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2010 CLC 1253

ABU DHABI MEDICAL DEVICES CO. L.L.C. vs FEDERATION OF PAKISTAN through

Citation2010 CLC 1253
CourtSindh High Court
Case No.Suit No, 613 and C.M.A. Nos. 3982, 3983 of 2010
Date2010-05-21
Judge(s)Muhammad Ali Mazhar
ResultSuit decreed

ORDER

1. MUHAMMAD ALI MAZHAR, J.-The matter was partly heard yesterday and by consent of the parties, this is fixed for further hearing today. The plaintiff has filed this Suit for Declaration, Specific Performance and Permanent Injunction with the following prayers:---

(1) Make a declaration that the Impugned Letter (Annexure "N" above) is illegal, mala fide; of no legal effect and void ab initio;

(ii) Grant specific performance of the Contract and direct the defendant No,1 to forthwith agree a payment mechanism that will enable the plaintiff to remit the payment received in Pakistan Rupees to Abu Dhabi after converting it into an equivalent amount of foreign currency and further direct the Defendant No,1 to agree to be the consignee of the Syringes, in order to enable the parties to execute the formal contracts in respect of the supply of the Syringes;

(iii) Grant a permanent injunction restraining the defendant No,1 from awarding the contract in respect of the supply of Syringes to any person other than the plaintiff, while annulling any such award if so made;

(iv) Grant a permanent injunction restraining the Defendant No,2 from paying any amount to the defendant No,1. Under the Letter of Guarantee No,09-6-066, in the amount of Pakistani Rupees 5,000,000 issued by it in favour of the defendant No,1 as bid security in respect of the bid of the plaintiff for the supply of auto disable syringes 0.5 ml and from taking any further adverse action against the plaintiffs;

(v) Grant a permanent injunction restraining the defendant No,2 from paying any amount to the defendant No,1 under the Letter of Guarantee No,09-6-068, in amount of Pakistani Rupees 1,800,000 issued by it in favour of the defendant No,1 as bid security in respect of the bid of the plaintiff for the supply of auto disable syringes 0.05 ml and from taking any further adverse action against the plaintiffs.

(vi) Grant any other better or further relief as may be deemed appropriate by this honourable Court in the facts and circumstances of the case; and

(vii) Grant costs.

2. ' The learned counsel for the plaintiff and defendant No,1 have jointly said that if this matter will be treated as a regular cause, it will take number of years to decide and there is no need to settle numerous issues or post the matter for evidence as entire suit is based on documentary evidence and can be decided on the basis of arguments along with listed applications. The contentions of the learned counsel are they have shown their intention to sign the contract. In this letter, the plaintiff has forwarded certain conditions with the assurances that they are ready to execute the contract in an un-amended format that has been proposed and prescribed by the EPI and it was further stated that relevant payments proceeds from their servicing of the contracts in Pakistani Rupees to be transferred to HSBC bank Abu Dhabi, "UAE. Equivalent to the Pakistani Rupee value of the contracts in foreign currency at the prevailing rate at the time of processing the funds transfer.

3. They requested for extension for signing of contract unless the defendant No,1 agrees to the payment arrangements requested by the plaintiff. In fact, this is a letter which created a matter of concern between the parties and the contract could not be signed and concluded.

4. ' The defendant No,1 has already filed their Written Statement and counter affidavit in which they have stated that the Ministry of Health has been providing free of cost immunization services to children up to the age of five years to protect them against the crippling and fatal diseases of childhood, tuberculosis, poliomyelitis, diphtheria, pertussis, tetanus, Hepatitis-B, haemophiles influenza type B and measles though its expanded programme on immunization (EPI). EPI also provides free of cost immunization services to pregnant women to protect them and their newly born babies against tetanus. Obviously, it has to purchase vaccines and syringes in order to provide immunization services to children and their mothers. For the purpose of procuring four types of syringes namely auto disable syringes 0.05 ml, auto disable syringes 0.5 ml, disposable syringes 2 ml and disposable syringes 5 ml to cater to the needs of the country for the year 2009- 2010, MoH/EPI floated tenders through national newspapers and website of the Public Procurement Regulatory Authority (PPRA) on 19th October 2009 as required under Public Procurement Rules 2004. It has been argued by the learned counsel for the defendant No,1 that after completion of bidding process in a transparent manner, the defendant No,1 announced the result on 19-2-2010 without any loss of time. It was displayed on PPRA's website as required under Rule 35 of Public Procurement Rules 2004 and simultaneously, Letter of Intent was also issued in the favour of the lowest bidder informing them of their success and to make preparations for signing contracts. The learned counsel has argued that defendant No,1 admits that the plaintiff is the successful bidder in the tender for procurement of auto disable syringes 0.05 ml and auto disable syringes 0.5 ml for which Letter of Intent was already issued to complete all formalities prior to 2-3-2010. On 7-3-2010, the plaintiff wrote a letter in which they imposed pre-condition for signing the contract. The plaintiff demanded the defendant No,1 to agree to become a consignee of all shipments of syringes as the plaintiff does not No,1 has also added that in spite of being declared the successful bidder, the plaintiff failed to sign the agreement, therefore according to the terms and conditions of the bidding document, the defendant No,1 is entitled to forfeit the bid security amount of Rs,18,00,000 (Rupees Eighteen Lacs Only), which was furnished by the plaintiff by way of Bank Guarantee No,09- 6-068. The learned counsel for the plaintiff has accepted the contention of the learned counsel for the defendant No,1 that according to the bid document, bid security amount is liable to be forfeited in case of non-signing of agreement and he further says that the plaintiff shall have no claim against this amount and the defendant No,1 may encash this Bank Guarantee submitted by the plaintiff to defendant No,1 as bid security in respect of the bid of auto disable syringes (0.05 m1).

5. The learned counsel says that his client has no objection if the above bid security amount is forfeited and bank guarantee is encashed.

6. ' Now the issue between the parties is only related to the contract for the supply of auto disable syringes (0.5 m1). The learned counsel for the plaintiff says that his client are ready to forego/ relinquish all preconditions that were tried to be imposed by them beyond the terms and conditions of the bid/tender document and they are agreed to sign the contract "as it is" without any pre-condition. At this stage, the learned counsel for the defendant No,1 states that no delay was committed by the defendant No,1, in fact it is the plaintiff which has forwarded certain unreasonable conditions,, whereby the award of contract was delayed. Had the plaintiff not forwarded the pre-condition, this agreement would have been signed much earlier within the stipulated time frame. The learned counsel for the defendant No,1 further argued that due to delay committed by the plaintiff the defendant No,1 vide letter dated 1-4-2010 annulled and withdrawn the Letter of Intent issued in favour of the plaintiff on 19-2-2010 and in the same letter it was further mentioned that the defendant No,1 will proceed for the procurement of syringes in accordance with the Public Procurement Rules 2004 with relevant clauses of bidding document. In this letter again the defendant No,1 in order to show their bona fide has clearly mentioned all the lapses on the part of the plaintiff categorically with different references of the letters. The main crux again was the condition imposed relating to the - registration of contract with the State Bank of Pakistan and transfer of Pakistan rupee from Pakistan to UAE into an equivalent amount of foreign currency.

7. However, this is an admitted fact that in spite of withdrawal of the Letter of Intent, no fresh tender has been invited for the contract in question and due to filing of this Suit, the status quo is being maintained against the encashment of bid security amount. He further says that on issuing the letter of withdrawal of Letter of Intent, the plaintiff has filed this suit and obtained the restraining order against the defendants from encashing the bid security, which interim orders are still continuing. Since public interest is involved in this case, therefore such type of cases must be decided expeditiously. In the opening paragraph of the Written Statement, the defendant No,1 has mentioned that the Ministry of Health .Has been providing free of cost immunization services to children upto the age of five years to protect them against the crippling and fatal diseases of childhood, tuberculosis, poliomyelitis, diphtheria, pertussis, tetanus, Hepatitis-B, haemophiles influenza type B and measles through its expanded programme on immunization (EPI), which also provides free of cost immunization services to pregnant women to protect them and their newly born babies against tetanus. For the purpose of procuring four types of syringes to cater the needs of the country for the year 2009-2010, EPI floated tenders through national newspapers and website of the Public Procurement Regulatory Authority on 19-10-2009.

8. ' Parties are at issue only for the reasons of pre-conditions imposed by the plaintiff which delayed the signing of contract and now they have clearly stated that they have withdrawn all such conditions and agreed to sign the agreement "as it is" and in the same terms and conditions as offered by the defendant No,1 in the tender document. At the same time, it is also pertinent to note that the defendant No,1 has not invited fresh tender for this contract and the matter is intact.

9. Therefore, I feel that the parties may sign the contract "as it is" to avoid wastage of time and if fresh tender will be invited, it will take another 2/3 months for the procurement of syringes and the very purposes of the tender and the awarding of contract will remain pending for number of months for fulfillment of different formalities required for awarding contract and procurement of syringes. In this exercise again a considerable time will be lapsed and ultimately general public/ children will be deprived from the laudable services undertaken by the defendant No,1 in the larger public interest. Since the parties have no serious dispute, therefore, in my view the matter can be resolved without any further delay and if new tender is called the expanded programme of immunization will be kept in abeyance whereby the public at large will suffer as the contract period is only confined to the financial year 2009-2010. The expression "public importance" is not capable of any precised definition. It can only be defined by process of judicial inclusion or exclusion. Each case has to be judged in the circumstances of that case as to whether the question of public importance is involved but it is settled that public importance must include a purpose or aim in which the general interest of the community as opposed to the particular interest of the individual directly or widely concern. Public Interest is very wide expression and embraces public security, public order and public morality. Expression Public Interest in common parlance means an act beneficial to general public and action taken in public interest necessarily means an action taken for public purpose. It further leads general social welfare or regard for social good and predicating interest of the general public in matters where regard was social good is of the first moment. The dispute involved in the present case is directly related to the larger public interest and such type of matter should be decided expeditiously.

10. ' For the foregoing reasons, die letter dated 1-4-2010 will deem to have been withdrawn to the extent of contract for the supply of auto disable syringes (0.5) ml. The parties are directed to sign and revive the contract within 10 days strictly in accordance with the tender/bidding document.

11. The defendant No,1 is entitled to forfeit the bid security of Rs,18,00,000 (Rupees Eighteen Lacs Only) furnished by the plaintiff in connection with an award of contract for auto disable syringes (0.05) ml and defendant No,2 is directed to encash bank guarantee in favour of the defendant No, 1 . In the above terms. Consequently, all pending applications have become infructuous and disposed of accordingly.

Cited by 14 cases

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