QAZI FAEZ ISA, C.J.---1. Learned counsel for the respondent stated that the interim order suspending the blacklisting of the petitioner is adversely affecting the interest of the respondent, and requested that the petition may be heard and disposed of at Katcha Peshi stage. Mr. Munir A.
Malik, advocate on behalf of the petitioner did not oppose the suggestion, accordingly we proceeded to hear the matter.
2. It is the case of the petitioner that the respondent vide letter dated 22nd October, 2010 blacklisted the petitioner in controversion of the 'Registration Proceduresof the Pakistan Electric Power Company (Pvt.) Ltd., which are applicable to the respondent, and such applicability is admitted by the respondents. To better understand the controversy it would be useful to reproduced the impugned letter of the respondent dated 22nd October, 2010.
"Messrs Atlas Cables (Pvt.) Ltd.
9th Floor, Textile Plaza, Mumtaz Hassan Road, PO Box No,5195, Karachi.
Subject: BLACK LISTING OF M/S ATLAS CABLES (PVT)
LTD. KARACHI IN CASE OF NON-SUPPLY OF MATERIAL TO QESCO UNDER VARIOUS CONTRACT AGREEMENT/PURCHASE ORDERS.
Ref: (i). This office Show Cause No,CEO/QESCO/G.M (Tech)/ 2852 dated 6-9-2010.
(ii) No,CEO/OESCO/MMM/3881-82 dated 11-10-2010.
(iii) No,MMM/KFP/QESCO/3901 dated 12-10-2010.
(iv) No,MMM/KFP/QESCO/4060-61 dated 19-10-2010.
(1) Your firm was issued KFP Contract Agreement No,28 dated 12-2-2009, for supply of ACSR Rabbit Conductor and A.A. Ant Conductor. Moreover the following Purchase Orders were also placed on your firm for supply of following material:-
(a) PO No,643 dated 29-11-2007 For supply of ACSR Dog Conductor.
(b) PO Nc.721 18-3-2008
(c) and No,762 dated 6-10-2008. For supply of ACSR Rabbit Conductor. Your firm has breached each Clause of Contract Agreement/ Supply Orders and failed to supply the material in time. Your firm was continuously pursued through series of letters and telephonically by the undersigned as well as G.M. (Tech) to supply the ordered material, but no positive response received from your end.
3. Foregoing Para-2, the Competent Authority has decided to impose the following penalty upon your firm:- "BLACK LISTING OF YOUR COMPANY".
4. This being issued with the approval of Competent Authority.
(Sd.)
(Khurshid Ahmed Sheikh)
Manager MM (KFP)
QESCO Quetta C.C. To:--
(I) The All Chief Executives (DISCOS, GENCOs, NTDC).
(2) The All General Managers.
(3) The All Chief Engineers.
(4) The Project Directors.
(5) The All Resident Engineers of Hydel Power Stations.
(6) The All Regional Directors of Inventory Controls.
(7) The All Store Managers."
3. Learned counsel for the petitioner has relied upon the provisions contained in Chapter-II of the Registration Procedures and in particular the following clauses thereof as under:- "(3) Approval.--Firm/individuals will be "Blacklisted" Removed and placed on Embargo with the approval of Registration Committee. Blacklisting of firms will be published in Wapda Weekly and the information will be conveyed by circular to other Government Departments also. Causes of Blacklisting. The following are the causes of Blacklisting:-
(a) Making false statements and allegations to gain undue advantage.
(b)Commission of fraud.
(c)Commission of embezzlement, criminal breach of trust, theft, cheating, forgery, bribery, falsification or destruction of records, receiving stolen property, false use of a trademark, securing fraudulent registration, giving false evidence furnishing of false information of serious nature." It is urged that the reason given in the impugned letter, whereby the petitioner was blacklisted, was on account of alleged breach of contract including the failure to supply material on time, and such reason was not sufficient cause to necessitate blacklisting and did not fall within any of the aforesaid sub-clauses (a), (b) and (c) of clause 5. It is next contended that the blacklisting can only be resorted to with the prior "approval of Registration Committee" but nothing has been produced by the respondent to show that the approval of the Registration Committee had been sought. The Registration Committee in respect of an electricity distribution company, which we are informed the respondent is, comprises of the following, as mentioned in clause 2.6 of the Registration Procedures:--
(1) Chief Executive Convener.
(2) Technical Director or any other Engineer of Grade 20 nominated by CEO. Member.
(3) Finance Director Member.
(4) Chief Engineer (MI) Member.
(5) Chief Engineer (D&S)/Chief Engineer (Design) NTDC. Member.
(6) Chief Engineer(P&D) (For Energy Meter, Distribution Transformers, Conductors and Cable). Member.
(7) Sr. Manager/Manager (MMM) Secretary.
Learned counsel for the petitioner states that the impugned letter was copied to all the electricity generating and distribution companies as well as to the National Transmission Distribution Company (NTDC), all of whom are the customers or potential customers of the petitioner, and as such the impugned letter would effectively cripple the business of the petitioner. It is contended that the petitioner's blacklisting and circulation of the impugned letter infringes the Fundamental Right of carrying on lawful business guaranteed by Article 18 of the Constitution of the Islamic Republic of Pakistan, 1973. In this regard reliance has also been placed upon the case of New Jubilee Insurance Co. Ltd. v. National Bank of Pakistan PLD 1992 SC 1126, and in particular paragraphs 15 and 16, thereof reproduced hereunder:- "(15) It may be stated that the respondent is a Bank owned by the State and therefore, under the Constitutional mandate, it should act fairly, justly, without any discrimination, and without adopting unfair procedure. If an Insurance Company fulfils the required conditions and becomes eligible to be enlisted in the list of approved Insurance Companies the respondent cannot arbitrarily refuse enlistment for a reason which may have no nexus with the eligibility to be enlisted. However, a company (including the appellant), listed in the list of the approved Insurance Companies has no right to force the respondent to enter into a contract of Insurance. It can at the most claim that it may be treated alike with the other Insurance Companies, placed in the same/similar position/situation. In other words, it is entitled that its offer to insure may be considered along with particular offer. So long the respondent acts in good faith, acceptance of a particular offer or non-acceptance of the same will not ensue any justifiable cause of action.
(16) It may be pointed out thus the fall-out of the blacklisting of the appellant is to prevent it from the privilege and advantage of entering into lawful relationship with the respondent for the purpose of gains which is violative of Article 18 of the Constitution, which lays down that subject to such qualifications, if any, as may be prescribed by law, every citizen shall have the right to enter upon any lawful profession or occupation, and to conduct any lawful trade or business. The blacklisting of a company/firm/person, also tarnishes the reputation of it/his, as to its/his credibility to honour its/his commitments which may dissuade other parties from entering into contracts with the former. Thus the consequences of blacklisting a company/firm/person are of great magnitude, which warrant that before taking such an action, there should be material on record prima facie to indicate that the delinquent Insurance Company's refusal to pay claim was not warranted in the circumstances of the case. "
5. Mr. Ghulam Mustafa Buzdar, learned counsel for the respondent, stated that the petition was not maintainable since the respondent has filed a suit for damages bearing No,5/2011 before the Court of Senior Civil Judge-V Quetta and the petitioner too has filed a civil suit for recovery of damages bearing No,44/2011 before the Court of Civil Judge-IX, Quetta, wherein inter alia damages on account of blacklisting have been sought and as such the instant constitutional petition is not maintainable. Learned counsel has placed reliance upon Budhu Shah v. Chief Adm. Auqaf 1991 CLC 1445. On merits the learned counsel for the respondent contended that the blacklisting was in accordance with law and has referred to clauses 18 and 19 (f), (g) and (h) under the heading 'Removal of Firms', of the Registration Procedures. It would be appropriate to reproduce the said clause 18 and sub-clauses (0, (g) and (h) of clause 19 as under:- "Assessment of Factors.
(18) The removal of a registered firm from the list of approved firms is a drastic action which must be based upon adequate evidence, consideration should be given to how much credible information is available, its reasonableness in view of surrounding circumstances, and inference which may be drawn from the existence or absence of affirmative facts. The assessment should include an examination of basic documents, such as contracts."
"Cause of Removal.
(19) With the approval of the relevant Registration Committees, a firm/individual may be removed from the list of registered firms as an administrative action for following reasons:-
(t) Misconduct: i,e, failure to proceed with the signed contract, withdrawal of the commitment, quoting, ridiculously low and then withdrawing the offer and not responding to written communication etc.
(g) Repeated failure to observe the instructions given in tender forms including schedule thereto.
(h) Failure to perform a contract(s) satisfactorily in accordance with the contractual obligations which in the opinion of competent authority was due to exclusive fault of the supplier". Learned counsel further stated that the petitioner's blacklisting was a follow up action of the 'removalof the petitioner as an approved firm.
6. We have heard learned counsel and have gone through the record and the cases relied upon.
The question of maintainability of the petition on account of the fact that the petitioner had filed a suit for damages needs examination first. In paragraph 6 of the plaint of such suit the petitioner claims, "a sum of Rs,200,000,000 by way of loss of profits on account of the blacklisting and the resultant disqualification of the plaintiff to participate in such tenders". And the following prayer has been made in the plaint:- "(a) A sum of Rs,269,495,644.32 together with interest at the bank rate from the date of suit until realization of the adjudged amount;
(b) For costs of the suit, and'
(c) For such other relief as may be appropriate in the circumstances of the case."
The fact that this petition was filed earlier in time, disclosure of the petition was made in paragraph 6 of the plaint and no declaration with regard to the blacklisting has been sought in the suit would not disentitle the petitioner from approaching this Court in its constitutional jurisdiction for enforcement of the petitioner's Fundamental Rights. The facts of Budhu Shah's case cited by the learned counsel for the respondent were different as demonstrable from the following portion from the said judgment: "Further more, an alternative remedy by way of filing petition under section-7 of the West Pakistan Waqf Properties Ordinance (XVIII of 1961) was available to the petitioners and they actually availed of it by filing the same on 13-11-1974 before the learned District Judge, Rahimyar Khan, for declaration to the effect that the impugned notification was illegal and without lawful authority.
Para-6 of the writ petition shows that in their petition under section 7 of the West Pakistan Waqf Properties Ordinance XVIII of 1961, the petitioners have taken all the grounds which they have taken in this petition. Strangely enough, without awaiting the decision in the said petition, the petitioners hurriedly filed this writ petition. The learned counsel for the petitioner, is not in a position to tell the fate of the aforesaid petition."
The prayer in this petition with regard to declaring the action of the respondent in blacklisting the petitioner as "unlawful and of no legal effect" has not been made in the suit filed by the petitioner.
Moreover, this Court in its constitutional jurisdiction cannot award damages as sought in the subject suit. However, the sooner the blacklisting order comes to an end will help mitigate the damages, if any, suffered by the petitioner. Accordingly, the legal objection on the maintainability on the petition is overruled.
7. It now remains to be considered whether the action of the respondent in blacklisting the petitioner was in accordance with the Registration Procedures and in accordance with the freedom to carry on lawful business, which has been enshrined in the Constitution of Pakistan as a Fundamental Right. The Registration Procedures that have been relied upon by both sides permit different actions to be taken against delinquent firms, including blacklisting, removal and placing of embargo. Blacklisting can only be resorted to after obtaining, "the approval of Registration Committee" (clause 3 of Chapter-II). In its counter affidavit the respondent has not filed any document to show that the Registration Committee was constituted to consider blacklisting the petitioner and had granted an opportunity of a hearing to the petitioner before passing an order approving the blacklisting. Moreover, the reasons stated by the respondent in the impugned letter for blacklisting the petitioner do not come within any of the categories listed in clause 5 of (a), (b) or (c) of the Registration Procedures. The contention of learned counsel for the respondent that blacklisting of the petitioner was a consequence of its 'removalis contrary to the respondent's own case besides being illogical. Even if it be presumed that the petitioner was being 'removedpursuant to clause 19 then too, "the approval of the relevant Registration Committee," was required, however, approval of the Registration Committee was not sought either for 'removalor blacklisting of the petitioner, let alone providing a hearing to the petitioner. The petitioner manufactures cables and conductors which are mostly used by power generating and distribution companies and NTDC and the extreme action of blacklisting the petitioner effectively prevents it from carrying on with its lawful business and consequently would drive the petitioner out of business. Such action thus violates the Fundamental Right of carrying on a lawful business guaranteed by Article 18 of the Constitution of Pakistan. The respondent also violated its own Registration Procedures.
8. Therefore, for the reasons stated above, the impugned letter dated 22nd October, 2010 is declared to have been issued without lawful authority and further declared to be unlawful and of no legal effect and the petitioner will no longer be considered to be blacklisted or treated as such.
Consequently the respondent is directed to circulate a letter to all those to whom it had circulated the impugned letter dated 22nd October, 2010 and recall the order of blacklisting. The petition is allowed in the aforesaid terms, but with no order as to costs.