WIQAR AHMAD, J.--Petitioner has agitated its grievance by filing the instant writ petition, against order dated 15.06.2020 of the Khyber Pakhtunkhwa Public Procurement Regulatory Authority (hereinafter referred to as "KPPRA") and the steps taken by Procuring Authority in pursuance thereof.
2. Facts essential for disposal of the instant petition are, that the Medical Superintendent Saidu Group of Teaching Hospitals Swat (hereinafter referred to as "MS") invited bids by publishing proclamation in newspaper dated 16.10.2019 (Advertisement No. INF (P) 4295/19) for supply, installation, testing and commissioning of Medical Equipment, instruments and other hospital supplies for Saidu Group of Teaching Hospitals Swat. It was required in the advertisement, so published that bid would be conducted through single stage two envelopes bidding procedure comprising a single package containing two envelops as per KPPRA Procurement Rules, 2014.
Respondent No. 5 i.e. M/s Friend Traders were dropped during the process of technical evaluation of the bids, vide order of the Procuring Entity dated 22.01.2020. After opening of financial bid among the technically qualified bidders, petitioner was declared highest responsive bidder. He was accordingly issued bid acceptance letter on 25.02.2020. Contract was executed with him for procurement of "Cath Lab with Full Accessories and Disposables" (hereinafter referred to as "Angiography Machine") on 19.03.2020. Supply order was accordingly issued to him vide letter No. Acctts/PDMA/SGTH/F-2/2019-20/616-20 dated 19.03.2020. Irrevocable letter of credit (hereafter referred to as "LC") was also opened by petitioner through the Bank of Khyber, Bank Square Branch Mingora. It was on 15.06.2020 that KPPRA ordered the Procuring Authority to allow respondent No 5 who had been knocked out during the process of technical evaluation, to participate in the financial bid by treating him to have qualified the technical evaluation. In pursuance thereof, Medical Superintendent Saidu Group of Teaching Hospitals sent a letter to the Bank of Khyber Mingora Branch for withholding of LC, to which, Manager of the concerned Bank responded vide his letter No. BOK/IBB/MING/0132/703 dated 22.06.2020 that the subject LC had been opened and proceeded at their end. They also stated that the LC was irrevocable letter of credit, which could not be amended or cancelled without consent of all the parties but they would just forward such request, to their foreign corresponding bank, for the purpose. It was also stated that if the shipment had proceeded then there would be no chance of withholding the LC. Petitioner has stated in his writ petition that it was, after the letter sent to the Bank of Khyber for withholding LC by the Procuring Entity, that they came to know about the impugned decision of KPPRA and thereafter he filed the instant constitutional petition with the following prayer; "It is therefore very humbly prayed that on acceptance of this writ petition, this Honorable Court may very magnanimously hold, declare and order that;
1. The impugned Decision of the Respondent No. 4 dated 15.06.2020 and consequent letter thereupon by the Respondent No. 2 addressed to the Respondent/BOK vide which the payment was asked to be withheld on the irrevocable Letter of Credit of the Lot-9 amount to depriving the Petitioner from vested right so created in his favor and thus are illegal, unlawful, without lawful authority and is thus liable to be set aside and put at naught.
2. The petitioner is entitled to make smooth and without any hindrance supply of the Lot-9 Equipment etc. and to complete his part of the Agreement and the Respondents have got no right and authority to abridge his rights.
3. The Respondent No. 2 be directed to at once withdraw the impugned letter dated 19.06.2020 addressed to BOK for withholding of the payment in respect of Lot-9.
4. Costs throughout.
3. Comments were called from respondents, which have separately been filed rebutting the assertions of petitioner as raised in the writ petition, except the comments of Procuring Entity i.e. respondents Nos.2 and 3 wherein case of the petitioner has been supported regarding factual aspects of the case.
4. Learned counsel for petitioner submitted during the course of his arguments that with the offering of letter of acceptance of the bid and execution of the contract, petitioner had got a vested right which could not have been rescinded unilaterally either by the Procuring Authority itself, or on the dictates of KPPRA. He further added that acting on the order placed by the Procuring Entity, petitioner had ordered procuring and import of the Angiography Machine, which has also been delivered on the Fort at Karachi on 15.09 2020, in which respect, he placed reliance on the document annexed with his application for placing on record additional documents (C.M No. 1258- M of 2020). Learned counsel also placed reliance on the judgment of Hon'ble Supreme Court reported as PLD 1969 Supreme Court 407.
5.. Learned counsel for respondent No. 5 submitted in rebuttal that respondent No. 5 had been knocked out, during the process of technical evaluation, which act has been declared by the competent forum i.e. KPPRA to have been illegal and unlawful. He further added that when respondent No. 5 had the right to participate in the bidding process, then a contract executed on conclusion of such a bidding process, to his exclusion, was nullity in the eye of law, which could not be made the basis for allowing the instant constitutional petition. He placed reliance upon judgments reported as 2003 SCMR 280 and PLD 2004 Supreme Court 271.
6. Learned counsel appearing on behalf of KPPRA submitted that KPPRA had not been in knowledge that the contract had been executed with petitioner and it had issued the impugned order on the basis of material placed before it, wherein no such fact had been brought in their notice. He further added that since respondent No. 5 had wrongly been ousted from the process at the stage of technical evaluation, the process should therefore be reversed and that it has already been rolled back by the Procuring Entity, in pursuance to the impugned order dated 15.06.2020 issued by KPPRA.
He also placed reliance on judgment reported as PLD 1958 Supreme Court 104.
7. Medical Superintendent namely Dr. Muhammad Naeem Awan was present in person who stated that the hospital had been in dire need of an Angiography Machine, as they were having a very rich faculty of Cardiology, but due to lack of the rem isite equipments most of the critically ill patients had to be referred .o Peshawar for treatment. He added that he had been pursuing the matter himself and had therefore attended hearing of KPPRA on 04.05.2020 where he had personally brought the fact of award of contract, in notice of the KPPRA authorities. He further stated that he had also communicated this fact to the said authority in writing, vide their letter No. Acctts/ SGTH/ PDMA/ F2/2019-20/1007 dated 05.05.2020, which had duly been received by them on 11.05.2020. The M.S produced the mentioned letter along with its annexures and requested for placing the same on record. Since the case had by then been heard to a larger extent, therefore said documents were allowed to be placed on file.
8. We have heard arguments of learned counsel for the parties, respondent No. 2 in person as well as learned Ad11: A.G. and perused the record.
9. Dispute in the instant writ petition has mainly arisen due to order dated 15.06.2020 of KPPRA, (impugned herein). We would therefore discuss the order first. Respondent No. 5 was shown with a lessor marks during the process of technical evaluation of his bid on 04.01.2020, according to contents of their grievance petition submitted before the Procuring Entity and annexed with the writ petition as Annexure "I". They filed their grievance petition before the Procuring Entity on 18.02.2020, wherein they also stated that decision of the Hospital Authority had been uploaded on their website on 04.01.2020, against which they also sent a grievance letter to hospital technical committee on 13.01.2020. Grievance of respondent No. 5 was disposed of by the Procuring Entity i.e. respondent No. 2 vide its order dated 24.02.2020. Respondent No. 5 have also annexed memo of their appeal filed before KPPRA authorities as Annexure "B" to their comments, which bears the date of 03.03.2020. In Para 3 of their memo. of appeal they had given the date of orders appealed against and have expressly stated therein that all such orders had been uploaded on website of the Procuring Entity. The first technical report wherefrom respondent No. 5 had been aggrieved (for the reason that seven marks had wrongly been deducted from them, according to their assertion) had been uploaded on website of the Procuring Entity on 04.01.2020. While the second order disqualifying the firm had been uploaded on website of the Procuring Entity on 22.01.2020, according to the contents of memo of their appeal. Respondent No. 5 has filed their appeal before KPPRA on 03.03.2020, which was beyond the period prescribed for filing such appeal. Section 35 of the KPPRA Act provided a period of 15 days for filing appeal before KPPRA, but appeal in the case in hand had been filed after 58 days of the first order and after 39 days of the second order, (whereby the firm had finally been disqualified). Appeal before KPPRA authorities was filed with much delay but this aspect of the case has totally been ignored by KPPRA while passing the impugned order.
When a law prescribes a condition for exercise of jurisdiction and the jurisdiction is exercised in ignorance of such a condition, it cannot be called as a valid exercise of jurisdiction.
10. KPPRA has not only entertained a time barred appeal but had also decided it without hearing of the effected party i.e. petitioner herein. It is admitted position that no notice had been given by KPPRA to petitioner. Learned counsel appearing on behalf of KPPRA had been denying the knowledge of fact that the contract had been executed by the Procuring Entity with the petitioner, but it is itself clear from the appeal filed by respondent No.5 before KPPRA that the Procuring Entity had been timely uploading their decisions, on their website. Documents produced by the MS shows that before the decision was made by KPPRA, the fact had been brought in their notice. As held by Hon'ble Division Bench of Sindh High Court in the case of "Messrs Mazari & Co through Proprietor v.
Province of Sindh through Additional Chief Secretary and another" reported as "1993 CLC 1768" that the principle enshrined in maxim 'audi alteram partem' was to be read in every statute unless the requirements of notice have been expressly excluded by statute itself, Relevant part of observations of the august Court is reproduced hereunder for ready reference; "No doubt subsection (3) of section 53 vests the Government with powers to quash any proceedings or to suspend-execution of any resolution passed or order made by the council or to prohibit doing of anything proposed to be done or to require the council to take such action as may be specified by the Government but the learned A.A.-G. has not been able to offer a satisfactory explanation as to how the Government is empowered to cancel a valid contract entered into by it with another party without serving upon it a show-cause notice prior to taking of such action. The principle enshrined in the maxim audi alteram partem is to be read in every Statute unless the requirements of notice have been expressly excluded by the Statute itself."
Both the objections of the petitioner (regarding decisions of KPPRA passed without notice to petitioner, and that same had been barred by the limitation provided in law), were therefore found well placed. Such objections by itself are considered sufficient for setting aside the impugned decision dated 15.06.2020 of KPPRA.
11. Decision of KPPRA is also not sustainable for the reason that the order, wherein respondent No.5 had been disqualified during the process of technical evaluation, had been challenged, but the subsequent orders of the Procuring Entity, whereby financial bid of petitioner had been accepted and contract awarded to him, had neither been impugned before KPPRA, nor had these subsequent orders been set aside. Once financial bid was opened and the contract awarded, then ordering the Procuring Entity to consider financial bid of respondent No. 5, without setting aside opening of financial bid and award of the contract to petitioner, was inappropriate and irrational. It was for this reason that the decision of KPPRA resulted into absurd consequences. The impugned order of KPPRA is not sustainable on this score also.
12. Procuring Entity was not having the locus poenitentiae to rescind the contract in the case in hand. The Procuring Entity had found financial bid of the petitioner substantially responsive to the relevant bidding documents and had evaluated his fmancial bid as the highest ranking best evaluated bid, according to section 2 (c) (i) of KPPRA Act. They had resultantly accepted his bid, called for submission of performance guarantee and execution of the contact on 25.02.2020. The contract had subsequently been executed between the Procuring Entity and petitioner on 19.03.2020. Supply order was also placed to the petitioner vide letter No. Acctts/PDMA/SGTH/F- 2/2019-20/616-20 dated 19.03.2020 of the Procuring Entity. Petitioner opened irrevocable letter of credit for the purpose of import of the Angiography Machine on 08.05.2020. The machine had also been delivered at Karachi Port on 15.09.2020. Supply order had not only been placed, contract executed but same had partly been performed by the petitioner also. In such situation, it is quite clear that decisive steps had already been taken, divesting the authorities from their locus poenitentiae to rescind the order under section 21 of the General Clauses Act, 1897. Reliance in this respect may be placed on judgment of Hon'ble Apex Court given in the case of "Pakistan, through the Secretary Ministry of Finance v. Muhammad Himayatullah Farukhi" reported as PLD 1969 Supreme Court 407. Said judgment was also followed by Hon'ble Apex Court in the case of "Government of the Punjab, Education Department through Secretary and others v. Muhammad Imran and others" reported as 2019 SCMR 643 wherein the Hon'ble Court, after a survey of the existing case law on the subject, had concluded; "Keeping in view the above deliberation, it is noted that there is a judicial consensus on the issues in hand in terms that; I) The Authority which can pass order is entitled to vary, amend, add to or to rescind the same under section 21 of the General Clauses Act, 1897.
II) The jurisdiction to recall an earlier older is based on the principle of locus poenitentiae.
III) There is an exception to the principle of locus poenitentiae vesting power in an authority to recall its earlier order: if in pursuance of the order passed by the authority, an aggrieved person takes decisive steps, and changes his position.
IV) None can retain the benefits of a withdrawn order, claiming the protection of having taken a decisive step, when the very order passed by the authority is illegal, void or without lawful authority. In such circumstances, it would not matter, even if decisive steps have been taken by the person in pursuance of the illegal order passed by the authority. However, the pecuniary benefit accrued and already received by a person in pursuance of an illegal order passed by the competent authority cannot be recovered from him unless the benefiting order was obtained by the person through fraud, misrepresentation or concealment of material facts."
In the case in hand there has been no allegation that petitioner had secured the bid by practicing any fraud, or in an unlawful manner. The Procuring Authority was therefore divested of their locus poenitentiae to recall the order for the reasons mentioned above.
13. So far as judgments of Hon'ble apex Court relied upon by learned counsel for respondent No. 5 reported as 2003 SCMR 280 and PLD 2004 Supreme Court 271, are concerned, same have been returned on the face of different facts and circumstances and ratios of the said judgments cannot be applied to the case in hand. It has no doubt been laid therein that sanctity could not be attached to contracts which had already been concluded, and that it would not prevent the constitutional Courts from exercising its jurisdiction, when such contracts were found to have been unlawfully executed. But the case here is the other way around. Impugned decision of KPPRA had already been held to be unsustainable itself. When that decision was set aside, no basis exist for ordering the Procuring Entity to exercise their locus poenitentiae and to reverse the contract., The contract in the case hand has not only been concluded but has also been performed partly.
14. Objection of learned counsel appearing on behalf of KPPRA that in pursuance to decision of KPPRA, financial bid had been opened again and therefore the instant constitutional petition had become infructuous, is also misplaced for the reason that we have already set aside impugned decision of KPPRA and the steps taken by Procuring Entity (after feeling compelled by the impugned decision of KPPRA), would be of no significance. We have also held that financial bid cannot be allowed to be opened twice, unless first opening of such bid is specifically set aside.
15. In light of what has been discussed above, the instant writ petition is allowed and the impugned decision dated 15.06.2020 of KPPRA as well as the steps taken by Procuring Entity in pursuance thereof are declared to have been unlawfull, null, void and resultantly set aside.