' MUHAMMAD MUJEEBULLAH SIDDIQUI, J.--- Through this petition under Article 199 of the Constitution of Islamic Republic of Pakistan, following relief has been sought:-- ' "It is, therefore, prayed that this Honourable Court may be pleased to:
(a) declare that the impugned decision of the Custodian to cancel the bid awarded in favour of the petitioners is contrary to law and of no legal effect.
(b) declare that the decision of the Custodian to invite fresh offer for the Project is contrary to law and of no legal effect.
(c) restrain the Custodian from re-selling the Project land/or disposing off the same to anyone other than the petitioners.
(d) direct the Custodian to execute a conveyance deed in favour of the petitioners for the Project on the agreed amount on terms and conditions contemplated in the bid documents and/or such terms and conditions as may be deemed appropriate or reasonable by this Honourable Court.
(e) such other order as may be necessary or expedient in the interest of justice."
2. The facts giving rise to this petition as contained in the memo. Of petition are that the petitioners jointly submitted a bid for purchasing Karachi Hotel Project (formerly known as Hayat Regency Hotel Project) in response to the bids invited by the respondents under the provisions of Karachi Hotel Project Order 1989 MLO 105. The bid was accepted and was subsequently cancelled for alleged violation of the terms and conditions of the contract. The offer given by the petitioners was accompanied by earnest money in the sum of Rs,50,00,000 and the project was sold on "as is where is basis". The bid was submitted by the petitioners in the sum of Rs,220,786,786. It is stated that in the event of offer being accepted the balance price was to be paid within 60 days of acceptance. The bid was submitted by the petitioners on the prescribed bid form which inter alia contained the following:-- "(a) The balance payment was to be made within sixty (60) days 'on conveyance being executed'.
As will be explicated hereinafter, subsequently the Custodian in gross and flagrant violation of the terms of the bid form which had been prepared by him insisted that the full payment should be made without his transferring the title and merely on handing over 'possession under a sale agreement the unreasonable terms of which were unilaterally specified by him.
(b) The Custodian was required to either accept the offer within six (6) months, or failing which, to refund the amount within the said period. In violation of the said clause the decision by him to accept the offer was taken after about nine months.
(c) In the description of the property being sold it was clearly specified that it included 'all the equipment imported for the purpose of the Hotel and stored in a warehouse'. Reading this clause together with the clause which stated that the project was being sold on an 'as is where is' basis it is clear that the commitment of the Custodian was to deliver all the equipment which had been imported for the Project but the condition of the equipment was not his responsibility. However, in violation of his obligation in relation thereto the Custodian was not prepared to supply even the original invoices relating to the equipment and, when an attempt to obtain the originals from him failed, was not even prepared to supply certified copies thereof to enable the. Petitioners to check whether the equipment was complete or not or to give them an adequate opportunity of inspection."
3. It is alleged that the bid form contained some false statements pertaining to the inspection of title-deed of property and the ownership of the land by the Pakistan Railways. It is also alleged that the value of the land was to be assessed and re-assessed by a Committee which did not take place with the result that some basic lacuna existed in this critical area. According to petitioners these points were subsequently, raised with the respondents which were thrashed out. It is contended that under the Transfer of Property Act, 1881, it is the right of every purchaser to take a clear title of a transferred property but the respondents acted as if he was the martial law authority, authorized to override all the laws of the land. It is further alleged that the petitioners were called upon to make payment of 10% of the total bid amount. The petitioners made partial payment and requested for extension to arrange the money from abroad. Certain pay-orders were submitted with a request not to encash them but ultimately the pay-orders were encashed, thus, 10% of the total bid amount was paid. Subsequently, a controversy arose between the parties, as the respondents demanded 100% payment without executing a conveyance-deed in favour of the petitioners. As the balance payment of 90% was not made within a period of 60 days of the acceptance of bid therefore, the contract was cancelled. The respondents thereafter, issued public advertisement inviting fresh bids. On the basis of these facts, the petitioners have invoked the Constitutional jurisdiction of this Court with the prayers as reproduced above.
4. The respondent has taken plea that the petitioners have committed serious default in performance of their obligations under the bid, document and have protracted the finalization of sale on one or the other pretext. It is contended that the petitioners are not willing to finalize transaction as from the very beginning they wanted to make payment on deferred terms and on long terms instalments which was not acceptable to the respondents. It is also contended that the petition is hit by the law laid down by the superior Courts, that the Constitutional jurisdiction cannot be invoked for enforcing the specific performance of contract. It is submitted that a perusal of prayer clauses shows that the petitioners want specific enforcement of the performance of the contract through the writ petition which is not permissible in law. It is alleged that the petitioners committed breach of the terms of contract and therefore, they have invoked Constitutional jurisdiction of this Court with mala fide intention. It is further contended that the contract has not been cancelled in exercise of any power conferred by MLO 105, but on account of serious defaults committed by the petitioners.
5. We have heard the learned Advocates for the parties.
6. Mr. Abdul Sattar Pirzada, learned counsel for the respondent has merely submitted a statement that no stay order was operating and consequently, the disputed property has been re-auctioned at much higher price as compared to the bid offered by the petitioners. The fresh bid has been accepted and thereafter the sale has been concluded and finalized. According to him in the above circumstances, the petition has been rendered infructuous which is liable to be dismissed. It is also contended in the statement that at same stage the learned counsel for the petitioners attempted to advance the arguments on the basis of principles of lis pendens, which according to him is not attracted. It is further averred in the statement that the principles of lis pendens, is applicable to the suit filed in the ordinary civil jurisdiction and not to a Constitution petition and that as per amendment made in section 52 of the Transfer of Property Act, the doctrine of lis pendens can only be attracted provided the plaint in the instituted suit has been registered with the Registrar under section 18 of the Registration Act. It is alleged that no such registration has been made or claimed.
7. On the other hand, Mr. H.A. Rehmani, learned counsel for the petitioners has addressed arguments on merits as well as on the point of applicability of the principles of lis pendens. Mr. Rehmani, was pointed out that the prayer clause seeks relief which is in the nature of specific performance of contract and was further asked to address arguments on the point of maintainability of the petition.
8. Mr. H.A. Rehmani, did not deny that the relief sought is in the nature of direction for specific performance of the contract and that the relief sought emanates from the contract executed between the petitioners and the respondent. He stated that normally a petition is not to be entertained if a relief sought pertains to the contractual obligation. However, according to him, if an illegal, arbitrary and mala fide act is committed by the public functionaries, then notwithstanding the ordinary course of seeking relief through a civil suit, the aggrieved person may invoke the Constitutional jurisdiction of this Court under Article 199 of the Constitution.
9. In view of the judgment to be delivered presently, we would not like to give any finding on merits as well as the issue pertaining to the availability of principles of lis pendens. The reason being that while disposing of the petition on the point of jurisdiction and non-maintainability of the petition it would not be proper to make any observation on merits and on any point of law other than maintainability of the petition as it is likely to affect the proceedings which the petitioner may like to pursue available to him under the statute.
10. On the point of maintainability of the petition Mr. H.A. Rehmani has placed reliance on the judgment of Honourable Supreme Court in the case of Messrs Airport Support Services v. The Airport Manager 1998 SCM R 2268. In the cited case a licence was granted which was subsequently terminated. This High Court dismissed the petition for the reason that the dispute, was covered by an arbitration clause and the investigation into the facts pertaining to contractual rights were involved, therefore, remedy of suit was more appropriate. Leave was granted by the Honourable Supreme Court upon a plea that the question was not one of enforcement of contractual obligation but of violation of mandatory provisions of law, requiring proper notice as envisaged in section 3 of the Central Government Lands and Buildings. (Recovery of Possession) Ordinance, LIV of 1965, since amended by Ordinance X of 1984, which was not duly considered in the High Court.
The Honourable Supreme Court after reproducing the relevant provisions of law observed that the impugned action fell beyond the scope of contractual stipulations and statutory mandate. It was further observed by the Honourable Supreme Court that the High Court proceeded to decline relief on the grounds that the Constitutional jurisdiction did not extend to the enforcement of contractual obligation and the arbitration clause also came in the way of the petitioner. It was held that neither of the conclusions was sustainable. The principle of law was propounded as follows:-- ' "It has consistently been held that while routine contractual disputes between private parties and public functionaries are not open to scrutiny under the Constitutional jurisdiction, breaches of such contracts, which do not entail inquiry into or examination of minute or controversial questions of fact, if committed by Government, Semi-Government or Local Authorities ' or like controversies if involving dereliction of obligations, flowing from a statute, rules .Or instructions can adequately be addressed for relief under that jurisdiction. Further a contract, carrying elements of public interest, concluded by functionaries of the State, has to be just, fair, transparent, reasonable and free of any taint of mala fides, all such aspects remaining open for judicial review. The rule is founded on the premises that public functionaries, deriving authority from or under law, are obligated to act justly, fairly equitably, reasonably, without any element of discrimination and squarely within the parameters of law, as applicable in a given situation. Deviations, if of substance, can be corrected through appropriate orders under Article 199 of the Constitution. In such behalf even where a contract, pure and simple, is involved, provided always that public element presents itself and the dispute does not entail evidentiary facts of a disputed nature, rederess may be provided."
11. The Honourable Supreme Court further observed as follows:-- ' "Thus, where a contract in terms of the Specific Relief Act cannot be specifically enforced or under the Contract Act is void ab initio or under the Sale of Goods Act giving effect to the same may contravene the principles and postulates of that law, a Constitutional Court would be slow in extending relief. It is for this reason that a servant cannot be forced on an unwilling master nor can contracts eminently unsuitable for specific performance to be directed to be specifically performed nor considerations of public policy may be ignored in extending a Constitutional remedy. All this, however, in the Courts discretion may give way to public interest and public goods, where a State functionary has exceeded his power and wilfully or wantonly trampled upon vested private or public rights."
12. After enunciating the above principle and examination of facts, as well as law, and after coming to the conclusion that the impugned action taken on part of Civil Aviation Authority was not in accordance with the law, the relief was declined by the Honourable Supreme Court and the appeal was dismissed for the reason that the conduct of the appellant/petitioner was not above board. By placing reliance on an earlier judgment of Honourable Supreme Court in the case of Nawab Syed Raunaq Ali PLD 1973 SC 236, it was held that the jurisdiction under Article 199 of the Constitution being discretionary; the Court, where equities require, may, even in the best of cases, choose to decline interference. It was held that even though the respondents were found liable, redress need not follow.
13. Mr. Rehmani, has next placed reliance on the judgment in the case of Messrs Ramna Pipe and General Mills (Pvt.) Limited v. Messrs Sui Northern Gas Pipe Lines (Pvt.) and others 2004 SCM R 1274, wherein reliance was mainly placed on the principles of law enunciated in the case of Messrs Airport Support Services (supra).
14. We have come across a recent Division Bench judgment of this Court in the case of Habib-ur- Rehman Unar v. Government of Sindh, SBLR 2004 Sindh 1371. After a very detailed and elaborate discussion it has been held that there are two different situations pertaining to the field of contract:--
(i) Situation at the time of entering into contract.
(ii) Situation after the execution of contract.
15. Dealing with Situation No,(ii), it has been held that if the State functionaries have executed a contract then the relations are no longer governed by the Constitutional provisions and it is the contract which shall determine rights and obligations of the parties. In such circumstances, the parties can claim rights conferred upon them by the contract until and unless some statute step in and confers some special authority, power or obligation on the State in the contractual field which is apart from the contract. With reference to the facts of the cited case, it was held that the parties entered into a contract and no statutory provisions governed the right and obligations of the parties therefore no writ could be issued under the Constitutional jurisdiction. After referring to a large number of rulings it was held that where a contractual right can be enforced through filing of suit for specific performance the petition would not be maintainable.
16. In the case of Messrs Momin Motor Company v. The Regional Transport Authority PLD 1962 SC 108, a Bench comprising five Honourable Judges of the Supreme Court, held that, "the contractual rights, if any, are not enforceable by recourse to writ jurisdiction". In this case an order passed by the public functionaries was assailed.
17. In the case of M. Muzaffar-ud-Din Industries Ltd. v. The Chief Settlement and Rehabilitation Commissioner, Lahore, 1968 SCMR 1136, the Honourable Supreme Court while dealing with an issue arising out of a contract held as follows:-- ' "We find ourselves in complete accord with the view adopted by the learned Judges in the High Court that the only appropriate remedy open to the petitioner was to file a civil suit for the specific performance of the contract if so advised."
18. In the case of Shamshad Ali Khan v. Commissioner, Lahore, 1969 SCM R 122, it was held that in case of breach of agreement no remedy lay in the writ' jurisdiction of the High Court. In another Division Bench judgment in the case of Owaisco v. Federation of Pakistan PLD 1999 Kar. 472, the question of maintainability of writ petition involving contractual obligation was examined at length by his Lordship. Nazim Hussain Siddiqui, C.J. (as his Lordship then was). It has been held as under:-- ' "Ratio of the above cases is that when the State while awarding a contract to a party had acted in an unfair or arbitrary manner or had discriminated against one of the parties who had contested for the award of contract such grievance could' be' looked into by superior Court in exercise of the power of judicial review under Article 199 of the Constitution, although in ordinary circumstances purely contractual obligation could not be the subject-matter of proceedings under said Article. If it is established that Government had acted arbitrarily or in an unfair manner the Court could strike down such action. The Court as a rule, shall strike a balance between competing interest and should be extremely fair to all the parties of the matter. Power vested in Government functionaries is a sacred trust and they should perform their duties as trustees. Where the actions/orders/decisions of State functionaries were illegal, mala fide, contrary to law, the High Court has power, in Constitutional jurisdiction to strike down such orders. Where there is no guideline for exercise of discretion, in such case also the discretionary power was not unbridled or unfettered. It shall appear to have been exercised reasonably, fairly and justly without providing any cause of grievance to any person who may be interested in exercise of such discretion. The discretion shall be structured in a way that it must demonstrate the following criteria viz. Open plans, open policy statement, open rules, open findings, open reason, open proceedings and fair informal . Procedure PLD 1991 SC 14. The Government act, ex facie, shall be non-discriminatory and provide equal opportunity to all eligible persons. State functionaries are bound to follow the rule of fairness and neutrality, while according contract to the citizen. When transaction was not transparent and on the contrary was done by adopting notorious methods of pick and choose for promoting nepotism and favouritism, it was declared to be without lawful authority and of no legal effect. Government was given option to recover losses incurred by Government exchequer from concerned officer, who was held liable to pay the same personally.
' First, we take up the issue of maintainability of the petition raised by the respondents. Mr. Shahani strenuously argued that neither any Constitutional right of the petitioner was violated nor any cause of action had accrued to it. He submitted that dispute, if any, is about contractual obligations and for that the remedy is not Constitutional petition. In support of this proposition he placed reliance on the case reported in PLD 1992 Kar. 283 wherein it was observed that there could be no cavil with the proposition that enforcement of purely contractual obligation could not be the subject-matter of proceedings under Article 199 of the Constitution. It is true that above observation is there in said case but the judicial consensus is that when the 'Government had acted arbitrarily, as in the instant case, the Court can interfere and strike down such action."
19. A perusal of the law laid down in the above judgments show that enforcement of purely contractual obligation could not be the subject-matter of proceeding under Article 199 of the Constitution. However, if at the time of awarding a contract, the State functionaries have acted in an unfair and arbitrary manner or have discriminated against one of the parties such grievance can be looked into, by the superior Courts in exercise of the power under Article 199 of the Constitution. Another exception is that if the State functionaries have violated any statutory provision while passing any order pertaining to contract, it can be made subject-matter of a Constitution petition under Article 199.
20. Now reverting to the facts of the present case, we find that no question of any discrimination or arbitrary exercise of powers at the time of awarding of the contract is involved. No statutory provision has been shown or alleged to have been violated while cancelling the bid in favour of appellant vide letter, dated December, 14th 1993. A perusal of the said letter shows that the bid was cancelled for the reason of nonperformance of the obligation on the part of petitioner arising out of the contract and the petitioner has also based his claim entirely on the contractual obligations arising out of a contract executed between the parties.
21. In the above circumstances, it is held that the relief sought in the petition purely arises out of a contract between the parties and such contractual obligation cannot be enforced by recourse to the writ jurisdiction of High Court under Article 199 of the Constitution. The disputed questions of fact are also involved, therefore, the proper course for the petitioner is to invoke the jurisdiction of civil Court through a civil suit. Consequently, it is held that the petition is not maintainable, which stands dismissed accordingly.