' QAZI FAEZ ISA, C.J.--Constitutional Petition ("CP") No,71 of 2009 has been filed by Mr. Muhammad Qahir Shah, an Advocate practicing at Quetta, in the public interest, wherein he has assailed the sale of certain lands by. Pakistan Railways at Quetta. Constitutional Petition No,219 of 2010 has been filed by eleven petitioners objecting to the sale of Pakistan Railays land at Chamman, District Killa Abdullah, and Constitutional Petition No, 286 of 2014 has been filed by the successful bidder who had purchased the said Chamman property. That since the advertisements through which the bids were invited by Pakistan Railways for the sale of the Quetta and the Chamman properties and the facts of these petitions are the same or similar, and as the petitions involve similar law points, therefore, these petitions are being decided by this common judgment.
2. Mr. Muhammad Qahir Shah, Advocate argued his own petition (Constitutional Petition No, 771/2009) and Mr. Abdul Wali Nasir, Advocate represented the petitioners in Constitutional Petition No, 219/2010 and adopted the submissions of Mr. Muhammad Qahir Shah and also made certain additional points. Messrs Aitzaz Ahsan and Gohar Ali Khan, Barrister-at-Laws represented the private respondents in Constitutional Petitions Nos.771/2009 and 219/2010 and the petitioner in Constitutional Petition No, 286 of 2014. Syed Ayaz Zahoor, Advocate appeared for Pakistan Railways, Mr. Sher Shah Kasi, learned Deputy Attorney General ("DAG") for the Federation of Pakistan and Mr. Tariq Ali Tahir, learned Additional Advocate General ("AAG..") and Mr. Shai Hag, learned Assistant Advocate General for the Government of Balochistan.
3. That Mr. Muhammad Qahir Shah alleged that valuable properties owned by Pakistan Railways were being disposed of by violating the Constitution of Islamic Republic of Pakistan ("the Constitution"), through a non-transparent process and at throwaway prices, which were well below the market rate, and that such sales were against the public interest. He further stated that the bidders did not abide by the terms of the bids and subsequent agreements entered into with Pakistan Railways; in addition the stipulated terms and conditions were from time to time changed to favour the bidders, which could not have been done as the new/revised terms had not been offered to the general publications.
4. That Constitutional Petition No,771 of 2009 was filed in respect of the following properties owned by Pakistan Railways; the location / description, area and name of successful bidders are also mentioned below:-- S. No.DescriptionArea (Sq.Yds.)Successful bidders
1. Plot-A, Jinnah Road, Quetta 3,289 Nil
2. Plot-B, Jinnah Road, Quetta 5,067 Mr. Munir Ahmed Baloch (respondent No.5)
3. Plot-C, Jinnah Road, Quetta 4,088Messrs Paracha Construction (respondent No.7)
4.Plot No.62, Zarghoon Road, Quetta2,823Mr. Hashmat Ali Shah Bukhari (respondent No.6)
5. Plot at Whyte Road, Quetta 2,132Messrs Paracha Construction (respondent No.7)
' No bids were received for the property listed at serial No,1 above and we have been told that it is not being sold. The four properties that are being sold (mentioned at serial numbers 2 to 5) are hereinafter collectively referred to as the "Quetta properties".
5. That Constitutional Petitions Nos. 219/2010 and 286/2014 pertain to a 29,493 square yard plot in Chamman town which is mentioned in the document's as Chamman Taxi Stand' and hereinafter referred to as the "Chamman property". Mr. Faizullah Khan (respondent No,5 in Constitutional Petition No, 219/2010 and the petitioner in Constitutional Petition No,286/2014) was the successful bidder in respect of the Chamman property.
6. That the facts of the case as ably put forward by Mr. Aitzaz Ahsan and which were not disputed by the other counsel, were that pursuant to advertisement published in the English newspaper 'Dawn' on 21st April, 2009 and in the Urdu newspaper 'Jang' on 22nd April, 2009 "Invitation of Bids for Prime Railway Lands" were invited "on 33 years (extendable) lease or rental basis". The published advertisement stated that, "Pakistan Railway invites bids from interested parties to setup commercial venture on the following properties across the country on attractive terms and conditions" (hereinafter referred to as "Bids Invitation"). The Bids Invitation mentioned 117 properties in Lahore, Rawalpindi, Multan, Peshawar, Sukkur, Karachi and Quetta Divisions. The Quetta properties and the Chamman property were listed under the sub-heading 'Quetta Division' and stood at serial numbers 114 to 117, as under:-- 114PR Property at Jinnah Road Quetta11390 115Chamman Taxi Stand on Mall Road29493 118Bungalow No.62 on Zarghoon Road2823 117P.R. Property on Whyte Road, Quetta2132 ' The referred to Plots A, B and C were not specifically mentioned and instead reference was made to, "PR Property at Jinnah Road Quetta" admeasuring 11,390 square yards; however, if the area of all three of the said plots (Plot A, B and C) are added together it comes to 12,444 and not 11,390. The terms and conditions in the Bids Invitation are reproduced hereunder:--
(i) The tender document and site plans can be obtained from the offices of Directorate of .Marketing and Non-Rail Business at Lahore, Karachi, and Islamabad at the addresses mentioned below: Only the bids submitted on tender documents issued by Railways shall be accepted.
(ii) The bids will be received in the office of Dy. Director Marketing and NRB institute Allama Iqbal Road; Lahore, up to 1000 hours on 6th May, 2009. The 33-years straight lease bids will be opened on the same date at 1030 hours in the presence of the bidders. However, the two-envelope technical proposals and financial bids received on the same day for rental offers will be processed later under intimation to the interested parties. Any bid received after 1000 hours shall not be received and will be returned.
(iii) The bid envelope 'should mention the serial number, property name and the type of bid (Lease or Rental) on the top left corner. Separate bids shall have to be submitted for each site and each type of bid.
(iv) A bid security equal to 2% of the total bid value in case of 33-years straight lease, or 10% of the annual rental offered, will also have to be submitted in shape of Demand Draft/ Pay Order drawn in favour of "FA & CAO, Pakistan Railways", Lahore. The bid security will stand forfeited in case the bidder fails to comply with the terms and conditions of the financial offer. Bid security shall be returned to the unsuccessful parties on conclusion of the process.
(v) A separate payment of Rs, 5000 as non-refundable processing/ submission fee shall also be made in the shape of Demand Draft/Pay Order drawn in favor of "FA & CAO, Pakistan Railways", Lahore.
(vi) Parties are also encouraged to identify any other Railways lands that are not appearing in this advertisement and are also not currently under Railway use, and may submit Expressions of Interest for such sites along with site maps/sketches and location details.
(vii) Pakistan Railways reserves the right to drop; all or any of the site or to cancel the bidding process."
7. That the last date for submission of bids as per the Bids Invitation was 6th May, 2009, however, the said date was subsequently extended by issuing corrigendums. A corrigendum was published on 21st May 2009 in daily 'Jang' and 'Dawn' stating that, "now bids are also invited for 99 years lease term" and extended the date of submission of bids till 10th June 2009 ("the first corrigendum"), followed by corrigendum published on 10th June 2009 in daily 'Jang' extending the date of submission of bids to 20th June 2009 ("the second corrigendum"). Another corrigendum was published, wherein it was stated that, "the following sites have also been added", however, the same is not relevant as the properties which were added through it were not situated in Balochistan.
8. That the 'Bid Documents' amongst others made mention of submission of 'Financial Offer' as under:-- "FINANCIAL OFFER ' The interested parties shall submit their rate for the lease premium on the basis of per Sq. Yard.
The 60% of the total bid amount shall be paid, within 15 days of issuance of letter of intent (LOI). The balance 40% amount will be paid within 6 months in the shape of 6 post dated cheques. The possession will be handed over after receiving 100% of lease amount."
' The 'Period of Lease' as per the Bid Documents (clause D (ii)) was stated as under:-- "(ii) Period of Lease is 33 years (extendable for another similar term after the expiry of first term, under fresh terms and conditions to be agreed with mutual consent)."
9. The bidders were required to submit the rate they were offering per square yard and also to mention the total price of the same in the 'Bid Form' wherein the 'Payment Terms' were stated as under:-- "(1) Payment Terms: The bidders will be required to quote the area to be bid and the rate on "per square yard" basis. The 60% of the total bid amount shall be paid within 15 days of issuance of Letter of Intent (LOI). The balance 40% amount will be paid within next 6 months in the shape of 6 post dated cheques. The possession of the land shall be handed over only on receipt of 100% of the lease amount.
Note: In additional to the above Annual Lease Rent in advance @ Rs,1.0 per sq. Ft per annum would be payable on the date of signing of the contract. Subsequently all advance annual lease rent payments would be due on the anniversary of same date."
10. That upon acceptance of the bid a 'Letter of Intent' ("LOI") was issued. The LOIs for the Quetta properties are dated 15th August, 2009, except one which is dated 13th August 2009. The LOI in respect of the Chamman property is dated 16th October, 2009. All the LOIs in respect of the Quetta properties are identical except the lease term in respect of Plot-B situated at Jinnah Road, Quetta is mentioned as ninety nine years, whereas in respect of the other three plots it is thirty three years.
The common terms of the LOIs in respect of the Quetta properties are reproduced hereunder:-- "This is further to your bid for the lease of subject land held on June 20, 2009 at Lahore. We are pleased to inform you that your bid regarding the subject property has been accepted by the Executive Committee of Railway Board. Following are the terms and conditions:
(i) Area
(ii) Bid Value per Sq.Yd ________
(iii) Total lease Value
(iv) Lease term Payment terms (a). 60% Upfront payment within 15 days of this letter.
(b) 40% remaining to be paid in 6 equal monthly instalments.
(c) Possession on 100% payment.
(d) Rs,1.0 per sq.Ft per annum as ground rental in yearly advances: ' All expenses, approvals and NOCs pertaining to commercial usage of this property shall be the sole responsibility of the lessee.
' You are requested to kindly communicate your acceptance within one week upon receipt of this letter.
(Imran Hussain Gilani) For Executive Director Marketing"
' The LOI in respect of the Chamman property is reproduced hereunder:- "This letter of intent is being issued in accordance with the decisions of the Executive Committee of Railway Board dated 13-7-2009 and 31-8-2009. We are pleased to inform you that the Executive Committee of Railway Board has accepted your bid, being highest, for the 33-year lease (extendable) of the subject property. Following are the terms and conditions offered by Railways to yet:-- I.Area 29,493 Sq. Yds II.Lease Premium Rs.5,750 per Sq.yd III.Total Lease Premium Re.1 Per Sq. ft IV.Annual Lease Charges33-Years (extendable) Payment Terms
(a) At least 15% Upfront/immediate payment along with remaining 85% in shape of post-dated cheques or an unconditional bank guarantee payable within six months, to be submitted within '
30-days of this letter, upon which you will have permission to establish the site office on the said property.
(b) Upon receipt of at least 40% lease premium amount, you may commence the construction work.
(c) Upon receipt of 60% amount, the possession of the entire site shall be passed on to you.
(d) Annual Lease Charges will be payable in yearly advances. First year charges to be paid with the upfront lease premium payment. All expenses, approvals and NOC, s pertaining to commercial usage of this property shall be the sole responsibility of the lessee.
(Syed Imran Hussain Gilani) For Executive Director Marketing"
' It is to be noted that the payment terms in respect of the Chamman property were changed, and whereas in the Bid Documents and Bid Form 60% payment was to be made within 15 days and remaining 40% within 6 months, in the LOIs only 15% payment was to be paid within 15 days and for the balance 85% post-dated cheque/s were to be submitted.
11. That a 'Lease Deed' dated 8th October, 2009 on a one hundred rupees stamp paper was executed in. Respect of Plot-B situated at Jinnah Road, Quetta. Another 'Lease Deed' also dated 8th October 2009 on a one hundred rupees stamp paper was executed in respect of Plot situated at Zarghoon Road, Quetta. The Lease Deed in respect of Plot-B was for a period of 99 years, whereas in respect of property situated at Zarghoon Road, Quetta it was for a period of 33 years "extendable". The measurement of Plot-B mentioned in the Lease Deed is 5,067 and in respect of 62, Zarghoon Road, Quetta it is 2,668 square yards, whereas in the Bids Invitation it was stated to be 2,823 square yards. 'Lease Deed' in respect of the Chamman property was executed on 1st February 2010; and was for a period of 33 years "extendable". Clause 2(b) of the leases in respect of the two Quetta properties and Clause 2(c) in respect of the Chamman Property, which are identical, are reproduced herein below: "(b) Possession ' On upfront payment of at least 15% of the Lease Premium at the time of signing of this Lease Deed as described in the clause 03 below, the Lessee shall have the right to setup a site office in the said property premises, whereas on receipt of 40% or more of the Lease Premium, the party may commence project construction work, and on receipt of 60% or more or the Lease Consideration, Possession of the entire property shall stand passed on to the Lessee."
' Clause 3 of the Lease Deeds titled 'lease premium' is reproduced hereunder: In respect of Plot-B situated at Jinnah Road, Quetta: "LEASE PREMIUM ' The consideration amount for the lease of the Property is Rs,160,623,900 (Rupees One Hundred Sixty Million Six Hundred Twenty Three Thousand Nine Hundred Only). The "Lease Premium" is to be paid by the Lessee as follows:
(i) At the time of signing this lease deed 15% of the lease consideration (i.e, a sum of Rs,24,105,000 (Rupees Twenty Four Million One Hundred and Five Thousand Only) has been paid by the Lessee to the Lessor vide Bank draft No, 3114596 dated 186-2009 and Cheque No,4892022 dated 8-10-2009.
(ii) 85% Remaining Lease Consideration (i.e, a sum of Rs,136,528,000 (Rupees One Hundred Thillty Six Million and Five Lacs Twenty Eighty Thousand Only) (the "Second Instalment") has been paid by the Lessee to the Lessor in shape of 02 (Two) unconditionally submitted post dated crossed cheques, duly verified by the Bank, and as per following details:
(a) Cheque No,4892025 of United Bank Limited, dated: 8-4-2010
(b) Cheque No,4892023 of United Bank Limited, Dated: 8-4-2010"
In respect of Plot No, 62, Zarghoon Road, Quetta: "LEASE PREMIUM ' The consideration amount for the lease of the Property is Rs,58,962,800 (Rupees Fifty Eight Million Nine Hundred Sixty Two Thousand Eight Hundred Only)) The "Lease Premium" is to be paid by the Lessee as follows:
(i) At the time of signing this lease deed 15.8% of the lease consideration (i.e, a sum of Rs,9,360;000 (Rupees Nine Million Three Hundred and Sixty Thousand Only) has been paid by the Lessee to the Lessor vide Bank draft No, 1835703 dated 4-5-2009, No, 1835705 dated 4-5-2009, No,000622 dated 8-10-2009, No,000623 dated 8-10-2009, No .1857327 dated 8-10-2009, No,2770656 dated 8-10-2009 and No,2770657 dated 8-10-2009. -(ii) 84.2% Remaining Lease Consideration (i.e, a sum of Rs,49,602,800 (Rupees Forty Nine Million and Six Hundred Two Thousand Only) (the "Second' Instalment") has been paid by the Lessee to the Lessor in shape of 02 (Two) unconditionally submitted post dated crossed cheques, duly verified by the Bank, and as per following details:
(a) Cheque No,2770658 of Habib Bank Limited, Dated: 8-1-2010 .
(b) Cheque Nci.2770660 of Habib Bank Limited, Dated: 8-4-2010"
In respect of the Chamman property: "LEASE PREMIUM ' The consideration amount for the lease of the Property is Rs,169,584,750 (Rupees One Hundred Sixty Nine Million Five Hundred Eighty Four Thousand, Seven Hundred and Fifty Only). The "Lease Premium" is to be paid by the Lessee as follows:
(i) At the time of signing this lease deed 15% of the lease consideration (i.e, a sum of Rs,25,439,000 (Rupees. Twenty Five Million Four Hundred and thirty nine thousand Only) has been paid by the Lessee, detail is given below:
(ii) 85% Remaining Lease Consideration (i.e, a sum of Rs,144,147,035) (Rupees One Hundred; Forty Four Million, One Hundred Forty Seven Thousand, and thirty five Only) (the "final instalment") has been paid by the Lessee to the Lessor in shape of 01 (One) unconditionally submitted post dated crossed cheque, duly verified by the Bank, and as per following details:
(a) Cheque No,7715608 of Askari Bank Limited, dated: 25-7-2010 It is to be noted that the payment terms in the leases were changed, and whereas in the Bid Documents and Bid Forms 60% payment was to be made within 15 days and remaining 40% within 6 months, in the Lease Deeds only 15% payment was received and in respect of the balance 85% post dated cheque/s were obtained.
12. That as per the terms of LOIs in respect of the Quetta properties 60% of the payment pursuant to the bid was to be made within 15 days of the date of the LOI, i.e, by or before 31st October, 2009 in respect of Plot A, B and C, Jinah Road, Quetta and by or before 28th August, 2009 in respect of Plot No, 62 Zarghoon Road, Quetta. The remaining amount was to be paid in six equal instalments. The payment in respect of the Chamman property was to be made "15% upfront" and "remaining 75%" within six months, i.e, by or before 16th April 2010.
13. That admittedly payment as stipulated/agreed between the parties was not made in respect of any of the properties. Mr. Aitzaz Ahsan, learned counsel, contended that payments could not be made in view of the operation of an interlocutory order passed by this court on 3rd June 2010 in Constitutional Petition No, 771/2009, which is reproduced hereunder:-- "On 22-3-2010 respondents Nos.2 to 4 were directed to submit information along with supporting documents with regard to the properties situated in Quetta as under:-- ' The bids received. Evaluation of the bids.
' The decision with regard to the disposal of the said property.
' Particulars of the successful parties.
' Documents executed with said parties.
' Whether compliance of the bid terms has been made.
' It was further ordered that the aforesaid information shall be accompanied with documents.
Unfortunately, till date neither the information nor the documents have been provided. The petitioner has assailed the right of the said respondents to dispose of properties to private parties that were under the use of Railways. The petitioner has filed this matter being a citizen of Pakistan and resident of Quetta City and in the public interest. Admittedly the land is public property, which was purportedly auctioned by the Railways. The petitioner has been able to disclose a prima facie case and states that the public would be greatly inconvenienced and suffer irreparable loss in case third party rights and construction is permitted to take place on the subject lands until the disposal of the petition. Moreover, the fact that the said respondents have failed to disclose the required information/documents has raised doubts about transparency and legality of their actions. Accordingly to safeguard public property and interest no work shall be carried out on, no third party interest created nor any transaction be made in respect of the Quetta properties auctioned by the Railways until the disposal of the petition.
' Respondents Nos.2, 3 and 4 are directed to submit explanation as to why contempt action should not be initiated against them for failure to provide the aforesaid information/ documents as directed vide order dated 22-3-2010."
14. That Mr. Abdul Wali Khan Nasir, Advocate adopted the arguments of Mr. Muhammad Qahir Shah. He however made the certain additional points with regard to the Chamman property. He referred to the reply filed by the Government of Balochistan in Constitutional Petition No,219/2010 and to the annexes therewith, including the attachment to a letter dated 11th June 1999 written by Mr. Haroon Khawaja, Secretary, Prime Minister's Secretariat to the Government of Balochistan wherein the value of the Chamman property was determined in 1999 or thereabouts to be "167.716m", i.e, Rs,167,716,000. He stated that whilst it is not known when the said valuation was done, however, even if it be presumed that it was done just before the issuance of the said letter in June 1999 it is not understandable how after a period of ten years it fetched only Rs,169,584,750. He further stated that the said valuation was determined on the basis of the property being "residential" and that if it was sold as 'commercial' its price would be manifold. He stated that if the bids were prominently and locally advertised considerably higher prices would have been offered.
He stated that a publication was made ostensibly in a local 'newspaper"Sahafat', but the said newspaper cannot be categorized as a publication in a 'newspaper' as it is completely unknown, and that such type of 'newspapers' are colloquially referred to as 'dummy newspaper', of which a few copies are printed, but these are not sold. The said reply of the Government of Balochistan stated that it has "objection over the rate of bid" and categorized it as "a national loss and consequently Provincial Government interests have been affected" as it had "40% share of the revenue" which too had not been paid to the Government of Balochistan.
15. Messrs Muhammad Qahir Shah and Abdul Wali Nasir Advocates relied upon the following cases:-- ' Nadia Malik v. Makki Chemical Industries Pvt. Ltd., 2011 SCM R 1675.
' Wattan Party v. Federation of Pakistan, PLD 2006 SC 697.
' Alleged Corruption in Rental Power Plants etc., 2012 SCM R 773.
' The abovementioned case of Nadia Malik pertained to the sale by a bank of property mortgaged with it. The Hon'ble Supreme Court through the judgment authored by Amir Hani Muslim, J. Held that, "the sale in favour of the auction purchaser must reflect transparency", must not be "conducted in the manner to extend favour" (paragraph 16 I). The court further held that the auction purchaser "had taken his time to deposit the balance sale consideration in violation of the mandatory provisions of Order XXI, Rule 85, C.P.C. The belated application for extension in time for deposit of balance amount was wrongly entertained" (paragraph 16 J&K).
' In the Wattan Party case the privatization of the Pakistan Steel Mills Corporation was considered by a bench headed by the Chief Justice and eight Hon'ble judges of the Supreme Court. In addressing the question of standing and maintainability of the petition, after a review of the case- law, it held, that, "any member of the public having sufficient interest can maintain an action for redress of public injury arising from a breach of public duty or from violation of some provision of the Constitution or the law and for enforcement of such public duty and observance of such Constitutional provision. In the case of Benazir Bhutto ibid, it was held that only when the element of public importance is involved, the Supreme Court can exercise its power to issue the writ while sub- Article (1)(c) of Article 199 of the Constitution has a wider scope as there is no such limitation therein" (paragraph 21 B&C). And that "Article 8 of the Constitution grants the power of judicial review" (paragraph 47 K). The court examined the terms of the contract entered, into with the purchaser and held that, "there was no necessity to privatize the PSMC at a lesser price instead of selling it at fair market price for achieving the objects set out for privatization" (paragraph 93).
' In the Rental Power Plants' case the Hon'ble Supreme Court attended to the execution of contracts by government and public institutions and preservation / disposal of public property, certain judgments of the Supreme Court of India were also cited with approval. It would be useful to reproduce the following extracts (paragraphs 17, pages798-800) from the judgment, as under:-- "Every action taken by the Government must be in public interest and its action would be liable to be invalidated on the touchstone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional and invalid. Reference in this behalf may be made to the .
Case of Ramana Dayaram Shetty v. International Airport Authority of India (AIR 1979 SC 1628)., Further, in the case of Nagar Nigam, Meerut v. Al Faheem Meat Exports (Pvt.) Ltd. [(2007) 1 Supreme 704] it has been held as under:-- "The law is well-settled that contracts by the State, its corporations, instrumentalities and agencies must be normally granted through public auction / public tender by inviting tenders from eligible persons and the notification of the public-auction or inviting tenders should be advertised in well known dailies having wide circulation in the locality with all relevant details such as date, time and place of auction; subject-matter of auction, technical specifications, estimated cost, earnest money deposit, etc. The award of Government contracts through public-auction/public tender is to ensure transparency in the public procurement to maximize economy and efficiency in Government procurement, to promote healthy competition among the tenderers, to provide for fair and equitable treatment of all tenderers, and to eliminate irregularities, interference and corrupt practices by the authorities concerned. This is required by Article 14 of the Constitution. In our opinion this is an essential requirement in a democracy, where the people are supreme, and all official acts must be actuated by the public interest, and should inspire public confidence."
"In the case of Ram and Shyam Co. v. State of Haryana (AIR 1985 SC 1147), the Indian Supreme Court has held as under: "...Disposal of public property partakes the character of a trust in that in its disposal there should be nothing hanky panky and that it must be done at the best price so that larger revenue coming into the coffers of the State administration would serve public purpose viz. The welfare State may be able to expand its beneficent activities by the availability of larger funds. ... Where disposal is for augmentation of revenue and nothing else, the State is under an obligation to secure the best market price available in a market economy."
"In the case of Haji T.M. Hasan v. Kerala Financial Corpn. (AIR 1988 SC 157), the Court observed that: "It is needless to state that the Government or public authorities should make all attempts to obtain the best available price while disposing of public properties. They should not generally enter into private arrangements for the purpose."
The Hon'ble Supreme Court stated that natural resources too came within the definition of 'property' and belonged to the general public and property which must not be compromised:-- "10. The Government/Executive being the custodian of the national resources on behalf of the nation is bound to preserve and protect the same by strictly adhering to the relevant laws, conventions, experiences and have no authority to compromise with the resources, which fall within the definition of property in terms of constitutional provisions, belonging to general masses falling within the ambit of Article 24 of the Constitution"
16. That Mr. Aitzaz Ahsan stated that the decision to sell the excess properties of Pakistan Railways was taken by the Council of Common Interest on 29th May, 1997 and was approved by the Cabinet Division of the Government of Pakistan on 20th October, 2003, whereby Pakistan Railways was to get 65% of the sale consideration and 35% was to go to the province where the land was situated, however, subsequently the proportion was changed and the Railway's share was reduced to 60% and of the province increased to 40%. He stated that Railways was strapped for cash, therefore, it was decided at the highest levels to sell its excess properties and as such it cannot be urged that the sales were not in the public interest. He contended that the purchasers complied with all the stipulated conditions and the decisions taken by the Pakistan Railways were in accordance with the applicable law governing it. He further stated that before the bids were invited a reserve price for the properties was determined and in all cases the bid price exceeded the reserved price, that bids that were received and were properly evaluated and the highest bidder was issued LOI and none of the other participants raised any objection or took legal recourse. The locus standi of the petitioners was also assailed by the learned counsel and that they cannot be categorized as 'aggrieved' persons in terms of Article 199 of the Constitution; and that the petitioners in Constitutional Petition No,219 of 2010 also have a personal interest therefore they cannot pretend to be acting in the public interest. The learned counsel categorized the petitions as frivolous. Reliance was also placed upon the following cases:-- ' Shri Sachidanand Pandey v. State of W. B., AIR 1987 SC 1109 ' G.J. Fernandez v. State of Karnataka, AIR 1990 Supreme Court 958 ' TATA Cellular v. Union of Karnataka AIR 1996 Supreme Court 11 ' Akhtar Hassan Khan v. Federation of Pakistan 2012 SCM R 455 ' Suo Motu Case No,13 of 2009 PLD 2011 SC 619 ' Tehsil Municipal Administration v. Chaudhry & Co., 2005 SCM R 1361 ' Echo West International (Pvt.) Ltd. v. Government of Punjab, PLD 2009 SC 406 ' Shahid Hameed Khan Chandia v. Tehsil Nazim Tehsil Administration, 2006 YLR 2619 ' Muhammad Tariq v. Lahore Development Authority, 2010 M LD 486 ' Dossani Travels Pvt. Ltd. v. Travels Shop Pvt. Ltd., PLD 2014 SC 1 ' Abrar Ahmed v. Irshad Ahmed, PLD 2014 SC 331 ' Faiz Muhammad v. Mines Labour Welfare Commissioner, 2007 M LD 423 ' That we have examined the precedents cited by learned counsel, and have gathered (in brief) the ratio there from as under:-- ' That the case of Shri Sachidanand Pandey was cited to canvass the proposition that, there was "need for restraint on the part of the public interest litigants." Chinnappa Reddy, J however went on to state, that, "Public interest litigation has now come to stay" (paragraph 58) which dilutes Mr Aitzaz Ahsan's objection with regard to the petitioner not being an 'aggrieved' person. Justice Reddy also referred to the onslaught of public interest cases and that guidelines and parameters for the same should be laid down so as not to adversely affect the disposal of other cases. We may state that the rate of disposal of cases in the Balochistan High Court exceeds the rate of institution and that over the period of the last five years the total pendency of cases has been halved. In any event this court carefully examines each case that purports to be of public interest and whether it merits such categorization.
' The case of G. J. Fernandez was cited to contend that the variation .In the terms of the bids/agreements was not arbitrary or discriminatory. Ranganathan, J, however set out the sort of minor changes/deviations which would not adversely affect anyone's interest or the benefit of which was extended to all and compared them with major changes% deviations or the benefit of which was not extended to all, and stated that in the former type of cases the variation would be acceptable but not in the latter type of cases. With benefit we reproduce the following extract from the said judgment of the Indian Supreme Court (paragraph 16):-- "Thirdly, the conditions and stipulations in a tender notice like this have two types of consequences.
The first is that the party issuing the tender has the right to, punctiliously and rigidly enforce them.
Thus, if a party does not strictly comply with the requirements of paras III, V or VI of the NIT, it is open to the KPC to decline to consider the party for the contract and if a party comes to Court saying that the KPC should be stopped from doing so, the Court will decline relief. The second consequence, indicated by this Court in earlier decisions, is not that the KPC cannot deviate from these guidelines at all in any situation but that any deviation, if made, should not result in arbitrariness or discrimination. It comes in for application where the non-conformity with, or relaxation from, the prescribed standards results in some substantial prejudice or injustice to any of the parties involved or to public interest in general. For example, in this very case, the KPC made some changes in the time frame originally prescribed. These changes affected all intending applicants alike and were not objectionable. In the same way, changes or relaxations in other directions would be unobjectionable unless the benefit of those changes or relaxations were extended to some but denied to others. The fact that a document was belatedly entertained from one of the applicants will cause substantial prejudice to another party who wanted, likewise, an extension of time for filing a similar certificate or document but was declined the benefit. It may perhaps be said to cause prejudice also to a party which can show that it had refrained from applying for the tender documents only because it thought it would not be able to produce the document by the time stipulated but would have applied had it known that the rule was likely to be relaxed."
' The case of Tata Cellular (and in particular paragraphs 90 to 96) dilates upon the concept of judicial review.
Akhtar Hassan Khan's case was in respect of the challenge to the privatization of Habib Bank Limited and involved the Interpretation of the Privatization Commission Ordinance, 2000. The petition which was directly filed in the Supreme Court under Article 184(3) was dismissed as no violation of any statutory provision was noted, as there was transparency, lack of mala fides and the privation was "in accord with the best practices around the world and the law declared by this court." The Hon'ble Supreme Court held that both the petitions were maintainable (paragraph 50), but struck a note of caution and that, "The Court has to guard against frivolous petitions".
Suo Motu Case No,13 of 2009 was cited to state that only where any law or rule was violated that the courts would interfere by using their power of judicial review. The Hon'ble Supreme Court struck down a joint venture agreement entered by the Capital Development Authority with a private party.
It would be useful to reproduce the following extract (paragraph 24) from the judgment of Iftikhar Muhammad Chaudhry, C.J.:-- "It is well-settled that in matters in which the Government bodies exercise their contractual powers, the principle of judicial review cannot be denied. However, in such matters, judicial review is intended to prevent arbitrariness or favouritism and it must be exercised in larger public interest. It has also been held by the Courts that in matters of judicial review the basic test is to see whether there is any infirmity the decision making process. It is also a well-settled principle of law that since the power of judicial review is not an appeal from the decision, the Court cannot substitute its decision for that of the decision maker. The interference with the decision making process is warranted where it is vitiated on account of arbitrariness, illegality, irrationality and procedural impropriety or where it is actuated by mala fides."
Tehsil Municipal Administration was referred to contend that a stranger to bids does not have locus standi. The facts of the case however have no relevance to the facts of these petitions. The auction sub-committee of the Tehsil Municipality of Sialkot had awarded a contract in open auction to the highest bidder, however, the Tehsil Nazim ordered fresh auction on an application submitted by a person who did not have the requisite registration at the time of auction, but who had obtained it subsequently, with a view to accommodate him.
' In Echo West International there was a dispute amongst bidders which resulted in civil litigation, however, "realizing that the appellant was unlikely to succeed in view of his participation in the bidding process ... The learned counsel for the appellant insisted that the matter be examined as one of public importance therefore, attempted to make it a case of public interest litigation".
However, Nasirul-Mulk, J (as he then was) writing for the Supreme Court did not accept the contention, and "held that the appellant was not treated unfairly or discriminately" (paragraph 15).
This case therefore in our opinion is not relevant to determine the present controversy.
' In Shahid Hameed Khan Chandia case one of the potential bidders did not meet a stipulated precondition for participation in an auction, therefore, the Lahore High Court by a short order held that he did not have locus standi and dismissed the petition filed by him. It was however not a case of public interest.
' Muhammad Tariq is another judgment of the Lahore High Court in respect of two petitions. In one of the petitions the petitioner had complied with all the terms of the auction and had also deposited the entire sale consideration, however, the Director-General of the Lahore Development Authority had rejected his bid for no cogent reason and it was held that he could not do so. The other petition challenged the auction on the ground that the petitioner had been prevented from participating in it, but the "petitioner failed to convince" the court in this regard.
' In Dossani Travels the orders of a learned single judge of the Lahore High Court in respect of the Hajj quota came to be assailed and the apex court held that policy matters were within the executive domain therefore the High Court should not interfere therewith in the "absence of any illegality, arbitrariness or established mala fides" (paragraph 24 0). In the comprehensive judgment of Tassaduq Hussain Jillani, J (as he then was) the extent and scope of the powers under Article 199 of the Constitution vesting in the High Courts were also examined.
' Abrar Ahmed pertained to a civil dispute regarding the gift of a property and it was held that a presumptive heir has no right in the property of his ancestor and thus no locus standi. The case is not relevant to the present dispute.
' In Faiz Muhammad's case an offer was made by a non-bidder (outsider) of more than the price offered by the auction purchaser. The petition was dismissed by a learned single judge of the Lahore High Court, who held that, "the impugned administrative decision challenged by the party having neither been lacked transparency nor tainted with mala fides, unfair, and unjust or unreasonable nor based on bias or favouritism and the discretion vested in the Authority had been properly exercised" (paragraph 8).
17. Syed Ayaz Zahoor, the learned counsel for Pakistan Railways, did not dispute the facts as contended by Mr. Aitzaz Ahsan, Advocate. He however stated that admittedly the payment was not made within the stipulated time. With regard to Constitutional Petition No,286/2014, filed by the auction purchaser in respect of the Chamman property, he stated that the same suffers from lathes as it was filed on 9th May, 2014, whereas the letter impugned therein is dated 1 1 th March, 2013. He further stated that arbitration could have been invoked under the 'Dispute Resolution'
(arbitration clause 14) of the Lease Deed dated 1st February, 2010, but the same was not done.
18. Mr. Sher Shah Kasi, learned D.A.G. And Mr. Tariq Ali Tahir, learned A.A.-G. Stated that the entire process of the sale of the Quetta properties and Chamman property was not transparent and should be undone. They further stated that the share of the Government of Balochistan was not paid to it. The learned A.A.-G. Also stated that the Government of Balochistan was not kept informed nor its permission taken before accepting the bids, despite the fact that it had a 40% stake. He stated that the Government of Balochistan may have elected to buy the properties itself as the bids that were received by Pakistan Railways were well below market rates / prices. He further stated that there are very few properties available for sale in Quetta and Chamman and that the Government could have utilized the same for some public purpose.
19. That Mr. Gohar Ali Khan, Advocate exercised his right of reply. In respect of Constitutional Petition No,286 of 2014 he stated that the principle of lathes was not applicable as the petitioner learnt of the issuance of the impugned letter dated 1 1 th March, 2013 on 15th April 2014, whereas the petition was filed on 9th May, 2014. The impugned letter stated that the contract between the parries had been frustrated and Pakistan Railways offered to refund the money that had been paid to it by the petitioner. He further stated that the petitioner is prepared to invoke the arbitration clause, provided Constitutional Petition No,219 of 2010, which is in respect of the same property, is dismissed. He further stated that the price as determined by the Government of Balochistan in respect of the Chamman property was for land measuring 41,929 square yards, whereas the land leased to the petitioner is only 29,493 square yards for 33 years.
20. That admittedly the amounts that have been received in respect of the Quetta properties and the amount that remains outstanding is as under:-- PropertyPayment ReceivedPayment PayableBalance Outstanding Situated at Jinnah Road, Quetta known as Plot-B24,150,600 160,623,900 136,473,300 Situated at Jinnah Road, Quetta Known as Plot-C3,100,000 90,344,800 87,244,800 Situated at Zarghoon Road, Quetta 9,386,000 62,388,300 53,002,300 Situated at Whyte Road, Quetta 3,514,188 21,533,200 18,019,012 ' That in respect of the Chamman property the learned counsel for the auction purchaser stated that pay orders were prepared in May, 2011 in respect of the balance payment, but the same were not received by Pakistan Railways.
21. That the first question to be determined is regarding the maintainability of the petitions.
Constitutional Petition No, 771/2009 has been filed by a person who does not seek any relief for himself. The petitioner is a practicing advocate and has come forward as a concerned citizen and therefore, can be categorized as a public spirited person. However, Constitutional Petition No,219/2010 has not been filed by persons who have the public interest at heart, but their own as they are seeking to purchase the Chamman property themselves. However, both the petitions raise matters of public concern, which is the sale of an asset of Pakistan Railways, the ownership whereof vests in the people of Pakistan. These petitions therefore cannot be categorized as 'frivolous' as they have raised significant points of improper exercise of discretion, extending of undue benefit and favour to auction purchasers and failure of a public functionary to abide by its public duty. In cases in which a petitioner highlights a matter of public interest or concern, however, his motivation is to seek a benefit for himself (as. In Constitutional Petition No,219/2010) the courts may still entertain the petition without granting any relief to the petitioner. If the attention of the court has been drawn to a matter of public interest having the attributes of public interest litigation and which highlights serious transgressions it would not be proper for the court to close its eyes and simply dismiss the petition on the ground that the petitioner was advocating his own cause or to use the idiom, 'Don't throw out the baby with the both water'.
22. That as regards the question of standing or locus standi in respect of public interest litigation the strict rule of standing is not applicable; as was also held in the cases cited by Mr. Aitzaz Ahsan (G.J. Fernandez, Akhtar Hassan Khan and Suo Motu Case No,13). In the Wattan Party case the Supreme Court had held, that, "any member of the public having sufficient interest can maintain an action for redress of public injury arising from a breach of public duty". Even otherwise any citizen who brings forward a public matter disclosing the violation of any constitutional or legal provision or unreasonable behaviour of a public functionary that is adverse to the public interest or has caused public loss may be categorized as an 'aggrieved' person. Accordingly, the objection as to maintainability of the petitions is rejected.
23. That 60% of the payment as stipulated in the Bid Documents (Financial Offer) and Bid Form was to be paid within 15 days, but payment was not made within this stipulated period in respect of any of the properties. That on this point alone the sales of the properties have to be set aside. When public properties are sold the bid conditions must be complied with and if the same are changed then the same benefit must be publicly extended to all. A benefit cannot be extended in secret to favour one or a few persons. We are not at all impressed with the ingenious argument of Mr. Aitzaz Ahsan that payments could not be made in view of the operation of the interlocutory order passed by this court on 3rd June, 2010 in Constitutional Petition No, 771/2009 (reproduced above). Initially Constitutional Petition No, 771/2009 was filed against the Federation of Pakistan and different officers of Pakistan Railways, however, when the names of the successful bidders were disclosed by Pakistan Railways, respondents Nos. 5, 6 and 7 were also added as well as respondent No,8 (Senior Member Board of Revenue). Admittedly, the payments were not made by the stipulated dates (as mentioned above), which expired before the issuance of the referred to interlocutory order. In any event the said interlocutory order did not restrain the successful bidders from tendering payment in respect of the properties that were purchased by them. The successful bidders did not abide by the terms of Bid Documents and the Bid Forms with regard to the most important aspect, i.e, making payment as stipulated. That a comparatively small percentage of the sale consideration has been paid till date (as mentioned in paragraph 20 above); five years have elapsed since the bids were submitted. It is common knowledge that price of property increases over a period of time whereas the effect of inflation and other factors depreciate the value of money in Pakistan. The public interest therefore has been seriously compromised and the auction purchasers have been accommodated and extended huge benefit at .The cost of the public exchequer.
24. That there are there other aspects of these cases which reflect the callous disregard of the public interest by Pakistan Railways. Valuable pieces of property at prime locations were to be sold in Quetta and Chamman, but one advertisement was published in respect of properties in four provinces. The 'Quetta Division' properties were barely discernible in this publication and were listed at the tail end at serial numbers 114 to 117. In respect of the Jinnah Road plots they were inaccurately lumped together. There is yet another aspect which shows incompetence at best or mala fide's at worst, and that is that the advertisement inviting bids offered properties for 33 years lease, however, through the first corrigendum the period was extended to 99 years; the first corrigendum however simply referred to the date of the earlier advertisement inviting bids, but the list of properties that were to be sold were not mentioned therein. Many who read newspapers do not retain earlier editions of the newspaper. Billions were to be derived from the sale of 117 properties therefore it would have been reasonable to mention the properties being sold in the first corrigendum again. Was it a case of benign neglect or sinister design? Moreover, the value a property having a lease of a period of 33 years as compared to a lease that is three times that period (99 years) is vastly different.
25. That generally those who live or do business in a particular place are most interested in buying property there, however, the sale was not proclaimed locally. Pakistan Railways did not publish advertisements in the local newspapers or in the local edition of the newspapers. The newspaper 'Dawn' is not published from Quetta and does not have a local edition. The newspaper 'Jang' has a local edition, but advertisements regarding the sale were not published in the local edition of `Jang'. And Sahafat' is not a known newspaper. Pakistan Railways could also have affixed billboards on the properties that were to be sold so that passer-bys could learn of the proposed sale; the fact that these properties were very centrally located this method would have been very effective and cheap and helped in informing the maximum number of people about the proposed sale. It is therefore no wonder that only a few bids were received and those that were received were far below the market rate.
26. That the decisions of the Supreme Court of India, that have been cited with approval by our Supreme Court, are fully applicable to the facts of these petitions. In Nagar Nigam, Meerut (above) it was held by the Indian Supreme Court that advertisements with full particulars of the property to be sold must be advertised in dailies having wide circulation in the locality with all relevant details:-- "... The public-auction or inviting tenders should be advertised in well known dailies having wide circulation in the locality with all relevant details such as date, time and place of auction, subject- matter of auction, technical specifications, estimated cost, earnest money deposit, etc."
' The importance for such advertisements was to ensure transparency and to maximize, the benefit to the people:- "The award of Government contracts through public-auction/ public tender is to ensure transparency in the public procurement to maximize economy and efficiency in Government procurement, to promote healthy competition among the tenderers, to provide for fair and equitable treatment of all tenderers, and to eliminate irregularities, interference and corrupt practices by the authorities concerned. This is required by Article 14 of the Constitution. ... In our opinion this is an essential requirement in a democracy, where the people are supreme, and all official acts must be actuated by the public interest, and should inspire public confidence."
' In Ram and Shyam (above) the Indian Supreme Court held that if public property is being disposed of it should be ensured that the best price is received:-- " ...Disposal of public property partakes the character of a trust in that in its disposal there should be nothing hanky panky and that it must be done at the best price so that larger revenue coming into the coffers of the State administration would serve public purpose viz. The welfare State may be able to expand its beneficent activities by the availability of larger funds. ... Where disposal is for augmentation of revenue and nothing else, the State is under an obligation to secure the best market price available in a market economy."
' In Haji T.M. Hasan another case of the Indian Supreme Court it the above principle was reiterated and private arrangements deplored, as under:-- "It is needless to state that the Government or public authorities should make all attempts to obtain the best available price while disposing of public properties. They should not generally enter into private arrangements for the purpose."
27. That the Government of Balochistan was an important stakeholder having a 40% share in the sale proceeds, but was not informed about the offers that Pakistan Railways had received. The learned A.A.-G. Was correct in stating that the Government of Balochistan may have elected to purchase the property itself as it would have had to pay only 60% of the highest price that had been offered. The central and prime location of the Quetta and Chamman properties meant that these could have been put to public use. The Jinnah Road plots lay opposite the Sandeman (Civil)
Hospital which needs expansion, but there is no available land in the vicinity for this important public purpose. There is also virtually no place to park vehicles and these central city properties could have been utilized for such purpose. The Government of Balochistan has enacted the Balochistan Land Lease Policy of 2000 (hereinafter "the Land Lease Policy")' (published in The Balochistan Gazette of 1st December 2000), pursuant to subsection (2) of the section 10 of the Colonization of Government Lands Act, 1912 which reflects the concern with regard to the acute congestion of towns and cities. Clause 4(2) of the Land Lease Policy prescribes, that, "All state land falling within 5 miles of the limits of Municipal Committee / Municipal Corporation and within 3 miles of Town Committee will be reserved for future utilization." The Land Lease Policy further stipulates in clause 3(2) that land can only be leased provided it was not required for "public buildings and other public sector projects". That Quetta and Chamman both are starved of parks, playgrounds, public hospitals, and other basic amenities. We are confident that if the Government of Balochistan had acquired the said properties it would have put them to public use as opposed to the sale thereof to private parties.
28. That there is another aspect which has further deprived the public exchequer of revenue. The 'lease deeds' have been printed, on stamp pare of one hundred rupees only, and the applicable stamp duty has not been paid / affixed thereon. The 'lease deeds' therefore cannot be relied or acted upon (section 35 of the Stamp Act, 1899) and are also liable to be impounded (section 33 of the Stamp Act). The lease deeds have also not been registered in terms of the Registration Act nor have the applicable registration charges paid.
29. That the properties that Pakistan Railways was selling were designated for residential use, however, Pakistan Railways defined them as 'commercial' without first have their designated land use changed. The de facto commercialization of all lands in towns and cities is adversely affecting the standard of living of people and making living therein impossible. Land owned by government, local government or public institutions is a valuable public asset and must be put to the best possible use for the benefit of the citizens. Such land should not be sold only for the value of the carcass of the proverbial goose that laid the golden eggs.
30. That for the aforesaid reasons we dispose of Constitutional Petition No,771/2009 and Constitutional Petition No,219/2010 in the following terms and dismiss Constitutional Petition No,286/ 2014, but with no order as to costs:--
(a) We declare that Pakistan Railways in extending the time for making payment to the auction purchasers, without publicly informing the general public that it had changed the payments terms and without inviting fresh bids in such terms acted unfairly, unreasonably, unjustly and illegally;
(b) We declare that Pakistan Railways in extending the time for making payment caused prejudice to the public interest;
(c) We declare that the failure of the auction purchasers to make payment promptly and as per the terms of the Bid Documents and Bid Forms was a major contravention of the sale terms which also adversely affected the public interest;
(c) We set aside the sale / sale proceedings in respect of the said Quetta properties and Chamman property;
(e) Pakistan Railways may however offer the Quetta properties and Chamman property to the Government of Balochistan at the price of the maximum bids received less 40% being the share of the Government of Balochistan. or ' If Pakistan Railways wants to invite fresh bids for the sale of the Quetta properties and Chamman property it must do so fairly, transparently: and with maximum publicity, by placing advertisements in major newspapers as well as local newspapers and by affixing billboards on the properties that are to be sold, and after receipt of bids offer the properties to the Government of Balochistan at the same price less 40%, i.e, grant to the Government of Balochistan the right of first refusal; and
(f) If the Government of Balochistan acquires the Quetta properties and or the Chamman property it should use the same for public purpose.