implied authority to carry on business in the usual way and bind the firm. Section 19(2) provides for the exclusions to the implied authority. Under these sections implied authority does not empower a partner to submit a dispute relating to the business of the firm for arbitration, or relinquish any claim by the firm, admit .any liability in a suit by or against the firm or withdraw the suit proceedings filed on behalf of the firm. These subject-matters have been specifically excluded from the implied authority of a partner. Filing of a constitutional petition has not been mentioned in the exclusion clauses. These clauses relate specifically to contractual disputes of the firm. In the instant petition, the petitioner seeks to enforce a right against the respondent to make certain payments which are due to it. In this regard, the petitioner seeks a direction to the respondents to decide upon its application pending before the respondents. Therefore, since a partner has the implied authority to act and carry on business in the usual way and can bind his firm, Mr. Sajjad Ahmad Khan can file this constitutional petition on behalf of the other partners without written authorization from the other partners." [Emphasis added] 23. I am also guided by the case of Messrs Fine Enterprises Traders through Partner/Representative v. Messrs Constellation Co-Operative Housing Society Limited 2019 CLC 1472. The Sindh High Court in this case was dealing with a suit in respect of, which Order XXX, Rule 1, C.P.C., clearly provides that any two or more partners can sue or be sued in the name of the firm. An objection was raised by the defendants in such case that other partners of the firm have not authorized one of the partners to file the suit. Yet the suit was held maintainable by holding that no adverse consequences are provided for non-compliance of Order XXX, Rule 1, C.P.C., and also by specifically taking in view the provision of section 19 of the Partnership Act. The relevant extract from the said judgment is reproduced herein below: "I have carefully gone through the judgment of the honourable Supreme Court with the assistance of learned counsel for the Plaintiff. Honourable apex Court has clearly held that there is no requirement for a partner to have an authority from other partners before initiating any action by way of a suit. Same principle was followed by the learned Lahore High Court in the subsequent case (ibid). The close examination of the provisions itself shows that no adverse consequence is mentioned in the provision of Order XXX, Rule 1 of C.P.C., if the compliance is not made. Similarly, no
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judgment has been cited today by the learned counsel for the Defendants to fortify the arguments that the Courts have interpreted this provision as mandatory with an adverse consequence. One of the exclusions mentioned under section 19 of the Partnership Act, 1932, inter alia, in clauses (c) and (d) refers to relinquishing/compromise of a claim and/or withdrawal of suit or proceeding filed on behalf of the Firm by a partner, that is, a partner can neither relinquish a claim of the firm nor withdraw a suit or proceeding without the authorization or endorsement of the other partners of a Firm, but it is nowhere mentioned that the proceedings can also not be instituted (underlined to add emphasis) by one of the partners. If the arguments of the Defendants' side is accepted and for the arguments' sake, this suit is dismissed or is held to be not maintainable on account of non-compliance (as alleged) of the provisions of Order XXX, Rule 1 of C.P.C., then it means that the Court is reading in the statute something which is not expressly provided. All the more, this strict interpretation cannot be laid down, because it is an established rule that such kind of consequence is to be expressly mentioned. In this context, the submission of learned counsel for the Plaintiff has substance that Court in such a situation cannot fill up the omission, intentionally omitted by the legislature. Principle of 'casus omisus' is applicable here. Taking guideline from the aforementioned judgment of the honourable Supreme Court, I am of the considered view that present proceeding as instituted is maintainable, which is further approved by all the partners as mentioned in the extract of Resolution dated 11.07.2016 and the disclosure of all the names of the partners of the Plaintiff-Firm were there when the suit was filed as it was accompanied by the Certificate of the Registrar of Firms, which is fortified further by filing a Statement today." [Emphasis added] 24. Therefore, in my opinion, the instant petition has been instituted by an authorized person being a partner of the Petitioner. Preliminary Objection No.2: So-called GRC Order impugned in W.P. 3024/2022 not passed by a 'procuring agency' 25. In this regard the objection raised by the counsel for Respondent No.1/MOL Pakistan was that Respondent No. 1/MOL Pakistan being a private foreign company is not a 'procuring agency' under the PPRA Ordinance therefore…
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