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2008 C.L.R. 794

M/s. Usmani Associates vs Pakistan Housing Authority, Islamabad through.

Citation2008 C.L.R. 794
CourtLahore High Court
Case No.Writ Petition No. 1290 of 2004
Date2004-10-27
Judge(s)Abdul Shakoor Paracha
ResultPetition allowed

ORDER

ABDUL SHAKOOR PARACHA, J. --- With the consent of the parties the present petitioner is being disposed of a Pakka one. This Constitutional petition has been filed under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973, with the following prayer:--- "Issuance of a direction to respondent No. 2 to forthwith pay the amount of Rs. 82,19,256/- (Rs.

1,09,94,756/- minus Rs. 27,45,500/-) with interest."

2. Brief facts of the case are that at the relevant time in the year 1999 the Government initiated Prime Minister's Scheme "Mera Ghar" and allotted the tenders for construction of 4 and 6 Marlas incremental Houses in different cities, including Multan. Vide letter dated 3.8.1999 respondent No. 1 Pakistan Housing Authority, Islamabad, accepted the tender submitted by the petitioner for construction of the 4 and 6 Marlas incremental houses at Multan By-pass, Multan. On 10.9.1999, the contract for the construction of the said houses was executed between respondent No. 1 and the petitioner. On the change of the Government, the said Scheme was dropped, which resulted in reversal of several decisions and policies of the previous Government; out of 42 projects, only 18 projects were allowed to continue in pursuance of the contracts executed under the said Prime Minister's Scheme "Mera Ghar". The petitioner's contract was one of those contracts which were discontinued; vide letter dated 2.5.2000 respondent No. 1 notified the petitioner that the contract was terminated under clause 75.1 of the Contract and it would terminate on the expiry of 56 days from the date of the said letter. Furthermore, the petitioner was called upon to forthwith cease work-related activities; the petitioner was entitled for the payment of the work done by him under clause 75.1 of the Contract (Part-II-Conditions of Particular Application) read with Clause 65.8 of the Contract (Part-I-General Conditions); under the said Clause 65.8 the amount payable to the petitioner were to be determined by the Engineer after consultation with respondent No. 1 and the petitioner. On 13.7.2000 the petitioner submitted to the Engineer its claim under Clause 65.8 of the Contract, who after consultation with the petitioner and the respondent No. 1, vide letter dated 13.4.2002 determined an amount of Rs. 1,09,94,756/- to be due and payable to the petitioner.

Petitioner's grievance is that on the mandate of different clauses of the Contract the amount is not being paid to the petitioner in spite of the work done by him and the amount determined by the Engineer.

3. In pursuance of the order dated 12.5.2004, respondent No. 1 has filed his report and para-wise comments. Apart from the fact that the respondent has taken the preliminary objection that the Constitutional petition is not maintainable as the parties are bound by the terms of the contract and the same is not enforceable through the Constitutional petition. It is further state that the Cabinet in its meeting held on 8th August, 2002 inter alia decided that Ministry of Housing and Works shall provide details of PHA's cash flows to Finance Division who would take steps to improve the liquidity position of PHA. Later on, the Cabinet again directed the Finance Division vide its directive dated 23.10.2002 to provide necessary funds to the Ministry of Housing and Works for making payments to the Contractors and Architects, who - had done work for PHA's Housing Programme, unfortunately, inspite of vigorous pursuing by the respondents Nos. 1 and 3 to the Finance Division, the decisions taken by the Cabinet/Government have not since been implemented by the Finance Division and funds requested are yet to be arranged by the Government to clear the liabilities/claims of the Contractors and Architects of the abandoned Projects; the petitioner's contract was terminated in implementing the Cabinet/Government decision and Government has agreed to settle all claims of the Contractors and Architects of its abandoned Projects; as Housing Programme undertaken by respondents Nos.

1 and 3 is being run on 'no profit no loss basis', respondents Nos. 1 and 3 have no provision to settle the Contractor's claim from the funds available from sale of its on-going Projects however after receiving the required funds from the Government, all the claims related to abandoned projects shall be settled by the respondents Nos. 1 and 3 accordingly in an amicable and just manner as per provisions of the Contract between the parties, currently the said answering respondent is still waiting for the funds from the Government for making payments to its Contractors and Architects, whose contracts had been terminated against their genuine/verified claims. On merits, the contents of para-10 of the petition have not been denied. The claim of the petitioner arising out of the termination of the Contract under sub-clause 75.1 was verified by respondent No. 2 is pending due to non-availability of funds from the Government.

4. The learned counsel for the petitioner refers to clause 75.1 of the Contract/Agreement, wherein it is provided that on termination of the Contract the contractor was to be paid by the employer as provided in sub-clause 65.8 of the Agreement. He further submits that respondent No. 2 has determined the amount payable to the petitioner in consultation with the employer-respondent No. 1. The learned counsel further contends that this Court has jurisdiction in the matters where amount was payable, determined and admitted by the authorities and the same was being delayed and the Court can direct the respondent to settle the matter and also issue a direction for payment of the amount. Relies on the cases reported as Messrs Airport Support Services v. The Airport Manager, Quaid-e-Azam International Airport, Karachi and others (1998 SCM R 2268), Messrs Ittehad Cargo Service, etc. v. Messrs Syed Tasneem Hussain Naqvi, etc. (PLD 2001 SC 116), Messrs Iftikhar Ahmed and Co. v. Province of Punjab through Secretary, Communications and Works Department and 4 others (2000 M LD 166), Messrs Wak Orient Power and Light Limited v.

Government of Pakistan, Ministry of Water and Power, etc. (1998 CLC 1178), Muhammad Tufail Tarar v. Government of Punjab and others (1999 CLC 1937) and Messrs United International Associates v. Province of the Punjab, etc. (1999 M LD 2745).

5. On the other hand, the learned counsel for the respondent states that the writ petition is not maintainable as this Court cannot interfere in the matters pertaining to the contract in exercise of its jurisdiction under Article 199 of the Constitution and also that the funds are not available with the respondents therefore no direction can be issued by this Court.

6. I have heard the learned counsel for the parties and perused the record with their assistance. It is not disputed that the Government at the relevant time in the year 1999 launched a Scheme "Apna Ghar" for construction of 4 and 6 Marlas incremental houses, acceptance of tender of the petitioner by the respondent through letter dated 3.8.1999 and execution of contract between the petitioner and respondent No. 1 on 10.9.1999. Thereafter notice was issued to the petitioner to commence construction work. The petitioner took steps towards mobilization at the site and actually commenced work on 30.8 1999, on 2.5.1999 respondent No. 1 determined the contract by invoking the provisions of clause 75.1 of the Contract Tart-II-Conditions of Particular Application) and it was stipulated that the Contract shall terminate on the expiry of 56 days from the date of the said letter and that vide letter dated 23.9.1999, respondent No. 1 informed the petitioner that respondent No. 2 had been appointed as Engineer for the Contract. Whether the petitioner is entitled for payment of the amount against work done by it, reading of certain letters and different clauses of the Contract would be relevant. The letter through which the contract was terminated is No. PHA/IsI/DG(C&M)/GEN-01/433, dated 2.5.2003 addressed to the petitioner firm, which read as under:-- "We hereby notify you that we are terminating the Contract pursuant to Clause 75.1 of the Conditions of Contract, as amended in the Conditions of Particular Application. Accordingly, the Contract shall terminate upon expiry of fifty-six (56) days from the date of this letter."

You are requested to cease all Work related activities forthwith and to remove all Contractors Equipment from the Site and to cause any Subcontractors to the likewise."

7. Clause 75.1 of the Contract pertains to termination of Contract for employer's convenience, which reads as under:--- "The Employer shall be entitled to terminate the Contract at any time for the Employer's convenience after giving 56 days prior notice to the Contractor, with a copy to the Engineer. In the event of such termination, the contractor:--

(a) shall -proceed as provided in Sub-Clause 65.7 hereof, and

(b) shall be paid by the Employer as provided in sub-Clause 65.8 hereof.

Now clause 65(8) of the Contract reads as under:- "65.8. If the Contract is terminated as afore-said, the Contractor shall be paid by the Employer, insofar as such amounts or items have not already been covered by payments on account made to the Contractor, for all work executed prior to the date of termination at the rates and prices provided in the Contract and in addition:--- (a), (b), (c), (d), (e) and (f) ........................................ Provided that against any payment die from the Employer under this sub-clause, the Employer shall be entitled to be credited with any outstanding balances due from the Contractors for advances in respect of Contractor's Equipment, materials and Plant and any other sums which, at the date of termination, were recoverable by the Employer from the Contractor under the terms of the Contract. Any sums payable under this sub-clause shall, after due consultation with the Employer and the Contractor, be determined by the Engineer who shall notify the Contractor accordingly, with a copy to the Employer."

Vide letter No. PHA/Finance/C-132, dated September 12, 2004, the petitioner firm was informed that, "Pending finalization of your claims, Chairman, PHA/Minister for Housing & Works has been pleased to authorize making interim payments subject to adjustment in finalization of the bills PHA certainly appreciates the understanding displayed by you so far, and assures you of fair and equitable settlement of your dues in the near future." It was further stated that. "A cheque bearing No. 571665, dated September 12,2001, for an amount of Rs. 2,745,500,000 is enclosed herewith as interim payment."

8. Though the petitioner submitted his claim for termination of contract amounting to Rs.

42,110,917.00 (including the work done), which had been worked out on the basis of Clause 65.8 of the Conditions of Contract as provided in clause 75.1, but he was informed through letter No. PHP/006/r.d./2287, dated 13.4.2002 that, "Enclosed herewith please find 2 copies of our final assessm ent of Contractor's claim amounting Rs. 10,994,756.00 (Rupees ten million nine hundred ninety-four thousand seven hundred fifty-six only) after due consultation with the Contractor and PHA as per conditions of Cabinet."

9. Comulative effect of reading of the above- stated documents and clauses 75.1 and 65.8 of the Contract, I am led to the conclusion that the petitioner was entitled to payment of the amount of Rs. 1,09,94,750/-, which amount is mentioned in the letter dated 14.2.2002 of the respondent. The petitioner has already been paid an amount of Rs. 2,745,500.00 through cheque No. 571665, dated 12.9.2001, therefore, I hold that the petitioner is now entitled for Rs. 1,09,94,756/- minus Rs.

2,745,500/- from the respondent.

10. The objection raised by the learned counsel for the respondent that this Court cannot interfere in the matter pertaining to the Contracts in exercise of its jurisdiction under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 is repelled because no factual controversy is involved in the matter. Awarding and termination of the contract is admitted. An Engineer was appointed, who was competent to decide the claim of the petitioner in consultation with the employer, which has been done and the petitioner was communicated. The portion of the amount, assessed has already been paid to the petitioner. Ordinarily a writ for enforcement of the contract is not maintainable for the reason that the enforcement of the contract requires factual inquiry into the disputed questions, which is the function of the Court having jurisdiction. For this view. I am supported by the case reported as Messrs lttehad Cargo Service and 2 others v. Messrs Syed Tasneem Hussain Naqvi and others (PLD 2001 SC 116), wherein while interpreting the provisions of Article 199 of the Constitution and the question that a concluded contract whether open to judicial review it was held by the Hon'ble Supreme Court that, "High Court in exercise of its Constitutional jurisdiction was possessed of power to examine the validity of order in regard to grant of a concluded contract and strike down the same on the grounds of mala fide, arbitrary exercise of discretionary power, lack of transparency, discrimination and unfairness etc., provided the challenge was made promptly and contentions questions of facts were and involved." In the case of Messrs Airport Support Services v. The Airport Manager, Quaid-e-Azam International Airport, Karachi, etc. (1998 SCM R 2268), it was 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 derelictions of obligations, flowing from a statute, rules or instructions can adequately be addressed to for relief under the jurisdiction." In the case reported as Messrs Wak Orient Power and Light Limited through Chief Executive Lahore v. Government of Pakistan, Ministry of Water and Power through Secretary, Islamabad and 2 others (1998 CLC 1178-Lahore DB), it was held that, "Remedy of Constitutional petition would be permitted to be resorted to in cases involving contract between private persons and State Statutory functionary for such remedy was considered to be more efficacious and speedy remedy as compared to civil suit or arbitration proceedings." In the case reported as Muhammad Tufail Tarar v. Government of Punjab and others (1999 CLC 1937), where the contractor completed the work for the Provincial Government, who did not clear his dues, cheque issued by the Government was bounced by the Bank for lack of funds, it was held that "---- --------- civil suit was the proper remedy for recovery of money but where the amount was admitted and even the amount was paid through the cheques, which were bounced by the Bank and there was no factual controversy involved. Constitutional petition was maintainable, and the petition was allowed in circumstances."

11. In reply to the petition, contents of para No. 10 of the petition have not been denied by the respondent but it is stated that the claim of the petitioner arising out of termination under sub-clause 75.1 was verified by the respondent No. 2 and payment of verified amount recommended by respondent No. 2 is pending due to non-availability of funds from the Government. It is the principle of law contained in order XII, Rule 6, Cr.P.C. That any party may, at any stage of a suit where admissions of fact have been made either in the pleadings or otherwise, apply to the Court for such judgment or order as upon such admissions he may be entitled to without waiting for the determination of any other question between the parties and the Court may upon such application make such order, or give such judgment as the Court may think just. I am fortified for this view by the cases reported as Macdonald Layton and Company Pakistan Ltd. V. Usin Export-Import Foreign Trade Co. And others (1996 SCMR 696) and Lal Muhammad v.

Additional District Judge, Gujranwala, etc. (1983 CLC 770). Non-availability of funds from the Government to respondent No. 1., to my mind, is no ground not to make the payment for the work done by the petitioner for no fault of his, when he has been knocking the door of the respondent by writing continuously.

For what has been discussed above, this writ petition is allowed. The respondent No. 2 in directed to make payment of Rs. 1,09,94,756/- Minus Rs. 2,745,500/-, with interest to the petitioner within one month of the passing of this order. The petition is disposed of. .

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