' MUHAMMAD IQBAL KALHORO, J.--The petitioner, a private company, is aggrieved by the Circular dated 8th July 2013 issued by General Manager (BMD) of respondent No, 1/Pakistan Steel Mills Corporation, Karachi blacklisting it along with its principal M/s Noble Resources Pvt. Ltd., which is based in Singapore. The blacklisting ostensibly has come on account of allegations that M/s Noble Resources Pvt. Ltd and its local agent i.e, the petitioner have manipulated the supply of 50,000 MT Coal and 40,000 MT Coke at an extremely exorbitant price, causing a huge loss to Pakistan Steel Mills.
2. Before this Court the petitioner has recorded its grievance through the instant petition in the words which are replicated here briefly. The petitioner has acted as an agent for several global companies successfully for the last almost two decades. On certain occasions it has acted so for a well-reputed global conglomerate M/s Noble that deals in diverse portfolios including industrial products, agriculture, energy, minerals and metals such as iron-ore, coke etc. In Pakistan it has facilitated M/s Noble in submitting bids, participating in tenders for supply of coal, iron ore and coke etc.. On their behalf, but when such process is successful they directly enter into agreement with the relevant procuring agency. Honorable Supreme Court in Suo Motu Case No,15/2009 took cognizance of financial problems being faced by the respondent 1 and asked FIA to investigate the same. In the ensuing investigation the FIA found one of the directors of the petitioner Captain Rasheed Abr9 individually involved in corrupt practices to obtain contracts for supply of coal and coke for M/s Noble from the respondent 1 and lodged three FIRs against him. The matter was subsequently entrusted to NAB Authorities under the orders of Honorable Supreme Court and the FIRs were dually converted in References. During further investigation by NAB Authorities, name of Captain Rasheed Abro was withdrawn for want of evidence against him. However the respondent 1 issued him two show cause notices threatening to blacklist M/s Noble on the allegations that they had supplied coal and coke at a high price. The show cause notices were followed by hectic correspondence over the time between the respondent 1 and Captain Rasheed Abro, the former always insisting the latter for personal appearance before it and the latter eternally resisting it.
They stuck to their respective positions until Captain Rasheed Abro filed a C.P. No,2571/2011 before this Court against the show cause notices and was granted ad interim relief but after its vacation again was served with the show cause notices for blacklisting the petitioner and M/s Noble. He duly replied respondent 1 and requested it to withdraw the notice of blacklisting them. Finally the petitioner received a letter dated 11th July, 2013 by the respondent 1 informing that already M/s Noble and the petitioner were black listed through a speaking order.
3. Respondent No, 1 has filed detailed comments, which inter alia speak that the petitioner and M/s Noble have been blacklisted under Rule 19 of PPRA Rules, 2004 vide order dated 4.7.2013 passed by the Standing Committee and duly approved by ECM on 18.6.2013. The show cause notice No, BMD/Annoula/11 dated 18.2.2011 was with regard to fraudulently manipulated supply of 50,000 MT of Coal at an extremely exorbitant price and its shipment through MV Annoula at a highly inflated price as compared to the then prevailing market value. The other show cause notice No, BMD/Alpha Afovos/11, dated 18.2.2011 was in respect of fraudulently manipulated supply of 40,000 MT of Coke at an extremely exorbitant price and shipment thereof through MV Alpha Afovos at highly inflated rates as compared to the then prevailing market rate. It is also stated that the issue pertains to misappropriation of public money, no question relating to violation of Article 13 of the Constitution has arisen and in view of disputed facts the petition is not maintainable. Regarding role of the petitioner, it is said that the petitioner submitted the bid as the agent of a foreign principal and participated in the tender and also signed the contracts on behalf of M/s Noble Resources Ltd. The petitioner being the agent of a foreign supplier is liable under section 230 of the Contract Act, 1872 for the acts and deeds of its principal." The petitioner was not only the agent of the supplier but the carrier/shipping company. The detailed order of blacklisting was passed by the Standing Committee after hearing representative of the petitioner and after going through the written reply as well as the facts and documents pertaining to procurements. The petitioner was found equally responsible in deceiving the respondent 1 in the two contracts. The said order that contained valid reasons and justifications regarding factual and legal issues of the matter was also approved by the Competent Authority.
4. Mr. Usman Hadi, advocate argued on behalf of the petitioner and based his case on the grounds, among others, that the principles of natural justice were not adhered to by the respondent while passing the impugned order/circular against the petitioner as no fair opportunity of hearing was afforded to it. That the fundamental rights of the petitioner guaranteed under the Constitution were violated by the actions of the respondents. That the respondent was incompetent and devoid of any legal authority to blacklist the petitioner. That due to stigma attached with the fact of being blacklisted, the petitioner was not able to partake in any venture for its clients either in any government or private entity, hence its business was badly suffering. That permanently blacklisting the petitioner was disproportionate to the charge against it and during the so-called proceedings before the Standing Committee no evidence was recorded leaving much to be desired in relation to the sanctity, if any, attached with such proceedings.
5. Strongly rebutting the above contentions, Mr. Agha Zafar Ahmed, advocate for respondent No,1, supported by Mr. Saeed A. Memon, Standing Counsel for respondent No,2. Stated that due and proper opportunity of hearing was given to the petitioner through several letters, notices for personal hearing and show cause notices, which were though replied but instead of properly participating in the process the petitioner always avoided to appear and lastly its representative appeared and participated in the proceedings before the Standing Committee. That the petitioner was equally responsible with the M/s Noble Resources Ltd. Being its agent in deceiving the respondent 1 into entering the two contracts that caused huge financial loss to the Pakistan Steel Mills. That the petitioner and the principal were declared blacklisted under R. 19 of Public Procurement Rules, 2004 which bestowed ample authority to the procuring agency to take such action against the companies involved in corrupt and fraudulent practices. He did not conclude his arguments before reading out section 230 of the Contract Act, 1872 to highlight responsibility of the petitioner leading to justification for blacklisting it.
6. We heard the counsel for the parties and perused the record. The main thrust emphasized by the petitioner to assail the impugned circular dated 8th July 2013 is that a fair opportunity of hearing during the proceedings before the Standing Committee was not given to it that amounted to condemning it unheard. The impugned circular is against the natural norms of justice and permanently blacklisting the petitioner would result in great financial loss to it and due to such stigma it would not be able to enter into any contract either with the government organizations or private companies. The petitioner has also claimed that punishment of permanently blacklisting is not proportionate to the charge against it, as being agent of the principal it was not responsible for any alleged fraud in the two contracts for procuring coal and coke. More so everything was completely done by following proper procedure. The impugned action has been taken against the petitioner under R.19 of Public Procurement Rules, 2004 (that was in vogue at the time of alleged dubious deals). A reference to the said rule would reveal that the procuring agency under a specific mechanism and manner was competent to permanently or temporarily bar the supplier and contractors from participating in its procurement proceedings who either consistently failed to provide satisfactory performance or were found to be indulging in corrupt or fraudulent practice, provided such supplier or contractor was afforded adequate opportunity of being heard. Under the said rule, it was left to the discretion of the procuring agency to devise some manner and mechanism to arrive at an inference, based on some material and cogent reasons justifying blacklisting the supplier. In the present matter, record reveals that before Standing Committee full- fledged proceedings were held against the petitioner and it was given several opportunities to present their replies to the charges leveled against it and through its representative notices for personal hearing were also served upon them. The petitioner however chose to dilly daily the matter by resorting to various tactics that kept the proceedings, which had originally started between the parties through a show cause notice dated 18.2.2011 to M/s Noble Resources Ltd and its representative/the petitioner regarding allegedly employing corrupt or collusive practices for procurement of a contract dated 20.3.2009 for purchase of 50,000 MT coal on spot, lingering on till 22.4.2013 when a notice for personal hearing was given to them. Finally the proceedings before the Standing Committee culminated on recommendation for blacklisting the petitioner and its principal which was acted upon after due approval by the competent authority through the impugned circular. The impugned action appears to have been taken against the petitioner after hearing its representative and after going through the written replies as well as documents, concomitant circumstances of the time, declining market trend in international price of coal and coke; the fag-end of March 2009 when freight reached Port Qasim and the relevant facts leading to finalization of the contracts pertaining to procurement. We have not found any illegality in the impugned circular on the touchstone of legal plane. The argument of the petitioner that it being merely an agent of the principal could not be held responsible for corrupt or collusive practice in obtaining the contracts or any dubious transaction between the respondent 1 and M/s Noble Resources Ltd is not factually correct as it was the petitioner which submitted the bid as the agent of a foreign principal and participated in the tender and also signed the contracts on behalf of M/s Noble Resources Ltd. Beyond that the petitioner also acted as carrier/ shipping company for supplier/M/s Noble Resources Ltd. Such active participation by the petitioner on behalf of a supplier residing abroad would attract the exception, whereby an agent is deemed to be a contracting party, provided under section 230 of Contract Act, 1872, to which legally no exception can be taken.
Adequate opportunity of hearing in terms of R. 19 of Public Procurement Rules, 2004 was also accorded to the petitioner and despite all possible dithering the representative of the petitioner appeared before the Committee in response to a notice dated 22.4.2013 for personal hearing on 8.5.2013 where he took plea that the matter was already sub-judice before the court of law and everything was done in accordance with the prescribed procedure. In defense he also relied upon the replies to the show cause notices and claimed that no corruption was either committed by him or his principal to cause loss to the respondent 1. After holding a lengthy exercise to ferret the facts behind the whole scam by the Standing Committee, the result has come in the shape of impugned circular which is found impregnable legally on examination of relevant record and applicable law as discussed above.
7. Notwithstanding the above, we have considered case of the petitioner on criterion of natural norms of justice and principle of proportionality. The decision taken by the respondent 1 against the petitioner though essentially is a business one indicating that it does not wish to enter into any contractual terms with the petitioner and its principal in future by virtue of their committing breach and we are aware under no law it could be compelled to act otherwise. But since the respondent 1 is the government concern, this Court can competently look into under writ jurisdiction the amount of punishment inflicted on the supplier for committing alleged fraud or breach. A decision to either permanently or temporarily debar often depends upon the severity of the alleged offence and the depth to which the contractor acts or omits to act in commission of the offence. Insofar as the decision to permanently debar a contractor from having a business is concerned it has far reaching consequences and could completely ruin a business concern forever, but that does not mean we want to state here that under no conditions it can (permanently blacklisting) be done or the severity of offence is an irrelevant factor to make such a decision. All that is intended to state here is that while awarding a punishment to a contractor for his malfeasance the principles of natural justice and proportionality shall be taken into consideration. The petitioner here in the present case has been permanently debarred from venturing into contractual obligations by the respondent 1. In the proceedings held by the Standing Committee, although the petitioner was found involved in the whole episode and while no adverse comment is conceptualized here over the merits of such inference, but the record therein is silent insofar as the extent the petitioner acted or omitted to act in collusion with the other alleged culprits, exactly the profits it gained and precise loss suffered by the respondent 1. In absence of such basics, permanently blacklisting the petitioner appears harsh and heavy a punishment to us.
8. A reading of the law i.e, Public Procurement Rules, 2004 under which a punishment of permanently blacklisting has been meted out to the petitioner has led us to infer that the right of appeal that is recognized a substantial right has not been provided there to the aggrieved party. In the face of an adversarial order the justice requires that a party being affected must have a right to challenge it before a higher forum. That right being substantial and inalienable if abridged would result into a serious miscarriage of justice and in case of such a situation this Court can interfere to examine propriety of such order on the touchstone of natural justice. We have had a look at R. 35 of Sindh Public Procurement Rules, 2010 that has succeeded earlier Rules of 2004, and have come to know that in sub-rule (4) a right of appeal has been provided to the aggrieved party to be submitted to the Authority, which shall refer the matter to the Review Committee for the decision to made in accord with sub-rule (5) to (11) of rule 32. Catering to the right of appeal of an aggrieved party in the stated law the legislature has healed the earlier wrong and abridgment of such a right stands completely removed in our humble view. But since that right has not been provided to the petitioner in terms of earlier law prevailing at the relevant time, we while refraining from disturbing the order of blacklisting the petitioner remand the matter to the Competent Authority to decide afresh the period such a punishment shall remain operative after having had a recourse to the principles of natural justice and proportionality. Such an exercise shall be done within 6 months of receipt of this order. The petition stands disposed of in above terms with no order as to costs.