MUSHIR ALAM, J.---Through this common judgment, weintend to dispose of CP-D 609 of 2006 (Fateh Muhammad v. Province of Sindh and CP-D 902 of 2006 (Dr. Tahir Mehmood Memon v.
Province of Sindh) both the above petitions, involve similar question of facts and law.
2. Facts giving rise to the petitions in hand appears to be that, the respondents offered for sale four properties, including STRC (Defunct) Residential Bungalow No,10-A, Latifiabad No, 3, Hyderabad, and Printing and Stationary Building Hyderabad, Survey No,478 Deh Sari, Taluka Qasimabad, Eidgah Road, Hyderabad, subject-matter of C.P. No,D-609/06 and C.P. No,D-902 of 2006 respectively. Bids were invited through newspapers, dated 16-9-2005. It seems that both the petitioners submitted their respective bids together with 10% of the bid amount, which were opened on 3-10-2005. It is the case of the Petitioners that they were invited for further negotiations with Committee constituted by the Privatization Commission. After negotiation, improved mproved their bids, which were recommended by the committee to the Sindh Cabinet Committee on Privatization (SCCP) on 22- 11-2005.
3. In C.P. No,609 of 2006 the petitioner asserts that they were kept on false hope and later informed verbally that the bid has been rejected but no order for refusal was given. In C.P. No,902 of 2006 petitioner claimed that on 15-6-2006 they received a letter, dated 13-5-2006 informing rejection of the petitioner's bid, dated 3-10-2005 and the pay order was also returned.
4. It seems that Sindh Cabinet Committee on Privatization (SCCP) in its meeting, dated 11-5-2006 rejected bids in respect of all the four properties including the two-properties the subject-matter of present petitions.
5. Both the petitioners claimed that the rejection of the bid is illegal, arbitrary and violative of rule of natural justice. It is the case of the petitioners that the fairness in the entire transaction is lacking on the part of the respondents. According to the learned counsel, once the petitioners were invited for negotiation and the petitioners had increased the bid amount, they being the highest bidders, their bids were accepted by the Sindh Privatization Commission (SPC) and recommended to the Sindh Cabinet Committee on Privatization (SCCP). However SCCP rejected the bids in a meeting, dated 11-5-2006 and returned the pay order, which action, it was argued is illegal and not sustainable.
6. Mr. Abrar Hassan learned counsel for the petitioner in C.P. 609 of 2006 contended that the petitioners on invitation of the SPC revisedthe bid and enhanced the offer; which was also accepted per item No,5 in its recommendation, dated 22 November, 2005. It was contended that such recommendation tantamount to approval of the bids. Mr.Zuberi, in C.P. D-609/2006 adopted similar position as the petitioners therein also, on the invitation of the SPC, revised the bid and enhanced the offer, which was also accepted per item No,3 in its recommendation of same date.
7. Both the learned counsel were required to satisfy the Court that a concluded contract came into being and petitioners acquired some vested rights in the subject property. They were also required to show whether merely making a highest bid confers any right or title to accept the bid.
8. Mr. Abrar Hassan, contended that this Court in exercise of writ jurisdiction is competent to review the administrative action of the respondents being violative of principle of natural justice being arbitrary is liable to be struck down. He relied on large number of cases including; Balochistan Construction Company v. Port Qasim Authority 2001 YLR 2716. In the said case, petitioners were awarded a contract, which was scraped and fresh tenders were invited. High Court declined to interfere on the ground that the petitioner was allowed to participate in fresh tender, Supreme Court maintained the findings. However, tenders were invited again and petitioner was declined participation, which action was successfully challenged. It was held that the Public functionaries are required to act fairly and judiciously and terms and conditions for award of contract must have nexus to the contract. Terms cannot be tailored to favor some and deprive other. In Pacific Multinational Ltd. v. I.G. Of Police PLD 1992 Karachi. 283, case Court declined to interfere in the decision of the Government of Sindh of awarding contract of purchase of Bell Helicopters to the higher bidder. It was held that beside price factor in contract for procurement of sophisticated machine other factor such as free technical services; on call visit by Representative of including, on site technical service in Pakistan, administrative warranty, were equally important and relevant consideration. Which the petitioner, a non-agent, could not offer, which the higher bidder, being agent of the manufacturer of Bell Helicopter, had offered. In the case of Abdullah and Co. v.
Province of Sindh 1992 MLD 293 petitioner participated twice to earn contract was not successful.
The department without informing or calling the petitioner, in a mock auction awarded contract to some other person. The award of contract was thus struck down being arbitrary, unjust and unfair.
In the light of cited cases, it was urged that this Court in exercise of its jurisdiction of judicial review should strike down the arbitrary administrative action.
9. According to the learned counsel, acceptance of the bid under the Privatization Ordinance is to be made by Privatization Commission and none else.
10. Mr. Abid S. Zuberi, learned counsel (appearing in C.P. D-902/2006) supplementing the arguments of Mr. Abrar Hassan urged that on invitation of the respondents commission petitioner enhanced the bid, which was accepted by SPC. It was however, rejected by the SCCP, without assigning any reason. It was urged that the impugned action is illegal, arbitrary and without jurisdiction, rejection letter is mala tide and cannot be sustained. Mr. Zuberi vehemently urged that in fact, the acceptance by the committee constituted by SPC is the final word, according to him approval from SCCP is merely a ministerial act and a natural corollary. In support of his contention, he has placed reliance on the case reported as Dada Bhoy Investment (Pvt.) Ltd. v. Federation of Pakistan PLD 1995 Karachi 33. In the cited case, it appears that the petitioners being the highest bidders was also invited to raise the bid upto 90.5 of the reserved price, which the petitioner did on 7-12-1991. However, on 18-10-1992 the bid was rejected without assigning any reason. The learned Division Bench concluded that since it was not shown by the authority that they have exercised the discretion judiciously on the sound principle of justice, equity and fairness, it was therefore, directed that the respondent may not negotiate with any other person except the petitioners. Mr. Abid Zuberi urged that the cited case applies on all fours in instant case.
11. Learned counsel appearing for the respondent/Privatization Commission contended that Sindh Privatization Commission (SPC) is not the competent authority to grant approval. According to him, it is the Sindh Cabinet committee on Privatization as defined under section 2(a) of the Sindh Privatization Commission Ordinance, 2001 who is competent to grant the final approval. According to him, unless the competent authority accepts the recommendation of the SPC, contract does not materialize nor any right accrues to the petitioners. He has relied upon the case Muhammad Ashraf v. Privatization Board 2002 MLD 550 and Pakistan Steel Products v. Indus Steel Pipes Limited 1996 CLC 118. In first referred case, it was held that, unless the competent authority accepts the bid no right is created. In last mentioned case it was held that unless the offer is accepted in unequivocal terms no concluded and binding contract comes into being. Learned counsel further points out that the reasons for rejection are already contained in the Items Nos. 2 and 3 of Agenda Item No,2 of the report of the SCCP, Annexure "R-4" to the counter affidavit. It was therefore, urged that, it could not be said that no reason was assigned. It was further contended that the offers were not accepted by the SCCP, who alone is thecompetent authority in the matter, no concluded contract came into being. It was also pointed out that all the four bids including the bids, which are subject-matter of present petitions were rejected, therefore, the petitioners cannot claim any discrimination. He contends that the petitioners, if so interested, may participate in the fresh bids.
12. Mr. Sarwar Khan, learned Additional Advocate General, contended that no legal right enforceable under the law came into being. The SCCP is the competent authority which could only grant final approval and not the SPC who is merely an agent. In support of his contention, he has placed reliance on Munshi Muhammad v. Faizanul Haq 1971 SCMR 533 and Pervez Qureshi v.
Settlement commissioner, Multan and Bhawalpur and others 1974 SCMR 337. In both the cases, it was held that in absence of final approval, bidders at auction, are not clothed with any right in auctioned properties and had no locus standi to challenge transfer competently.
13. We have heard the arguments and perused the record. There is no cavil to the proposition that in appropriate cases executive and administrative action and decision tainted with mala fide, arbitrariness, which lacks transparency and fair play, could be subjected to judicial review. (One may refer to Ittehad Cargo Services v. Syed Tasneem Hussain Naqvi PLD 2001 SC 121 and Messrs Airport Support Service v. Airport Manager 1998 SCMR 2268.
14. In the instant case, it appears that the sealed bids were invited by the SPC through print media in respect of various properties. One of the conditions was "offer shall remain open for further negotiations." (Later part of condition No,4). Condition No,5 provided "The offer shall be subject to approval of SPC/Government of Sindh, successful bidder whose offer is approved shall be required to pay the 2nd instalment of 50% occupancy value within 15 days from the date of acceptance of offer."
15. It appears that the petitioners being the highest bidders in respect of properties subject-matter of petitions in hand, were invited by the SPC for further negotiations (in consonance with condition No,4 of the invitation as reproduced above). After negotiations petitioners improved the bids, which were accepted in a meeting of the SPC, dated 22-11-2005. Though the acceptances contained in the minutes were not communicated to the petitioners, however they managed to obtain copy of the same (in CP-D 609/2006 had attached the copy of the minute as P/5 to the petition (page 47)
Names of the PropertiesDecision No,3. Printing Press Building, Hyderabad.As the bid received in this is higher than the Reserved price so the bid was accepted and recommended to the SCCP No,
5. Residential Bungalow SRTC HyderabadThe highest bid was accepted by all the membersof the tile. Nor the petitioners were called upon to deposit the 2nd instalment of 50% within 15 days of acceptance of the offer, as per conditions of invitation to bid.
16. Matter relating to the consideration of the sealed bid was placed before SPC as agenda, item No,2 reads as follows:-- At the foot of the recommendation following note is made; ' "The above decision made for the privatization of the properties/assets were to be referred to the SCCP" (Underlined to add emphasis).
17. It seems that the bids, with the recommendations of SPC, forwarded to the SCCP, were considered by it in a meeting, dated 11-5-2006, Annexure "R-5" to the counter affidavit, which records as, follows:-- "The SCCP rejected the bids received by the SPC and decided to refund the earnest money deposited by the bidders. The SPC was directed to get the fresh valuation through independent Valuator and put up for approval of SPC/SCCP on 22nd May, 2006."
18. Petitioners were communicated the rejection through letter, dated 13-5-2006 enclosing the pay order representing earnest money (R/1 to the counter affidavit), since petitioner in C.P. 690 of 2006 was out of city his pay order was returned (R/3 to Counter Affidavit). No rejoinder has been filed.
19. It is settled position in law that inviting bid is in fact and invitation to offer unless accepted and confirmed by the competent person no enforceable contract comes into being nor does it create any right in favor of the highest bidder. (See Afzal Maqsood Butt v. Banking Court No,1 PLD 2005 SC 470).
20. It needs no authority to say that unless an offer is accepted unconditionally no enforceable contract comes into being. Where the acceptance is contingent or conditional then it amounts to a counter proposal. Unless the contingency is met or condition is complied or the counter proposal is unconditionally accepted it cannot be said that a valid contract is born. (one may refer to Habib Bank Ltd. v. Abdul Wahid Khan). In said case it was held that making a promise and conveying it tothe promisee would not amount to coming into being a contract, unless the promisee accepts the offer unconditionally: As noted in the case in hand, the acceptance by SPC in its minute was in substance only a provisional arrangement, subject to approval by the SCCP under the given situation, it cannot be said that a binding contract came into being. The condition attached to the acceptance by the SPC i,e, acceptance by the competent authority, which in instant case. Was SCCP, was not fulfilled. What the petitioners are relying upon is the recommendation made by the SPC for the approval of bids to the SCCP. Meeting of the SPC was an internal affair, in the meeting formal proposal was made to the competent authority for their consideration, such proposal of the meeting was never communicated to the petitioners. Furthermore from the minutes of approval it is very much clear that the recommendations for acceptance were subject to the approval of the SPC, as evident from the footnote of recommendation; as reproduced above. Putting in other words, unless the acceptance of offer is made or communicated to the offerer, no enforceable contract is formed.
21. Where the bids arc subject to the approval of competent authority then unless the competent authority approves the same recommendation alone cannot be termed as acceptance and confirmation cannot be claimed as a matter of right. It may be observed that the SPC merely acted, as an agent for the SCCP (See Afzal Masood Butt v. Banking Court No,2 PLD 2005 SC 470).
22. Though we have come across a case reported as Petrosin Products (Pvt.) Ltd. v. Federation of Pakistan 2001 CLC 1412. In the cited case, the petitioner was, in.The pre-bidding, excluded. Action was successfully challenged in the High Court. Petitioner participated and was declared successful, Board of directors approved the bid. However, SCCP rejected the bid for of the petitioner made for Sui Northern Gas Limited (SNGL) petitioner, whereas, in respect of another transaction in respect of Sui Southern Gas Limited (SSGL) accepted the bid of Caltex Oil, without assigning reason for the discriminatory action. Which action was successfully challenged in Intera-Court Appeal. In the referred case, it was held that "decision taken by respondent No,4, i,e, Cabinet Committee on Privatization, violates the principle of natural justice because while taking a deviation from the recommendation on the basis of summary submitted to it, it ought to have provided a fair opportunity to the appellant of explanation as to why his bid was cancelled". As could be seen in Petrosin Product case, there was clear discrimination, two bidders placed in a same situation were meted out different treatment. In another case, we were able to lay hand on, is Bagh Construction Company v. Federation of Pakistan 2001 YLR 2791. In the said case the letter of intent (LOI) was issued but no contract was executed within the given time. It was the case of the petitioner thatcertain conditions of LOI were prejudicial and some clarification was needed. It was held that the LOI was in the nature of an offer no contract came into being and no right enforceable at law was created, petition was dismissed. In another case reported as City School (Pvt.) Ltd. v.
Privatization Commission of Pakistan 2002 CLC 1158, the petitioner was the highest bidder and his bid was finalized on the fall of the hammer. However the bid was rejected as being unacceptable and fresh bidding was directed. Petitioner unsuccessfully tried to re-negotiate the price ultimately filed a writ petition. Re-auction was stayed by the High Court, matter was taken up to the Honourable Supreme Court. Order restraining re-auction was suspended and apex Court directed re-auction and petitioner was given right to match the highest offer if received. No auction took place and in the meantime pay order of the petitioner was also encashed in para. 11 of the judgment it was held:--
(11) Perusal of different provisions of the Contract Act reveals that a tender notice is merely an invitation for making an offer and not by itself an offer or proposal. The advertisement does not constitute a proposal. Only by acceptance of offer or proposal by the person calling for tender it becomes a promise or agreement. When offer of tenderer is not accepted by the relevant authority, no legal right accrues to such tenderer. An agreement enforceable by law becomes a contract. The true test for deciding'whether a valid contract is made between the parties or not is to ascertain if the parties were of one mind on all the material terms at the time it is said to have been finalized and whether they intended that the matter was closed and concluded between them. For this purpose, the correspondence exchanged between the parties is also to be looked into.
' While refusing appeal in para. 14 it was held:--
(14) As observed earlier, the true test for deciding the question if in a particular circumstance a contract is made or not is to ascertain whether the parties were of one mind on all material terms and conditions or not. Commutative effect of all the circumstances is that the respondents had never agreed to accept the bid offered by the petitioner. Even after the order of this Court, dated 15-7-1999, the auction proceedings were never held. Manifestly, it is enough to hold that the respondents are not at all inclined to sell said property. Therefore, before the finalization of sale process, the property could be de-listed from auction pool of the Privatization Commission."
23. In the light of above, it may be observed that the approval by the SPC in its internal meeting was never communicated to the petitioners,therefore it cannot be urged that offer of the petitioner was accepted. In the instant case the pay order was not enchased and was returned. It is a matter of record that in terms of condition No,5 of invitation to bid the offer was subject to approval of SPC/Government of Sindh, which has since been declined. Therefore the petitioners were not called upon to "pay the 2nd instalment of 50% occupancy value within 15 days from the date of acceptance of offer". (page 41 of CP 902/2006). It was nobody's case that the petitioners were called upon to pay 2nd installment as per terms of the invitation to bid.
24. We are therefore of the view that, mere making highest bid by itself does not constitute any valid and enforceable contract, unless there is unqualified acceptance by the authority concerned, which in instant matters is massing. We were not persuaded to exercise extraordinary writ jurisdiction in the given facts and circumstances of the case. It was for the foregoing reasons recorded now, the petitions were dismissed vide short order, dated 13-10-2006.