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Petitioner: MUHAMMAD QAHIR SHAH and others VS Respondent: FEDERATION OF PAKISTAN, MINISTRY JUDGMENT
Court Name: Balochistan High Court Judge(s): Qazi Faez Isa, Muhammad Ejaz Swati Title:MUHAMMAD QAHIR SHAH and others vs FEDERATION OF PAKISTAN, MINISTRY
JUDGMENT
Reported As: 2014 YLR 2571 Result: Order accordingly Judgment JUDGMENT ' QAZI FAEZ ISA, C.J.--Constitutional Petition ("CP") No,71 of 2009 has been filed by Mr. Muhammad Qahir Shah, an Advocate practicing at Quetta, in the public interest, wherein he has assailed the sale of certain lands by. Pakistan Railways at Quetta. Constitutional Petition No,219 of 2010 has been filed by eleven petitioners objecting to the sale of Pakistan Railays land at Chamman, District Killa Abdullah, and Constitutional Petition No, 286 of 2014 has been filed by the successful bidder who had purchased the said Chamman property. That since the advertisements through which the bids were invited by Pakistan Railways for the sale of the Quetta and the Chamman properties and the facts of these petitions are the same or similar, and as the petitions involve similar law points, therefore, these petitions are being decided by this common judgment. 2. Mr. Muhammad Qahir Shah, Advocate argued his own petition (Constitutional Petition No, 771/2009) and Mr. Abdul Wali Nasir, Advocate represented the petitioners in Constitutional Petition No, 219/2010 and adopted the submissions of Mr. Muhammad Qahir Shah and also made certain additional points. Messrs Aitzaz Ahsan and Gohar Ali Khan, Barrister-at-Laws represented the private respondents in Constitutional Petitions Nos.771/2009 and 219/2010 and the petitioner in Constitutional Petition No, 286 of 2014. Syed Ayaz Zahoor, Advocate appeared for Pakistan Railways, Mr. Sher Shah Kasi, learned Deputy Attorney General ("DAG") for the Federation of Pakistan and Mr. Tariq Ali Tahir, learned Additional Advocate General ("AAG..") and Mr. Shai Hag, learned Assistant Advocate General for the Government of Balochistan.
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3. That Mr. Muhammad Qahir Shah alleged that valuable properties owned by Pakistan Railways were being disposed of by violating the Constitution of Islamic Republic of Pakistan ("the Constitution"), through a non-transparent process and at throwaway prices, which were well below the market rate, and that such sales were against the public interest. He further stated that the bidders did not abide by the terms of the bids and subsequent agreements entered into with Pakistan Railways; in addition the stipulated terms and conditions were from time to time changed to favour the bidders, which could not have been done as the new/revised terms had not been offered to the general publications. 4. That Constitutional Petition No,771 of 2009 was filed in respect of the following properties owned by Pakistan Railways; the location / description, area and name of successful bidders are also mentioned below:-- S. No.DescriptionArea (Sq.Yds.)Successful bidders 1. Plot-A, Jinnah Road, Quetta 3,289 Nil 2. Plot-B, Jinnah Road, Quetta 5,067 Mr. Munir Ahmed Baloch (respondent No.5) 3. Plot-C, Jinnah Road, Quetta 4,088Messrs Paracha Construction (respondent No.7) 4.Plot No.62, Zarghoon Road, Quetta2,823Mr. Hashmat Ali Shah Bukhari (respondent No.6) 5. Plot at Whyte Road, Quetta 2,132Messrs Paracha Construction (respondent No.7) ' No bids were received for the property listed at serial No,1 above and we have been told that it is not being sold. The four properties that are being sold (mentioned at serial numbers 2 to 5) are hereinafter collectively referred to as the "Quetta properties". 5. That Constitutional Petitions Nos. 219/2010 and 286/2014 pertain to a 29,493 square yard plot in Chamman town which is mentioned in the document's as Chamman Taxi Stand' and hereinafter referred to as the "Chamman property". Mr. Faizullah Khan (respondent No,5 in Constitutional Petition No, 219/2010 and the petitioner in Constitutional Petition No,286/2014) was the successful bidder in respect of the Chamman property. 6. That the facts of the case as ably put forward by Mr. Aitzaz Ahsan and which were not disputed by the other counsel, were that pursuant to advertisement published in the English newspaper 'Dawn' on 21st April, 2009 and in the Urdu newspaper 'Jang' on 22nd April, 2009 "Invitation of Bids for Prime Railway Lands" were invited "on 33 years (extendable) lease or rental basis". The published advertisement stated that, "Pakistan Railway invites bids from interested parties to setup commercial venture on the following properties across the country on attractive terms and conditions" (hereinafter referred to as "Bids Invitation"). The Bids Invitation mentioned 117 properties in Lahore, Rawalpindi, Multan, Peshawar, Sukkur, Karachi and Quetta Divisions. The Quetta properties and the Chamman property were listed under the sub-heading 'Quetta Division' and stood at serial numbers 114 to 117, as under:-- 114PR Property at Jinnah Road Quetta11390 115Chamman Taxi Stand on Mall Road29493 118Bungalow No.62 on Zarghoon Road2823 117P.R. Property on Whyte Road, Quetta2132 ' The referred to Plots A, B and C were not specifically mentioned and instead reference was made to, "PR Property at Jinnah Road Quetta" admeasuring 11,390 square yards; however, if the area of all
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three of the said plots (Plot A, B and C) are added together it comes to 12,444 and not 11,390. The terms and conditions in the Bids Invitation are reproduced hereunder:-- (i) The tender document and site plans can be obtained from the offices of Directorate of .Marketing and Non-Rail Business at Lahore, Karachi, and Islamabad at the addresses mentioned below: Only the bids submitted on tender documents issued by Railways shall be accepted. (ii) The bids will be received in the office of Dy. Director Marketing and NRB institute Allama Iqbal Road; Lahore, up to 1000 hours on 6th May, 2009. The 33-years straight lease bids will be opened on the same date at 1030 hours in the presence of the bidders. However, the two-envelope technical proposals and financial bids received on the same day for rental offers will be processed later under intimation to the interested parties. Any bid received after 1000 hours shall not be received and will be returned. (iii) The bid envelope 'should mention the serial number, property name and the type of bid (Lease or Rental) on the top left corner. Separate bids shall have to be submitted for each site and each type of bid. (iv) A bid security equal to 2% of the total bid value in case of 33-years straight lease, or 10% of the annual rental offered, will also have to be submitted in shape of Demand Draft/ Pay Order drawn in favour of "FA & CAO, Pakistan Railways", Lahore. The bid security will stand forfeited in case the bidder fails to comply with the terms and conditions of the financial offer. Bid security shall be returned to the unsuccessful parties on conclusion of the process. (v) A separate payment of Rs, 5000 as non-refundable processing/ submission fee shall also be made in the shape of Demand Draft/Pay Order drawn in favor of "FA & CAO, Pakistan Railways", Lahore. (vi) Parties are also encouraged to identify any other Railways lands that are not appearing in this advertisement and are also not currently under Railway use, and may submit Expressions of Interest for such sites along with site maps/sketches and location details. (vii) Pakistan Railways reserves the right to drop; all or any of the site or to cancel the bidding process." 7. That the last date for submission of bids as per the Bids Invitation was 6th May, 2009, however, the said date was subsequently extended by issuing corrigendums. A corrigendum was published on 21st May 2009 in daily 'Jang' and 'Dawn' stating that, "now bids are also invited for 99 years lease term" and extended the date of submission of bids till 10th June 2009 ("the first corrigendum"), followed by corrigendum published on 10th June 2009 in daily 'Jang' extending the date of submission of bids to 20th June 2009 ("the second corrigendum"). Another corrigendum was published, wherein it was stated that, "the following sites have also been added", however, the same is not relevant as the properties which were added through it were not situated in Balochistan. 8. That the 'Bid Documents' amongst others made mention of submission of 'Financial Offer' as under:-- "FINANCIAL OFFER ' The interested parties shall submit their rate for the lease premium on the basis of per Sq. Yard. The 60% of the total bid amount shall be paid, within 15 days of issuance of letter of intent (LOI). The balance 40% amount will be paid within 6 months in the shape of 6 post dated cheques. The possession will be handed over after receiving 100% of lease amount." ' The 'Period of Lease' as per the Bid Documents (clause D (ii)) was stated as under:-- "(ii) Period of Lease is 33 years (extendable for another similar term after the expiry of first term, under fresh terms and conditions to be agreed with mutual consent)." 9. The bidders were required to submit the rate they were offering per square yard and also to mention the total price of the same in the 'Bid Form' wherein the 'Payment Terms' were stated as
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under:-- "(1) Payment Terms: The bidders will be required to quote the area to be bid and the rate on "per square yard" basis. The 60% of the total bid amount shall be paid within 15 days of issuance of Letter of Intent (LOI). The balance 40% amount will be paid within next 6 months in the shape of 6 post dated cheques. The possession of the land shall be handed over only on receipt of 100% of the lease amount. Note: In additional to the above Annual Lease Rent in advance @ Rs,1.0 per sq. Ft per annum would be payable on the date of signing of the contract. Subsequently all advance annual lease rent payments would be due on the anniversary of same date." 10. That upon acceptance of the bid a 'Letter of Intent' ("LOI") was issued. The LOIs for the Quetta properties are dated 15th August, 2009, except one which is dated 13th August 2009. The LOI in respect of the Chamman property is dated 16th October, 2009. All the LOIs in respect of the Quetta properties are identical except the lease term in respect of Plot-B situated at Jinnah Road, Quetta is mentioned as ninety nine years, whereas in respect of the other three plots it is thirty three years. The common terms of the LOIs in respect of the Quetta properties are reproduced hereunder:-- "This is further to your bid for the lease of subject land held on June 20, 2009 at Lahore. We are pleased to inform you that your bid regarding the subject property has been accepted by the Executive Committee of Railway Board. Following are the terms and conditions: (i) Area (ii) Bid Value per Sq.Yd ________ (iii) Total lease Value (iv) Lease term Payment terms (a). 60% Upfront payment within 15 days of this letter. (b) 40% remaining to be paid in 6 equal monthly instalments. (c) Possession on 100% payment. (d) Rs,1.0 per sq.Ft per annum as ground rental in yearly advances: ' All expenses, approvals and NOCs pertaining to commercial usage of this property shall be the sole responsibility of the lessee. ' You are requested to kindly communicate your acceptance within one week upon receipt of this letter. (Imran Hussain Gilani) For Executive Director Marketing" ' The LOI in respect of the Chamman property is reproduced hereunder:- "This letter of intent is being issued in accordance with the decisions of the Executive Committee of Railway Board dated 13-7-2009 and 31-8-2009. We are pleased to inform you that the Executive Committee of Railway Board has accepted your bid, being highest, for the 33-year lease (extendable) of the subject property. Following are the terms and conditions offered by Railways to yet:-- I.Area 29,493 Sq. Yds II.Lease Premium Rs.5,750 per Sq.yd III.Total Lease Premium Re.1 Per Sq. ft IV.Annual Lease Charges33-Years (extendable) Payment Terms (a) At least 15% Upfront/immediate payment along with remaining 85% in shape of post-dated cheques or an unconditional bank guarantee payable within six months, to be submitted within ' 30-days of this letter, upon which you will have permission to establish the site office on the said property. (b) Upon receipt of at least 40% lease premium amount, you may commence the construction work.
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(c) Upon receipt of 60% amount, the possession of the entire site shall be passed on to you. (d) Annual Lease Charges will be payable in yearly advances. First year charges to be paid with the upfront lease premium payment. All expenses, approvals and NOC, s pertaining to commercial usage of this property shall be the sole responsibility of the lessee. (Syed Imran Hussain Gilani) For Executive Director Marketing" ' It is to be noted that the payment terms in respect of the Chamman property were changed, and whereas in the Bid Documents and Bid Form 60% payment was to be made within 15 days and remaining 40% within 6 months, in the LOIs only 15% payment was to be paid within 15 days and for the balance 85% post-dated cheque/s were to be submitted. 11. That a 'Lease Deed' dated 8th October, 2009 on a one hundred rupees stamp paper was executed in. Respect of Plot-B situated at Jinnah Road, Quetta. Another 'Lease Deed' also dated 8th October 2009 on a one hundred rupees stamp paper was executed in respect of Plot situated at Zarghoon Road, Quetta. The Lease Deed in respect of Plot-B was for a period of 99 years, whereas in respect of property situated at Zarghoon Road, Quetta it was for a period of 33 years "extendable". The measurement of Plot-B mentioned in the Lease Deed is 5,067 and in respect of 62, Zarghoon Road, Quetta it is 2,668 square yards, whereas in the Bids Invitation it was stated to be 2,823 square yards. 'Lease Deed' in respect of the Chamman property was executed on 1st February 2010; and was for a period of 33 years "extendable". Clause 2(b) of the leases in respect of the two Quetta properties and Clause 2(c) in respect of the Chamman Property, which are identical, are reproduced herein below: "(b) Possession ' On upfront payment of at least 15% of the Lease Premium at the time of signing of this Lease Deed as described in the clause 03 below, the Lessee shall have the right to setup a site office in the said property premises, whereas on receipt of 40% or more of the Lease Premium, the party may commence project construction work, and on receipt of 60% or more or the Lease Consideration, Possession of the entire property shall stand passed on to the Lessee." ' Clause 3 of the Lease Deeds titled 'lease premium' is reproduced hereunder: In respect of Plot-B situated at Jinnah Road, Quetta: "LEASE PREMIUM ' The consideration amount for the lease of the Property is Rs,160,623,900 (Rupees One Hundred Sixty Million Six Hundred Twenty Three Thousand Nine Hundred Only). The "Lease Premium" is to be paid by the Lessee as follows: (i) At the time of signing this lease deed 15% of the lease consideration (i.e, a sum of Rs,24,105,000 (Rupees Twenty Four Million One Hundred and Five Thousand Only) has been paid by the Lessee to the Lessor vide Bank draft No, 3114596 dated 186-2009 and Cheque No,4892022 dated 8-10-2009. (ii) 85% Remaining Lease Consideration (i.e, a sum of Rs,136,528,000 (Rupees One Hundred Thillty Six Million and Five Lacs Twenty Eighty Thousand Only) (the "Second Instalment") has been paid by the Lessee to the Lessor in shape of 02 (Two) unconditionally submitted post dated crossed cheques, duly verified by the Bank, and as per following details: (a) Cheque No,4892025 of United Bank Limited, dated: 8-4-2010 (b) Cheque No,4892023 of United Bank Limited, Dated: 8-4-2010" In respect of Plot No, 62, Zarghoon Road, Quetta: "LEASE PREMIUM ' The consideration amount for the lease of the Property is Rs,58,962,800 (Rupees Fifty Eight Million Nine Hundred Sixty Two Thousand Eight Hundred Only)) The "Lease Premium" is to be paid by the Lessee as follows: (i) At the time of signing this lease deed 15.8% of the lease consideration (i.e, a sum of Rs,9,360;000 (Rupees Nine Million Three Hundred and Sixty Thousand Only) has been paid by the Lessee to the
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Lessor vide Bank draft No, 1835703 dated 4-5-2009, No, 1835705 dated 4-5-2009, No,000622 dated 8-10-2009, No,000623 dated 8-10-2009, No .1857327 dated 8-10-2009, No,2770656 dated 8-10-2009 and No,2770657 dated 8-10-2009. -(ii) 84.2% Remaining Lease Consideration (i.e, a sum of Rs,49,602,800 (Rupees Forty Nine Million and Six Hundred Two Thousand Only) (the "Second' Instalment") has been paid by the Lessee to the Lessor in shape of 02 (Two) unconditionally submitted post dated crossed cheques, duly verified by the Bank, and as per following details: (a) Cheque No,2770658 of Habib Bank Limited, Dated: 8-1-2010 . (b) Cheque Nci.2770660 of Habib Bank Limited, Dated: 8-4-2010" In respect of the Chamman property: "LEASE PREMIUM ' The consideration amount for the lease of the Property is Rs,169,584,750 (Rupees One Hundred Sixty Nine Million Five Hundred Eighty Four Thousand, Seven Hundred and Fifty Only). The "Lease Premium" is to be paid by the Lessee as follows: (i) At the time of signing this lease deed 15% of the lease consideration (i.e, a sum of Rs,25,439,000 (Rupees. Twenty Five Million Four Hundred and thirty nine thousand Only) has been paid by the Lessee, detail is given below: (ii) 85% Remaining Lease Consideration (i.e, a sum of Rs,144,147,035) (Rupees One Hundred; Forty Four Million, One Hundred Forty Seven Thousand, and thirty five Only) (the "final instalment") has been paid by the Lessee to the Lessor in shape of 01 (One) unconditionally submitted post dated crossed cheque, duly verified by the Bank, and as per following details: (a) Cheque No,7715608 of Askari Bank Limited, dated: 25-7-2010 It is to be noted that the payment terms in the leases were changed, and whereas in the Bid Documents and Bid Forms 60% payment was to be made within 15 days and remaining 40% within 6 months, in the Lease Deeds only 15% payment was received and in respect of the balance 85% post dated cheque/s were obtained. 12. That as per the terms of LOIs in respect of the Quetta properties 60% of the payment pursuant to the bid was to be made within 15 days of the date of the LOI, i.e, by or before 31st October, 2009 in respect of Plot A, B and C, Jinah Road, Quetta and by or before 28th August, 2009 in respect of Plot No, 62 Zarghoon Road, Quetta. The remaining amount was to be paid in six equal instalments. The payment in respect of the Chamman property was to be made "15% upfront" and "remaining 75%" within six months, i.e, by or before 16th April 2010. 13. That admittedly payment as stipulated/agreed between the parties was not made in respect of any of the properties. Mr. Aitzaz Ahsan, learned counsel, contended that payments could not be made in view of the operation of an interlocutory order passed by this court on 3rd June 2010 in Constitutional Petition No, 771/2009, which is reproduced hereunder:-- "On 22-3-2010 respondents Nos.2 to 4 were directed to submit information along with supporting documents with regard to the properties situated in Quetta as under:-- ' The bids received. Evaluation of the bids. ' The decision with regard to the disposal of the said property. ' Particulars of the successful parties. ' Documents executed with said parties. ' Whether compliance of the bid terms has been made. ' It was further ordered that the aforesaid information shall be accompanied with documents. Unfortunately, till date neither the information nor the documents have been provided. The petitioner has assailed the right of the said respondents to dispose of properties to private parties that were under the use of Railways. The petitioner has filed this matter being a citizen of Pakistan and resident of Quetta City and in the public interest. Admittedly the land is public property, which
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was purportedly auctioned by the Railways. The petitioner has been able to disclose a prima facie case and states that the public would be greatly inconvenienced and suffer irreparable loss in case third party rights and construction is permitted to take place on the subject lands until the disposal of the petition. Moreover, the fact that the said respondents have failed to disclose the required information/documents has raised doubts about transparency and legality of their actions. Accordingly to safeguard public property and interest no work shall be carried out on, no third party interest created nor any transaction be made in respect of the Quetta properties auctioned by the Railways until the disposal of the petition. ' Respondents Nos.2, 3 and 4 are directed to submit explanation as to why contempt action should not be initiated against them for failure to provide the aforesaid information/ documents as directed vide order dated 22-3-2010." 14. That Mr. Abdul Wali Khan Nasir, Advocate adopted the arguments of Mr. Muhammad Qahir Shah. He however made the certain additional points with regard to the Chamman property. He referred to the reply filed by the Government of Balochistan in Constitutional Petition No,219/2010 and to the annexes therewith, including the attachment to a letter dated 11th June 1999 written by Mr. Haroon Khawaja, Secretary, Prime Minister's Secretariat to the Government of Balochistan wherein the value of the Chamman property was determined in 1999 or thereabouts to be "167.716m", i.e, Rs,167,716,000. He stated that whilst it is not known when the said valuation was done, however, even if it be presumed that it was done just before the issuance of the said letter in June 1999 it is not understandable how after a period of ten years it fetched only Rs,169,584,750. He further stated that the said valuation was determined on the basis of the property being "residential" and that if it was sold as 'commercial' its price would be manifold. He stated that if the bids were prominently and locally advertised considerably higher prices would have been offered. He stated that a publication was made ostensibly in a local 'newspaper"Sahafat', but the said newspaper cannot be categorized as a publication in a 'newspaper' as it is completely unknown, and that such type of 'newspapers' are colloquially referred to as 'dummy newspaper', of which a few copies are printed, but these are not sold. The said reply of the Government of Balochistan stated that it has "objection over the rate of bid" and categorized it as "a national loss and consequently Provincial Government interests have been affected" as it had "40% share of the revenue" which too had not been paid to the Government of Balochistan. 15. Messrs Muhammad Qahir Shah and Abdul Wali Nasir Advocates relied upon the following cases:-- ' Nadia Malik v. Makki Chemical Industries Pvt. Ltd., 2011 SCM R 1675. ' Wattan Party v. Federation of Pakistan, PLD 2006 SC 697. ' Alleged Corruption in Rental Power Plants etc., 2012 SCM R 773. ' The abovementioned case of Nadia Malik pertained to the sale by a bank of property mortgaged with it. The Hon'ble Supreme Court through the judgment authored by Amir Hani Muslim, J. Held that, "the sale in favour of the auction purchaser must reflect transparency", must not be "conducted in the manner to extend favour" (paragraph 16 I). The court further held that the auction purchaser "had taken his time to deposit the balance sale consideration in violation of the mandatory provisions of Order XXI, Rule 85, C.P.C. The belated application for extension in time for deposit of balance amount was wrongly entertained" (paragraph 16 J&K). ' In the Wattan Party case the privatization of the Pakistan Steel Mills Corporation was considered by a bench headed by the Chief Justice and eight Hon'ble judges of the Supreme Court. In addressing the question of standing and maintainability of the petition, after a review of the case- law, it held, that, "any member of the public having sufficient interest can maintain an action for redress of public injury arising from a breach of public duty or from violation of some provision of the Constitution or the law and for enforcement of such public duty and observance of such
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Constitutional provision. In the case of Benazir Bhutto ibid, it was held that only when the element of public importance is involved, the Supreme Court can exercise its power to issue the writ while sub- Article (1)(c) of Article 199 of the Constitution has a wider scope as there is no such limitation therein" (paragraph 21 B&C). And that "Article 8 of the Constitution grants the power of judicial review" (paragraph 47 K). The court examined the terms of the contract entered, into with the purchaser and held that, "there was no necessity to privatize the PSMC at a lesser price instead of selling it at fair market price for achieving the objects set out for privatization" (paragraph 93). ' In the Rental Power Plants' case the Hon'ble Supreme Court…
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