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Petitioner: Saifco Group through its Chief Executive and another VS Respondent: Privatisation Commission of Pakistan and others
Court Name: Islamabad High Court Judge(s): Miangul Hassan Aurangzeb Title:Saifco Group through its Chief Executive and another vs Privatisation
Commission of Pakistan and others Case No.: W.P.No.1505 of 2017 Date of Judgment:2017-05-29 Reported As: 2017 IHC 161 Result: Petition dismissed Judgment MIANGUL HASSAN AURANGZEB, J:- Through the instant writ petition, the petitioners, Saifco Group and Haji Saif-ur Rehman, seek a direction to respondent No.1 (Privatisation Commission of Pakistan) to receive the Statement of Qualification ("SOQ") from the petitioners and consider them for prequalification for participation in the privatisation process of SME Bank Ltd (respondent No.3). 2. The petitioners' case is that in response to an invitation for submission of Expression of Interests ("EOIs") regarding privatisation of 93.88% shares of respondent No.3, the petitioners, on 06.04.2017, submitted their EOIs and applied to respondent No.1 (Privatisation Commission of Pakistan) for the provision of Request of Submission of Qualification ("RSOQs") regarding the said privatisation. On 07.04.2017, respondent No.1 provided the RSOQs to the petitioners. Furthermore, the petitioners were required to submit the Statement of Qualification ("SOQs") on the same very day, i.e. 07.04.2017, which was the deadline fixed for the submission of SOQs. The petitioners feel that since respondent No.1 had extended the deadline for submitting the EOIs and SOQs from 17.03.2017 to 07.04.2017, the petitioner should have been permitted to submit the SOQs beyond the said extended deadline. 3. The facts essential for the disposal of this petition are that on 14.02.2017, an advertisement was published by respondent No.1 inviting EOIs from investors having an interest in acquiring up to 93.88% share capital of SME Bank Ltd. (respondent No.3), along with the control of its management. In the said advertisement, the Government of Pakistan, acting through respondent No.1, held out an assurance that the State Bank of Pakistan will issue a new banking license of a specialized nature to the investors with a minimum capital requirement of Rs.6 Billion, out of which Rs.2 Billion would be required to be injected upfront while Rs.1 Billion would have to be injected every year over the next four years. 4. The interested parties were required to submit their EOIs along with non-refundable processing fee. On the receipt of the EOIs from the interested parties, respondent No.1 was to provide RSOQs, which contained details of the
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qualification criteria etc. The last date for the receipt of the SOQs was 17.03.2017. The interested parties were encouraged by respondent No.1 to submit their EOIs 'as early as possible' in order to maximize the time available to them for the preparation and submission of the SOQs. The SOQs submitted by the interested parties were to be evaluated by respondent No.1 for the prequalification of the bidders. The details of the transaction, information memorandum, instructions to bidders and the draft of bidding documents were to be provided by respondent No.1 only to the prequalified parties. 5. The Preliminary Information Memorandu m/Transaction Teaser issued by the financial advisers of respondent No.1 with respect to the privatisation of the said 93.88% share capital of respondent No.3 inter-alia provided that the EOIs and the RSOQs could be issued to the interested parties in the period between the week of February to the week of March, 2017; and that the receipt and the evaluation of the SOQs were to take place in the 2nd and 3rd week of March, 2017. As per the said Information Memorandum, the announcement of the prequalified bidders and the issuance of the bidding documents were to take place in the week of March, 2017. 6. Thirteen parties, excluding the petitione r, are said to have been issued EOIs and RSOQs by 07.04.2017. Out of these, eight parties applied to responden t No.1 for an extension in the deadline for the submission of the SOQs. Consequently , on 16.03.2017, respondent No.1, through an advertisement published in the newspapers extended the deadline for the submission of the EOIs and SOQs from 17.03.2017 to 07.04.2017. Only five parties are said to have submitted their SOQs by 07.04.2017. 7. Even though the initial advertisement inviting EOIs was published on 14.02.2017, and the advertisement extending the deadline for the submission of the EOIs and SOQs to 07.04.2017 was published on 16.03.2017, as late as 06.04.2017 (i.e. one day before the deadline for the submission of the SOQs), the petitioners came on the scene and submitted their EOIs with an application for the issuance of the RSOQs. The very next day i.e. 07.04.2017, respondent No.1 provided the RSOQs to the petitioners. Furthermore, respondent No.1, vide letter dated 07.04.2017 requested the petitioners to prepare and submit the SOQs on the same very day. Annexed at page-43 of this petition is an undated letter from the petitioners to respondent No.1 seeking an extension in time up to 17.04.2017 for the submission of the SOQs. This letter appears to have been received by respondent No.1 on 10.04.2017. As respondent No.1 did not accede to the petitioners' request for an extension in time for the submission of the SOQs, the petitioners, on 21.04.2017 filed the instant writ petition. 8. Learned counsel for the petitioners submitted that petitioner No.1 was a firm owned by Saifco Construction which was a registered partnership; that respondent No.3 was included in the privatisation list in 2007; that an attempt to privatize respondent No.3 in the year 2008 was not successful; that on 14.02.2017, respondent No.1 invited EOIs for the acquisition of 93.88% share capital of respondent No.3; that the last date for the submission of the SOQs was 17.03.2017; that the information memorandum issued on behalf of respondent No.1 regarding the privatisation of respondent No.3, set timelines for the submission of EOIs and SOQs which were different from the dates set-out in the said advertisement; that vide advertisement dated 16.03.2017, the deadline for the submission of the EOIs and SOQs was extended to 07.04.2017; that with the extension in the deadline for the submission of the EOIs, respondent No.1 should also have proportionately extended the deadline for the submission of the SOQs; that the petitioners submitted EOIs to respondent No.1 on 06.04.2017; that the petitioners were provided the RSOQs on 07.04.2017; that the petitioners were required to submit the SOQs on the same day i.e. 07.04.2017; that it was not possible for the petitioners to prepare and submit the SOQs on the same very day on which the RSOQs were issued to the petitioners; that vide letter dated 10.04.2017, the petitioners requested respondent No.1 to extend the deadline for the submission of the SOQs, but to no avail; that respondent No.1 should have made every efforts to enlarge the bidding arena so as to make the bids for the privatisation of respondent No.3 more competitive; and that there was no impediment before respondent No.1 to have extended the deadline beyond 07.04.2017 so that the petitioners could have submitted their SOQs. 9. Learned counsel for the petitioners also submitted that respondent No.1 could not have extended the deadline for the submission of the SOQs from 17.03.2017 to 07.04.2017, so as to favour some of the entities who wanted to participate in the bidding process; that respondent No.1 had admitted that there was a discrepancy in the dates given in the advertisement, and the preliminary information memorandum; that it was respondent No.1's statutory obligation2nd 2nd 4th
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to ensure widest possible participation in the privatisation process; that Rule 3(1)(d) of the Privatisation (Modes and Procedure) Rules, 2001, requires the issuance of a suitable information memorandum regarding the privatisation of a State owned entity; that respondent No.3 was the first bank to be privatized by respondent No.1 after the privatisation of Habib Bank Limited in 2003; and that if this Court was not inclin ed to direct respondent No.1 to accept the SOQs from the petitioners, the entire bidding process should be annulled due to non-transparency , and a direction should be issued to respondent No.1 to start the privatisation process of respondent No.3 afresh. Learned counsel for the petitioners praye d for a direction to respondent No.1 to accept the SOQs prepared by the petitioners. In the alternative, it was prayed that respondent No.1 be directed initiate the privatisation process of respondent No.3 afresh. 10. On the other hand, learned counsel for respondent No.1 raised preliminary objections to the maintainability of the writ petition by submitting that the petitioners were not 'aggrieved persons' in terms of Article 199 of the Constitution; and that the petitioners had the alternative remedy available under the law. Furthermore, it was submitted that the petitioners had ample time (i.e. since 14.02.2017 when the invitation of EOIs was published by respondent No.1) for submitting their EOIs and SOQs; that through an advertisement published on 16.03.2017, the deadline for the submission of EOIs and SOQs was extended to 07.04.2017; that the petitioners applied for the RSOQs on 06.04.2017 (one day before the deadline for the submission of SOQs); that since the petitioners had applied for the issuance of RSOQs before the deadline for the submission of SOQs, respondent No.1 on 07.04.2017 provided RSOQs to the petitioners with the requirement that they should prepare and submit the SOQs by 07.04.2017; that three days after the deadline for the submission of the SOQs, the petitioners applied for an extension in the deadline for the submission of the SOQs; that the RSOQs issued by respondent No.1 to all the applicants expressly set-out the deadline for the submission of the SOQs; that the deadline mentioned in the RSOQs was extended by respondent No.1 to 07.04.2017 on the request of several entities who had been issued the RSOQs; and that the petitioners could not be granted undue advantage by accepting their SOQs beyond the stipula ted deadline. Learned counsel for respo ndent No.1 prayed for the writ petition to be dismissed. 11. I have heard the contentions of the learned counsel for the contesting parties and have perused the record with their able assistance. The facts leading to the filing of the instant petition have been set out in sufficient detail in paragraphs 2 to 7 above, and need not be recapitulated. 12. As mentioned above, respondent No.1 had, through an advertisement published in the newspapers on 14.02.2017, invited EOIs for the acquisition of 93.88% share capital of respondent No.3. The petitioners had filed a copy of the said advertisement along with the writ petition. Therefore, the petitioners were in the knowledge of the said advertisement right from the date when it was published. Ever since 14.02.2017 the petitioners could have submitted their EOIs to respondent No.1, and applied for the issuance of RSOQs. The petitioners have also filed a copy of the advertisement dated 16.03.2017 issued by respondent No.1, whereby the deadline for the submission of EOIs and SOQs was extended to 07.04.2017. The RSOQs issued by respondent No.1 clearly stipulates the deadline by which the SOQs were required to be submitted. The petitioners waited until the eleventh hour and submitted their EOIs to respondent No.1 on 06.04.2017, with the request for the issuance of the RSOQs. Since, the deadline for the submission of the EOIs and the SOQs was 07.04.2017, respondent No.1 provided the RSOQs to the petitioners on 07.04.2017 with the request to submit the SOQs by the same very day i.e. 07.04.2017. Admittedly, the petitioners did not submit the SOQs by the deadline of 07.04.2017. Vide an undated letter, the petitioners requested respondent No.1 to grant them an extension for submitting the SOQs. This letter appears to have been received by respondent No.1 on 10.04.2017 (i.e. three days after the expiry of the deadline for the submission of the SOQs). 13. Since the advertisements were published by respondent No.1 on 14.02.2017 and 16.03.2017, the petitioners had sufficient time to submit their EOIs and apply for the issuance of the RSOQs. The petitioners were negligent and insincere in applying for the RSOQs with an inordinate delay, and not submitting their SOQs within the stipulated time though they were well aware that there was a time schedule attached to the advertisements inviting EOIs. Therefore, their contention that the time was too short for submission of the SOQs is without any merit.
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14. There is no provision in the tender documents/RSOQs authorizing respondent No.1 to extend the deadline for the submission of the SOQs after the lapse of such a deadline. The deadlines fixed in advertisements inviting EOIs must be complied with scrupulously in order to avoid discrimination, arbitrariness and favouritism. Relaxation in such deadlines by State or its agencies in favour of a particular bidder is not permissible unless expressly provided for in the tender conditions or the applicable rules. Strict adherence to instructions to bidders is most essential. Mr. Justice Frankfurter in Vitarelli Vs. Seaton (1959) 359 US 535, observed that an executive agency must be rigorously held to the standards by which it professes its action to be judged. The earlier extension of the deadline from 17.03.2017 to 07.04.2017 was well before the last date of the submission of the EOIs and SOQs. Such an extension cannot give the petitioners the right to seek another extension in the deadline for the submission of the SOQs, more so when the deadline for the submission of the SOQs had already lapsed. The earlier extension was in conformity with Rule 27 of the Public Procurement Rules, 2004, which reads as follows:- "27. Extension of time for submission of bids.- Where a procuring agency has already prescribed a deadline for the submission of bids and due to any reason the procuring agency finds it necessary to extend such deadline, it shall do so only after recording its reasons in writing and in an equal opportunity manner . Advertisement of such extension in time shall be done in a manner similar to the original advertisement." 15. As mentioned above, vide advertisement dated 16.03.2017, the deadline for the submission of the EOIs and SOQs was extended from 17.03.2017 to 07.04.2017. The advertisement dated 16.03.2017 was in a similar manner to the original advertisement dated 14.02.2017. Since the said extension was made well ahead of the last date for the submission of EOIs and SOQs, all the potential bidders were treated equally. By the date when the said advertisement dated 16.03.2017 was published, the petitioners had not even submitted their EOIs. Therefore, the petitioners cannot claim to be adversely affected by the said extension. The reason put forth by respondent No.1 for the extension in the said deadline was requests in this regard made by several parties. Such an extension cannot be made the basis for an extension in the deadline for the submission of SOQs, after the deadline had already lapsed. An extension in the deadline for the submission of SOQs (after the lapse of such a deadline) would be in contravention of Rule 27 of the Public Procurement Rules, 2004. 16. The last date for the submission of the SOQs was explicitly mentioned in the advertisements mentioned above and in the RSOQs. This Court cannot rewrite the conditions in the advertisements and the RSOQs so as to suit to the convenience of the petitioners, enabling them to submit the SOQs beyond the stipulated deadline. Since the petitioners applied for the RSOQs with an inordinate delay, hence they have only themselves to blame for the unsavory situation that they now find themselves in. Consequently, I do not find any illegality , irrationality , procedural improprie ty or unreasonableness in respondent No.1' s decision not to extend the deadline for the submission of the SOQs at the petitioners' behest. At this stage, it would be apposite to make reference to the following case law on the subject:- (i) In the case of Aliya Hamayun Vs. Nadeem-ul-Haq (2014 CLC 958), the Court auctioneer had fixed 28.12.201 3 (11:00 am to 11:30 am) for the auction of a certain property. At 12:08 pm on the said date, the appellant appeared before the Court auctioneer and offered to match the highest bid submitted by another bidder during the auction. It was held by the Hon'ble High Court of Sindh that since the time during which the auction was to take place had been fixed earlier, the appellant should have been cautious and present during auction. Therefore, it was held that the bid offered during the auction was correctly accepted and that the appellant's bid made subsequent to the auction, could not be entertained. (ii) In the case of Shafco International Vs. Chairman Pakistan Telecommunication Corporation, Karachi (1995 MLD 146), the petitioner had sought permission to be allowed to purchase tender documents and to participate in the tendering process even though the closing date for receiving tende rs had lapsed. The petitioner 's application was turned down by the Hon'ble Sindh High Court, Sindh. The third paragraph of the said report is reproduced herein below:-
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"Mr. Mohammad Farogh Nasim submitted on behalf of the respondents that the petitioner cannot now be permitted to participate in the tender for the reasons, firstly, that the petition has not yet been admitted and no such application can be entertained or considered at this stage, and, secondly, these tenders were invited on 31.08.1994, nearly two months ago, and the last date for closing of the tenders was fixed on 29.09.1994 and the petitioners were free to participate in the tender but they chose not to do so, and as such closing date of tender having expired, if they were to permit any one including the petitioners to participate in the tenders, the respondents would be violating the terms of the advertisement, as well as the rules governing the subject. We find the contention of Mr. Farogh Nasim to be substantial. The petitioners could well have participated in the fresh tenders, but if they chose not to do so, they have to blame themselves. Admittedly, it would be encouraging the violation of the terms and conditions of the advertisement and of the rules bearing on the subject." (Emphasis added) (iii) In the case of Azam & Co. Solicitors Vs. Legal Services Commission ([2010] EWCA Civ. 1194), the England and Wales Court of Appeal (Civil Division) has inter alia held that a deadline is a necessary part of a tendering process, and that where a deadline was plainly stated in readily accessible documents, the entity inviting the bids needed to be cautious of their duty to treat the bidders equally and to avoid suggestions of favouritism towards a particular party . It was also held that a bidder who is granted an extension in time, notwithstanding the terms of the tender , adversely ef fects the position of other bidders. (iv) In the case of Sorath Builders Vs. Shreejikrupa Buildcon Limited (2009) 11 SCC 9, the respondent had submitted its bidding documents three days after the deadline fixed for the submission of the said documents. Since the organization inviting the bids did not consider the respondent' s bid due to its submission beyond the stipulated time, the respondent filed a writ petition before the High Court. The writ petition was allowed and the decision to award the contract to another bidder , who had submitted his bid within time, was set aside. The Supreme Court of India set aside the judgment of the High Court. In paragraph 15 of the said report, it is held as follows:- "15. Following the aforesaid legal principles laid down by this Court, we are of the considered opinion that the respondent no. 1 was negligent and was not sincere in submitting his pre qualification documents within the time schedule laid down despite the fact that he had information that there is a time schedule attached to the notice inviting tenders. Despite being aware of the said stipulation he did not submit the required documents within the stipulated date. Pre-qualification documents were received by the respondent no. 2 - University only after time schedule was over. The terms and conditions of the tender as held by the Supreme Court are required to be adhered to strictly, and therefore, the respondent no. 2 - University was justified in not opening the tender submitted by respondent no. 1 on 01.12.2008, which was late by three days. According to us no grievance could also be made by the respondent no. 1 as lapse was due to his own fault." (v) In the case of Nokia India (Pvt.) Ltd. Vs. Mahanagar Telephone Nigam Ltd. (AIR 2003 Delhi 474), the bidding documents had provided that bids received after the time prescribed for the submissions of the bids would be rejected. Since the petitioner submitted its bid with a delay of a few minutes, it was not entertained. The excuse for the delay put forth by the petitioner was that the lifts in the building where the bids were to be submitted were not functioning. The petitioner's writ petition was dismissed by the Delhi High Court holding that there were no abnormal or exceptional circumstances for permitting the petitioner's bid to be accepted beyond the stipulated deadline. (vi) In the case of K.V. Joseph & Sons Vs. Surya Constructions (AIR 2005 Kerala 159), the respondent had fixed 04.05.2004 (03:00 pm) as the last date for the submission of tender documents. The tender notification stipulated that the tender documents should be submitted through registered post. The writ petitioner had sent the tender documents through registered post on 05.05.2004. Since the tender documents were not received by 03:00 pm on 04.05.2004, by registered post, the same were not considered. The prequalification committee of the respondent had rejected the petitioner's prequalification documents since they had been sent late. The writ petitioner had prayed for the issuance of a writ of mandamus directing the respondents to consider the petitioner's tender documents. The Single Bench of the Kerala High Court allowed the writ petition, but the Division Bench of the said Court allowed the appeal and dismissed the writ petition.
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(vii) In the case of Siemens Ltd. Vs. Mumbai Railway Vikas Corporation Ltd., (Writ Petition No.2449/2010), the petitioner had filed a writ petition before the High Court of Judicature at Bombay praying for a direction to the respondent (the entity inviting bids) to extend the deadline for the submission of the bids to a date beyond the stipulated deadline so as to enable the petitioner to submit a bid. The writ petition was dismissed vide judgment dated 07.12.2010, wherein it was held that the competitive process of bidding had not suffered as a result of the petitioner 's exclusion. (viii) In the case of Aisha Siddique Vs. Senior Terminal Manager (2003 (2) AWC 1642), the time and date for the submission of tender documents was fixed in the tender notice. The writ petitioner had submitted her bid with a delay of ten minutes. It was asserted that the said delay was caused by a traffic jam. The Allahabad High Court dismissed the writ petition with the observation that time was of the essence in such matters, and to hold otherwise would make the legal position totally chaotic. Furthermore, it was held as follows:- "3. ... If we extend it by 10 minutes, then why not for 10 hours or 10 days? Where will the line be drawn. Hence, the only correct view can be that one has to be strict in such matters. Since the petitioner did not reach in time to submit her tender it cannot be accepted." (ix) In the case of Vijayashanti Instruments Corporation Vs. Directorate of Women Development and Child Welfare (1998 (1) ALD 515), respondent No.2 in the said case had submitted a bid beyond the deadline fixed in the tendered documents. The entity inviting the bids had entertained and accepted the bid submitted by respondent No.2. The other bidders who had submitted their bids within the stipulated deadline filed a writ petition before the High Court of Andhra Pradesh challenging the entertainment of respondent No.2's delayed bid. The writ petition was allowed and the decision to entertain and accept respondent No.2's bid was quashed. In the judgment dated 29.08.1997, it was held, inter alia, as follows:- "9. ...This reminds of an episode that there is no defense for anybody for being late even where the watch has stopped. It is for the interested persons to submit the bid and to make all possible attempts to reach the spot of tender receipt place before the stipulated time, if not well in advance. The punctuality is the back-bone of the policies in the business and contractual obligations. A person having…
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