JAWAD HASSAN, J. It needs to be emphasized, as a prefatory , that the core question which garners the indulgence of this Court and lies at the heart of the controversy is the interpretation of Rule 63 of the Punjab Procurement Regulatory Authority Rules, 2014(the "PPRA Rules" ). Threading the relevant rules of the procurement law regime along with the holistic reading of the case law developed so far by our Courts around this question can surely provide an answer as will be seen in my findings in the latter half. Through the instant Constitutional petition, filed under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973(the "Constitution" ), the Petitioner has impugned the letter dated 04.01.2020, issued by the Respondent No.10/Grievance Redressal Committee, Nishtar Hospital Multan (the "Committee" ).
I. BACKGROUND OF THE CASE
2. The Petitioner/M/s. Bio Labs Private Limited (the "Petitioner Company") claims to be a pharmaceutical company and is in the production of high quality medicines since 1989 and is also a license holder under the Drug Regulatory Authority of Pakistan. Bids for procurement of different medicines, surgical disposable items, lab kits1 and X-Ray Films, etc. were invited by the Respondent No.4/Medical Superintenden t Nishtar Hospital, Multan under Rule 38(2) of the PPRA Rules. In respons e thereof the Company participated in the bidding process and ultimately framework contract for the procurement of drugs/medicines for the financial year 2019-2020 was awarded vide letter dated 27.11.2019. After the award of contract, allegedly the Company started importing various items from the foreign companies including M/s. ZHUHAI United Laboratories Trading Company Ltd. China. Meanwhile one M/s. Wilshire Laboratories Pvt. Ltd./the Respondent No.11 (the "Respondent-Company" ) assailed order dated 09.11.2019 by filing Writ Petition No.18535 of 2019 which eventually was disposed of on 29.11.2019 with a direction to the Respondent No.4 to place the same before the Grievance Redressal Committee for redressal of grievance however , the representation of the Respondent-Company was rejected vide minutes of meeting dated 03.12.2019. The said order was again challenged before this Court through W.P.No.19408 of 2019 with the specific ground that the Committee was not constituted in accordance with the Law and Rules, as a result of which the learned Legal Advisor of Nishtar Hospital appeared before this Court and made conceding statement regarding constitution of the Committee being illegal. Consequently , vide impugned letter dated 04.01.2020 the Committee ordered for retender of award/contract.
II. PETITIONER'S SUBMISSION
3. Learned counsel for the Petitioner -Company , Mr. Khalid Ashraf Khan, ASC and Mr. Mahmod Ashraf Khan ASC, inter-alia contended that framework contract awarded vide letter dated 27.11.2019 regarding procurement of eight drugs/medicines mentioned at Sr.No.55,5 6, 60, 61, 62, 66, 124, 260 still holds the field because that award has never been challenged at any forum as such the Grievance Committee has no authority to retender the same; that while passing impugned letter , the Respondent No.4 has ignored the important aspect that the supply order has already been issued in favour of the Petitioner -Company ; that the Committee was constituted on 04.01.2020 to hold meeting and on the same day the impugned order was passed as such the same is self-contradictory; that there was no objection with regard to acceptance of Technical Evaluation Report as well as approval of the bid of financial aid of the Petitioner -Company hence no adverse order could be passed against the order dated 27.11.2019; that before rescinding the award already granted to the Petitioner-Co mpany , neither any notice was issued nor an opportunity of hearing was afforded hence the Company has been condemned unheard which is violation of Article 10-A of the Constitution; that by award of contract to the Petitioner -Company , vested rights have been created in terms of Rule 35 and 63-A of the PPRA Rules; that till today the bid has not been cancelled and re- tendering of the same is not permissible under the PPRA Rules. Learned counsel for the Petitioner-Company relied on "ABDUL MAJEED through L.Rs. Versus MUHAMMAD BOOT A"(2004 SCMR 807),"DIRECT OR GENERAL, ORDNANCE SERVICES, GENERAL HEADQUAR TER, RAWALPINDI Versus MUHAMMAD ABDUL LATIF"
(2003 SCMR 410),"Messrs ARMY WELF ARE SUGAR MILLS LTD. Versus FEDERA TION OF PAKIST AN and others"( 1992 SCMR 1652 ),"Dr . MARIAM RAZA SYED and anothe r Versus PAKIST AN MEDICAL AND DENTAL COUNCIL through Registrar and others"( PLD 2019 Lahore 558), "Messrs FUN INFOT AINMENT NETWORK (SMC-VT) LIMITED/NEO TV, through Muhammad Nasrullah Khan Versus PAKIST AN ELECTRONIC MEDIA REGULA TORY AUTHORITY through Chairman and others"( PLD 2019 Lahore 486),"Messrs EASTERN MEDICAL TECHNOLOGY SERVICES Versus PROVINCE OF PUNJAB and others"( PLD 2019 Lahore 395),"KHUSHDIL KHAN MALIK Versus SECRET ARY, MINISTR Y OF DEFENCE RAWALPINDI CANTT and others"( PLD 2017 SC 173),"GHULAM AHMAD CHAUDHR Y Versus AKBAR HUSSAIN through Legal Heirs and another" (PLD 2002 SC 615),"Ch. MUHAMMAD YOUNUS Versus The ISLAMIC REPUBLIC OF PAKIST AN through the Secretary , Ministry of Communication, Government of Pakistan, Islamabad and 3 others" (PLD 1972 Lahore 847),"CHIEF COMMISSIONER, KARACHI and another Versus Mrs. DINA SOHRAB KATRAK"
(PLD 1959 Supreme Court (Pak.) 45),"JDW SUGAR MILLS LTD. and others Versus PROVINCE OF PUNJAB and others"(PLD 2017 Lahore 68), "ANW AR SAIFULLAH KHAN Versus THE STATE, etc."( PLD 2001 Peshawar 7), "Messrs NEW ERA TECHNOLOGIES PRIV ATE LIMITED through Chief Executive Officer, Lahore Versus PROVINCE OF PUNJAB through Chief Secretary , Lahore and others"( 2019 CLC 1128) and "PETROSIN ENGINEERS AND CONTRACT ORS P.T.E. Ltd. Versus FEDERA TION OF PAKIST AN and others"
(2003 MLD 646 ).
III. RESPONDENTS SUBMISSIONS i. Arguments of Respondents No.1&2 (Government of Punjab)
4. Learned Law Officer, Mr. Tariq Nadeem, states that once contract has been awarded to the Company , vested right has been created in its favour , which cannot be cancelled or withdrawn. ii. Arguments of Respondents No.3 to 10 (Nishtar Hospital)
5. Learned Legal Advisor for the Respondents No.3 to 10 argued that the contract has rightfully been awarded to the Petitioner -Company which still holds the field. He further argued that the Respondent No.11 has been given proper right of hearing before the Grievance Committee which perused the previous decisions of the Technical Evaluation Committee dated 14.10.2019 and of the Grievance Committee of Nishtar Hospital Multan, dated 06.11.2019, wherein the Respondent No.11 was declared as non-eligible/non-responsive for the procurement process for the purchase of Drugs/Medicine items for the financial year 2019-2020. He adds that the Respondent No.11 did not challenge the framework Contract for the financial year 2019-20 awarded to the Company for items having comparative statement No.55, 56, 60, 61, 62, 66 and 260 on 27.1 1.2019. iii. Arguments of the Respondent No.1 1 (W ilshire Laboratories)
6. Syed Muhammad Ghazanfar , Advocate for the Respondent Company inter-alia contends that that the Respondent-Company is the lowest bidder than that of the Petitioner -Company , therefore, the impugned order regarding re-tendering is in accordance with law; that under Rule 63(b) of the PPRA Rules the procurement contract can only commence from the date of which signatures of both the procuring agency and the successful bidder are affixed to the written contract and the issuance of award letter in and of itself does not vest any rights in favour of the Petitioner -Company ; that acceptance of bid award letter dated 27.11.2019 is a mere letter of intent which can be cancelled by the competent authority and the whole process can be put to re-auction if a valid contract has not been entered in to betw een the parties; that as the contract has not been signed and no vested right has been created in favour of the Petitioner -Company , therefore, the procuring agency had ample powers under Rule 36 of PPRA Rules to proceed to re-tender the products; that the bidding documents clarify where Rule 63(a) and 63(b) are applicable; that the bidding document is defined under 2(g) of the PPRA Rules which states that bidding document? means a document or a set of documents prescribing the quantity , quality , characteristic, conditions and procedures of the transactions proper to the actual procurement and on the basis of which bidders prepare their bids and under Rule 2(n) the contract means the agreement proposed to be entered in to between the procuring agency and the successful bidder; that the Committee has no power to withdraw its re-tendering order .
He relied on the judgments cited as "PETROSIN CORPORA TION PVT. LTD. SINGAPORE and 2 others Versus OIL AND GAS DEVELOPMENT COMP ANY LTD. through Managing Director , Islamabad"( 2010 SCMR 306), "MUNSHI MUHAMMADAND ANOTHER Versus FAIZAN UL HAQ AND ANOTHER"( 1971 SCMR 533),"Messrs AL-NOOR through Partner Versus The PROVINCE OF SINDH through Chief Secretary Sindh and 8 others"
(PLD 2019 Sindh 400),"KITCHEN CUISINE PVT. LTD. Versus PAKIST AN INTERNA TIONAL AIRLINES CORPORA TION and others" (PLD 2016 Lahore 412),"Messrs PAKIST AN GAS POR T LTD. Versus Messrs SUI NOR THERN GAS CO. LTD. and 2 others" (PLD 2016 Sindh 207),"A.M. CONSTRUCTION COMP ANY PVT.
LIMITED through Chief Executive Officer and another Versus NATIONAL HIGHW AY AUTHORITY through Chairman and 2 others"( 2017 CLC 178),"SINO TEC CO. LIMITED through Authorized Representative Versus PROVINCE OF KHYBERP AKHTUNKHW A through Secretary , Energy and Power Department and 5 others" (2015 CLC 1589 ),"Messrs MEGA SIGN and others Versus CAPIT AL DEVELOPMENT AUTHO RITY and others"( 2014 CLC 516), "AFZAL MOT ORS PVT. LTD. through Managing Director Versus HIGHER EDUCA TION ARCHIVES AND LIBRARIES DEPARTMENT through Secretary and 7 others" (2010 CLD 1182),"PLA TINUM INSURANCE COMP ANY LTD. Versus DIRECT OR INSURANCE"( 2010 CLD 1190), and "SIGNAGE SECURITY SYSTEM PVT. LTD. Versus CAPIT AL DEVELOPMENT AUTHORITY and others" (2010 CLC 567), "CITY SCHOOLS PVT. LTD. LAHORE CANTT . Versus PRIV ATIZA TION COMMISSION, GOVERNMENT OF PAKIST AN and another"( 2002 CLD 1158) and "Messrs BAGH CONSTRUCTION COMP ANY Versus FEDERA TION OF P AKIST AN and others"( 2001 YLR 2791 ).
IV. CONSTITUTIONAL MOOT POINTS
7. In order to resolve the controversy in the matter , this Court deems it appropriate to frame the following constitutional moot points: i. Whether the Company was duly awarded contract under the PPRA Rules? ii. Whether the Grievance Redressal Committee can re-tender the contract without hearing the parties under the Rules? iii. Whether the Grievance Redressal Committee can pass any order without hearing the Petitioner?
8. I have heard the learned counsel for the parties at length and have also perused available record.
V. DETERMINA TION BY THE COURT A. Prologue -Philosophy and Legal Anthropology of procurement law regime
9. Legal practices, processes, and claims are among the most powerful forces that shape our lives. Legal anthropology has historically tried to understand the relationship between legal processes and other aspects of social, cultural, economic, and political life as well as the meanings and implications of legal practices on their own terms. For our purpose, while dealing with the procurement law regime it needs to be understood that the concept of procurement has always been in existence but mostly developed due to the strict requirements of the international financial institutions and the international donor agencies. Maybe not in the same regulated way that it is now; but people and businesses have always had to purchase goods, material and labour to complete projects.
10. A book written by Charles Babbage in 1832 titled `On the Economy of Machinery and Manufactures' discussed the need for an introduction of a so-called `materials man? in the mining industry . He said that the materials man should be someone who selects, purchases and tracks the goods used on a project - essentially the modern-day procurement agency . It has been established that the procurement is primarily the process of finding and agreeing to terms, and acquiring goods, services, or works from an external source, often via a tendering or competitive bidding process. However , the procurement is used to ensure the buyer receives goods, services, or works at the best possible price when aspects such as quality , quantity , time, and location are compared. The corporations and the public bodies often define processes intended to promote fair and open competition for their business while minimizing risks such as exposure to fraud and collusion. Hence, the bidding is a most important element of procurement. It is an offer (often competitive) to set a price tag by an individual or business for a product or service or a demand that something be done. Moreover , the bidding is used to determine the cost or value of something which can be performed by a person under influence of a product or service based on the context of the situation. Formalized acquisition of goods and services has its roots in Military logistics, where the ancient practice of foraging and looting was taken up by professional quarter masters, a term which dates from the 17th Century .
The first written record of what would be recognized now as the purchasing department of an industrial operation is in the railway companies of the 19th Century .
"The intelligence and fidelity exercised in the purchase, care and use of railway supplies influences directly the cost of construction and operating and affect the reputations of officers and the profits of owners."
An early reference book from 1922 explains that: "The modern purchasing agent is a more important man by far than he was in older days when purchasing agents were likely to be rubber stamps or bargainers for an extra penny . A Purchasing agent of the modern breed is a creative thinker and planner and now regards his work as a profession."
11. Correspondingly , Government or public procurement is the formal process through which official government agencies obtain the necessary goods, services and work to carry out government activities.
12. Every Government across the globe needs some material, equipment and services (including consultancy services) to perform its activities. The acquisition of these materials, equipment and services warrants that the whole activity should be undertaken in the most transparent, economical and efficient manner that results in best value to the government and the people. Transparency and accountability in a public procurement system essentially covers important aspects of the procurement system that includes stakeholders as part of the system. It requires an enabling environment, an institutional framework, management capacity and a legislative framework.
B. Global Practices in Public Procurement Policy Making2
13. The research on the historical development of the procurement laws identifies that most countries have public procurement laws that set out the rules and processes to be followed for all forms of public procurement. Most international financial institutions, such as World Bank (IBRD), the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD) and the Inter-American Development Bank (IDB), require a transparent, competitive bidding process as a condition of financing for major Infrastructure projects. In most cases the process to be followed for procurement of PPP projects that are supported by IFIs are included in their procurement guidelines. The World Bank has issued a specific Guidance Note on Procurement Arrangements Applicable to PPP Contracts Financed under World Bank Project in September 2010 and its Procurement Guidelines 201 1.
14. Another useful source of guidance in this area, specifically related to procurement in infrastructure projects, is UNCITRAL - Legislative Guide on Privately Finance Infrastructure Projects, 2001, in Chapter III and Recommendations 14 to 29. This provides guidance and draft legislative provisions. This can also be found in different languages on the UNCITRAL website. There is also UNCITRAL Model Law and guidance on Public Procurement, 201 1 on general public procurement.
15. An extract from the report "Curbing Corruption in Public Procurement in Asia and the Pacific" Progress and Challenges in 25 Countries Asian Development Bank Organisation for Economic Co-operation and Development states that "A majority of the countries in the region (Australia; Bangladesh; P.R. China; Hong Kong, China; Indonesia; Japan; Korea; the Kyrgyz Republic; Mongolia; Pakistan; Palau; Philippines; Singapore; Vanuatu; Vietnam) have passed comprehensive and widely applicable public procurement laws or regulations. Some of these frameworks are the fruit of recent efforts to establish or substantially modernize procurement. Indonesia and Mongolia passed new procurement frameworks in 2000; Mongolia, in 2005, was preparing institutional and procedural improvements. The Philippines established new procurement rules in 2002. P.R. China did the same in 2003, as did Bangladesh, the Kyrgyz Republic, and Pakistan in 2004. A similar reform process started in Kazakhstan in 2002. In 2005 India revised its General Financial Rules, which lay down the principles for central government procurement, and passed new procedures for the defense sector . Indonesia has adjusted its procurement framework repeatedly in 2003- 2006. Vietnam enacted procurement legislation in mid-2006, and supplementary decrees are expected to be passed in the second half of 2006. Papua New Guinea's procurement system was undergoing reform in 2006, following the promulgation of new legislat ion on finance instructions in relation to procurement. Bangladesh, the Fiji Islands, and Nepal are preparing new procurement legislation, and Thailand is modernizing its procurement regulations by revising the existing regulation.
Some of the recently adopted laws and regulations--notably those of Bangladesh, the Kyrgyz Republic, Mongolia, and Pakistan have been strongly inspired by the model law on public procurement of the UN Commission on International Trade Law (UNCITRAL). The proposal to revise Thailand's procurement regulations is also based on the model law. However , regulations on public procurement in Cambodia, Malaysia, and Nepal are still fragmented and are spread over several legal documents.
Procurement rules need to be unambiguous and reliable over time to provide for steady and consistent practice and transparency , and to ensure that training programs in the subject are not made obsolete by constant changes in the procurement framework. Today , there is a growing consensus that the stability of the framework over time clearly benefits from the establishment of the constitutive elements of procurem ent rules in parliamentary law.
Regulation at this level protects the framework against short-lived modifications through government decrees and confusion caused by overriding or confli cting parliamentary laws. Violations of procurement rules laid down as guidelines or in manuals may also fall out of the scope of judicial review and may thus go unsanctioned, as such rules are often not legally binding. Given the specific legal traditions and very particular circumstances of some countries, regulation at a lower level may also achieve the goal of stability?.
C. National Underpinnings- Pakistani Example
16. Government procurement in Pakistan is overseen by the Public Procurement Regulatory Authority (PPRA), an autonomous body based in Islamabad which was established by the Public Procurement Regulatory Authority Ordinance of May 2002. The PPRA is responsible for issuing regulations and procedures for public procurement undertaken by federal level public secto r organizations. Its brief is to improve the governance, management, transparency , accountability and quality of Pakistan's public procurement.
The PPRA also monitors other public sector agencies' procurement activity . Pakistan has observer status with respect to the Government Procurement Agreement. In Pakistan current procurem ent regime started functioning in 2002 when the Government of Pakistan created PPRA at Federal level through a presidential ordinance. The system was strengthened by adding Public Procurement Rules 2004 and Public Procurement Regulations 2008.
The Punjab Province adopted the system in 2007 through an ordinance which was under the same nomenclature was converted into an Act 2009. Punjab Procurement Rules 2009 were also notified in the same year to beef-up the procurement system in the province.
Subsequently Rules of 2014 are in place. The salient features of the current procurement system include a regulatory body mandated to monitor the public procurement activities, legal framework elaborating a mechanism as well as procedure on public acquisition of goods, works and services by the public sector enterprises, establishment of grievance redressal/app eal mechanism exclusively for settlement of complaints on the contract management issue, a mechanism for wide dissemination of Government policy decision, procurement opportunities and results of evaluation exercises for award of contracts and regulatory arrangements for ensuring access to information on the public procurement system.
D. Contextual Perspective: Punjab Procurement Rules 2014
17. The Punjab Procurement Regulatory Ordinance was promulgated in 2007 to establish the Punjab Procurement Regulatory Authority . Thereafter , Punjab Procurement Rules 2009 were framed and implemented under the Punjab Procurement Regulatory Ordinance 2009. Some amendments were made in 2013 in Punjab Procurement Rules 2009 which were renamed as Punjab Procurement Rules 2009 (Amended). These rules have been repealed in 2014 and new Punjab Procurement Rules have been enforced as Punjab Procurement Rules 2014. Like all the government departments and public sector corporations that are using public funds, the City Districts Governments/District Governments/V ASAs/Development Authorities have to follow Punjab Procurement Rules 2014 for procurement of goods, works, services and consultancy services.
E. Redreesal Mechanism under the PPRA Rules
18. In order to determine the moot points framed in this case, the Rule 67 of PPRA Rules has to be examined first which deals with the redressal of grievances of the bidders. It enjoins the procuring agency to constitute a committee having odd number of persons with proper powers and authorization to address the complaints of bidder occurring before enforcement of the procurement contract. Furthermore, it would also be instructive to refer to the judgment cited in "MESSRS MIA CORPORA TION (PVT) LTD Versus PAKIST AN PWD AND OTHERS" (PLD 2017 Islamabad 29 ) in which it has held as under: "PPRA Rules are not exhaustive and do not cater for each and every eventuality that can be thought of in the realm of tender- bidding. The PPRA Rules are codified norms and requirements of a fair, open, competitive and transparent tender bidding required to be conducted by the Government or Public Sector Organizations . The mere fact that a certain process adopt ed for bidding by a procuring agency is not expressly prohibited by the PPRA Rules will not pose as an obstacle before this Court to examine the process on the touchstone of fairness, reasonableness and transparency . These requirements are also stipulated in Rule 4 of the PPRA Rules, which provides that procuring agencies, while engaging in procurements, shall ensure that the procurements are conducted in a fair and transparent manner , the object of the procurement brings value for money to the agency and the procurement process is efficient and economical.
F. DE LEGE LA TA (of the law as it is) Guiding Principles for Procurement
19. It is very much important to mention firstly the principles of the procurement law which have in fact been provided in Rule 4; Principles of Procurements .-A procuring agency , while making any procurement, shall ensure that the procurement is made in a fair and transp arent manner , the object of procurement brings value for money to the procuring agency and the procurement process is efficient and economical.
In "KITCHEN CUISINE (PVT) LTD Versus PAKIST AN INTERNA TIONAL AIRL INES CORPORA TION and others? ( PLD 2016 Lahore 412 ), this Court observed that: "19. The grundnorm of the PPRA Rules is section 4 of the Rules. It says:
4. Principles of procurements .--Procuring agencies, while engaging in procurements, shall ensure that the procurements are conducted in a fair and transparent manner , the object of procurement brings value for money to the agency and the procurement process is efficient and economical.
20. Fairness, transparency , value for money , and the process being efficient and economical lie at the heart of the procurement process. None of these factors can be nullified or brushed under the carpet to the detriment of the process and those who offer their tenders for the procurements. Since the promulgation of PPRA Rules, superior courts have proactively and vigorously sought their enforcement so that they are not reduced to a painting, to be looked at only. A cluster of case-law signifies the overreaching policy of the courts in such matters and that policy is driven by the concept of public trust and that it be preserved inviolate. Thus it is immutable rule now that all public bodies making contracting or procurement decisions must adhere to the statutory scheme of things and chime with the intent and the purpose of the law , so that these are not tainted with invidious discrimination.
21. It will be noticed from the entire reading of PPRA Rules that the word 'shall' has been used to denote and accentuate the mandatory nature of the duty as against permissive words which grant distinction. This runs through the length and breadth of the Rules.
In "Messrs MEGA SIGN and others Versus CAPIT AL DEVELOPMENT AUTHORITY and others" (2014 CLC 516), the Court further observed that; "whenever a right belonging to the State is going to be alienated, the inventor/publ ic functionary is under obligation to protect at preserve the transparency and to ensure the maximum gain for the public exchequer .
It is also the duty of the Public functionary to ensure transparency and where a right has been accrued without adhering to the parameters highlighted above, the principle of locus poenitentiae would not be applicable."
In "Messrs AL-NOOR through Partner Versus The PROVINCE OF SINDH through Chief Secretary Sindh and 8 others" ( PLD 2019 Sindh 400 ), the Hon?ble Sindh High Court observed that "Transaction involving public money must be made in a transparent manner for the satisfaction of the people who were the virtual owners of the national exchequer which was being invested in such projects ...in the case reported as Asaf Fasihuddin v. Government of Pakistan (2014 SCMR 676) wherein the apex Court has been pleased to hold that it is the duty of the Court to ensure that relevant laws are adhered to strictly , to exhibit transparency . It has been further held that it is universally recommended that the transaction involving public money must be made in a transparent manner for the satisfaction of the people who are the virtual owners of the national exchequer which is being invested in such projects... .... And to this I may observe that the very purposes of calling bids in respect of public funds is to ensure that the best and lowest price is quoted by the bidders; and at the same time, the process is transparent and without any ambiguity .... ... It is settled law that every state functionary , while dealing with public money is required to show ultimate fidelity and is burdened with extraordinary obligation to maintain fairness, equity , and impartiality ....
The discretion of public functionaries in awarding tenders and spending of public money always requires a vigilant and vibrant scrutiny by the Courts. The public authority cannot mess up with public funds as it is not permitted to give largess in its arbitrary discretion or at its sweet will or in such terms as it chooses in its absolute discretion.
The award of tenders by a Governmental agency always have a public interest, and therefore, it ought to have fairness and equality in its conduct. When it awards a tender , it must do so with fairness and without discrimination and favour , and must also follow the procedure as far transparent as possible. In the case of Kasturi Lal Lakshmi Reddy v The State of Jammu and Kashmir and another (AIR 1980 SC 1992) , the Indian Supreme Court has been pleased to hold as under;
11. So far as the first limitation is concerned, it flows directly from the thesis that, unlike a private individual, the State cannot act as it pleases in the matter of giving largess. Though ordinarily a private individual would be guided by economic considerations of self-gain in any action taken by him, it is always open to him under the law to act contrary to his self-interest or to oblige another in entering into a contract or dealing with his property . But the Government is not free to act as it likes in granting largess such as awarding a contract or selling or leasing out its property . Whatever be its activity , the Government is still the Government and is, subject to restraints inherent in its position in a democratic society . The constitutional power conferred on the Government cannot be exercised by it arbitrarily or capriciously or in and unprincipled manner; it has to be exercised for the public good. Every activity of the Government has a public element in it and it must therefore, be informed with reason and guided by public interest. Every action taken by the Government must be in public interest; the Government cannot act arbitrarily and without reason and if it does, its action would be liable to be invalidated. If the Government awards a contract or leases out or otherwise deals with its property or grants any other largess, it would be liable to be tested for its validity on the touchstone of reasonable ness and public interest and if it fails to satisfy either best, it would be unconstitutional and invalid.
14. Where any governmental action fails to satisfy the test of reasonableness and public interest discussed above and is found to be wanting in the quality of reasonableness or lacking in the element of public interest, it would be liable to be struck down as invalid. It must follow as a necessary corollary from this proposition that the Government cannot act in a manner which would benefit a private party at the cost of the State; such an action would be both unreasonable and contrary to public interest. The Government, therefore, cannot, for example, give a contract or sell or lease out its property for a consideration less than the highest that can be obtained for it, unless of course there are other considerations which render it reasonable and in public interest to do so G. Discourse on the Essential Moot Points with Law
20. The case of the Petitioner -Company is that it was awarded framework contract by the Respondent No.4 as per Rule 63(a) of the PPRA Rules on 27.11.2019 and as such vested rights have been accrued in its favour while the stance of the Respondent-Company is that aforesaid award is mere a letter of intent which does not vest any rights under the law and for a valid contract it has to fulfill the requirement of Rule 63(b) of the PPRA Rules. In order to resolve the controversy in hand, it is vital to look at the evolution of the jurisprudence on the point of procurement law and its application. In Punjab, The Punjab Procurement Regulatory Authority Act, 2009 is relevant statute and the procedure for public procurement has been given in The Punjab Procurement Rules 2014. It has 10 chapters and 70 rules. It is important to reproduce relevant provisions of the statute and principles given by the superior courts of the country connected to the lis in hand to determine the controversy amongst the parties.
Rule 2 of the PPRA Rules has defined certain terms as under:- Rule 2(f) 'bid' means a tender or an offer, in response to an invitation, by a person, consultant, firm, company or an organization expressing his or its willingness to undertake a specified task at a price; Rule 2(g) 'biding document' means a document or a set of documents prescribing the quantity , quality , characteristics, conditions and procedures of the transactions prior to the actual procurement and on the basis of which bidders prepare their bids; Rule 2(n) 'contract' means the agreement proposed to be entered into between the procuring agency and the successful bidder; Rule 2(r) 'evaluation committee' means a committee constituted by the procuring agency to evaluate tender or proposal to ascertain whether the bid's proposal or tender correspond to the evaluation criteria formulated by the procuring agency; Rule 2(s) 'evaluation report' means the report prepared after the evaluation of tenders, quotations, expression of interest, or proposal; Rule 2(ae) 'value for money' means the best returns for each rupee spent in terms of quality , timeliness, reliability , after sales service, up-grade ability , price , source, and the combination of whole-life cost and quality to meet the procuring agency's requirements Meaning of Bidder
21. Although term bidder' is not defined in PPRA Rules but some of its definitions given in various dictionaries are as under; WORDS AND PHRASES , VOLUME 5A by THOMSON WEST ,pg 42 "....Natural persons who were dominant and motivating principles behind series of corporations and partnerships formed specifically for purpose of making tender of fer were to be deemed as "bidders....."
THE MAJOR LA W LEXICON 4th Edition pg 768 " a person who makes an of fer at an auction...." "someone who makes a bid"
BLACK'S LA W DICTIONAR Y 10th Edition defines bidder' as "someone who makes a bid; esp., at an auction, one who signals a specific offer to buy the property being auctioned at an announced price"? As per CAMBRIDGE DICTIONAR Y, "someone who offers to pay a particular amount of money for something: In an auction, goods or property are sold to the highest bidder (= the person who offers the most money).
As per BUSINESS DICTIONAR Y: "Contractor , supplier , or vendor who responds to an invitation to bid (ITB). Also called offeror or quoter"
COLLINS DICTIONAR Y defines it as: "A bidder is someone who offers to pay a certain amount of money for somethin g that is being sold. If you sell something to the highest bidder , you sell it to the person who offers the most money for it".
As per OXFORD LEARNER DICTIONAR Y "bidder (for something) a person or group that offers to do something or to provide something for a particular amount of money , in competition with others".
22. These rules also provide its scope and applicability and give principles of procurements, principal method of procurement, evaluation criteria, rejection of bids, re-bidding, procedures for selection of contractors, acceptance of bids, commencement of procurement contract and redressal of grievances by the procuring agency .
23. By virtue of this petition, the Petitioner -Company has disputed the letter dated 04.01.2020 issued by the Respondent No.4 whereby the Committee recommended for retendering of certain disputed items in the best interest of Government Exchequer . It is necessary to quote the decision given by the Committee which reads as follows and is self explanatory:
1. As per technical report, some of the DRCs were missing. It was observed that the numbering on the technical bid was inappropriate. The actual status of presence of DRCs does not exist in the technical report of Technical Evaluation Committee and at this time it is very difficult to assess the actual position of DRCS.
2. The Grievance Committee was told that the tendering process was started on 27.07.2019. The financial bids were opened on 13.1 1.2019 and award letters have been issued on 27.1 1.2019 for items.
3. The patients are suffering a lot due to non-completion of the process and non-issuance of supply orders.
4. So keeping in view the above situation, the Grievance Redressal Committee recommended that the following disputed items quoted by M/s W ilshire Lab be retendered in the best interest of the Govt. Exchequer .
Sr.N o.C.S. No.Name of Items Specifications Tentative Qty .
(As per tender)Approved rate in Rs. W ith the Names of Mfg. Firm/Firms/Sole Agent of Foreign Principal with Brand Name 1 55 Ceftazidime Inj. 250mg. 20400 Rs.88/- Per V ial Inj.Biozid 250mg 2 56 Ceftazidime Inj. 500mg. 15500 Rs.124/- Per V ial Inj.Biozid 500mg 3 60 Ceftriaxone Inj.250mg/vial 50000 Rs.62/- Per V ial Inj. Tuff 250 mg/I.V 4 61 Ceftriaxone Inj.500mg/vial 150000 Rs.67/- Per V ial Inj. Tuff 500 mg/I.V 5 62 Ceftriaxone Inj.1gm/vial 565590 Rs.77/- Per V ial Inj. Tuff 1 gm/I.V 6 66 Cefepime Inj. 1gm 45600 Rs.402/- Per V ial.Inj. Bioprim 1000 mg 7 124 Ketorolac TrometamolInj.30mg/ml 316150 Rs.41/- Per amp. Inj. Biorolac Amp 30mg 8 260 Pantoprazole Inj. 40 mg 110090 Rs.235/- Per L yophilized vial Inj.
Pancap 40mg
24. It is not disputed by the parties that a tender notice dated 05.07.2019 was floated by the Respondent No.4 inviting bids under Rule 38(2)(a) of PPRA Rules and in response thereto, the Petitioner -Company submitted its bid.
In the said notice, date for opening tende r (Technical Offers) was fixed as 29.07.2019 in terms of Rule 38(2)(a)(iii) of PPRA Rules and later on Technical Evaluation Committee issued its evaluation report on 12.10.2019 and the Petitioner -Company was informed with regard to award of frame work contract through letter dated 17.10.2019 issued by the Respondent No.4 and consequently , on 27.11.2019, the Respondent No.4 issued framework contract along with certain terms and condition on which the Petitioner -Company is claiming vested right being a valid contract.
25. In the present case, procedure laid down under Rule 38(2)(a) of PPRA Rules was adopted by the Respondent No.4 where the Petitioner -Company submitted its bid which was evaluated as per Rule 32(1). The reading of aforesaid Rule depicts that all bids have to be evaluated in accordance with the evaluation criteria and other terms and conditions set forth in the prescribed bidding document. The term 'Bidding Document' is defined under Rule 25 of the PPRA Rules which states that "a procuring agency shall formulate precise and unambiguous bidding documents that shall be made available to the bidders immediately after the publication of the invitation of bid?.
Criteria for evaluation and comparison of bids were given in Clause 60 of the Bidding Document (Annex-C of the Petition), which reads as follows:- "Evaluation & Comparison of Bids" i. The technical evaluation committee of this institution shall evaluate and compare the bids, which have been determined to be substantially responsive. ii. The technical evaluation committee's evaluation of technical proposal/bid shall be on the basis of previous performances, previous test reports, inspection of plant/factory/premises (if not previously conducted), previous experience, financial soundness and such other details as the Procuring Agency , at its discretion, may consider appropriate, shall be considered. However , the evaluation of financial proposals shall be on the basis of price inclusive of prevailing taxes and duties in pursuant to instruction to bidders and bid Security . iii. All bids shall be evaluated in accordance with the evaluation criteria and other terms & conditions set forth in these bidding documents. iv. A bid once opened in accordance with the prescribed procedure shall be subject to only those rules, regulations and policies that are in force at the time of issuance of notice for invitation of bids.
26. From the reading of above clause as well as what is referred herein below , it is clear that Technical Evaluation Committee has to evaluate technical proposal which reserves the right to accept any tender or part of the tender by assigning the reason in terms of Clause 70 of the Bidding Document which reads as follows: The Technical Evaluation Committee of this institution reserves the right to reject or accept any tender or part of the tender by assigning the reason.
27. As per tender notice dated 05.07.2019, Technical Proposal? was opened under Rule 38(2)(a)(iii) of the PPRA Rules which was evaluated as per Rule 38(2)(a)(iv) of the PPRA Rules. Whereafter the Petitioner -Company was informed through letter dated 17.10.2019 about technical evaluation report in the following manner: "Your firm has been declared Responsive by the Technical Evaluation Committee of this institution, for all of your quoted items, except items nos. 123, 169, 170, 261, 307, & 308 DRC not attached . Items nos. 123, 169, 170, 179, 259, 307, 308 & 577 samples not submitted.
The meeting regarding opening of financial bids for the purchase of Drugs/Medicines etc., for the financial year 2019-2020 is scheduled to be held on 26.10.2019 at 10:00 a.m. in the committee room of this institution. You are requested to depute your authorized representative to attend the said meeting on the specific date and time positively?.
28. As per report and parawise comments submitted by the Respondents No.3 to 10, the financial bid was opened on 13.11.2019 and thereafter , alleged award of framework contract was issued to the Petitioner -Company on 27.11.2019 with certain terms and conditions mentioned therein.
29. The crux of the matter involved in this case is, inter alia, the interpretation of PPRA Rules specially Rule 63(a) and 63(b) because the Petitioner -Company claims to have a valid contract by relying upon the Rule 63(a), whereas the Respondent-Company negates aforesaid stance and is depending on Rule 63(b) of the PPRA Rules. For ready reference the Rule 63 is reproduced as under Rule 63. Commencement of procurement contract.- A procurement contract shall come into force:
(a) where no formal signing of a contract is required, from the date the notice of the acceptance of the bid or purchase order has been given to the bidder whose bid has been accepted and such notice of acceptance or purchase order shall be issued within a reasonable time; or
(b) where the procuring agency requires signing of a written contract, from the date on which the signatures of both the procuring agency and the successful bidder are affixed to the written contract and such affixing of signatures shall take place within a reasonable time; and
(c) where the coming into force of a contract is contingent upon fulfillment of a certain condition or conditions, the contract shall take effect from the date whereon such fulfillment takes place.
30. Aforesaid rule starts with wording "procurement contract". The word 'contract ' in terms of law of procurement has been defined in Rule 2(n) 'contract' means the agreement proposed to be entered into between the procuring agency and the successful bidder , Its means mere intent to award the contract does not constitute a concluded contract.
31. It is the argument of learned counsel for the Petitioner-Company that framework contract awarded on 27.11.2019 still holds the field as the Petitioner -Company was declared lowest bidder for the purchase of drugs/medicines whereas this stance was totally negated by learned counsel for the Respondent-Company on the ground that letter dated 27.1 1.2019 was a mere letter of intent which does not vest any rights under the law .
32. It evinces from the perusal of record that the bid submitted by the Petitioner- Company was evaluated by the Technical Evaluation Committee constituted by the Respondent No.4 which informed the Petitioner -Company on 17.10.2019 about its being responsive for the quoted items and resultantly the Petitioner -Company was awarded framework contract on 27.11.2019 for the supply of items Nos.55, 56, 60, 61, 62, 66, 124 and 260 along with certain terms and conditions mentioned therein. It is very important to reproduce Clause-27 of alleged award of contract which is as follows:- "The firm will be bound to give an agreement on judicial paper worth Rs.100/- for the acceptance of all the terms and conditions of the tender enquiry No.IBP No.6016 dated 05.07.2019 and this contract for the financial year 2019-2020. The firm will be bound to abide by all the terms & conditions of the tender inquiry IPL No.6016 dated 05.09.2019.
33. From the bare reading of aforesaid clause, it is clear that after acceptance of bid and award of framework contact, firstly the Petitioner -Company was bound to give an agreement on judicial paper for the acceptance of terms and conditions of tender inquiry dated 05.07.2019 and secondly it was bound to do it for the contract.
Needless to add that neither the Petitioner -Company attached any document with regard to acceptance of terms and conditions nor an agreement on judicial paper for acceptance of term and conditions was submitted. The Respondent No.4 in its report submitted on 09.03.2020 has stated that "the firm M/s Bio. Labs has been awarded of Frame work contract for the financial year 2019-2020 for items having comparative statement No.55, 56, 60, 61, 62, 66 & 260 on 27.11.2019" however , neither document regarding fulfillment of Clause-27 was produced/attached nor was discussed during arguments.
34. Furthermore, above discussed Clause-27 also finds mention in Terms and Conditions of Bidding Document (Annex-C of the petition). A look at Claue-84 of the Biding Document attached with the writ petition would reveal as follows:- "The successful firm/bidder will be bound to submit an agreement on judicial paper worth Rs.100/- for the acceptance of the terms and conditions of the contact issued by the authority of this institution prior to issuance of the supply order , failing which the firm will be held responsible under the rules".
35. Bare reading of aforesaid clause reveals that the Petitioner -Company has to submit an agreement for the purpose of accepting terms and conditions prior to issuance of supply orders meaning thereby that alleged award of framework contract is just an offer to accept or not the terms and conditions mentioned therein which leads toward execution of a contract. Rule 63 of the PPRA Rules clearly stipulates the manner of commencement of contract. If, for the sake of argument, the stance of the Petitioner -Company is considered as correct according to Rule 63(a) which requires no formal signing of a contract from the date of the notice of acceptance of the bid or giving of purchase order to the bidder , in the case in hand, the bid of Petitioner -Company was accepted and it was issued an award of framework contract on 27.11.2019, terms and conditions thereof are binding upon the Petitioner-Company which it has not fulfilled in terms of Clause-80 read with Clause-27 of the alleged award of contract.
36. Rule 38 of PPRA Rules explains the procedure for selection of contractors, according to which in a single stage-two envelope procedure two separate envelopes containing financial and technical proposals separately are submitted and initially the envelope marked as technical proposal is opened for evaluation while the envelope marked as financial proposal is retained by the procuring agency . Sub-rule (vi) to above Rule (38) indicates that upon approval of technical proposals the financial proposals are publically opened at the appointed time. The approval of technical proposal has been equated there with acceptance of technical bid, but that admittedly cannot be construed as acceptance of bid for all the future purposes creating inalienable right in favour of technically successful bidder . Rule 55 of PPRA Rules has a very clear concept of what the acceptance of bid, means, the bid is accepted only when, in addition to being the lowermost financially , it is not in conflict with any other law, rules, regulation or Policy of the Federal Government, and it culminates into a procurement contract in terms of rules 55 and 63. For convenience of reference I would like to reproduce Rule 55:- Acceptance of bids.-Subject to these rules, the bidder with the lowest evaluated bid, if not in conflict with any other law , shall be awarded the procurement contract within the original or extended bid validity period.
37. From plain reading of aforesaid Rule it is obvious that the award of the contract is contingent upon acceptance of the bid. A declaration at the time when financial proposals are opened that a particular party is a lowest bidder would not mean that its bid stands accepted. The procedure in terms of Rules 37 and 55 has to be followed before a bid can be declared to have resulted into contract. In "Messrs PAKIST AN GAS POR T LTD Versus Messrs SUI SOUTHERN GAS CO. L TD. and 2 others" ( PLD 2016 Sindh 207 ), it is observed by the court that: "..Acceptance of bid leads to the stage where concluded contract comes into force either by putting signatures on it or where signatures are not required by placing purchase order to the bidder . However the lowest bid so determined does not inevitably usher in immediate acceptance of it, and before the contract comes in force the examination to ensure that it is not in conflict with the any other law, rules, regulatio ns or any Government policy , is undertaken and only after getting satisfied in all respects, the acceptance is announced through a report at least ten days before the award of the contract..."
32. After survey of above mentioned provisions and case laws, it is crystal clear that no concluded contract has been constituted between the petitioner and the procuring agency/authority as there was only intenti on to award the contract to the petitioner which does not constitute vested right in favour of the petitioner to claim concluded contract. So rule 63 (b) ibid is very well attracted in this case which postulates that procurement contract shall commenced where the procuring agency requires signing of a written contract, from the date on which the signatures of both the procuring agency and the successful bidder are affixed to the written contract and such affixing of signatures shall take place within a reasonable time;
38. The success at technical evaluation stage is a procedural step forward for the competing bidder , then his/its status of being the lowest one or not is determined at the time of opening of the financial proposals. Rule 37 comprehensively speaks out about the stage where either a bid's acceptance or rejection is announced through a report at least ten days before the award of the procurement contract. The superior courts time and again have held that intent to award the contract does not create the vested right to claim a concluded contract.
39. What is a vested right ? According to the Oxford English Dictionary , "vested" means "clothed, robed, dressed especially in ecclesiastical vestments. A close examination of these meanings and explanations reveals that vested right is free from contingencies, but not in the sense that it is exercisable anywhere and at any moment.
By `vested right` can be meant no more than those rights which under particular circumstances will be protected from legislative interference (unless it is clearly intended). But as it is a right which vests upon equities, it has reasonable limits and restrictions.
40. In "PETROSIN CORPORA TION (PVT .) LTD. SINGAPORE and 2 others Versus OIL AND GAS DEVELOPMENT COMP ANY LTD. through Managing Director , Islamabad (2010 SCMR 306), the august Supreme Court of Pakistan ruled out that: "7. ........ The mere letters of intent to award the contract in present cases would not constitute a concluded contract. There may be cases in which a contract may involve a number of documents including exchange of correspondence between the parties in the process of finalization of the award of a contract. The principle of natural justice was not attracted in the absence of infringement of any vested rights of the appellants. Reference may usefully be made to the case of Ittehad Cargo Services v. Syed Tasleem Hussain Naqvi (PLD 2001 SC 116). Since the bids of the appellants had not been confirmed finally , therefore, the contract could not be said to have been complete d. Reference may be made to the cases of Union of India v. Bhimsen Walaiti Ram (AIR 1971 SC 2295) and Babu Parvez v. Settlement Commissioner (1974 SCMR 337). Even the lowest bid would not confer an absolute title for award of a contract. In such like mega projects host of other considerations become relevant to avoid any unnecessary risk. The general letter of interest merely implies an intention to enter into a contract and authority to the contractor to start the work before completion of the contract in anticipation of the signing of the contract with a right to the contractor for compensation of the work, if any, he already done. Therefore, the letter of intent could not be treated to be synonymous to a completed contract. The present ones are not the cases in which bid of any other bidder had been accepted.
Rather the respondent had decided quite justifiably to re-advertise the tenders. We leave the question open for consideration in some other appropriate case whether or not a writ could be issued against the respondent company under Article 199 of the Constitution. In our opinion, the impugned judgment of the High Court is plainly correct to which no exception can be taken."
In "Messrs BAGH CONSTRUCTION COM PANY Versus FEDERA TION OF PAKIST AN and others" (2001 YLR 2791 ), the Court has stated that: "....The letter of intent, Annexure ' B' was only in the nature of an offer or a promis e and would have turned into a valid agreement of sale only after an agreement of sale had been executed by the aforesaid parties in pursuance thereof on the terms and conditions embodied in the letter of intent, Annexure 'B'. However , on failure of the petitioners to execute an agreement of sale no concluded contract/agreement of sale ever came into existence.
In view of the fact that no valid, legal and proper contract/agreement of sale had been executed by the aforesaid parties, and there was no concluded contract between the parties, the petitioners did not acquire any right, whatsoever , which could be enforced by this Court in exercise of its Constitutional jurisdiction. Mere acceptance of the bid offered by the petitioners and an intention/desire to sell/dispose of the two properties in question to it on payment of a sum of Rs.67 Million did not amount to coming into existence of a contract or an agreement of sale, which would have bound the respondents to dispose of/sell the two properties in question to the petitioner s. The petitioners have miserably failed to establish that it had acquired a legal rights to claim the sale of the two properties in question by the respondents for consideration of a sum of Rs.67 Million and as no right had been created in its favour , it would not be deemed to be an aggrieved party as contemplated in Article 199 of the Constitution of the Islamic Republic of Pakistan, which is a necessary condition for invoking the Constitutional Jurisdiction of this Court under Article 199 of the Constitution of the Islamic Republic of Pakistan. The petitioner did not have any legal or vested right, which was violated by any act of commission or omission by the respondents. Another essential condition that a party invoking the jurisdiction of this Court would have suffered legal injury resulti ng in loss to him was also not available as in the absence of any right neither the question of violation there of nor question of legal injury would arise."
In "Messrs PAKIST AN GAS POR T LTD Versus Messrs SUI SOUTHERN GAS CO. LTD. and 2 others? (PLD 2016 Sindh 207 ), it is observed by the Court that:- "Acceptance of bid leads to the stage where concluded contract comes into force either by putting signatures on it or where signatures are not required by placing purchase order to the bidder . However the lowest bid so determined does not inevitably usher in immediate acceptance of it, and before the contract comes in force the examination to ensure that it is not in conflict with the any other law, rules, regulations or any Government policy , is undertaken and only after getting satisfied in all respects, the acceptance is announced through a report at least ten days before the award of the contract. After having had general contours of what the law requires when it comes to seeking procurements of services, works etc. in public sector we tend to have a word on rule 48, 2004 Rules meant for redressal of grievances of the bidders. It enjoins the procuring agency to constitute a committee having odd number of persons with proper powers and authorization to address the complaints of bidder occurrin g before enforcement of the procurement contract. It was in line with that provision of law the petitioner lodged its complaint before the committee but failed to succeed .
However if for certain reasons the contract has not been executed and the offer or a proposal has not become a promise against some consideration as provided under Section 2(a) (b) (d) and (e) of the Contract Act, 1872, no contract comes into force creating certain rights in favour of the parties that might be enforced through the Court's intervention.
It deserves reiteration here; the lowest bidder cannot claim its right to the contract to be absolute and unquestionable till acceptance of its bid and signing of the contract. For reliance the case of Petrosin Corporation (Pvt.) Ltd. Singapore and 2 others v. Oil and Gas Development Company Ltd. (2010 SCMR 306) can be cited with reference to the relevant portion:-
7. "Even the lowest bid would not confer an absolute title for award of a contract. In such like mega projects host of other considerations become relevant to avoid any unnecessary risk. The general letter of intent merely implies an intention to enter into a contract and authority to the contractor to start the work before completion of the contract in anticipation of the signing of the contract with a right to the contractor for compensation of the work, if any, he already done. Therefore, the letter of intent could not be treated to be synonymous to a completed contract. The present ones are not the cases in which bid of any other bidder had been accepted.
Rather the respondent had decided quite justifiably to re-advertise the tenders."
In "CITY SCHOOLS (PVT .) LTD., LAHORE CANTT versus PRIV ATIZA TION COMMISSION, GOVERNMENT OF PAKIST AN and another" ( 2002 CLD 1 158), the august Supreme Court of Pakistan says that:- "11. Perusal of different provisions of the Contract Act reveals that a tender notice is merely an invitation for making an offer and not by itself an offer or proposal. The advertisement does not constitute a proposal. Only by acceptance of offer or proposal by the person calling for tender it becomes a prom ise or agreement. When offer of tenderer is not accepted by the relevant authority , no legal right accrues to such tenderer . An agreement enforceable by law becomes a contract. The true test for deciding whether a valid contract is made between the partied or not is to ascer tain if the parties were of one mind on all the material terms at the time it is said to have been finalized and whether they intended that the matt er was closed arid concluded between them. For this purposes, the correspondence exchanged between the parties is also to be looked into."
In "MUNSHI MUHAMMAD AND ANOTHER versus FAIZANUL HAQ AND ANOT HER" (1971 SCMR 533), the apex court observed that:- "The view formed by the High Court is unexceptionable. Since the auctions in favour of the petitioners were not finally approved, they did not acquire any right in the properties, and had, therefore, no locus standi to ask for their transfer . According to the terms and conditions of the auction itself, the highest bids offered in the auctions were subject to the approval of the Additional Settlement Commissioner concerned, who may or may not accept the bids, without assigning any reasons for his action.
The manner of the exercise of this discretion by the relevant authorities, as conferred by law, is not amenable to writ jurisdiction of the High Court , unless it be found to be arbitrary or fanciful. This is not so in the present case."
41. In the light of case law, referred above, the alleged award of framework contra ct is a mere letter of intent and cannot be said as a valid concluded contract.
42. A ground was agitated by the Petitioner -Company that supply orders have been issued in its favour pursuant to which it placed orders to certain companies for the purchase of drugs/medicines. In this regard, no document was placed on record either by the Petitioner -Company or by the Respondents No.3 to 10 to substantiate this version.
The Respondent No.4 in report and parawise comments submitted on 31.01.20 20 stated that "supply orders were not issued for these items. Now these items are not included in tender of list of re-advertisement" which fact is further strengthened through the decision given by the Committee in the impugned letter dated 04.01.2020 under heading Decision (3) meaning thereby that supply orders have not been issued so far hence argument of learned counsel for the Petitioner -Company that supply orders have been issued has no weight.
43. The ground taken by the Petitioner -Company is that while passing impugned order , no opportunity of hearing was provided to it as such it remained condemned unheard. In this regard, Minutes of Meeting of Grievance Redressal Committee (Regarding Purchase of Drugs/Medicines) for the financial year 2019-2020 for Nishtar Hospital, Multan) attached with report and parawise comments submitted by the Respondent No.4 reveals as under: "The meeting of the Grievance Redressal Committee was held on 26.10.2019 at 9:30 A.M. in the committee room of this institution to decide upon the grievance lodged by following firms regarding purchase of Drugs/Medicines for the financial year 2019-2020, Nishtar Medical University Hospital, Multan.
In the abovesaid meeting following proceedings were conducted
1. As the meeting started, it was told to the committee that every firm has been intimated by the Purchase Department of Nishtar Hospital Multan about the meeting and the firms were requested to send their authorized representatives to attend the meeting in person for hearing of their grievances.
2. The committee called the representatives of the firms one by one and gave them the opportunity of being heard regarding their grievance In the said meeting, following decision was given.
Sr.No. Name of Firm 27 The representative Mr. Muhammad Jamil attended the meeting. He was asked to present his case to the committee. The committee perused the contention of the firm.
The committee also examined the technical offer/bid of the firm. Item No.80 was declared NTS & signed copy of terms and conditions was not attached with the technical offer/bid. After detailed discussion and giving a fair opportunity to the firm, the grievance committee allowed the representative of the said firm to sign the already submitted copy of terms and conditions & relax to accept item No.80 due to typographical mistake in Hospital Formulary for financial year 2019-2020 and over ruled the decision of the technical evaluation committee for further purchase process.
The firm also obtains minimum qualifying marks. So, the firm is responsive for further purchase process for all of its quoted items except Item No.53, 54, 55, 56, 57, 60, 61, 62, 66, 247, 248, 260 (DRC).
44. The perusal of above minutes of meeting conducted on 26.10.2019 reveals that only those firms, who had grievances, were heard by the Committee wherein, the Respondent-Company was declared responsive for further purchase. Record reveals that the Respondent-Company was initially disqualified by the Technical Evaluation Committee through Technical Evaluation Report dated 12.10.2019 on the ground of non-providing signed copy of terms and conditions of tender/bid documents. A grievance complaint under Rule 67 of PPRA Rules was submitted by the Respondent-Company on 17.10.2019 before the Committee. Subsequently , the Respondent-Company received a letter dated 09.11.2019 from the Respondent No.3 against which complaint was filed under Rule 67(2) of PPRA Rules which was to be decided within fifteen days as per Rule 67(3) of the PPRA Rules after the announcement of bid evaluation report. However , non-decision of complaint by the Respondent No.3 prompted the Respondent-Company to file W.P.No.18535 of 2019 which was disposed of with direction to the Respon dent No.3 to place the complaint before the Committee however; pursuant to aforesaid directions the said Committee rejected the complaint. The Respondent-Company challenged aforesaid rejection through another writ petition bearing No.19408 of 2019 which was allowed and decision of the Committee was set-aside pursuant to which the impugned order was passed. Since the Petitioner -Company was not aggrieved of and he had not lodged complaint regarding redressal of his grievance, if any, before the Committee therefore, his ground of being unheard does not arise.
45. Yet another ground was agitated by the Petitioner -Company with regard to it?s non-impleadment as party to the writ petitions filed by the Respondent-Company . Available record reveals that the Respondent-Company in response to tender notice also submitted its bid however , it was informed by the Respondent No.4 vide letter dated 12.10.2019 that as per technical evaluation report the firm was not responsive for further process for all of its goods items as the firm did not meet compulso ry criteria at Sr.No.vi. Upon this the Respondent-Company challenged aforesaid letter by filing Grievance Complaint under Section 67 of the PPRA Rules dated 19.10.2019 before the Committee and non-decision of that complaint within the statutory period prescribed under Rule 67(3) of the PPRA Rules, promoted the Respondent-Company to approach this Court by filing W.P.No.18535 of 2019. The said writ petition was disposed of on 29.1 1.2019 with the following observation: "The instant petition is disposed of with the direction to the Medical Superintendent, Nishtar Hospital, Multan- respondent No.2 to place the grievance petition of the petitioner before the Committee if still pending and ensure that the same is finally adjudicated, by affording right of audience to the petitioner , in accordance with law at the earliest and in any case within seven days from today and for this purpose the petitioner will appear before respondent No.2 today .
It is further directed that while deciding the grievance petition, the Committee will take into consideration the Technical Evaluation Report of Drugs/Medicines for Financial Year 2018-2019 (Annex-C) and all the other documents which the petitioner places before the Committee. If the final order for supply of medicines has not been issued till date, respondent No.2 will not issue the same, prior to decision of grievance petition or above period whichever is earlier".
Pursuant to aforesaid directions, the Committee, after providing an opportunity of hearing to the Respondent No.11, decided as under: "After perusal of all the record in presence of the counsel and taking into considera tion the circular issued by PPRA authorities dated 20.05.2019, vide No.L&M (PPRA)10- 01/201 1, the Grievance Redressal Committee rejected the contention/grievance of the firm and maintained the previous decision of Technical Evaluation Committee & Grievance Redressal Committee". The Respondent-Company once again approached this Court and filed W.P.No.19408 of 2019 against rejection of grievance petition as well as formation of the Committee however , said writ petition was allowed in the following manner: "Learned law officer on the instructions of officer in attendance has conceded that the grievance redressal committee was not constituted in accorda nce with the law/rules and has undertaken that the competent authority will reconstitute the grievance redressal committee in line with above referred circular and the grievance petition of the petitioner will be decided afresh. As such the instant petition is allowed, the impugned order passed by the grievance redressal committee at page No.42 is set-aside and grievance petition already filed by the petitioner will be deemed pending, with the direction to the Grievance Redressal Committee (newly constituted under the above referred circular) to decide the matter afresh in accordance with law/rules..
In the light of aforesaid directions, the Committee decided to retender the disputed products/drugs vide impugned letter dated 04.01.2020.
46. Above-stated facts are clear and manifest in the manner that the Respondent-Company had no grievance against the Petitioner -Company rather the Respondent-Company availed remedies provided under the relevant Rules for redressal of grievance as such the ground urged by the Petitioner-Company that it was not made party to the writ petitions, mentioned above, is of no relevance.
47. It is argued by learned counsel for the Petitioner -Company that the Committee had no authority to re-tender the items quoted by it. In this regard it is evide nt from the perusal of impugned letter that the Committee has only made a recommendation for re-tendering. Rule 67(1) of the PPRA Rules talks about constitution of Grievance Redressal Committee by the Procuring Agency in order to address the complaints of bidders prior to entry into force of the procurement contract under Rule 63 of the PPRA Rules. The Committee performs its functions with respect to complaints only lodged by any bidder before entering into procurement contract and if it gives any recommendations then the Procuring Agency has to pass an order under Rules 35 and 36 of PPRA Rules. Perusal of record reveals that at present, no order , as such, of the Procuring Agency is in field hence the question with regard to validity of process of re-tendering does not call for determination at this stage, therefore, premature.
However , in the passing reference to Rules 35 & 36 of the PPRA Rules which deal with the criteria of rejection of bids and re-bidding process respectively are reproduced for ready reference: Rule 35. Rejection of bids.- (1) The procuring agency may reject all bids or proposals at any time prior to the acceptance of a bid or proposal.
(2) The procuring agency shall upon request communicate to any bidder , the grounds for its rejection of all bids or proposals, but shall not be required to justify those grounds.
(3) The procuring agency shall incur no liability , solely by virtue of its invoking sub-rule (1) towards the bidders.
(4) The bidders shall be promptly informed about the rejection of the bids, if any .
(5) A procuring agency may, for reasons to be recorded in writing, restart bidding process from any prior stage if it is possible without violating any principle of procurement contained in rule 4 and shall immediately communicate the decision to the bidders.
Rule 36. Re-bidding .- If the procuring agency rejects all the bids under rule 35, it may proceed with the process of fresh bidding but before doing that it shall assess the reasons for rejection and may, if necessary , revise specifications, evaluation criteria or any other condition for bidders.
In this regard, reference could be made to a judgment reported in "Messrs PAKIST AN GAS POR T LTD Versus Messrs SUI SOUTHERN GAS CO. LTD. and 2 others"( PLD 2016 Sindh 207)where the court while interpreting Public Procurement Rules of 2004 observed that:- "Thus rule 33 does not oblige the procuring agency to justify its grounds of scrapping the entire bidding process. On account of doing so it also incurs no liability . When all bids are rejected under rule 33 the procuring agency is empowered to call for rebidding under rule 34. So once rule 33 is invoked then in such eventuality none of the bidders can insist that the procuring agency should proceed with the unfinished bidding process, announce the result and accept the lowest bid. Insisting on proceeding with the bidding process that has been annulled under rule 33 would come in direct conflict with the procuring agency's right to exercise its options under rules 33 and 34. Therefore, when rules 33 and 34 are invoked by the procuring agency , the bidders cannot make a grievance out of it. It cannot be said that in such eventuality the "duty to act fairly" has not been discharged. The expectations of the participating bidders that once the procuring agency commences the process to award procurement contract then it must finalize the same and not to cancel the process cannot be said to be a vested right of the bidders as rules 33 and 34 fully empower the procuring agency to reject all bids without incurring any liability and call for rebidding.
8. The exercise of discretion under rules 33 and 34 does not give any undue advantage to any of the participants of the bidding process. Such an occasion would only arise when the procuring agency discloses its intention to grant the contract in favour of any of the bidders. Only in such eventuality the decision of the procuring agency can come under scrutiny . The rules do not envisage that once the bids are invited, the process cannot be annulled by invoking rule 33. The discretion under the said rules having been conferred upon the procuring agency , vires of which have not been called in question in these proceedings, the Court has to give effect to such rules if the occasion so warrants.
9. Where it is decided by the procuring agency to annul the entire bidding process under rule 33 then there is also no occasion for seeking remedy under rule 48. The purpose of rules 33 and 34 can never be achieved if even after the entire bidding process is annulled by the procuring agency , the participating bidders can stall the process of procurement by litigating for years to seek award of contract under the very same bidding process. One of the reasons for incorporating rules 33 and 34 is to put to an end to a controversy in which bidding process stand submerged. The expectations of unsuccessful bidders cannot take precedent over the purpose for which bidding process was started. It is for such reason that rule 33 puts an end to the bidding process without leaving any room for the participating bidders to seek justification from the procuring agency . If the exercise of discretion under rule 33 is made justiciable then the whole procurement process would remain suspended till the legal battle comes to an end. Additionally , such an interpretation would amount to doing violence to the provisions of rule 33(1) wherein it is stated that procuring agency is not required to justify the grounds for calling for rebidding. Thus, to seek direction from a Court to the procuring agency to continue with the bidding process that has already been scrapped under rule 33 is not warranted in law ......."
48. Since the Procuring Agency has not passed any order till filing of this petition therefore, no cause of action has accrued to the Petitioner -Company to challenge the recommendations given by the Committee.
49. Furthermore, the case law relied upon by the learned counsel for the Petitioner -Company , with utmost respect, are distinguishable from the facts and circumstances of the instant case.
50. In view of what has been discussed above, this writ petition having no merit is dismissed accordingly . . Trials of the State: Law and the Decline of Politics, (Profile Books, London UK-First Edition 2020) by Lord Jonathan Sumption, UK Supreme Court . 1 Government procurement generally covers two main types of public expenditure: consumption expenditure and expenditure on capital formation, that is, investment expenditure The OECD. The Size of Government Procurement Markets. 2015