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Petitioner: M/S. M.N. Construction Company VS Respondent: Federation Of Pakistan, Etc
Court Name: Islamabad High Court Judge(s): Shaukat Aziz Siddiqui Title: M/S. M.N. Construction Company vs Federation Of Pakistan, Etc. Case No.: Writ Petition No. 3387 of 2012 Date of Judgment:2013-03-28 Reported As: PLD 2013 Islamabad 85, 2013 P.C.T.LR. 475 Result: Petition allowed
JUDGMENT
JUDGMENT SHAUKAT AZIZ SIDDIQUI, J. - Through this single judgment Writ Petition Nos. 3387, 3724/2012 and 582/2013 are being disposed off, as common question of law and facts are involved. FACTS AND EVENTS: 2. The Executive Engineer, Central Civil Division No. VIII, Pak PWD, Islamabad i.e. Respondent No. 3, through public notice called for pre-qualification of contractors, for the development schemes, approved under Prime Minister's directives for the year 2012-2013 for Xehsil Gujar Khan, District Rawalpindi, for the following two development projects:- (i) Dualization of Mandara of Chakwal Road, Tehsil Gujjar Khan and District Chakwal (64 Kms - Cost of PKR 2.676 billions) (ii) Dualization of Sohawa to Chakwal Road, Tehsil Gujjar Khan, District Rawalpindi and District Chakwal (70 Kms - Cost of PKR 3.3 billions) 3. Post qualification process of inviting bids for award of contract was on, when all of a sudden impugned directive No. 4218/M/PSPM/2012, dated 02.10.2012 surfaced, contents of which are of some significance, therefore, are being reproduced herein below:- PRIME MINISTER'S SECRETARIAT ISLAMABAD. Subject: (i) Dualization of Mandara to Chakwal Road. Tehsil Guiiar Khan and District Chakwal (64 Kms Cost of PKR 2.676 billions) (ii) Dualization of Sohawa to Chakwal Road. Tehsil Guiiar Khan. District Rawalpindi and District Chakwal (70 Kms Cost of PKR 3.3 billion) The Prime Minister has been pleased to direct that the two development projects cited as subject
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be assigned to National Logistic Cell (NLCV (emphasis provided) which is a government organization, (emphasis provided) for execution, as deposit works. 2. Funds be transferred to NLC and (emphasis provided) necessary coordination be made for ensuring timely completion of the projects. (Muhammad Ayub Qazi) Principal Secretary to the Prime Minister 02.10.2012 Secretary Housing & Works No. 4218/M/PSPM/2012. 4. Incidentally, both above-mentioned schemes/projects, fall in the constituency (NA 51) of Raja Pervez Ashraf, Ex-Prime Minister of Pakistan. Vide office order No. CEN/W-175268 (NA-51)/5682, dated 11.09.2012, pre-qualification list of all categories was circulated. It is worth to mention here that ail three petitioners were qualified whereas, National Logistics Company, commonly known as NLC i.e. Respondent No. 5 was not amongst the qualified contractors in any of the categories. 5. After issuance of above directive in negotiation with NLC, cost of both projects increased from Rs. 2.676 Billion to Rs. 4.472 Billion and from Rs. 3.3 Billion to Rs. 4.900 Billion (Total Rs. 5.976 billion to Rs. 9.372 Billion, with net difference of Rs. 3.396 Billions) but scope of work remained same. Director General PWD Mr. Shah Din Shaikh, vide letter No. DG-215/WI/PWD/NA-51, dated 12.10.2012 addressed to the Chief Engineer (North) conveyed information about signing of MOU between Pak PWD and NLC. This letter is also of much value, therefore, its contents are being reproduced hereunder:- Subject: (i) Dualization of Mandara to Chakwal Road. Tehsil Gujjar Khar and District Chakwal (64 Kms - Cost of PKR 2.676 billions) (ii) Dualization of Sohawa to Chakwal Road. Tehsil Guiar Khan. District Rawalpindi and District Chakwal (70 Kms - Cost of PKR 3.3 billion) In pursuance of Prime Minister's directive received vide P.M. Secretariat Islamabad U.O. No. 4218/M/PSPM/2012, dated 02.10.2012 and MOU has been signed between Pak. PWD, and National Logistic Cell (NLC) in respect of the above-mentioned development schemes approved under Prime Minister's Directives for NA-51 for the year 2012-13 2. . MOU is sent herewith in original for taking further action strictly as per terms and Conditions laid down therein (emphasis provided) All concerned may also be informed accordingly, for further necessary action. (SHAH DlN SHEIKH) Director General Enel: As stated MOU (in original) Contents of MOU signed between, Secretary Ministry of Housing and NLC, are being provided hereunder:- "MEMORANDUM OF UNDERSTANDING (MOU) This agreement (hereinafter referred to as the "MOU" is made on this the day of 2012. BETWEEN The President of Islamic Republic of Pakistan through Secretary Housing & Works, Government of Pakistan, (hereinafter referred to as "Employer" which expression shall, wherever context so permits, include its successors-in-interest, representative and assigns) of the one part; AND M/s. National Logistics Cell (NLC), (hereinafter referred to as the "Agency" which expression shall, wherever context so permits, include its successors- in-interest, representatives and assigns) of the second part. (Both "the Employer" and "the Agency" are collectively referred to as "the Parties")
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WHEREAS the Agency is responsible for the execution of Schemes (Dualization of Mandra to Chakwal Road, Tehsil Gujjar Khan, District Rawalpindi & District Chakwal (64 KMs) and Dualization of Sohawa to Chakwal Road, Tehsil Gujjar Khan, District Rawalpindi & District Chakwal M/s. M.N. Construction Co. V. Federation of Pakistan C.L. 483 (Shoukat Aziz Siddiquie J.) (70 KMs) assigned by the Prime Minister of Pakistan vide letter No. 4218/M/PSPM/2012, dated 02.10.2012. AND WHEREAS the Parties are agreed on- mechanism of deposit work payment. NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Parties hereto, through their authorized agents respectively, have agreed to the terms and conditions set forth hereinafter for the performance of the MOll and in token thereof have affixed their signatures. 1. GENERAL (a) The MOU is considered to be a comprehensive document of Civil Engineering works which the Employer intends to carry out through Agency. (b) The basic parameters of MOU are deposit works arrangements by the Employer and the Agency for execution/completion of public projects. (c) Both schemes are planned to be completed within agreed timelines. 2. OPERATIONAL: (a) Work to be undertaken on the direction of Prime Minister of Pakistan through Secretary Housing & Works. (b) the employer will be responsible for acquisition of land. Centre line with extent of Right of Way (ROW) will be provided by 15th October, 2012. (c) The agency shall be responsible for execution of works as deposit work arrangements. (d) The Agency will mobilize and take up the work immediately after signing of an MOU. (e) "The Agency" shall ensure engagement of consultant for proper planning, designing and detailed supervision on commencement of work. (f) The agency shall ensure assigning of work soon after the signing of the MOU. (emphasis provided) (g) The parties will conclude and enter into formal contract for both the projects after provision of detailed design by the Consultant and Engineer Estimate. (h) Time schedule mutually agreed for completion of project will be integral part of both the contract agreements. (j) The Agency will be responsible for relocation of utility services, diversion, and traffic control arrangement. (k) Escalation/price variation will be admissible-.As per existing rules of PEC with effecTfrom signing of MOU. (l) NLC shall be responsible for maintenance period upto 2 years free of cost. (m) Any query/clarification will be resolved mutually. FINANCIAL: (a) Rates of contract will be mutually decided after preparation of Engineers Estimate, (emphasis provided) (b) (Shaukat Aziz Siddiqui, J.) Payment. Follow in a Davment modalities will be followed:- (D 25% of already worked out indicated cost on signing of MOU. (2) 25% on signing of contract. (3) Remaining amount of the contract by 30th March, 2013.
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ADMINISTRATIVE: (a) On 5th of every month a progress review meeting will be held for informing progress to Director General Pak PWD. (b) Both parties have accepted and agreed to record the understanding and commitments through this MOU. (c) The Agency has accepted the appointment to execute the work at the terms and conditions agreed upon. Ln witness WHEREOF the parties hereby sign this MOU, on___________ day of ____ _2012. Pak PWD, Islamabad Ministry of Housing & WorksCommander Engineers NLC Witness 1:----------------------------- -------------Witness 1: ----------------------------- ----------- Senior Manager (Monitoring) Headquarter Engineers NLC Witness 2: ---------------------------- --------------Wintess 2: ---------------------------- ------------- Senior Manager (contract) Headquarters Engineers NLC 6. Feeling aggrieved of this act M/s. M.N. Construction Company, invoked the Constitutional jurisdiction of this Court on 09.10.2012 by way of filing W.P. No. 3387/2012 on the following grounds:- * That award of contract to NLC is indirect violation of PPRA Rules 2004. * That impugned office order dated 02.10.2012 is illegal, void, of no legal effect, liable to be struck down. This Writ Petition came up for hearing before this Court on 10.10.2012, and after hearing the learned counsel following order was passed:- "Grievance put forth through instant petition is that, in response to a notice, petitioner alongwith other parties participated in the pre-qualification process and carried out for the following projects:- (i) Dualization of Mandra to Chakwai Road. Tehsil Gui'iar Khan. District Rawalpindi and District Chakwai (64 Kms.) (Cost of PKR 2.676 Billions). (ii) Dualization of Sohawa to Chakwai Road. Tehsil Gujjar Khan. District Rawalpindi and District Chakwai (70 Kms) (Cost of PKR 3.3 Billions). Petitioner qualified the same. According to petitioner, his previous excellent track record and prolific performance there was genuine expectancy of the award for contract, but impugned order dated 02.10.2012 surfaced through which Honourable Prime Minister of Pakistan, has directed for assigning the contract to National Logistics Cell (NLC) being a Government Organization. Learned counsel for petitioner submits that discretion exercised by the authority is in violation of the PPRA Ordinance, 2002 and the Public Procurement Rules, 2004, besides the . Fact that non-transparent mechanism has been adopted. Let copy of this petition be transmitted to respondent No. 1, for report and parawise comments, so as to reach this Court within a fortnight, with an advance copy to the learned counsel for petitioner Notices may also be issued to respondent Nos. 5 & 6, for their representation before the Court on next date of hearing. C.M. No. 1/2012: Subject to notice, in the meantime, operation of impugned order dated 2.10.2012, shall remain
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suspended. However, if respondent Authority, opts to complete the bidding process in accordance with law, this order shall not run against it. C.M No. 2/2012: Exemption sought for is allowed subject to all just and legal exceptions: Disposed of." 7. M/s. Gondal Construction Company and Ch. Saeed Anwar Sole Proprietor, M/s.- Allied Aids filed their petitions on 03.11.2012 & 12.02.2013, on similar grounds, which came for hearing on 05.11.2012 and 13.02.2013, respectively, and almost same order, already passed in Writ Petition No. 3387/2012 were passed. 8. During the pendency of Writ Petitions and currency of restraining orders dated 10.10.2012, 05.11.2012 & 13.02.2013, PWD issued three cheques in favour of NLC, detail of which is as under:- Sr.No.Cheque No.Amount Dated (i) B 836966 Rs. 1.1 Billion 15.10.2012 (ii) B 850167 Rs. 1.2 Billion 30.01.2013 (iii) B 853844 Rs. 3.675 Billion 16.03.2013 Total Pak Rupees Rs. 5.975 Billion 9, In order to point out, disobedience and violation of Court order M/s. Gondal Construction Company filed Criminal Original No.128-W/2013, which came for hearing on 20.03.2013 and after hearing the learned counsel following order was passed:- "Grievance of petitioner is that despite specific orders dated 10.10.2012 passed in writ petitions Nos. 3387/2012 and 3724/2012, respondents intentionally, deliberately, maliciously and willfully frustrated and disobeyed these orders by making payment through cheque dated 16.03.2013 amounting to Rs. 3,675,0, 000/-. According to learned counsel, the respondents instead of performing their duties in accordance with law acted under the influence of authority, which has resulted into frustrating the orders of this Court and undermining the judicial authority. Let notice be issued to respondents for their personal appearance before the Court on 25.03.2013," 10. Ln compliance of order, respondents put their appearance. After- hearing them and learned counsel for petitioner following order was passed. "Respondent Nos. 1 & 2, took the stance that order dated 5.11.2012, was not In their knowledge, however, submitted that order dated 10.10.2012, passed in Writ Petition No. 3387/2C12 was in their knowledge but on the direction of Principal Secretary to the then Prime Minister of Pakistan, work for execution to NLC was awarded, therefore, cheque No. B- 853844, dated 16.03.2013, was issued. The stance taken by the respondents on the face of it is an admission on their part that despite the order dated 10.10.2012, passed in Writ Petition No. 3387/2012, they issued the cheque amounting to Rs. 3,675,000,000/-. In this view of the matter they may be issued formal show-cause notices, to explain that why contempt of Court proceedings may not be initiated against them, for intentional, deliberate and willful disobedience of the order of the Court? They are directed to file the reply of show-cause cause notice within two days. It is made clear that, concerned bank shall not release the payment, till the final adjudication of the main writ petition. Adjourned to 28.03.2013." 11. By realizing the mistake and consequences of the disobedience of the orders of this Court, official of PWD wrote letter No. EE.CCD.VIII/AB/546, dated 25.3.2013 which reads as under:- Subject: (i) Dualization of Mandara to Chakwal Road. Tehsil Gujjar Khan and District Chakwal 164 KM Cost of PKR 2.676 billions) (ii) Dualization of Sohawa to Chakwal Road: Tehsil Gujjar Khan. District Rawalpindi and District Chakwal 170 K M Cost of PKR 3.3 billion)
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Dear Sir, The cheque bearing No. B-0853331, dated 16.03.2013 amounting Rs. 3.675 Billion (Rupees Three Billion Six Hundred Seventy five Millions Only) issued in your favour for the above-cited projects be returned to this Office, as this Office is receipt of Court orders for Suspension of the direction issued by PSPM vide No. 1428/PSPM/2012, dated 02.10.2012 ^(Copies of stay order Contempt notice are attached). Your faithfully, (M. ATIQ-UR-REHMAN) Executive Engineer, Central Civil Divn. No. VIII Pak PWD, Islamabad. Copy forwarded to:- 1. The Treasury Officer, Federal Treasury Office Islamabad. He is requested that the cheque bearing No. B-08534/B-853331, dated 16.03.2013 amounting Rs. 3.675 Billion issued in favour of M/s. NLC may not be entertained for endorsement till the decision of the honourable Islamabad High Court, Islamabad. 12. On the same date i.e. 25.03.2018 through C.M. No.1200/2013 under Section 151, C.P.C., for appropriate order and setting aside order dated 05.11.2012 was sought by the NLC, and vide order dated 26.03.2013, notice of CM was issued for the already fixed date i.e. 28.03.2013, similarly on 26.03.2013 C.M. Nos. 1241 & 1243/2013 were moved in connected Writ Petitions. On 27.03.2013 M/s. M.N. Construction Company moved CM No. 1248/2013 for permission to withdraw the Writ Petition on the ground that "grievance of the petitioner remains resolved due to filing of the titled Writ Petition". This move was not sudden, rather all stake holders were trying to provide cover to the assigning of work to NLC, therefore, M/s. M.N. Construction Company was also blessed by award of Sub. Contract by NLC, this aspect is evident from the contents of undertaking given to the Executive Engineer Pak PWD by Mr. Zain Ullah son of Niamat Ullah, Proprietor of M/s. M.N. Construction Company which reads as under:- The Executive Engineer, Central Civil Division No. VIII, Pak, PWD, Islamabad. Subject: Court Case Writ Petition No. 3387/2012. Dear Sir, We had filed the subjected writ petition because we were not allowed to participate in the tenders of Mandra to Chakwal Road and Sohawa to Chakwal Road. However, NLC has awarded the portion of these roads and the agreement will be signed with NLC shortly. Since our grievance has been redressed, we are withdrawing the subjected writ petition, and will not pursue this case till withdrawal. However, we reserve the right for litigation in future. Yours Sincerely, (ZAIN ULLAH) Son of Niamat Ullah 13. On the date of hearing i.e. 28.03.2013 learned counsel for petitioner looked unsure about the approach of his client, regarding move of withdrawal of Writ Petition. I will deal this aspect in the later part of my judgment. However, learned counsel appearing on behalf of NLC, requested that, application under Section, 151 may be treated as reply to writ petition, and that they are ready to advance their arguments on the main petition. 14. Learned counsel for petitioners arid petitioners of Writ Petition Nos. 3724/2012 and 582/2013 submitted that entire process of award of contract to NLC is besides the law, non-transparent and result of some underhand deal. Petitioners in person further submitted that NLC does not execute work directly, rather through sub-contractors. 15. Conversely, learned, counsel for NLC supported the impugned directive dated 02.10.2012 on the following grounds: That respondent No. 5 has deployed heavy machinery on the project site at main G.T. Road and development work of road is being completed with full use of all resources and manpower as
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public at large is suffering tremendously due to traffic hazards and development work. That Public Procurement Law are not applicable on the development projects assigned to respondent No. 5 as development projects were to be executed as "Deposit Works" and not from Public Fund, and for the reason that NLC is a Govt. Organization. That, deposit works are not included in the definition of Public Fund, as well as Public Procurement, sto Federal Government is at liberty to assign any project as deposit works, as per the decision/policy and it is settled principle of law that Constitutional jurisdiction cannot be invoked in policy matters formulated by the Federal Government. That the instant writ petition mandamus in nature, therefore, it comes within the ambit of Article 199(1)(a)(i) of the Constitution and Interim order dated 05.11.2012 was obtained in violation of provision of sub-Article (4) of Article 199 of the Constitution. That, petitioners placed reliance on letter dated 11.09.2012 which contains list of companies who declared pre-qualified but the Prime Minister under exercise of hi3 authority and discretion directed to assign the work to NLC, as deposit works, therefore, list/ietter dated 11.09.2012 became infructuous. 16. Besides above grounds, objection raised on the maintainability of Writ Petitions, In support of their contentions learned counsel placed reliance on the judgments reported as PLD 2002 Lah. 359, 2011 CLC 1935 and 2000 P.Cr.L.J. 1150. I have heard learned counsel, perused the documents appended with the pleadings and gone through the PPRA Ordinance, 2002 and Rules made there under. 17. Since facts and events took place, have already been provided, therefore, I will confine myself to the provisions of law, dictums laid down by the august Supreme Court and their applicability to the instant matter. Objection with regard to maintainability of writ petition and applicability of PPRA Ordinance, 2002 and PPRA Rules, 2004 are being answered through celebrated judgments delivered by ultimate Court of the country. "In the case of Sindh High Court Bar Association "PLD 2009 SC 879" honourable Supreme Court held as under:- "Government power must be exercised within the constraints of rules that apply to ample categories of persons and acts, and these rules, whatever they may be, must be uniformly applied. Rule of law as defined by Aristotle is "Rule of law is to be preferred to that of any Individual" whereas in the words of the Massachusetts Constitution It means "a Government of laws and not of men" which described in one word means supremacy of law. Supremacy of law defined with the Divine Command the Holy in Quran 4:59 which is translated in English as under:- "O ye who believer! Obey Allah and obey the Apostle, And those charged with authority you". Hazrat Abu Bakr Siddique (R.A.A.) in his first speech as Caliph explained the above words; the nub of its is that obedience to persons in authority is an obligation only if what they require you to do so is in accordance with the Holy Qur'an and Sunnah of the Holy Prophet (S.A.W.S) This is the highest authority in the power to judicial review. "In the Suo Motu Case No. 18/2010 regarding matter of Violation of Public Procurement Rules, 2004 reported as PLD 2011 SC 927 august Supreme Court held that:- "Where a procedure has been provided for doing a thing in a particular manner that thing should be done in that manner and in no other way or it should not be done at all indeed it impliedly prohibits doing of thing in any other manner; the : compliance for such thing in no way could be either ignored or dispensed with.
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If the act complained of is without jurisdiction or is in excess of authority conferred by statute or there is abuse or misuse of power, Court can interfere, In such an eventuality, mere fact that there is denial of allegation of mala fide or oblique motive or of its having taken into consideration improper or irrelevant matter does not preclude the Court from enquiring into the truth of allegations levelled against the authority and granting appropriate relief to the aggrieved party. The decision is unlawful if it is one to which no reasonable authority could have come. The discretion enjoyed by the persons holding high offices should not be left to the good sense of individuals and presumption thafrpersoh holding high office does not commit wrong is liable to be repelled. Every arbitrary action, whether in the nature of legislative or administrative or quasi judicial exercise of power, is liable to attract the prohibition under the Constitution. Court may look into the material on record, uphold the right of judicial review, on the basis of illegality in decision making process coupled with irrationality and perversity. If the administrative or judicial power has been exercised on non- consideration or non-application of mind to relevant factors, such exercise shall stand vitiated. The parameters of the Court's power of judicial review of administrative or executive action or decision and the grounds on which the Court can interfere with the sample are well-settled. Indisputably, if the action or decision is perverse or is such that no reasonable body of persons, properly informed, could come to or has been arrived at by the authority misdirecting itself by adopting a wrong approach or has been influenced by irrelevant or extraneous matter the Court would be justified in interfering with the same. In Suo Motu case No. 5 of 2010 reported as PLD 2010 SC 731 the learned apex Court held that:- "Awarding of contract-rTransparency-Supreme Court, duty of-Massive corruption was alleged in awarding contract of supply of Liquefied Natural Gas (LNG)-Supreme Court, in exercise of powers under Art. 184(3) of the Constitution took notice of the allegation and issued notices to the parties concerned-Validity-Ministry of Petroleum and Gas Company did not follow the process for awarding contract for LNG supply for Mashal or Short Term project seriously and with high order of transparency-Price slope averaging from 0.145 to 0.155, needed to be kept in view-It was duty of Supreme Court to ensure that Procurement Public Regulatory Authority Ordinance, 2002, read with Public Procurement Rules, 2004, were adhered to strictly to exhibit transparency-Such type of transactions must be made in transparent manner for the satisfaction of people, whb were the virtual owners of national "'exchequer, which was being invested in such projects. While taking suo motu notice of violation of Public Procumbent Rules, 2004 august Supreme Court through reported judgment "2011 PLC (CS) 1130" observed as under:- "Fair and discretion, exercise of-Principies- Action must be based on fair, open and Just consideration to decide matters more particularly when such powers are to be exercised on discretion-Arbitrariness in any manner is to be avoided to ensure that action based oh discretion Is fair and transparent-Discretion Is to be exercised according to rational reasons which means that; there be finding of…
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