1. ' The Capital Development Authority got published a public notice in the daily "Pakistan Times" and other newspapers on 16-11-1990 inviting applications for pre-qualifications from firms/companies interested in the construction and management of 300 to 500 rooms Five Star Hotel in Islamabad on the following two sites:-
(i) Site located at the corner of Khyaban-i-Suharwardy and Constitution Avenue near the Foreign Office.
2. ' Area = 5.2 Acres.
(ii) Site located along Ataturk Avenue near Holiday Inn. Area = 4.6 Acres ' It was asked that applications for pre-qualifications shall be accompanied by the following information/documents: (Annex. B)
(a) Organizational structure with registered official address and particulars of the partners of the firms/directors of the company.
(b) Details of experience in the establishment and management/operation of 5-Star Hotels.
(c) Particulars of technical collaboration with reputed International Chains of Hotels.
(d) Financial status (verifiable financial resources) and bank references.
(e) Any other information which may be considered relevant for pre-qualification.
3. ' The last date for the submission of the application was 26-11-1990. The petitioner as well as respondent No, 2 alongwith others submitted their applications. In all 41 applications were received and 17 contenders/applicants were pre-qualified. Thereafter, CDA through its letters dated 7-1-1991 and 15-1-1991 (Annexures D&E) called upon the petitioner to submit the bid in a sealed cover with the following requirements:
(a) A letter of Intent from a well-known 5-Star Hotel chain must accompany the bid.
(b) The bid is to be in rupees per square yard.
(c) Bids are to be addressed to the Chairman, CDA and must be in sealed cover.
(d) The bid must be received by 31-1-1991 before closing hours of the office.
4. ' The petitioner submitted his bid for both the sites along with letters of Intent from Swiss International Hotels, Switzerland and Touche Ross, U.K. Alongwith bid a pay order of Rs, one million drawn at Allied Bank of Pakistan Ltd. Was also submitted in accordance with the requirements. Bids were opened on 31-1-1991 and the petitioner's bid was the highest i,e, Rs,7,101 per square yard for site No, 2 located along Ataturk Avenue. It must be clarified at this juncture that the present Constitutional petition concerns site No, 2 as the site No, 1 at Khiyaban-e-Suharwardy was allotted to M/s. Tourism Promotion Services being the highest bidder. It is noteworthy that the fact of the petitioner's company being the highest bidder was reported iri Business Recorder and other media, as reflected from Annex. "K". M/s. ITT Sheraton who initially collaborated with respondent No, 2 congratulated the petitioner on his success through Telefax communication dated 1-2-1991 with a further offer that they would be most interested in entering into a management contract concerning the operation of the hotel on terms to be agreed (Annexure "L"). The petitioner to further strengthen his case transmitted the aforesaid telefax from M/s. ITT Sheraton Hotel and original documents from Touche Ross Ltd., UK to respondent No,
1. Subsequently through letter dated 21-2- 1991 the petitioner was intimated that his bid did not meet the requirements of collaboration/franchise, as such the same was not considered and the pay order for a sum of Rupees one million earlier given by him was returned in original. The respondent CDA also through letter dated 18-2-1991 accepted the offer of respondent No, 2 at a rate earlier offered by the petitioner who in turn deposited 25% of the amount within the prescribed period. Hence this Constitutional petition.
5. ' It is argued by the learned counsel that the petitioner has been meted out a discriminatory treatment as after having pre-qualified he was the highest bidder and his bid has been rejected on flimsy grounds without appreciating the documents of Intent appended with the bid. He has made a grouse that he submitted letter of Intent from Swiss International Hotels as reflected from his bid/letter dated 31-1-1991 (Annexures G, H, I) but respondent No, 1 in an illegal manner ignored those documents simply on the ground that the petitioner had not submitted the same alongwith the bid. There is no provision for negotiation and respondent CDA in an arbitrary manner accepted the bid of respondent No, 2 on 18-2-1991 even prior to the rejection of petitioner's bid. Grievance has also been made that the whole exercise has been done in clear violation of law as under sections 5 and 6 of Capital Development Authority Ordinance, 1960 (hereinafter referred to as an Ordinance) only the board can decide this issue. In support of his contentions learned counsel for the petitioner has relied upon these authorities.
(i) Ramana Dayaram Shetty v. The International Air Port Authority of India and others AIR 1979 SC 1628;
(ii) Rashid A. Khan v. West Pakistan Railway Board etc. PLD 1973 Lahore 733;
(iii) Wali Muhammad v. Karachi Metropolitan Corporation and 2 others 1981 CLC 730;
(iv) Amanullah Khan and others v. The Federal Govt. Of Pakistan etc. PLD 1990 SC 1092;
(v) Chairman, Regional Transport Authority, Rawalpindi v. Pakistan Mutual Insurance Company Ltd., Rawalpindi PLD 1991 SC 14;
(vi) Province of West Pakistan through the Secretary Public Works Department, Lahore v. Gammon's Pakistan Ltd., Karachi PLD 1976 Kar. 458; and.
(vii) Anjuman-e-Ahmadiya, Sargodha v. The Deputy Commissioner, Sargodha and others PLD 1966 SC 639.
6. ' Learned counsel appearing for the respondents Dr. Pervez Hassan and Mr. Bashir Ahmad Ansari have challenged the very maintainability of this writ petition and stated that the petitioner has got no locus standi and is not an aggrieved person. Further, petitioner on the basis of being the highest bidder has got no vested right particularly so when he has already withdrawn his earnest money. It has further been stated that there is a lot of difference between the pre-qualification and letter of Intent. In pre-qualification process only particulars were required while in the bid, the letter of Intent was needed which the petitioner never submitted. Dr. Pervez Hassan learned counsel for the respondent No, 2 has stated that the terms of pre-qualifications are always liberally construed so as to attract more competitors while the letter of Intent requires strict compliance. It has also been stated that the letter of Intent as stated by the petitioner from Swiss International Hotels was not attended with the bid as such the petitioner's bid was non-responsive. Mr. Bashir Ahmad Ansari, learned counsel for respondent No, 1 has argued that the matter being contractual and involving disputed questions of facts is not amenable to the writ jurisdiction when no rules or regulations have been violated. He has pointed out that the quorum of the Board is three members under the law and file fully demonstrates that the bid of respondent No, 2 had been approved by all the three members. Another argument has been advanced by him that respondent CDA under section 49 of the Ordinance has got unfettered power to dispose of its land in any manner it likes. In support of their contentions reliance has been placed upon the following authorities:
(i) Mst. Tilawatunnisa and others v. Settlement Commissioner and others 1978 SCMR 225;
(ii) Mustafa Khan and another v. Hakim Abdul Mughani and 3 others 1978 SCMR 154;
(iii) Wilayat Ali v. Mst. Iqbal Sarwar and 3 others 1973 SCMR 458;
(iv) Munshi Muhammad and others v. Faizanul Haq and another 1971 SCMR 533;
(v) Syed Muhammad v. The Settlement and Rehabilitation Commissioner and others 1976 SCMR 61;
(vi) The Principal, Cadet College, Kohat and another v. Muhammad Shoab Qureshi PLD 1984 SC 170; and
(vii) M/s. Pacific Multinational (Pvt.) Ltd. v. Inspector-General of Police and others PLD 1992 Kar.
7. 283.
8. ' I have noticed that the land in Islamabad is disposed of in accordance with "Land Disposal in Islamabad Regulation 1988" framed by the Authority under section 51 read with section 49 of the Ordinance. According to Regulation 16 commercial and business sites which have been classified in Regulation 4 are to be disposed of through public auction. Subsequently Regulation 19(a) was inserted after its approval by the competent Authority which is as under:-- "Notwithstanding anything contained in these Regulations, the Authority may, in suitable cases, make allotments of land vesting in it, on the recommendations of a Committee to be constituted by the Government."
9. ' In pursuance to the above amendment a three-member committee was constituted. However, in the case of 5-Star Hotel sites as reflected from the file it was decided by the CDA Board on 28-1- 1991 to get sealed bid from the pre-qualified parties. It is also on record that the petitioner prior to the requisition of pre-qualifications already submitted his feasibility report alongwith a certificate from the Allied Bank on 30-6-1990 showing his financial soundness to secure land for hotel. The petitioner being the highest bidder after satisfying the conditions for pre-qualification has a right to see that the same is finalized in accordance with the terms of the bid. It is true that the petitioner has got no vested right that his highest bid be accepted but certainly he has got a right that his bid be properly considered by the public functionaries. The arbitrary rejection of his bid in this manner without properly considering his documents would certainly give him a cause of action. It is a well-settled principle of law that if a method is prescribed to do a thing it must be done in that way and not otherwise. Respondent CDA through its board itself has chalked out a method of leasing out the land for 5-Star Hotel in Islamabad on the basis of pre- qualifications. Any deviation from the same would certainly give cause of grievance to the petitioner. It has been held in Rashid A. Khan v. West Pakistan Railway Board etc. PLD 1973 Lahore 733 that: "There is sufficient case-law on the point that some instructions, even if not framed or issued in the form of rules and in spite of their being subject to change or amendment, can be binding on the State functionaries as rules/law. The change of such instructions for the purpose of one case may not be entirely legal. The action of a State functionary entering into an ordinary contract with a party in any matter concerning the Government is different from entering into a contract through the process of tenders. The basic concept of financial dealing in the latter case is different from the former. Any serious contravention of the rules/instructions in the latter case might set at naught the entire concept. When rights are involved, such contravention may not be accepted as a lawful act or as falling within the discretion of the State functionary; as it would lead to most serious consequences both legal and factual. The functionaries would be well-advised in their own interest not to contravene the rules and instructions which have been laid down with care to safeguard the interests of the State (public exchequer) and the citizens including the dealing parties. In proper competently instituted proceedings, the Court will not hesitate to interfere particularly if in addition to the contravention of the above type, there is allegation of mala fides. And in the latter case, it may be neither unlawful nor improper for the court, while interfering for the purpose of correcting the error, to further direct that the loss suffered by the public exchequer and/or by a citizen be compensated personally by the defaulting public functionaries."
10. As far as the exercise of discretion is concerned the same cannot be exercised arbitrarily. It is not denied that the petitioner was the highest bidder and none has questioned his financial soundness. There is also recommendation as reflected from file of a member to grant the lease to the petitioner being the highest bidder. He has only been non-suited on the ground that the letter of M/s. Gustar dated 8-1-1991 was not in fact the letter of collaboration/franchise as it did not meet the requirements. However, the letter of Swiss International Hotels reliance upon which has been placed by him, was not even adverted simply for the reason that it was not sent with the bid.
11. Reading of pages 117 to 120 of the official file demonstrates that apart from the letter from M/s. Gustar, there were other two letters appended with the petitioner's bid. There is no reason and justification to place three copies of the same letter of M/s. Gustar's on pages 118 to 120. I do not want to dilate much upon this issue in view of the nature of the order which I am going to pass but one factor is evident that letter of Intent from Swiss International Hotel finds mention in the petitioner's bid and if there was any dispute or doubt, respondent No, 1 should have clarified the same from the petitioner. This act on the part of respondent No, 1 clearly demonstrates that the discretion has not been exercised in this case on sound judicial principles. As far as exercise of discretion is concerned the Hon'ble Supreme Court in two recent decisions reported in Amanullah Khan v. Federal Government of Pakistan PLD 1990 SC 1092 and Chairman, R.T.A. v. Pakistan Mutual Insurance Co. PLD 1991 SC 14 at page 24 has laid down certain conditions which are asunder:- "17. Wherever wide worded powers conferring discretion are found in statute, there remains always the need and the desirability to structure the discretion and the need for this has been pointed out in the Administrative law test by Kenneth Culp Davis in the following words:-- `Structuring discretion means regularizing it, organising it, producing order in it, so that decisions will achieve a higher 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 When legislative bodies delegate discretionary power without meaningful standards, administrators should develop standards at the earliest feasible time, and then, as circumstances permit, should further confine their own discretion through principles and rules. The movement from vague standards to definite standards to broad principles to rules may be accomplished by policy statements in any form, by adjudicatory opinions, or by exercise of the rule- making power When legislative bodies delegate discretionary power without meaningful standards, administrators should develop standards at the earliest feasible time, and then, as circumstances permit, should further confine their own discretion through principles and rules."
18. In our context, the wide worded conferment of discretionary powers or reservation of discretion, without framing rules to regulate its exercise, has been taken to be an enhancement of the powers and it gives that impression in the first instance but where the authorities fail to rationalize 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..
12. ' The term letter of Intent has been defined in Black's Law Dictionary 5th Edition as under:-- "A letter of intent is customarily employed to reduce to writing a preliminary understanding of parties who intend to enter into contract."
13. No particular words are required to express the Intent. Respondent No, 1 itself has not laid down any format or parameters for expressing the letter of Intent. In Province of West Pakistan through the Secretary Public Works Department, Lahore v. Gammon's Pakistan Ltd., Karachi. PLD 1976 Karachi 458 is observed as under:-- "Before I examine the submission advanced, I would point out that I have not been able to come across the expression 'Letter of Intent' even in the commercial dictionaries, nor was learned counsel able to assist us on the meaning of this expression, although it has been used by the appellant. Be that as it may, the learned arbitrator was referred to an American commentary on the subject but he did not agree with that view and observed that a letter of Intent," as its very name implies, includes (a) an intention to enter into a contract, (b) an authority to the contractor to start work before the formalities associated with the signing of the contract can be completed and (c) the right of the contractor to be compensated for the work done."
14. All this shows that no particular words are required. It is the substance and the expression which matter and not form. In this background non-consideration of the letter of Intent submitted by the petitioner has certainly prejudiced his case. It is notable to point out at this juncture that the collaboration of respondent No (sic) the telefax message to the petitioner M/s. ITT Sheraton became doubtful. Non-consideration of all these aspects has certainly prejudiced the case of the petitioner.. The other argument that the CDA under section 49 of the Ordinance has got unfettered power to dispose of its property in any manner is devoid of any force. All the public functionaries are required to perform their duties strictly within the four corners of law and the rules and regulations made thereunder. The respondent CDA itself has framed the policy and it does not lie in its mouth to say that the property can be leased out in any manner it likes. It has been held in Haji T.M. Hassan Rawther v. Kerala Financial Corporation AIR 1988 SC 157 as under: "14. The public property owned by. The State or by any instrumentality of the State should be generally sold by public auction or by inviting tenders. This Court has been insisting upon that rule, not only to get the highest price for the property but also to ensure fairness in the activities of the State and public authorities. They should undoubtedly act fairly. Their actions should be legitimate.
15. Their dealings should be above board. Their transactions should be without aversion or affection.
16. Nothing should be suggestive of discrimination. Nothing should be done by them which gives an impression of bias, favouritism or nepotism. Ordinarily these factors would be absent if the matter is brought to public auction or sale by tenders. That is why the Court repeatedly stated and reiterated that the State-owned properties are required to be disposed of publicly. But that is not the only rule. As 0. Chinnappa Reddy, J. Observed 'that though that is the ordinary rule, it is not an invariable rule'. There may be situations necessitating departure from the rule, but then such instances must be justified by compulsions and not by compromise. It must be justified by compelling reasons and not by just convenience."
17. ' A further argument of the learned counsel for the petitioner that the matter was not decided by the board has got some force as is evident that the matter for the grant of lease was never considered by the Board in any of its meeting. It is also noteworthy that respondent No, 2 was allotted the disputed land on 18-2-1991 and by that time the petitioner's bid was not rejected as he was intimated through letter dated 21-2-1991. This shows that respondent authority without rejecting the bid of the petitioner which was the highest one, has arbitrarily exercised its discretion.
18. A further argument that the petitioner has got back earnest money, as such, he has lost all his rights to maintain this writ petition, is also devoid of any force. This involuntary action on the part of the petitioner would not prejudice his case as the earnest money was returned by the respondent authority itself with the impugned letter. The petitioner immediately thereafter, challenged this action of the authority through this Constitutional petition. As such this involuntary receipt of earnest money shall not come into his way to maintain this petition.
19. Resultantly, for what has been stated above, the impugned letters dated 18-2-1991 as well as 21-2- 1991 of respondent No, 1 are declared to have been passed without lawful authority and of no legal effect. The case is remitted to respondent No, 1, who shall dispose of the same by giving full opportunity of hearing to the petitioner as well as respondent No, 2 within two months. There shall be no order as to costs in the circumstances of this case.