MUHAMMAD AFZAL LONE, J.---This I.CA. Is directed against the order dated 18-11-1987 passed by a learned Single Judge dismissing the petitioner's Writ Petition No. 3334/87.
2. The facts are that in pursuance of its policy of disinvestment, the Punjab Industrial Development Board invited offers for the sale of Harappa Textile Mills Limited. The petitioner is one of the parties who tendered offers. His initial offer was of Rs.185 million which vide letter dated 22-2-1986 (Annexure `A') was revised to Rs. 203 million. As a result of meeting between the parties the offer was finally enhanced to Rs.205 million. This enhancement is evidenced by petitioner's letter dated 30-3-1986 (Annexure `B'). Thereafter the Board issued a letter of intent dated 22-5-1986 (Annexure `C') to the petitioner. It embodies some of the conditions of sale having financial implications, forming part of terms of sale, earlier finalized in a meeting presided over by the Chairman of the Pakistan Banking Council, which the petitioner and rival bidders also attended. Under one of these conditions the petitioner was required to make payment of Rs.2 million, on receipt of letter of intent.
The fate of this appeal largely hinges on the interpretation of this letter, para I whereof heavily relied upon by the petitioner, is, reproduced below:-- "We are pleased to inform you that in the light of the recommendations made by the Pakistan Banking Council in the meeting held at Karachi on March 16, 1986, the Chief Minister, Government of the Punjab, has in principle approved the proposal of issuing the Letter of Intent to you for the sale of Harappa Textile Mills Limited."
3. It is evident from the petitioner's letter dated 24-5-1986 (Annexure `D') that in pursuance to the Letter of Intent, he deposited a sum of Rs. 2 million vide cheque dated 24-5-1986. Simultaneously the Board allowed a representative of the petitioner namely Mohammad Shafique Ahmad to remain in the Mills alongwith his team, for the purposes of supervising any movement of fixed assets. It was further agreed that the gate passes would be shown to and initilled by the said representative before anything was taken out of the Mills. This arrangement is manifested by the Board's letter dated 24-5-1986 (Annexure `E').
4. It is discernible from the record that on 8th June, 1987 a second meeting was held between the parties which was presided over by the Minister .Oft Industries Punjab Government. In this meeting a fresh offer of Rs. 260 million was also received. The petitioner had earlier expressed his willingness to increase his offer but asked for time to consider the issue as the Company's Managing Director had then gone abroad. The petitioner was called in the meeting, informed about the offer aforesaid, persuaded to increase his offer but he declined. It seems that by then a few more prospective buyers appeared on the scene and showed interest in the deal. The respondent Board thereupon held a meeting on 12-7-1987 and passed a resolution (Annexure "B' to the parawise comments) to the effect that public notice be issued in respect of the Mills aforesaid alongwith two other Textile Mills, notifying to all those who had already tendered their bids to negotiate and finalize their offers on 22-7-1987. Offers were also invited from new parties. The public notice issued in the `Pakistan Times' is Annexure `C'. A specific notice Annexure `D' was also issued to the petitioner asking him to attend the meeting on 22-7-1987. In reply, by means of telegram dated 20- 7-1987 the petitioner demanded transfer of the Mills to the Company against his previous offer and dubbed the move for further negotiation as illegal. The proceedings recorded by the Board on 22- 7-1987 are reproduced below:-- "It was decided that all the bidders for Harappa Textile Mills should be called in the meeting collectively and informed about the bids received from each party. In order to give a fair chance to the old bidders and the new parties as well as to eliminate any objections, the bidders were asked to revise and give their firm and final offers. The parties were later called to the meeting and their revised offers were announced in the presence of all the representatives which are as under:-- Rs.
M/s Shirani Investments (Pvt) Ltd., 31,11,11,111.
M/s. Hassan Faheem Associates.
38,50,00,000.
M/s. Pak Ghee Industries.
30,66,00,000.
M/s.Hussnain Construction Company.
33,10,00,000.
5. It was with this background of the case that the petitioner invoked the Constitutional jurisdiction of the Court for issuance of a writ that respondent's refusal to finalize the dis-investment of the Mills; transfer the same against the petitioner's offer of Rs.230 million- and to complete the documentation in respect thereof, was without lawful authority. The learned Single Judge who was seized of the case on 11-11-1987 passed by the following order:--- "Report and parawise comments have been submitted. The highest bid presently being recommended to the Government for approval is for Rs.33,10,00,000. The petitioner if so minded may improve the offer. The offer, if sizeably improved only then the matter would be considered further, provided it is accompanied by Bank Draft representing 10% of the bid amount made out in the name of the Registrar of this Court to establish the seriousness and bona fides of the petitioner; in the absence whereof this petition would be dismissed."
On 18-11-1987 which was the next date of hearing the petitioner refused to improve his bid. In view of his previous order the learned Single Judge dismissed the writ petition.
6. Before adverting to the petitioner's contentions it is to be noticed that the "Board" is the creation of the Punjab Industrial Development Board Act, 1973 and is a body corporate. The administration and management of its affairs vests in a Board of Directors and it is guided by such directions as the Government may give from time to time. The Government can suspend the execution of any resolution and order of the Board, as in its opinion is in contravention of such directions, or the Act or the Rules framed thereunder. The Board of Directors consists of a Chairman and four members comprising Secretaries to the Punjab Government of the Finance and Industries Department, the Chairman Planning and Development Board and the Director (or Managing Directors of Industries) appointed by the Government. The Government is also the appointing authority of the Chairman.
The "fund" of the Board mainly consists of investment, grants made and loans obtained from the Government, foreign loans and loans procured from the scheduled Banks. There is thus no private investment. The Board has to submit to the Government an annual statement of its Accounts on the close of each financial year. The Government is also possessed of the power to dissolve the Board. Subsection (3) of Section 17 of the Act incorporated therein by the Punjab Industrial Development Board (Amendment) Ordinance, 1979 which is relevant for the purpose of the disposal of this appeal is reproduced below:-- "(3) The Board may, with the approval of Government and in such manner as Government may direct, sell or transfer its shares in or otherwise dispose of the assets of the companies and projects established by it."
6-A. The stage now arrives to attend to the arguments of the learned counsel for the petitioner. It is contended that the first para of the Board's letter Annexure `C' already reproduced above has the effect of according approval op behalf of the Government by the Chief Minister, who is the Chief Executive of the Province, in pursuance whereof the petitioner deposited a sum of Rs. 2 million with the Board. It is emphasised that second approval is not countenanced by section 17(3). According to the learned counsel since the petitioner's offer of Rs. 230 million was never rejected by the Government, the deal stood finalised and no power vested in the Board, to negotiate and obtain fresh offers from the parties, particularly 14 months after the acceptance of his bid which was the highest. In the submission of the learned counsel the posting of petitioner's representative in the Mills amounted to delivery of its symbolic possession to the petitioner, in furtherance of acceptance of his offer Reliance was placed on Wali Mohammad v. Karachi Metropolitan Corporation (1981 C LI C 730) and Mian Mohammad Rashid v. Chief Settlement and Rehabilitation Commissioner (PLD 1962 Lahore 217) to support these submissions.
7. We are unable to agree with any of these arguments. The opening para of the letter date 22-5- 1986 rendered merely a tentative approval of issuance of Letter of Intent to the petitioner. It is noteworthy that the evaluation report of the Mills was then under preparation. The offer made by the petitioner had to be processed in the light of that report and the matter placed before- the Government for their final approval. This is. Quite evident from the last para of the letter which runs as under:-- "You will appreciate, that the Government of the Punjab has to finally approve the offer on .The basis of the Evaluation Report which is presently under preparation by our Chartered Accountants.
Once the Report has been received and approved by the Board of Directors, the approval for transfer of shares and ownership of the company will be sought from the Punjab Government and only after the approval has been received, then and only then will the mill be transferred to your company.
When this letter is read as a whole the fallacy of the petitioner's arguments becomes quite apparent. The mills could be transferred to the petitioner only after the final approval of the Government which it is clear to us was never extended. The Letter of Intent cannot be treated as an approval in contemplation of Section 17(3). The question of second approval therefore, did not arise.
8. As regards the precedents, in the Karachi judgment the case was governed by section 45 of the Sindh Local Government Ordinance, where--under if the highest bid was rejected by the Corporation, the approval of such rejection had to be obtained from the Government, who had to give reasons for non-acceptance. In the second precedent the auction was conducted under the provision of the Settlement Scheme No. III which made the approval of the Chief Settlement Commissioner sine qua non for the finality of the auction. The Chief Settlement Commissioner gave his approval to the highest offer. In these circumstances when the matter came up before the High Court, it maintained that consideration of another higher offer, after acceptance of bid was inconsequential. In our view these decisions are clearly distinguishable and do not provide any assistance to the cause of the petitioner.
9. The true import of Letter of Intent, the invitation of new offers by the Board and fresh negotiations with the parties by it, with a view to obtain highest price has to be examined in the light of the character and constitution of the Board. The Board has been constituted for the purpose of the Act and the purpose of the Act is the economic development of the Province, through industrialization in public sector. According to the Scheme and salient features of the act alluded to in the earlier part of this order, the Board carries on itsbusiness under the direct control of the Government, like a Government Department. It discharges its function subject to the orders and directions of the Government. In these circumstances the Governments association at the-- intermediate stage with the processing of the offers is not abhorrent to the Act. The Letter of Intent needs to be construed in this context. In the discharge of its functions the commercial and national ' interests have to be kept in view by the Board. Thus, there was nothing wrong with the negotiations conducted by the Board in the presence of the proposers and further disclosure of the bid of each party to the others, with a view to persuade them to improve their offers, motivated by the sole object of benefiting the public exchequer. As a result of these negotiations the Board succeeded in obtaining an offer of Rs.33.10 million from M/s. Hussnain Construction Company and recommended their case to the Government for acceptance. The petitioner who earlier participated in the negotiations but could not compete with the said bidder has now vainly fallen back on the Letter of Intent.
10. The petitioner's claim as to the delivery of symbolic possession is also untenable. The position taken up by the Board in the parawise comments in this respect is that the petitioner's representative was merely permitted to stay in the mills so that subsequently controversy was not raised that the assets of the Mills were tampered with after issuance of Letter of Intent. We do not think that the stay of the petitioner's representative in the Mills amounted to delivery of symbolic possession.
11. As regards the deposit of Rs. 2 million, it seems to have been, procured by the Board to compel the petitioner to comply with the terms of Letter of Intent. It, therefore, m our estimation cannot m any way be considered as evidence of finalization of the deal in favour of the petitioner.
12. For all these reasons we do not find any merit in this appeal. It is dismissed in limine.
H.B.T./N-294/L