Muhammad Noor Meskanzai, C.J.--By means of this common judgment, we intend to dispose of Constitutional Petition Nos, 659 of 2017 & 542 of 2016 as both the petitions involve a common legal question.
FACTS OF C.P. NO. 542 OF 2016
2. It is the case of petitioner that on 3rd August, 2015 a contract, after observing all formalities in respect of collection of royalty on mines and mineral i,e, reti, bajri, gravel, Crush etc in District.
Lasbela including Hub river was awarded to Respondent No, 2 for a period of one year w:e.f. 6.7.2015 against his offered bid amounting to Rs, 6.55,00,000/. After awarding contract, the Respondent No, 2 on one pretext or the other failed to deposit the monthly installments. The petitioner in order to collect complete information addressed a letter to the Deputy Director, Mines and Mineral Hub on 20th August, 2015 who submitted his report stating therein that the contractor (Respondent No, 2) is collecting royalty of minerals from Hub river and the complaint filed by the Respondent No, 2 is frivolous. So, the petitioner issued a letter dated 20th August, 2015 directing the Respondent No, 2 to deposit monthly installments. This order was challenged before the appellate authority by way of filing appeal, the latter vide impugned order dated 26.2.2016 accepted the appeal filed by the Respondent No, 2, and waived off an amount in tune of Rs, 1,63,750,00/-. The petitioner approached the Respondent No, 1 for review of the order but was advised to approach the High Court, relevant observation is as under: "Reference to your Letter No, DG(MM)/Auction-MM(17)/267, dated April 15, 2016 on the subject cited above and to state that this Appellate Authority has no revision powers to review the order referred above.
2. If deemed necessary Hon'ble High Court of Balochistan may be approached against the, said order."
3. Learned Additional Advocate General -submitted that the impugned order passed by Respondent No, 1 has caused great financial loss to the national exchequer. He stated that a lame excuse was put forth by the Respondent No, 2 just to avoid the payment of installments outstanding against Respondent No,
2. He stated that internal enquiry conducted by the petitioner reveals that the request for waiving of the installments of three months is not justified. He empathetically urged that in any case no authority is vested either in petitioner or Respondent No, 1 to waive off the amount of installment because both the authorities are custodian and trustee of the public assets and responsible to receive and deposit the same in national exchequer. He maintained that had there been evidence in support of the application even then neither of the forums i,e, petitioner or Respondent No, 1 could have waived off the amount. He maintained that the award/letter finds mention a specific clause disentitling the contractor for any concession, revision or refund on account of any loss or damage sustained by the contractor. Learned Additional Advocate General contended that looking at the case from whatever perspective and angle, the sole legal conclusion that can be drawn is that the impugned order is beyond jurisdiction and without lawful authority. The Respondent No, 1 was/is not at all competent even to waive off a single penny what to speak of the power to waive off an amount in millions.
Learned counsel for. Respondent No, 2 raised a preliminary objection on the competency of constitutional petition on the ground that the petitioner being an employee of the Government cannot file petition against the Secretary, Mines and Minerals. Secondly, the amount so waived off have been paid as the security of the Respondent No, 2 lying with petitioner have been realized and the installments stood paid and satisfied, no amount is outstanding against Respondent No, 2.
4.We have heard the learned counsel for the parties and gone through the available record with their valuable assistance. So far as the preliminary objection on maintainability of the petition is concerned, we do not subscribe to Mr. Muhammad Riaz Ahmed, Advocate for multiple reasons.
Firstly, because under the Balochistan Mineral Concession Rules, the petitioner is an authority defined in Rule (i) having been empowered to grant contract for collection of royalty of minerals concession and responsible to collect the tax amount. Secondly, as per the scheme of Balochistan Mineral Concession Rules any order passed by the Director General is subject to appeal before the Secretary within the meaning of Rule 70 of the Balochistan Mineral Concession Rules. Therefore, on dissatisfaction by an order passed by the appellate authority the petitioner has the right to question the legality and validity of the order if national interest is jeopardized. Thirdly, being executant of the contract, the petitioner was/is responsible to collect the contractual amount, therefore, the petitioner was bound to take each and every step to undo the orders passed by Respondent No, 1, otherwise he would have exposed himself to legal proceeding for allowing the national exchequer to suffer and sustain such huge loss on account of the impugned order.
Fourthly, the petitioner being custodian and trustee of the assets belonging to public is bound to leave no stone unturned for saving the national exchequer from sustaining any loss. Fifthly, the petitioner was a party before the appellate forum, and as party was/is entitle to knock at the door of Court it feels aggrieved of the order passed by the appellate forum arising out of a contractual obligation, particularly when it is prejudicial to public interest. Above all, the order passed by the Respondent No, 1 is administrative in nature having for-reaching consequence and adverse impact on national exchequer as more than sixteen million rupees are at stake, therefore, in such circumstances the right of judicial review cannot be denied. In this regard, we are fortified with the dictum laid down by the Hon'ble Supreme Court in Suo Moto case No, 13 of 2009 reported in PLD 2011 SC 619 relevant at Page-636, wherein it has been observed as under: "4. 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 in 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."
5. Now adverting to merits of the case, the perusal of record reveals that the Respondent No, 2 in consequence of a publication participated in the bidding process. He was awarded contract being the highest bidder, with the result, award letter was issued in favour of Respondent No,
2. However, the Respondent No, 2 failed to deposit three monthly installments; so, he was served with a notice by the petitioner. The notice dated 27,11.2015 was challenged by means of appeal under Rule 70 of the Balochistan Mineral Rules 2002 before the Respondent No, 1, which was accepted vide impugned judgment on the ground that the contractor could not collect royalty tax on some check-posts due to interference by Sindh Mines Directorate assisted by Sindh Police. The alleged non-collection of royalty tax at Hub Naddi by Respondent No, 2 was made a basis for waiving off the three installments. Written statement was filed by the petitioner before the appellate forum, wherein specifically attention of the Respondent No, 1 was invited to clause 12 of the award letter and thereby it was submitted that the appeal is not competent. However, the appellate authority accepted the appeal and three installments of Rs, 1,63,750,00/- were waived off.
The impugned order reveals that it suffers from inherent and incurable infirmities, therefore, is not sustainable for a couple of reasons. Firstly, because the order does not refer to any specific provisions of I3MC Rules 2002 empowering the Respondent No, 1 to waive off any amount, and, if so, to what extent on what terms and conditions and under what circumstances. Secondly, the Respondent No, 1 while passing the order remained oblivious of the relevant clause of the letter of award of the contract accepted by the Respondent No, 2 which reads as follows: "6. That you will not claim any concession remission or refund on account of any loss or damages sustained by you due to unforeseen calamities including wars floods, road blocks, bomb attacks, curfews strikes, fire or you inability to recover royalty due to any reason, whatsoever.
7. That in case of suspension of mining operation/cancellation of any license/lease of a mine owner in the area by the department due to any violation of Balochistan Mineral Rules, 2002 creation of law & order situation the contractor will have no right to claim any remission/concession and compensation."
6. The above referred to specific clauses of the award letter do not entitle the contractor for claiming any concession or refund or waiving off the installment, so in view of the principle of waiver, he could not have requested for waiving off any amount. Fourthly, for the sake of argument, had he legally been entitled for any compensation, even then no order for compensation could have been passed in his favour in absence of determination of the quantum of loss. Fifthly, the Respondent No, 1 took the matter very lightly, treated the same perhaps a routine matter remained absolutely ignorant of the far-reaching re-precautions and consequences of the order on national exchequer. Sixthly, entertaining of lame excuses of non-collection of royalty tax and thereby causing loss to national exchequer can never he accepted nor such an illegality can be allowed to be perpetuated. Though the learned counsel for Respondent No, 2 stated that the respondent has paid the outstanding amount as the same has been realized from the security lying with the petitioner, but this by itself would not absolve the illegal order being subjected to judicial review. So, in case, the amount is not received and still remains outstanding, the same shall be realized as land revenue arrear.
FACTS OF C.P. NO. 659 OF 2017 The grievance of the petitioner is that the contract regarding collection of royalty of Marble, Stone, Mines and Mineral covering field areas of Lasbela, Khuzdar, Kalat and Mastung awarded to the Respondent No, 3 was extended for a period of six mmiths at the enhanced rate of 10% against total amount of Rs, 6.87,00,000/- by the Respondent No 1. The extension is in violation of rules and regulation and a direct loss caused to national exchequer; therefore, the order is liable to be set aside..
7. Now adverting to the contentions of learned counsel for petitioner in C.P. No, 659/2017 who submitted that the contract for collection of royalty tax awarded to Respondent No, 3 expired on 20th June, .2017 and as per the law, the Respondent No, 1 was bound to have invited bids through publication in wide circulations of the province. He maintained that instead of making publication and inviting bid through public auction, the Respondent No, 3 with connivance of Respondent No, 1 succeeded to get the contract extended for another six months with enhancing rate of 10%.
Learned counsel stated that the petitioner offered enhanced rate of 20% and to ensure that the petitioner is really interested, he deposited 1,87,50,000/- with Respondent No, 1 for the grant of award on the enhanced rate. According to learned counsel for petitioner, the Respondent No, 1 preferred his personal interest over the public interest and extended the contract on lame and un- warranted pretexts. He stated that legally the Respondent No, 1 was bound to have acted fairly, justly, reasonably and carefully while dealing with the assets of public. He stated that the extension of contract is contrary to rule and regulation, therefore, liable to be cancelled. He empathetically urged that the impugned extension of contract has got no legal backing and the sub-clause 16(i)
(ii) being a delegated legislation cannot over ride the clear rule under which the so called procedure has been prescribed. He took serious exception to sub-clause 16(i) of the procedure introduced under Rule 104-A, of Balochistan Minerals Concession Rules 2002, and thereby maintained that as per the mandate of Rule 104-A, the royalty can be collected through open public auction preceded by publication and if the practice of extension is allowed, then the concept of publication and inviting bids through open public auction shall vanish forever. He stated that in fact a baseless application was moved at the instance and in connivance with Respondent No, 1 and thereby a way for illegal extension of contract was paved. The extension of contract by Respondent No, 1 is an absolute mis-exercise of power and has culminated in causing heavy financial loss to the national exchequer. According to learned counsel for petitioner in any case, there was no justification for extension of contract at the strength of clause 16(1) which runs contrary to the benefits and interest of national exchequer. Besides, this clause is in utter violation and flagrant disregard of the universally accepted rule i,e, making publication, inviting bids through open auction for auction of public assets, therefore, must be struck down and declared non- existent.
8. Learned Additional Advocate General half heartedly opposed the submissions and stated that as per the procedure, the contract has been extended. Since the petitioner was not a contractor for the preceding year, therefore, his request was not entertained. However, he frankly conceded to the legal position that Clause 16(i)(ii) run contrary to the mandate of Rule 104-A rather falsify the object of parent law. The Respondent Nos, 2 and 3 while filing their para-wise comments and counter affidavit raised certain objections and strongly controverted the stance of petitioner by stating that the Respondent No, 1 has extended the contract for a period of six months with 10% increase rate in accordance with the provisions of clause 16 (1) of the Notification dated 10th March, 2010, which empower the Respondent No, 1 to the extend the Contract, therefore, requested for dismissal of petition.
9. To better comprehend the controversy, it would be advantageous to reproduce Rule 104-A: "104-A. The Government may also collect daily royalty on all or any major minerals for a specific period through contractors by floating sealed tenders for auctioning of all major minerals in various districts of the province through an Auction Committee under prescribed procedures to be notified by the Government in the official Gazette."
A bare perusal of Rule 104-A reveals that the Government may collect royalty on daily basis through open auction by inviting bids and that shall be through an Auction Committee, meaning thereby in any case the collection of royalty shall be carried out through open auction. Rule 104-A being parent law does not speak nor contemplate extension of the contract or refund and waiving off any amount. So far as the notification is concerned, the opening words of the notification dated 22nd March. 2010 leave no room for doubt that it is meant to effectuate the procedure for open auction to collect royalty. Surprisingly, clause 16(i)(ii) empower the Director General and Secretary, Mines & Mineral Department, to extend the contract for six month and one year respectively and also refund proportionate bid money subject to some conditions. For sake of convenience clause 16(i) (ii) are reproduced: "16. The contract period shall commence from the date of issue of allotment letter / work order.
(i) in case a contractor fails to assume possession of the area or to the work therein due to circumstances beyond his control and can prove it to the satisfaction of Licensing Authority, it may either extend the contract for a period not exceeding six month by the licensing authority and one year by the Government or refund proportionate bid money in thereof.
(ii) In case of any extension in the contract, Government shall have the right to claim half of the actual bid amount in case of extension by six months and full bid amount in case of extension for one year in addition to 10% escalation charges in both cases as per mode of payment prescribed at Para-11 & 12 above."
10. The plain language of clause 16(1) manifests that it does not place any embargo and restriction on consecutive exercise of the power of extension by D.G, and Secretary. For example, if on an application by a contractor, the D.G. extends the contract for six months and on completion of this period, the contractor applies to Government for further extension and the Government on its satisfaction extends the contract for one year and this practice may continue for indefinite time.
So, it can safely be concluded that clause 16(i)(ii) being subordinate and delegated legislation confer unbridled power, exercisable for unlimited consecutive terms by diminishing, decreasing rather eliminating the chances for open competition of public assets. This clause of procedure would create and conceive monopolies over the public assets which shall culminate in causing loss to national exchequer, therefore, should simply be ignored.
Clause 16(i) apparently creates an anomalous situation and infect plays mischief with the mandate of Rule 104-A of I3MC Rules 2002, Any procedure, mean or method that runs contrary to the concept of open auction as contemplated by Rule 104-A of the Balochistan Minerals Concession Rules, 2002 would be beyond the scope of Rule 104-A, without lawful authority, non- existent and of no legal effect. Rule 16(i) and (ii) are in direct conflict with the spirit of Rule 104-A and in flagrant violation of universally accepted principle of open auction of public assets through publication by inviting bids for the contract, therefore the validity and legality of the same is under serious question. By now it is settled law that a subordinate legislation that runs contrary to the Statute, falsifies the very object of parent law or creates hurdle in achievement of the purpose of the Statute has to be declared illegal and without lawful effect, 11, Last but not the least, it is a classic example of approbate and reprobate because in C.P. No, 542 of 2016 the Respondent No, 2 Director Gum, I, has categorically stated that the Secretary is not competent to refund the bid money and rightly so, but if the Secretary by virtue of Clause 16W is not competent to refund proportional bid money. how the Respondent No, 1 is competent to extend contract. The Respondent No, 1 has conceded to legal proposition that Clause 16(i) is ineffective, illegal and it does not vest oven Secretary the power to pass any order. So, on the same analogy the Respondent No, 1 is equally incompetent to exercise any power on the strength of clause 16(1) of the Notification dated 22nd March, 2010. Besides, award letter issued to Respondent No, 4 on 23rd June, 2016 contains clauses 6 and 7 and are worth material for ready reference, are hereby reproduced: "6. That you will not claim any concession remission or refund on account of any loss or damages sustained by you duo to unforeseen calamities including wars floods, rod blocks, bomb attacks, curfews strikes, fir or you inability to recover royalty due to any reasons, whatsoever.
7. That in case of suspension of mining operation/cancellation of any license/lease of a mine owner in the area by the department due to any violation of Balochistan Mineral Rules, 2002 creation of law & order situation, the contractor will have no rights to claim any remission/concession and compensation."
12. It is beyond comprehension that the Respondent No, 1 how ignored his own stipulation and extended the contract, The extension of contract is illegal, unjustified, unauthorized and based on improper exercise of jurisdiction, therefore, liable to be sot aside. In this regard, we are fortified with the dictum laid down by the Hon'ble Peshawar High Court in a judgment reported in PLD 2011 Peshawar 1, relevant observations read as under: "14. We are aware of the fact that the said order of the appellate authority dated 2-4-2008 has not been impugned in the present writ petition. However, we as constitutional Court cannot be silent spectators to such an abuse of authority. The illegality is glaringly floating on the record of the case. Public revenues, the protection thereof is a paramount obligation of every organ of the State, morose of the judiciary. We are not to sit mum and hand folded to such excesses been made."
In similar circumstance this Court in C.P. No, 164/1998 titled as Muhammad Anwar us, Khan Muhammad & 6 others decided on 16.07.1.998 cancelled the extension of contract awarded on same terms and conditions as in the present case. It would be appropriate to reproduce the relevant para(s) of afore cited judgment heroin below:-- "As far as question of implementation of the contract for the last about 3 months is concerned that would also not be a hindrance in issuing the writ because if it is allowed the concerned authorities shall be at liberty to auction the contract to collect cuss for the left over period of contractual period and as far as the period during which Respondent No 1 had been collecting the tax to that extent he would be liable to make the proportionate payment of the contract to the department.
For the foregoing reason, petition is allowed, impugned order dated 20-3-1998 is declared as been passed by Commissioner Mines Labour Welfare Balochistan., Respondent No, 3 without lawful authority and jurisdiction, thus is of no legal effect subject to observations made hereinabove."
In the light of above discussion, it can safely be concluded that the Secretary & Director General, Mines & Mineral Department, Government of Balochistan while passing the impugned orders dated 26.2.2016 and 20.6.2017 were absolutely ignorant and unmindful of their fiduciary relations with the poor people of Balochistan province, who are the beneficiary of the assets and amount in question.
Both the authorities failed to discharge their fiduciary obligation carefully cautiously, justly, fairly and reasonably, therefore we do not have any doubt in our mind to conclude that the orders impugned herein smack mala fide and have been passed without lawful authority.
Resultantly, both the petitions are accepted in the following terms:--
(i) The impugned order dated 26,2.2016 is hereby set aside. The order dated 20,6.2017 would remain in filed up till 19th October, 2017 and shall seize to have any legal effect from 20th October, 2017.
(ii) As per the Rule 104-A of the Balochistan Mines and Mineral Rules, 2002 the collection of royalty shall be made through open auction by inviting bids through respective Auction Committees on expiration of the term of contract. No extension whatsoever on any premises or pretext shall be made nor any refund of the proportionate bid money shall be permissible.
(iii) However, the private Respondent No, 3 in C.P No, 659/2017 shall continue to collect royalty upto 19th October, 2017 (19.10.2017) and in the meanwhile, the Director General, Mines & Mineral Department, Government of Balochistan shall Auction the contract for collecting royalty for the left over contractual period.