SYED ABDUR RAHMAN ,J.:- This is a petition under Article-199 of the Constitution.
2. Petitioner, M/S Capgas (Private) Ltd. Is a licensee of Liquified Petroleum Gas (LPG). It was allocated 15 tons of LPG-Ex-Adhi oilfields by respondent No.1 on 15.4.1989. The licence was granted under Rule-6 of LPG Rules, 1971 for the construction of works for storage, filling and distribution of LPG for a period of 15 years. An agreement was executed between the petitioner, respondent No.1, respondent No.2 and O.G.D.C. Setting out the terms and conditions on which the parties had to at.
Respondent No.1 vide order dated 23.4.1991 in purported exercise of power under Section-21 of LPG Rules, 1971 reduced the per-day quantity of the petitioner from 15 tons to 5 tons. It is contended by the petitioner that the said reduction was unlawful, arbitrary, malafide and violative of the rules of natural justice and the Constitution. Hence this petition.
3. Respondent No.1 did not file any Counter-Affidavit to the petition. Respondent No.2 has filed a Counter - Affidavit in rich it is contended that the reduction is made by the Authority i.e. Respondent. No.1 and not by respondent No.2. Respondent No.2 has reduced the supply in pursuance of the direction of the Authority. Thus respondent No.2 has strictly complied with the contractual obligations of the petitioner as embodied in LPG Sale-Agreement and accordingly is not liable in any manner whatsoever to any claim of the petitioner, nor it is guilty of any unlawful, unreasonable or arbitrary conduct.
4. We have heard Mr. Khalid M. Ishaque Advocate for the petitioner, Mr. Naeem-ur-Rehman, Standing Counsel for respondent No.1 and Mr. Sajid Zahid, learned counsel for respondent No.2.
5. No Counter-Affidavit has been filed by respondent No.1. Initially Mr. Naeem-ur-Rehman has stated that he had no instructions from respondent No.1. Later on he opposed the petition in some what lukewarm manner and contended that it was the absolute privilege of respondent No.1 to reduce the quantity of PLG without assigning any reason and without even giving a Show-cause- notice.
6. Mr. Sajid Zahid, Advocate for respondent No.2, referred to Clauses (a) and (e) of Para-2.1 of the Agreement dated 20.11.1990 referred to above which read as under:- "(a) The Sellers shall sell and deliver and the Buyer shall by and accept on the terms and conditions hereinafter specified such quantities of LPG & would be made available by the Sellers for sale and delivery to the Buyer to the extent of fourth (1/4) of the total LPG production from the Adhi field per day (hereinafter referred to the 'Maximum Quantity'). The said Maximum Quantity may be varied under the terms of this Agreement or a directive of the Authority. b) .... c) .....
(d) ....
(e) Provided however that subject to Clause 2.1.(a) the actual quantities of LPG to be delivered and purchased may at any the be increased or reduced at the option of the Sellers by notifying the Buyer at least twenty four hours in advance of the date of delivery of such increase or reduction".
He, therefore, submitted that, according to these clauses, the quantity of LPG can be varied; (1) by the Seller i.e. Respondent No.2 under the terms of Agreement, and (2) by the Authority by a directive. So far as the increase or reduction in the supply of LPG by respondent No.2 was concerned, it has the option to do so under Clause,-(e) at any the by notifying to the Buyers i.e. Petitioner, 24 hours in advance. He frankly conceded that respondent No.2 has not reduced the supply of LPG to the Petitioner in exercise of his option under Clause-(e) deferred to above. He then submitted that the Authority had power to regulate distribution of LPG under Rule-21 of Liquified Petroleum Gas (Prod. & Dist.) Rules, 1971. This rule reads as under:- "21. Power to regulate distribution of LPG:- Notwithstanding anything contained in a contract or an agreement between one licensee and another or between a licensee and a consumer, the Authority may, if it is satisfied that it is necessary in the public interest so to do, by order in writing, determine the maximum and minimum quantities of LPG base-stock and LPG which a licensee may supply to another licensee or to a consumer, whether generally or during such period as may be specified in the order."
According to this Rule, the Authority, if it was satisfied that it was necessary in the public interest so to do, may by an order in writing, determine the maximum and minimum quantities of LPG which a licensee may supply to another licensee. He made it clear that this order was passed by the Authority i.e. Respondent No.1 in which respondent No.2 had no hand did not accept any responsibility whatsoever for the same.
7. Mr. Khalid M. Ishaque Advocate, who appeared for the petitioner attacked the impugned order on mainly to grounds:- i) That it was passed without any notice to the petitioner and without affording him any opportunity of hearing and was, therefore, in contravention of the rule of natural justice of audi-alteram- patrter; and ii) That when the satisfaction of an Authority is needed for coming to the conclusion that it was necessary in the public interest to do so, then obligation is cast upon it before exercising its discretion to consider the grounds which exist on the basis of which an honest opinion could be formed, otherwise exercise of the power by the Authority would be unconstitutional and open to correction through judicial review. In this connection he placed reliance upon:-
(1) P.L.D. 1989 S.C. 166- Federation of Pakistan vs. Mohammad Saifullah Khan.
(2) M.L.D. 1989 11 - Mohammad Qadir Hussain vs. Controller of Patents & Designs.
(3) P.L.D. 1990 S.C. 1092 -Amanullah Khan vs. Federal Govt, of Pakistan.
(4) P.L.D. 1988 Lah. 1 - Shehbazuddin Choudhry vs. Services Industries Textile Ltd.
(5) P.L.D. 1989 Lah. 554 - Ziaullah Khan vs. Govt, of Pakistan, and
(6) P.L.C. 1988 P-344 - Mantharali Jatoi vs. Govt, of Sind.
8. There can be no cavil with the proposition that no order can be passed to the detriment of any person without giving him an opportunity of being heard. This is based on the principle of audi- alteram-parteran. This principle is so welk nown that it does not require any authority in its support.
However, following cases can be referred to usefully in this behalf: - 1) University of Dacca and another vs. Zaki Ahmed - (PLD 1965 S.C.90); 2) The D.B. Decision of this Court in the case of Abdul Latif vs. Chairman, Board of Intermediate and Secondary Education, Sukkur - (1986 C.L.C. 1908) in which one of us (Syed Abdur Rahman, J.) was a member; 3) Shoukat Ali vs. Controller of Examination, University of Punjab - (1982 SCMR.364); 4) Masood Parvez vs. Advisory Committee, University of Punjab - (1982 SCMR.1084).
9. No doubt Rule - 21 of LPG (P & D) Rules, 1971 gives power to the Authority i.e. Respondent No.1 to determine the maximum and minimum quantities of LPG which a licensee may supply to another licensee, but it places a restriction upon that Authority to do so by an order in writing and that also if it is satisfied that it is necessary in the public interest so to do. Now let us see what is meant by the term 'public interest'. In Stround's Judicial Dictionary Volume 4 Fourth Edition, one of the meanings assigned To the term 'public interest' is "a matter of public or general interest does not mean that which is interesting as gratifying curiosity or a love of information or amusement but that in which a class of community have a pecuniary interest,, or some interest by which their legal rights or liabilities are affected." Hence when the question of 'public interest is considered, the Court has to consider and ascertain amongst other matters the question whether the proposed order will serve the 'public interest'. P.L.D. 1988 Lah. 1 - Shahbaz-ud-Din Choudhry & others vs. M/s. Services Industries Textiles Ltd and others is referred to in this behalf.
10. In the case of Ziaullah Khan & others vs. Government of Punjab and others (P.L.D. 1989 Lah. 554) the expression 'public interest is defined as to mean "general social welfare or regard for social good and predicating interest of the general public in matters where a regard for social good is of the first moment". (Law Lexicon, 2nd Edition, 1986, Vol.3 pp 1956-1957).
11. The question as to when an order by an Authority can be passed if the law requires it to be satisfied that a certain condition exists, it was incumbent upon the Authority to first form its opinion objectively by making his own assessment of the situation, and his opinion must be founded on some material and such material is shown to have been taken into consideration by the Authority.
This proposition was high lighted in the famous case of Federation of Pakistan vs. Mohammad Saifullah Khan 1989 S.C,166) wherein the question of constitutionality of the dissolution of National Assembly by the President under Article-58 (2) (b) of the Constitution passed by Late Genl. Zia-ul- Haq was considered. It was held that "an obligation was cast on the President that before exercising his discretion he had to from his opinion that a situation of the kind envisaged in the Constitution has arisen which necessitated the grave step of dissolving the National Assembly. The President could make his own assessment of the situation as to the course of action to be followed, but his opinion must be founded on some material. When no ground existed on the basis of which an honest opinion could be formed, the exercise of the power by the President was held to be unconstitutional and open to correction through Judicial review."
12. In the case of Amanullah Khan vs. Federal Govt, of Pakistan. (P.L.D.1990 S.C. 1092) the question of registration of a Company with the Stock Exchange was considered and it was held as follows:- "Wherever wide worded powers conferring discretion exist, there remains always the need to structure the discretion. The structuring of discretion only means regularising it, organizing it, producing order in it so that decision will achieve the high quality of justice. The seven instruments that are most useful in the structuring of discretionary power are open plans, open policy statements, open rules, open findings, open reasons* open precedents and fair informal procedure. Somehow, the wide worded conferment of discretionary powers or reservation of discretion, without framing rules to regulate its exercise, has been taken to an enhancement of the power and it gives that impression in the first instance but where the authorities fail to rationalise it and regulate it by Rules, or Policy statements or precedents, the Courts have to intervene more often than is necessary, apart from the exercise of such power appearing arbitrary and capricious at times."
13. The case of Muhammad Quadir Hussain vs. Controller of Patents and Designs, Govt, of Pakistan and 2 others (1990 M.L.D. 11) related to the prerogative of the Central Government to withheld the grant of a patent under the Patents and Designs Act, 1911 and it was held as follows:- The Patents and Designs Act, 1911 was framed when the Crown was the Supreme Head of the British Empire and the same terminology of prerogative has continued till today although neither Crown's preeminence nor its prerogative is attached to or inherited by Government of Pakistan. The Act provides a comprehensive procedure for grant of patent rights which governs the claim of an applicant and power to grant it or not. The Act further confers discretionary power on the Government to use the invention to the exclusion of everyone for the services of the Government. In these circumstances to take refuge under the prerogative powers would amount to using back door method to defeat the provisions of law. The law has supremacy over prerogative, and overrides it. The historical background of legal evolution in Pakistan confirms that the prerogative of the Government is nothing but its discretion conferred by law which has to be exercised in accordance with the recognised and well-settled principles."
14. In the case of Manthar Ali M. Jatov vs. The Government' of Sind 1988 P.L.C.(C.S.) 844),the question as to how discretion of with-holding the appointment, on the ground that he was a political worker, was to be exercised by the competent authority, while issuing appointment order of a candidate, who was recommended by the Public Service Commission, it was held that "discretion vested in competent authority, has to be exercised in good faith and in accordance with law. It should be exercised justly, fairly, reasonably and it should not be exercised arbitrarily orcapriciously. " Incase where no material has been produced to support the allegation of his being a political worker, direction was issued that the recommendation of the Public Service Commission regarding the petitioner be implemented.
We are, therefore, satisfied that the impugned order is unlawful and of no legal effect, arbitrary, unreasonable, violative of rule of natural justice and Constitution. We direct respondent No.2 to supply to the petitioner the allocated quota of 15 tons of LPG per day.