' AMER RAZA NAQVI, ].--Through this order I intend to dispose of C.M.A. No.9061/2014 filed by defendants Nos.2 and 3 Under Order XXXIX Rules 3 and 4, C.P.C. r/w Section 151, C.P.C., whereby, defendants Nos.2 and 3 have prayed that order dated 11-7-2014 be vacated, such order was passed on C.M.A. No.8840/14, and also application filed by the plaintiff mentioned above on which order dated 11-7-2014 was passed. Plaintiff have filed this suit inter alia, for declaration praying therein that terms and conditions mentioned in the Tender dated 15-5-2014 cannot be varied except by corrigendum. Similar other prayers were made including for a direction to respondents to entertain the bid of the plaintiff in impugned tender.
2. Facts of the case are that defendant No.3 advertised in daily "JANG", Tender Notice on 15-5-2014 and thereby invited offers in respect of intended purchase of 300,000 wires seals for Pakistan Customs Container Sealing System to be used for sealing containers and railway wagons. The said Tender notice was annexed by the plaintiff as Annexure "C" to the plaint. Five descriptions and specifications were mentioned on the top of the publication and thereafter terms and conditions were given. It is mentioned in the description and specifications of seals required that product should be of high security and should meet standard mentioned in Term-I i.e. ISO PAS 17712.2010 dimension and length required is also mentioned in Term-II and IV. Term-V provides that the product should bear custom logo, number, machine readable bar code and legible name as Pakistan Customs PCCSS. Provided that Tenderers should submit bids comprising of single package containing two separate envelopes and each envelope should contain separately the financial proposal and technical proposal. The envelopes should be marked as technical proposal and financial proposal. It was also mentioned that proposal should contain test reports from international testing laboratories showing compliance of all requisite I.S.0 standards. It was also a requirement that Tenderers shall be required to mention manufacturers names and country of origin. Term-IV provided that related broacher, certified copies of relevant ISO Certificates, and test reports from International Testing. Laboratories showing compliance of all requisite ISO standards should be submitted and in case they are not accompanied with the technical bids, the bid shall be rejected. Remaining are the normal terms and conditions usually found in all invitations. In the plaint it is mentioned that plaintiff obtained tender form on 20-5-2014 and was surprised that terms and conditions were varied. Particularly condition-IV and tender form provided that the seal shall be got evaluated from Peoples Steel Mills, Karachi. Plaintiff, however, participated in the bid and he was informed through letter dated 3-7-2014 that bid submitted by plaintiff was evaluated as per test report and found that it could not qualify for the standard of high security seals as per Serial No.1 of the description and specifications of seals required. In para-8 of the plaint plaintiff has alleged that in the letter dated 3-7-2014 defendant No.3 neither disclosed the name of the laboratory, which has technically evaluated the technical bid of the plaintiff nor was the test report annexed with the letter. Defendant No.3 was approached by the plaintiff through letter dated 3-7- 2014 and requested that defendant No.3 should furnish reasons for rejecting the bid and to inform the plaintiff difference between plaintiff's technical bid and specification/description required in terths of enactments mentioned on the top of the letter. Through letter dated 8-7-2014 reasons were provided. It is mentioned in the plaint that this process adopted by respondent No.3 was mala fide and it is alleged that without any corrigendum no terms and conditions can be varied. It is also stated by the plaintiff that technical bid was opened on 30-5-2014 and respondent No.3 took more than 30 days time in getting the bid evaluated leaving ample chance of change of samples as the samples were got tested at the back of the plaintiff. In this respect plaintiff made a specific prayer in clause (d) of Prayer Clause and expressed itself in Para-10(iv) of the plaint. Plaintiff being aggrieved of such actions and omissions on part of the defendants particularly defendant No.3 filed the instant suit and prayed that respondents be directed to entertain the bid of the plaintiff in accordance with the terms and conditions of Tender dated 15-5-2005. Besides other prayers including the clause (b) & (d) already referred above.
3. Learned counsel for the plaintiff argued that nothing was mentioned in the publication regarding evaluation of seals by Peoples Steel Mills but plaintiff still participated as he had no fear of evaluation but subsequent events transpired that the seals were not even evaluated by Peoples Steel Mills but were sent to PCSIR under suspicious conditions and plaintiff first time came to know about this fact when they received Letter dated 8-7-2014 annexed as annexure "H". Learned counsel further said that there is a gap of about one month between opening of the bid and letter of respondent No.3 dated 3-7-2014 in which plaintiff was informed that bid submitted by him was not found up to the mark and therefore was rejected. There are number of documents filed by the parties but so far as the documents are concerned none of the party has disputed any document filed by other side. Learned counsel pointed out that it was not a requirement in the publication that the seals should be sent for technical evaluation but in the tender form it was mentioned that evaluation will be done by Peoples Steel Mills. Learned counsel referred documents filed by defendants pertaining to the correspondence between defendants and Peoples Steel Mills and referred Annexure "C" to the para wise comments/counter replies to the application for injunction and submitted that Annexure "B" is a Letter of defendant No.3 available at Page-117 of second part, and it is mentioned in that letter that samples have been sent to Peoples Steel Mills and the letter is addressed by name to one Mr. Sharafat with his designation as well. The letter was replied on the same date i.e. 2-6-2014. He has also referred Annexure "F", which suggests that on the next day the samples were sent to PCSIR. Per learned counsel this clearly shows the mala fides on part of the defendants as the seals shuttled from one destination to the other within about 24 hours and therefore, he argued that this shows not only the mala fide but the probability of changing of samples. Per learned counsel this has prejudiced the right of the plaintiff and is also violation of PPRA rules. Particularly sub-rule (3) of Rule 23.
4. Mr. Mushtaq Hussain Kazi further submitted that defendant No.3 is creation of Central Board of Revenue as rules regarding unified Common Pool. Funds were framed on 16-5-2006 and therefore, PPRA Rules are applicable . He has filed such rules as Annexure "B-2" to the plaint. 11e has also filed Customs Reward Rules, 2012 and says that welfare fund was established under sub-rule 2 of Rule 5 of these Rules. He also referred Letter dated 14-3-2014 filed on behalf of defendant No.3 and submitted that this proposed procurement was suggested by defendant No.3 to Secretary Law and Procedure, Federal Board of Revenue, who has approved the procurement by defendant No.3. He further submitted that profit of sale of the seals would go to defendant No.3 according to such record. He submitted that financial constraints were said to be reasons for the procurement by the defendant No.3 but as a matter of fact earlier there were attempts to procure the seals through Model Collectrate of Customs Preventive and thrice those tenders were cancelled as they were not able to award to a company of their choice and plaintiff has also made complaints in this regard to National Accountability Bureau, who scrutinized the matter and as a result lastly on 21-3-2014 financial bid for tender notice No. S-34/01 /Admn(P) dated 26-12-2013 was cancelled and plaintiff was informed through above referred letter filed as Annexure "D-2" to the counter affidavit to CMA No.9061/2014. Per the learned counsel the goods proposed by plaintiff was never found of less quality. He further submitted that it is not disputed by the defendants that sister concern of plaintiff has been supplying the seals to the defendants and there has been no complaint ever of inferior quality and it is evident that the only purpose for rejecting the proposal of plaintiff and deviation from the rules is to award the contract to the Contractor of the choice of the defendants to gain monitory benefits as is evident from the letter of defendant No.3 to FBR referred above. Learned counsel has relied on the following case-law.
(i) 2009 CLC 1104, (ii). 2012 CLC 1780
(iii) 2009 SCMR 659
(iv) PLD 2012 Sindh 434
5. In response to the arguments of learned counsel for the plaintiff and also in support of C.M.A.
No.9061/2014 filed by defendants Mr. Mushtaq A. Memon, learned counsel for the defendants Nos.2 and 3 firstly questioned the maintainability of the suit on the ground that resolution filed by the plaintiff does not authorize the person swearing the plaint to institute or file any proceedings as both these words do not find place in Annexure "A" filed by the plaintiff and he was only authorized to appear, sign and deliver all necessary documents to the advocate, who will be representing the Company in this Court. In fact all the learned counsel argued at length on the question of maintainability and also cited a number of case-law in support of their respective contentions.
Learned counsel for the plaintiff, however, on 27-8-2014 filed Memorandum and Articles of Association of the plaintiff showing the power of the directors under clause-I of Article 57 of the Articles of Association to institute, prosecute, compromise, withdraw or abandon any legal proceedings by and against the Company. After going through such document firstly learned Additional Attorney General stated that in view of such document, the suit is maintainable. Mr. Mushtaq A. Memon, learned counsel for the defendants Nos. 2 and 3 also conceded that suit has been competently filed in view of above referred document, therefore, he does not press his objection on maintainability. ' In view of this position the maintainability of the suit is not dealt in this order.
6. The Federation of Pakistan is defendant No.1 in this matter and they have filed para wise comments and learned Additional Attorney General represented defendant No.1. He submitted that defendant No.3 does not fall within the administrative control of defendant No.1. He submitted that existence of defendant No.1 has been traced as far back as 1912 and it is a club established by Customs Preventive Service and now it has come to be called as Welfare Fund Preventive.
According to him at the time of its establishment the fund was fed by donation from the club and by subscription contributed by the club's members on monthly basis. He has filed a document appears to be an article. This document also shows the rate of the contribution of the members. He has also filed constitution of Welfare Fund Preventive Collectorate Customs House, Karachi. On merits he has stated that PPRA rules have not been violated in this case. It is mentioned in the para wise comments filed by defendant No.1 that PPRA rules were followed strictly throughout the tender process and no violation thereof appears to have been committed by the defendants Nos.2 and 3.
7. Learned counsel for defendants Nos.2 and 3 Mr. Mushtaq A. Memon submitted that PPRA rules are not applicable to defendant No.2 as it is an independent body and as submitted by learned Additional Attorney General it is not under administrative control of FBR, he, however, submitted that for the purpose of transparency and fairness, PPRA rules were made applicable to the process although the question of application of PPRA rules cannot be taken as a principle. He further submitted that no rule has been violated and evaluation by PCSIR cannot be objected to as it a renowned laboratory and expert in such type of examination. He submitted that plaintiff himself participated after obtaining the tender form, therefore, he was well aware that evaluation was to take place. He further submitted that Peoples Steel Mills, who was supposed to evaluate the product expressed it's inability to do so and therefore, matter was referred to PCSIR and samples were got evaluated by PCSIR and such laboratory rejected the samples of plaintiff and therefore the financial bid was not opened as it was a necessary requirement for opening the financial bid that sample is examined technically after opening the technical proposal in accordance with the single stage two envelopes ,procedure provided under Rule 36(b). He further submitted that discussion on status of defendant No.2 is irrelevant and submitted that process be adjudged under PPRA rules and those were made applicable voluntarily by defendant No.3. He submitted that it is immaterial that the persons representing defendant No.3 are also public servants and employees of FBR but defendant No.3 itself is not under administrative control of defendant No.1 or any of its department. Per learned counsel once plaintiff participated in the Tender they have been stopped from objecting the evaluation by PCSIR. He submitted that in the tender documents it was mentioned that the samples will be technically evaluated by Peoples Steel Mills but they refused to evaluate on the ground that they do not have facility for such exercise and therefore, samples were sent to PCSIR. He further submitted that plaintiff has not proved the allegation of mala fides, collusion and nexus between the defendant No.3 and any of the competitor of plaintiff. He says that so far one day process is concerned it can be termed as efficiency instead of collusion. On the point of the office bearers of defendant: No.3 not being public functionary for the purpose of judicial, review in respect of the controversy learned counsel relied on an order of Hon'ble Supreme Court dated 11-6-2007, passed in human rights Case No.1411/2007 and submitted that they are not required to be judged on the principles applicable to the Government Functionaries and therefore, principles laid down in 2009 CLC 1104 and principles laid down in PLD 2012 Sindh 434 are not applicable in case of defendant No.3. Learned counsel referred the documents filed by defendants, whereby, matter was referred to PCSIR and submitted that the conclusion of Purchase Committee was right and plaintiff is not entitled to the relief claimed in the suit or in C.M.A. No.8840/2014. Per learned counsel plaintiff has not qualified for the standards required in respect of intended .
Procurement while arguing the matter on 5-8-2014, learned counsel submitted that respondent No.3 was authorized to make changes in accordance with rule 36(c)(iv), subsequently, however, while arguing the matter on 2-9-2014, learned counsel stated that in fact in the present case Rule 36(b) applies and not Rule 36(c). The submission of learned counsel that allegation of mala fides is to be proved by the person, who alleges mala fides was conceded by the learned counsel for the plaintiff. In support of his contention learned counsel has relied upon 2009 SCMR 659 and PLD 2009 SC 406. Initially learned counsel for the defendant cited a number of case-law on the issue of maintainability but such ground was dropped, subsequently, in view of the document filed by advocate for the plaintiff on 27-8-2014 and suit was found to have been filed by a competent person. Learned counsel submitted that there is no allegation that seals were changed, or tempered.
8. I have heard all the learned counsel appearing in the matter at, length and also have gone through the material placed on record with the able assistance of all the counsel appearing in the matter.
9. It is an admitted position that there was no requirement of technical evaluation of the item intended to be procured in the advertisement and such condition was included in the tender document. I have also noted that Tenderers were required that they will mention the name of manufacturer and country of origin and shall also furnish the certificate by International Standard Laboratory and Test Reports. The standard required is also mentioned. It is not the case of defendants that plaintiff failed to provide such certificates or such certificates are doubtful. It is also a fact that in the tender form it was mentioned that the samples would be sent to Peoples Steel Mills. The documents produced by defendants themselves show that the request made to Peoples Steel Mills was addressed to a particular person by name and the replies were received on the same date and within 24 hours it was decided that the samples would be sent to PCSIR Laboratory and the same were sent instantly. The letters sent to Peoples Steel Mills state that the seal should meet ISO-PAS 17712:2010 and samples were sent to them. The same request was made to PCSIR the documents of this process have not been filed by the defendants completely but they have opted to choose to file certain documents, which they thought are relevant, however, one document available at page-221 in second part signed by various office bearers of defendant No.3 suggests that after refusal of Peoples Steel Mills inquiries were made from various other organization like Karachi Shipyard and Engineering Works, Pakistan Machine Tool Factory and it is also mentioned that no one showed their ability to carry out this testing, all this was done in one day and refusal by other organizations is not documented. The reports of PCSIR nowhere state that the sample of plaintiff does not meet the criteria required, against the words statements of compliance "N.A" has been written. However, it is claimed by the defendants that as a result of comparison the sample of plaintiff was not found in accordance with the required standard. It appears that such question was not asked to PCSIR Laboratory otherwise some answer would have been given by the Laboratory. Besides that in my opinion there was every likelihood that samples could have been changed intentionally or by mistake as this whole process was completed in about 24 hours as the report of PCSIR laboratory says that sealed samples were received on 3-6- 2014, this itself shows that process was not transparent, as correspondence with Peoples Steel exchanged on 2-6-2014 followed by inquiries from other organizations and samples were sent to P.C.S.I.R on 3-6-2014.
10. It has been argued by learned counsel appearing for the defendants that the procurement agency is not a government functionary. It may not be but it is a fact that office bearers of defendant No.3 are also officials of the department for whom the procurement was being made.
The report of PCSIR laboratory itself mentions the name of the client as by Messrs Welfare Funds of Preventive Model Collectorate of Preventive, Custom House, Karachi. I am not giving any finding about the competency of defendant No.3 to procure these items for the official use but it may be pointed out that the permission was sought from Federal Board of Revenue for procurement of this item by defendant No.2. The person, who has signed Vakalatnama for defendants Nos.2 and 3 has also signed the comments filed on behalf of defendant No.1, he is also Collector of Model Collectorate Preventive. In my humble opinion in such state of affairs, officer bearers of defendant No.2 should have been even more careful than the public functionaries in view of possible objections on indulgence of defendant No.2 in an activity, which is not mentioned as permissible activity in their constitution, which has been filed, therefore, I do not agree with the contention of Mr. Mushtaq A. Memon while commenting upon the requirement mentioned in 2009 CLC 1104 when he submitted that requirement mentioned in such judgment is not applicable on defendant No.2, in view of above, I hold that the principles laid down in Judgment reported as 2009 CLC 1104 are applicable to defendants Nos.2 and 3. This case-law was relied by learned counsel for the plaintiff.
It has been held that public functionaries have to exercise their authority with all care and diligence. The judgment also says that it is onerous responsibility on public functionary to establish and regain their credibility and public trust and confidence in discharge of their public duties and functions, which is fast eroding. There is serious dearth of credibility of public functionaries, therefore, in my view the office bearers of defendant No.2, who are holders of offices in defendant No.1 cannot use the pretext of being office bearers of defendant No.2 and for such reason claim that since they are not under the administrative control of defendant No.1, therefore, should not be required to act in the manner, the officers of defendant No.1 are required to act.
11. The facts and circumstances in which judgment reported as 2009 SCMR 659 was passed was entirely different. In the said case, the judgment impugned before the Hon'ble Supreme Court clearly stated that all the bidders at all the material times were duly informed about the progress and regular meetings were held with their representatives and even prior to the award of contract the information regarding award of the contract was duly displayed. It was also taken into consideration that item procured was buses for the police department and successful bidder was having manufacturing facility, and backup to support as well and after all the required formalities being fulfilled and taken into consideration the fact that successful bidder himself is a manufacturer, the bid was awarded to him, whereas, transparency is miserable lacking in the present case. It was also observed that in such case payment was already made to the supplier and entire process had already been finalized, therefore, their lordships were not persuaded to reverse it and reopen the matter, which attained the status of a past and closed transaction.
Similar was the situation in case of PLD 2009 SC 406 relied by Mr. Mushtaq A. Memon. The said case pertains to various projects in which developers were required to participate and in such circumstances at Page 413, it was observed "a distinction was therefore drawn between construction contracts where detailed specifications are provided to the prospective bidders and the form of (BOT) arrangement where the project specifications are generally sorted out with the developers after the bids are offered. In this context, it was maintained that after short listing, a number of pre-bidding meetings were held between the representatives of the Expo (Pvt.) Ltd. And the Prospective bidders whose queries about the projects were answered to their satisfaction, leaving no confusion in their minds as to the company's requirement". It was also observed that appellant in that case made a lame excuse for not bidding for the hotel on 31-10-2005 and offered an enhanced bid only after his writ petition was dismissed by the Lahore High Court on 5-12-2005.
On the same page it is also observed that "In this context, the learned counsel read out a letter dated 23-7-2005 by the appellant addressed to the Expo (Pvt.) Ltd., expressing regrets for not participating in the bidding for the Hotel Project as the same it did not find the project feasible after market research, survey and financial analysis conducted by the appellant".
12. The situation in the present case is different. At no stage plaintiff was asked to join the discussion in the matter.
13. Learned counsel for the defendants Nos.2 and 3 has also relied on the case of Muhammad Ali v.
Province of Punjab (2005 SCMR 1302). Case of Petrosin Corporation (Pvt) Ltd. v. MOL Pakistan Oil and Gas Company (PLD 2008 SC 472). In the earlier case plaint was rejected under Order VII Rule 11, C.P.C. On the ground that jurisdiction of Civil Court was barred by section 36 of Colonization of Government of Punjab Act, 1912. High Court dismissed appeal against order of rejection of plaint and such order was upheld by the Hon'ble Supreme Court. The facts and circumstances of the present case are entirely different and moreover defendants themselves conceded that the suit is maintainable. In the case of Petrosin Corporation (supra), the project was at the implementation stage and a lot of investment has already been made. Moreover, it was an admitted position that petitioner's certificate of Quality Management System ISO-2000 was not valid at the relevant time and petitioner was found to be ousted from the process of pre-qualification on the basis of lawful grounds. As mentioned earlier even the reports of PCSIR in this case did not suggest that the sample of plaintiff does not meet the standard mentioned in the advertisement or the tender documents.
14. Now I come to the applicability of PPRA rules in this matter. Mr. Mushtaq A. Memon firstly, argued that Rule 36-c(iv) is applicable but subsequently he withdrew such arguments but again that withdrawal was withdrawn. In any event in case Rule 36(b) is supposed to be applicable the proposal could only have been rejected, if the same does not conform to the specified requirements as mentioned earlier, this is not the case in the present circumstances and it is also doubtful that what sample was sent to PCSIR and furthermore PCSIR has not given any finding with regard to the standard of samples. In case Rule 36(c) is applicable in that event also the revisions, deletions, modifications or additions ought to have been communicated to the plaintiff before taking any final order. In the present case advertisement and tender documents clearly show that section 36(b) is applicable as the process in the present case was single stage-II envelope procedure. Various documents discussed above clearly show that procurement was for the purpose of public sector and the office bearers of defendant No.2 cannot avoid statutory obligations on the ground that by virtue of being office bearer of defendant No.2 they are not government functionaries. The order passed by Hon'ble Supreme Court on 11-6-2007 in human rights case No.1411/2007 deals with a different question. It pertains to the employees of the trust belonging to the people of Central Board of Revenue and it appears that complainants were in fact employees of the trust and were not government servants and the question involved was claimed pension by the complainants.
15. In view of the above facts and circumstances in my humble view plaintiff has made out a prima facie case and balance of convenience is also in its favour as in case injunction is not granted he might be out of the business and he had complied with the requirement of advertisement and in the process of evaluation he has not been treated fairly. I agree with the contention of learned counsel for the plaintiff that where decisions of public functionaries were either mala fides or against the law and/or rules then same would be liable to be struck down and balance of convenience in such cases would hardly matter. The same principle has been held in the case of M/s Shaheen Construction v. Pakistan Defence Officers Authority (PLD 2012 Sindh 343). No harm or prejudice would have been caused to any one if before passing of any final order plaintiff was given a chance to present his point of view. During the arguments learned counsel for the plaintiff offered that he would not press his suit in case samples are sent afresh to PCSIR for evaluation but this offer was not accepted by the defendants. In C.M.A. No.9061/2014 it was stated that in case injunction is not vacated the trade of whole country will be stopped and ports of this country will be stuck up due to absence of seal stock for daily utilization. This stand is not in conformity with the stand of the defendants that defendant No.2 is an independent body and in that capacity they were procuring the item. Defendants themselves are not clear with regard to the position and status of defendant No.2 for the reasons perhaps that there is no mention of activity of procurement as a function of defendant No.
2. According to its' constitution, it is an organization for wellbeing of government officers working in Preventive Collectorate of F.B.R. If the procurement is allowed to be made in the present form it would be a mis-procurement within the meaning of Section 2(h) of Public Procurement Regulatory Authority Ordinance, 2002. Even the conclusion given by the office bearers of defendant No.2 in Annexure "F" to their para wise comments filed in response to injunction application does not say that the sample of plaintiff does not meet the standard known as ISO-PAS 17712:2010 mentioned at Serial No.1 of description in the advertisement. I, therefore, dismissed C.M.A. No.9061/2014 and for the above reasons plaintiff's application being C.M.A. No.8840/2014 is allowed. No purchase order shall be issued in pursuance of the tender dated 15-5-2014 till disposal of the suit, however, this order shall not prevent any fresh process of procurement strictly in accordance with law after inviting fresh tenders. I am thankful to all the learned counsel, and learned Additional Attorney General for their valuable assistance rendered in the matter.