SHAHID ANWAR BAJWA, J.--- Vide short order announced on 06.04.2010, this Constitution Petition was dismissed for reason to be recorded later. The following are the reasons for the short order announced in. Court on 6.4.2010.
2. Facts as pleaded in the petition are that petitioner is a Private Limited Company and is carrying on business of construction and supply of goods to various organizations and departments including Respondent No. 2, Pakistan Steel Mills Corporation. Pakistan Steel invited tenders. for infrastructure/development work of Gulshan-e-Hadeed. Petitioner submitted his bid and it is stated in the petition that his bid was the lowest amongst the bids submitted. It is further submitted that besides petitioner seven other pre-qualified contractors also submitted their bids. Despite the fact that the petitioner was the lowest bidder, Pakistan Steel Mills was reluctant to award contract to the petitioner. Consequently the petition was filed with the following prayers:---
(1) Declare that the act of the Respondents for not awarding the contact work to the lowest bidder i.e. petitioner is illegal, unlawful, against principles of natural justice, fairness equity.
(2) To direct the Respondents to immediately award contract, to the petitioner.
(3) To restrain the Respondents, their attorneys, agents or any person/body acting on their behalf from awarding the contract to any other contractor till the disposal of this petition.
3. Comments were filed by Pakistan Steel and it was stated in the comments that since none of the bidding firms were found to be completely responsive to the tender documents it was decided that the tenders be scrapped and fresh tenders be called from existing pre-qualified firms/contractors.
Consequently it was pleaded by Pakistan Steel that petition has become infructuous and is therefore liable to be dismissed.
4. Learned counsel for the petitioner referred to various documents and submitted that since the petitioner was the lowest bidder he has a vested right that his bid be accepted. He submitted that Pakistan Steel is an organization being owned and controlled by the Federal Government.
Therefore, while exercising its discretion it must not resort to arbitrariness. He has further submitted that his right to conduct business is guaranteed to him under Article 18 of the Constitution and if he does not conduct his business or his such right to conduct business is hampered it amounts to denial of right to life which is guaranteed to him under Article 9 of the Constitution of the Islamic Republic of Pakistan. He further submitted that although Pakistan Steel has pleaded that the tender was not responsive but no material has been placed on record to substantiate by Pakistan Steel and therefore the reasons given by Pakistan Steel and therefore the reasons are patently false and flimsy. Learned counsel relied upon Ayaz Builders through Partner v. Karachi Water and Sewerage Board through Managing Director and 2 others (2007 CLC 728) and Federal Government Employees Housing Foundation through Director General; Islamabad and another v. Muhammad Akram Alizai, Deputy Controller, PBC, Islamabad (PLD 2002 S.C. 1079).
5. Mr. M. G. Dastagir, learned counsel for the petitioner submitted that the bids submitted by the petitioner as well as other pre-qualified persons were found deficient and non-responsive because the words and rates have not been quoted in figures which was violation of Clause IT 19- 1(c) of the Tender Documents. He further submitted that some pages of bill of quantity of the petitioner had been found changed and tender bank guarantee submitted by the petitioner was not as per requirement of the tender documents as laid down in Clause IT-29-1 of Tender Documents. He further submitted that a party who submits bid does not acquire any vested right merely for the fact that the bid submitted by it is the lowest. He further submitted that non-acceptance of the bid does not cause any legal injury to a party because it has not acquired a right by mere fact that its bid is the lowest. Learned counsel relied upon M/s. Bagh Construction Company v. Federation of Pakistan & others (SBLR 2001 Kar. 628), City Schools (Pvt.) Ltd.,. Lahore Cantt. v. Privatization Commission, Government of Pakistan & another (2002 CLD 1158), Mst. Noor Jehan Begum v. Dr. Abdus Samad & others (1987 SCM R 1577) and Fateh Muhammad Agha and another v. City District Government, Karachi through District Coordinaion Officer and 5 others (2009 CLD 1336).
6. We have considered the submissions made by the learned counsel and have also gone through the record as well as case-law cited at the bar.
7. In Ayaz Builders case (Supra) which was decided by a Division Bench of this Court, facts were that Karachi Water & Sewerage Board invited bids for construction of certain civil works and three concerns responded. When the bids were opened it was found that the bid of the petitioner was the lowest. Officer of KWSB started negotiations with the other bidders. Therefore writ petition was filed with the prayer; inter-alia, that the petitioner being the lowest bidder is entitled to be awarded the contract for the project in question. The High Court observed as under:-- "8. It would be seen that per settled law, mere participation in a bidding process does not entitle a bidder to claim the contract in question, although it may be the lowest. However, an unsuccessful bidder can certainly approach this Court where it alleges mala fides and discrimination etc. in the award of the contract to another bidder. In this regard reference can be made to Owaisco v.
Federation of Pakistan, Messrs Pacific Multinational (Pvt.) Ltd. v.
1. G. of Police Sindh and Asadullah Mangi v. PIA (supra).. Similarly, it would be seen that per settled law executive authorities have been enjoined to act fairly, bona fidely and in a manner which ensures transparency of the process before them. In this regard reference can be made to Dadahbhoy Investment (Pvt.) Ltd. v.
Federation of Pakistan (PLD 1995 Kar. 33), Asadullah Mangi v. PIA and Abid Hussain v. PIA (Supra)."
Consequently, High Court allowed the petition and ordered KWSB to again invite public tenders for the project in question and thereafter conduct a transparent, fair and judicious exercise in evaluating the tenders.
8. In Muhammad Akram Alizai's case (supra), the appellant, Federal Government Employees Housing Foundation, with a view to establish a housing scheme acquired land through Land Acquisition Collector, Islamabad and allotted plots to its members., Respondent being an employee of the Pakistan Broadcasting Corporation applied for a plot which application was rejected on the ground that he was not employee of Federal Government. Supreme Court held that the Constitution Petition was maintainable. It further held that if entitlement of a person to allotment of plot in the scheme of Housing Foundation or a right of allotment if already created is undone, on any ground, the aggrieved person can maintain a writ petition in the High Court.
9. In Bagh Construction Company's case (supra), facts were that the Privatization Commission invited public bids for sale of its several properties including the property located at Garden Road, Karachi. The petitioner deposited earnest money and participated in the open bid. Petitioner was subsequently informed that his bid being highest was accepted. Petitioner pleading that the letter of acceptance had created some confusion sought clarification calling upon the Privatization Commission to provide photocopies of title documents of the property in question. Later on it transpired that one of the properties was property of another company and that was subject- matter of litigation in a civil suit. The petitioner suggested that finalization of sale of such property be deferred till the title is established a civil suit. Matter continued at that and bid of the petitioner was cancelled and the two properties were re-advertised and therefore writ petition was filed. It was held by the High Court that the Government/Executive did not enjoy or possess any inherent authority and further that powers or duties were inseparably annexed to it laying down that Government/Executive act must be backed by contemporaneous law. The High Court further held that no contract had been created between the parties in that case.
10. In City School's case (supra), Privatization Commission advertised for sale of "Federal Lodge, Chamber House, Lahore". Said school participated in open bidding and its bid was the highest.
However, it was not accepted by the Privatization Board because according to it the bid was not satisfactory and therefore it was ordered that the bidding be held again. Petitioner approached the Board and offered to re-negotiate but to no effect. Writ petition was filed and it was disposed of by the High Court with a direction to the Privatization Commission to summon the petitioner, to provide it details of the decision and reasons and thereafter to hear the petitioner and to decide the matter keeping in view the principles of fairness and justice as also the larger public interest.
CPLA was filed in the Supreme Court. Operation of the order of the High Court was stayed and Privatization Commission was permitted to re-auction the said property. Subsequently Askari Commercial Bank informed the petitioner that Privatization Commission had encashed the demand draft furnished by it. The Supreme Court held as under:--- "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."
11.In Noor Jehan Begum's case (supra), it was laid down as under:-- "A mere possibility that a person could obtain a property by making the highest bid if an evacuee property is disposed of by public auction does not give any such potential bidder a vested right in the property. The right of a person to bid in an auction is a right shared by him with every other citizen and the mere fact that the property, which is liable to be disposed of through auction is not so disposed of and the potential bidder deprived the opportunity of offering the highest bid at such an auction does not make him an "aggrieved person" so as to give him "a right to maintain a Constitutional Petition."
12.In Fateh Muhammad Agha's case (supra), facts were that petitioner was successful bidder in an open auction and consequently he paid the entire consideration in the manner stated in the letter of acceptance. Subsequently he received a letter canceling auction. The High Court noticed that auction was held and the petitioner was successful bidder and in accordance with the terms and conditions of publication, successful bidder whose bid was accepted by competent authority was required to pay balance 50% of the consideration and that petitioner was informed through acceptance letter regarding acceptance of his bid and he was told that he was to pay balance amount within 30 days. It was also stated that in case of non payment of the amount within stipulated period, sale of the plot shall be cancelled and the 25% deposit will be forfeited. The amount demanded was admittedly paid within due date. On behalf of City District-Government it was contended that it had right to cancel and revoke the bid without assigning any reason at any time. High Court observed as under:-- "We are afraid such brazen discretion cannot be left to be exercised by the public functionary like CDGK. We have no cavil to the proposition that authority may reserve to itself aright to accept or reject bid/offer without assigning any reason, provided such authority is exercised with circumspection, due care and utmost responsibility. Such reservation Of authority to reject the bid does not clothe the public functionary with brazen and arbitrary power to reject the offer merely because it possesses such power and or that it reserved to itself such power. Such right or reserve action to cancel or revoke the bid could only be retained till the offer is not accepted by the competent authority as reserved under the invitation to offer. Once that stage is crossed and the competent authority approves the bid/offer a binding contract comes into being. Signing of the formal agreement etc. is but procedural requirements. It may be observed that CDGK performed its functions and discharge its duties and exercise the power and authority under the SLGO, 2002.
Unlike private individuals, CDGK being public functionary has to exercise its authority with all care and diligence. Once offer is invited on stated terms and conditions adherence to representation and commitment is obligated upon such functionary. Onerous responsibility is cast upon public functionary to establish and regain its credibility and public trust and confidence in discharge of its public duties and functions which is fast eroding. There is serious dearth of credibility in the public functionaries. All possible efforts should be made by the public functionary to live up to the commitment and live up to the expectation of the common citizen in the realm of contractual obligation committed by it in discharge of its statutory duties."
13. In the present case, the facts that must not be lost sight of are:---
(1) Bids were invited.
(2) Petitioner was the lowest bidder and no letter of acceptance has been issued.
(3) Tender has been scrapped and fresh tenders have not yet been invited.
(4) It is contended by Pakistan Steel that the bids submitted by the petitioners as well as other bidders were not responsive and it is, on the contrary, contended by the petitioner that bids were responsive in every material aspect.
14. It is in this context of facts that the case-law should be evaluated.
15. In Fateh Muhammad Agha's case (supra), bid has been accepted and balance consideration had been paid. The observation of the Court are clear that once the payment has been received a contract is created and therefore, it would not be available to the City District Government to revoke the same. In the present case bid had not yet been accepted. Therefore, the facts of the case are quite distinguishable. In Ayaz Builder's case the bidder was the lowest bidder and the KWSB instead of accepting a bid resorted to negotiation with the other bidders. High Court ordered that public tenders be again invited. The facts are fairly identical with the present case except one difference: in the present case the tender has been scrapped. Therefore, circumstances in Ayaz Builder's case were on a firmed foundation. In the present case, it has been decided that fresh bids will be invited but have not been invited. In any case tender has already scrapped.
16.There cannot be any cavil with the proposition laid down in Noor Jehan's case that mere possibility that a person vied to obtain a property by making highest bid does not give any potential bidder a vested right in the property. The same principle would hold true when bids for work ordered to be executed by a public functionary. Mere fact that his bid was the lowest would not ipso facto entitle him to be awarded tender. Nevertheless, if the State functionary who is entrusted with dominion are the public property cannot reject the lowest bid without assigning valid reasons. One may also refer to City Schools case, where it has been held that a tender notice is merely an invitation for making an offer and does not itself constitute an offer or proposal and unless it is accepted no contract in Jaw can be deemed to have come into existence.
17.In the present case, bids were invited and the petitioner was the lowest bidder. His bid was not yet accepted when it was decided to scrap the tender because in the opinion of the authority the bids was not responsive. Had it been a case where the bid of the petitioner had been rejected for being not responsive and bid of some one else had been accepted, it would have been appropriate to enter into the question whether the bid of the bidder being treated as not responsive was justified' in the circumstances or not. However, since all bids have been scrapped and the matter is ordered for ore-tendering and since Ayaz Builder's case where the bid had not been scrapped public authority had, merely entered into negotiations with the second and third highest bidders, the High Court had ordered that fresh tenders be invited, we do not think the present case calls for any interference by this Court in exercise of Constitutional jurisdiction.
Needless to observe if fresh tenders are invited and if the petitioner participates in it, it is expected from and required of the authorities of Pakistan Steel that the bids be evaluated in a just, fair and judicious manner which is transparent at the same time and tender is awarded strictly in accordance with the law and the rules while observing highest standards of probity.
Above are our reasons for the short order announced on 06 04.2010.