1. ' MRS. MAJIDA RAZVI, J.---The petitioner herein has filed this Constitution petition seeking directions that the respondents may be directed to act in accordance with law and to finalise the sale/transfer of shares, assets and management of Javedan Cement Limited (J.C.L.) to the petitioner-company in terms agreed and/or in terms normally followed by the Privatization Commission (Commission) and to further direct the respondents not to put to another auction the shares, assets and management of J.C.L. And/or to open or accept any bids or enter into any negotiations for the said purposes with any other person and restrain the respondents from taking any action in that behalf.
2. ' The brief facts, according to the petitioner, are that the Commission invited bids for the purchase of shares/assets along with the transfer of management of various units including J.C.L. Vide Public Notice, dated 31-8-1991. In response to the said Public Notice the petitioner submitted its bid for the purchase of J.C.L. Which were opened on 17-10-1991 and the petitioner's bid of Rs,51 per share, was the highest bid received by the Commission. The Commission, vide its letter, dated 24-11-1991 (Annexure B), informed the petitioner that the Government had decided that the petitioner being the highest bidder, should be provided an opportunity to raise its bid price to a minimum of 90 per cent. Of the reference price to enable the Government to declare the petitioner as the successful bidder. The said letter, dated 24-11-1991 is reproduced hereinbelow, the contents of which are very important in context of the present dispute: "M/s. Dadabhoy Investment Ltd.
3. ' Sub: Sale of 66.72 Shares of Javedan Cement Company Limited.
4. ' Dear Sir, ' You were the highest bidder for the subject unit during the bids opened on 17-10-1991. Your bid price of Rs,51 per share being less than 90% of reference price of Rs,111 per share is not acceptable to the Government to declare you successful for the subject unit.
2. The Government has decided that in view of you being the highest bidder, you should be provided an opportunity to raise your bid price to a minimum of 90% of the reference price.
5. However, as the unit for which you have bid is a unit which was taken over under Economic Reforms Order, 1972 and by virtue of the Transfer of Managed Establishments Order, 1978 (P.O. No,12 of 1978) as amended by the Transfer of Management Establishments (Second Amendment) Ordinance, 1991 (XXXIII of 1991), the previous owner has a right to match the price offered by you. You may kindly take this into consideration while improving your bid price.
3. In case you opt to raise the bid price as mentioned above, your revised offer must reach Privatization Commission within fifteen days of the date of this letter failing which your bid for the s, ject unit will stand rejected. Yours faithfully, (Sd.)
6. (M. MASIHUDDIN)."
7. ' In response to the above-quoted letter, the petitioners revised their bid to the extent of 90 per cent. Of the reference price, as stated above, and informed the Commission vide their letter, dated 7-12-1991 conveying acceptance of the conditions mentioned therein. This letter was received by the Commission within the time granted by it in the concluding para. Of the above-quoted letter. It is pertinent to note that the amount to earnest money in the sum of Rs, 1 million, which was sent along with the bid, was kept by the Commission till 18-10-1992 when, without assigning any reason, the bid of the petitioner was rejected and the pay order of Rs, 1 million was returned.
8. ' The petitioners, being aggrieved by the letter dated 18-10-1992, cancelling their bid without assigning any reason, made representation to the Commission vide their letter, dated 19-10-1992 and also returned the pay order of the earnest money of Rs, 1 million. The petitioner also made representation to the Prime Minister of Pakistan vide letter dated 21-10-1992, which was duly acknowledged by the Prime Minister's Secretariat vide letter, dated 27-10-1992 and the matter was referred to the Commission for examination of the petitioners' case and the Commission was directed to submit its report to that Secretariat at an early date.
9. ' However, the Commission vide letter, dated 25-10-1992, without giving any details of the case, again rejected the bid and also returned the pay order of Rs,1 million, being the earnest money, for the second time to the petitioner.
10. ' Mr. Abdullah of the petitioners' Company sought interview with the Chairman of the Commission wherein the entire situation was reviewed and reconsidered and the petitioner was assured that the bids for J.C.L. Would not be invited and that the transaction would be finalised after receiving the opinion from the Ministry of Law. In accordance with the assurance given by the Chairman, the name of J.C.L. Was excluded from the public advertisement which appeared in the newspapers on 9-11-1992, 11-11-1992 and 20-11-1992.
11. ' However, the Commission, all of a sudden, vide its advertisement of 2-4-1993 invited bids for several units including J.C.L. The petitioners immediately protested vide its letter, dated 7-4-1993 but received no reply from the Commission. On failing to receive any response, the petitioners filed the present petition praying to restrain the Commission from taking any further steps in regard to this disputed unit.
12. ' Mr. Abdul Hafeez Lakho, learned counsel for the petitioners, has referred to section 4 of the Transfer of Managed Establishments Order, 1978 wherein it is provided that the Federal Government may transfer the shares or proprietary interest in respect of a managed establishment acquired by it under Article 7-B of the said Order, to the specified persons and on the terms set out in the Schedule. He vehemently contended that the Government could not reject the bid of the petitioners after accepting the same, without assigning any reason. According to him, the letter, dated 24-11-1991 was very clear in giving the petitioners an opportunity to raise the bid as well as informing them that according to law the previous owner will also be given the chance to match the bid given by the petitioners and if these conditions were acceptable to the petitioners, they should inform the Commission of their acceptance within 15 days from the date of the letter or the, bid will stand rejected. The learned counsel has further contended that once the petitioners had accepted the terms mentioned in the said letter, and had informed the Commission within the stipulated time granted, their bid stood to have been accepted. It is also pointed out that though the original owners were given opportunity to match the bid but they did not come forward to do so. He has also contended that the last para. Of the advertisement that "the Commission has the right to reject any or all offers whatsoever without assigning any reasons thereof', can be read only in the context to the subject-matter and the discretion granted by this para. Has to be exercised cautiously, fairly, equitably and justly. He has placed reliance on the case of Amanullah Khan v. The Federal Government of Pakistan PLD 1990 SC 1092. In this case the Hon'ble Supreme Court while discussing discretion observed "wherever wide-worded powers conferring discretion exist, there remains always the need to structure the discretion and it has been pointed out in the Administrative Law Text by Kenneth Culp Davis (page 94) that 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, 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 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." In the case of Muhammad Iqbal Khokhar v. The Province of Punjab PLD 1991 SC 35, the Supreme Court has held that "discretion, even where outwardly appearing as absolute, will always be treated as qualified by the terms and spirit of the provision in which it occurs and by the object of the law".
13. ' The learned counsel for the petitioner has also replied to the respondents technical objection as to the maintainability of this petition for want of territorial jurisdiction as the Head Office of the respondent is located in Islamabad. According to him, since the cause of action arose at Karachi, which falls within the territorial jurisdiction of this Court, this Court has jurisdiction to take cognizance of the matter. He has also invited our attention to the advertisement calling for bids wherein a clause directs the "interested parties" to contact the Officer In charge of the plant for details and inspection of the plant offered for sale, which is also situated at Karachi i,e, within the territorial jurisdiction of this Court.
14. ' Mr. Sirajul Haq Memon, learned counsel for the respondent No,2, has taken a preliminary objection as to the maintainability of this petition. According to him, the petitioner does not lie as the petitioner has filed the same for the enforcement of contractual obligation. The learned counsel has drawn our attention to Article 13 of the Transfer of Managed Establishments Order, 1978, to be referred to as "the Order". To put the matter in proper perspective, the Article is reproduced herein below:--- "13.Bar of jurisdiction,---(1) No Court shall call in question or permit to be called in question any provision of this Order or any rule or order made or anything done or any action taken thereunder.
(2) No Court shall grant any injunction, or make' any order, nor shall any Court entertain any proceedings, in relation to anything in good faith done or intended to be done under this Order."
15. ' According to the learned counsel for the respondent No,2 under this Article the jurisdiction of the Courts has been barred and as such this Court has no jurisdiction to take up this matter.
16. ' In reply to the petitioners' arguments, the learned counsel has submitted that Article 4 of the Transfer of Managed Establishments Order, 1978 has been substituted and radically changed by an amendment through Ordinance XV of 1991. Transfer of Managed Establishments (Amendment)
17. Ordinance, 1991. The substituted Article is as under: "4. Transfer of shares and proprietary interests, etc.-(1) If the Federal Government considers it necessary in the public interest to transfer the shares or proprietary interests in respect of a managed establishment acquired by it under Article 7-B of the said Order, the Federal Government may, through a public advertisement, invite bids for the transfer of the shares or proprietary interests.
(2) On the receipt of bids in pursuance of an invitation under clause (1), the Federal Government shall offer the transfer of the shares or proprietary interest to the persons specified in the Schedule on the highest bid so received and on such terms and conditions as it may deem fit.
(3) If the persons specified in the Schedule do not accept the offer made under clause (2), the Federal Government may transfer the same to such persons and on such terms and conditions, as it may deem fit.
(4) In case of transfer of shares or proprietary interest in respect of a managed establishment under clause (2) or clause (3), the provisions of Articles 5, 6, 7, 8, 9, 10 and 11, and the Schedule to this Order shall not apply."
18. ' The said Ordinance was further amended by Transfer of Managed Establishments (Amendment)
19. Act, 1992 (Act V of 1992) by which the following proviso to Article 4 of the Order was added:-- "Provided that it shall not be necessary to make such an offer to the persons specified in the Schedule in case the highest bid has been made by the employees of the managed establishment."
20. ' According to him, this amendment has changed the complexion of the Order as apart from the original owners, other parties, including the workers of the said Unit have also been allowed to make bids/offers for the purchase/transfer of the Units.
21. ' It is further argued that sub-clause (3) of section 4 clearly authorises the Government to transfer the units to such persons as it may deem fit. As such, the Government has a discretion to accept or reject the bids given by the parties. According to the learned counsel, the advertisement under reference also mentions the 'workers' and as such the petitioners are not the only party and by giving them an opportunity to raise the bid, did not create any vested rights in their favour.
22. ' Mr. Memon has also pointed out that it is a matter of policy for the Government and, as such, the Government can take a discretionary action as it may deem fit.
23. ' In support of his above submission, Mr. Memon has relied upon the case of Lahore Improvement Trust v. The Custodian, Evacuee Property and others PLD 1971 SC 811, wherein it has been held as under: "Another principle attracted in the case is that before an order passed by a public authority is struck down it is the duty of the Court to explore every possible explanation for its validity and examine the entire field of powers conferred on the authority in pursuance to which the impugned order has been passed. See the Chairman, East Pakistan Railway Board, Chittagong and another v.
24. Abdul Majid Sardar, Ticket Collector PLD 1966 SC 725. It was remarked in this judgment: ' Acts performed and orders made by public authorities deserve due regard by Courts and every possible explanation for their validity should be explored and the whole field of powers in pursuance to which the public authorities act or perform their functions examined and only then if it is found that the act done, order made or proceeding undertaken is without lawful authority should the Courts declare them to be of no legal effect.
25. ' To satisfy the requirement of this rule it is the duty of the Court to examine the entire record pertaining to the action taken, order passed and proceedings undertaken which are challenged as without lawful authority under Article 98 of the Constitution. Otherwise grave miscarriage of justice may take place in the exercise of this beneficial jurisdiction. The objection raised by Mr. Ghias Muhammad that the appellants or the Court suo motu could not make resort to any document on the record of the Collector, the Trust and the University which was not relied upon in the High Court has, therefore, no substance'."
26. ' We have gone through the facts of the above case and find that these are entirely different from the facts of the case in hand and have no bearing on the matter.
27. ' The learned counsel for the respondent No,2 has drawn our attention to para.5 of his counter- affidavit in which he has taken the plea that "the Commission has the right to reject any or all offers whatsoever without assigning any reason thereof." He has also pointed out that the bidding documents also bear a clause that "the Government reserves the right to reject all or any of the bids made or to accept any bid which may not be the highest, without assigning any reason whatsoever. The decision of the Government shall be final and binding on the parties."
28. ' The learned counsel has also drawn our attention to para. 6 of the counter-affidavit wherein he has taken the plea that giving an opportunity to the petitioner to raise the price to 90 per cent. Of the reference price, does not mean that the Government had accepted the said offer. In para. 20 of the counter-affidavit, he has also mentioned that no action on the public notice of 7-4-1994 is being taken as the same has been postponed and therefore fresh dates would be advertised later.
29. ' Mr. Memon has vehemently argued that the letter, dated 7-12-1991 from the petitioner to the Commission is not an acceptance letter, neither quantitatively nor qualitatively. In this behalf he has relied on the case of Mian Rasool Bux Khan Sundrani & Co. v. Peoples Municipality Sukkur and others PLD 1975 Kar. 878, wherein it has been held as under: "....It is well settled that Courts while exercising extraordinary jurisdiction do not issue orders or directions for the enforcement of contractual obligations, nor can this jurisdiction be allowed to be used for the purpose of determining and enforcing such rights."
30. ' The learned counsel has also relied upon the following cases:
(1) Munshi Muhammad and another v. Faizanul Haq and another (1971 SCMR 553 at 534);
(2) Shamshad Ali Khan v. Commissioner, Lahore etc. 1969 SCM R 122;
(3) Millat Tractors Employees Trust and 2 others v. Government of Pakistan. PLD 1992 Lah. 68;
(4) Sandal! Fibres Limited v. Government of Pakistan and otr.i I D 1992 Lah. 400;
(5) Muhammad Iqbal Khokhar and others v. The Government of the Punjab and others PLD 1991 SC 35.
31. ' In the above first case the Confirming Authority did not accord approval to the auction held for the disputed plots of land and as such, the land was transferred in favour of the respondents. It was held by the Court that the petitioners were not clothed with any right in auction property and had, therefore, no locus standi to challenge the transfer, competently made by the settlement authorities in favour of the respondent. According to the terms and conditions of the auction, the highest bids offered were subject to approval of the Additional Settlement Commissioner concerned who may or may not accept the bids without assigning any reason for his action. In the present case the admitted fact is that the Government had given an opportunity to the petitioner to revise its bid and had also given a time frame to accept the same, which the petitioner had accepted within time. As such, this case is also distinguishable.
32. ' In the second case the facts were that the petitioner M/s. Khan & Co. Filed a petition for enforcement of his claim for lease of a plot. The claim was based on a letter, dated 18th August, 1959 which was addressed by the Municipal Corporation, Lahore to M/s. Standard Vacuum Oil Co., informing it that the Corporation had agreed to the lease of the plot in question in its favour. This letter was later on withdrawn by a subsequent letter, dated 29th August, 1960 for the reason that the plot in question being a grassy plot, could not be given to the Company. The High Court dismissed the petition and held that "no right is disclosed in the petitioner to get the lease in question, as the initial agreement which was subsequently withdrawn was between the Corporation and the Standard Vacuum Oil Company, without the petitioner being a party to it. The Supreme Court, while dismissing the petition for leave to appeal, held as under: "We feel that the writ petition filed by the petitioner was misconceived. At the highest it was a case of a breach of agreement for which the remedy did not lie in the writ jurisdiction of the High Court."
33. ' In the present case the petitioners have already stated that they have not filed the petition to enforce the contract.
34. ' In the third case, referred to by the learned counsel, the question involved was as to who represented the majority of employees as two different groups of employees participated in the auction and offered bids for purchase of 51 per cent. Shares/net assets of the Millat Tractors Limited. The Court held that the "question as to who represented the majority of employees being disputed question of fact, determination whereof could not be undertaken in Constitutional jurisdiction".
35. ' In the fourth case, it was held that "there cannot be any doubt that a Constitutional petition cannot be maintained to enforce contractual rights unless it is shown that there has been some violation of any statute or rules having the force of law. No such question arises in the present case.
36. This petition is therefore not maintainable".
37. ' The above fifth case is also not relevant to the present case.
38. ' Mr. Abdul Hafeez Lakho, in reply to the above contention of Mr. Memon regarding the maintainability of the petition, has submitted that in the case reported in PLD 1992 Lahore 68, it was not the petitioner who was the highest bidder 5ut the respondent No,4 and as such the case is distinguishable from the present one. He has also argued that in the present case the petitioner is not seeking enforcement of the contract but is seeking relief against the rejection of his bid by the executing authority without assigning any reason which is unjust, unfair and arbitrary. He has also submitted that in the present case there was no competition with the workers as the amendment came subsequent to the present dispute. He has also reiterated that the said letter dated 7-12-1991 is clearly an acceptance letter and the respondent No,2 has already accepted the offer on 'as is where is basis'. In support of his submissions he had relied on the cases of. (i) Maniar Industries (Pvt.) Limited v. Sindh Industrial Trading Estate Limited (1992 CLC 2329) and (ii) Abdullah & Company v. The Province of Sindh and others (1992 M LD 293).
39. ' In the case of Maun air Industries (supra) respondent No,2 had taken a preliminary objection as to the maintainability of the petition on the ground that under its Constitutional jurisdiction, this Court will not enforce contractual obligations. The learned Judge in Chambers held as under: "12. The preliminary objection raised by Mr. K.B. Bhutto has no substance. No contractual rights are being enforced. Petitioner has challenged the arbitrary and unreasonable decision of SITE to allot a part of Nallah in a manner not warranted by law.
13. In our view, in the circumstances, the ex parte decision to allot the Nalla without there being any rational basis available on record to change the stand taken earlier by SITE and without hearing the parties likely to be affected, including the petitioner, being arbitrary and unreasonable, is without lawful authority and of no legal effect."
40. ' The upshot of the above is that in view of public interest the executive authority could not be allowed to change its stand in an abrupt and arbitrary manner.
41. ' In the case of M/s. Abdullah & Company (supra), relied upon by the learned counsel for the petitioner, the petitioners had challenged the award of the contract of octroi collection of Dewan Sugar Mills of Union Council, Darya Khan Soho to respondent No,3 on the ground that no auction had taken on any date and the award of contract in favour of respondent No,3 was mala fide and also illegal. In this case, while discussing the points raised, it was held: "We may not be taken to hold that the Government did not have the power to withdraw the letter dated 11-5-1991 but, in our view, this power or discretion which effected individual rights was required to be exercised in a fair, reasonable and just manner. An executive discretion which affects private rights cannot be exercised at the whims of the executive authority. It must have a basis and such basis must be reasonable, fair, and just in the circumstances of the case."
42. In the present case it is an admitted fact that the petitioners are not, or have not, filed the present petition for the enforcement of contractual obligations but is only seeking relief against the actions of the executive authority which according to the petitioners, are unjust, unfair and arbitrary.
43. ' After hearing the arguments and going through the case-law submitted by both the learned counsel, we are of the view that no doubt the Government reserved to itself the discretionary power to accept or not to accept the bid but while rejecting the same the Government is expected to act justly, fairly and reasonably, which in the present case was not so.
44. ' It is settled law that the discretion vested in the authority is to be exercised judiciously and not arbitrarily. Exercise of such discretion against the subject shall be based on sound principles of justice, equity fairness and in accordance with the spirit of the provision in which it occurs and shall not be merely at the whims of the authority. In the present case the respondents have not shown if the said discretion was exercised judiciously keeping in view the above principles.
45. ' In view of the above, we allow the prayer (b) of the petitioners and direct the respondents not to put to any other auction the shares, assets and management of Javedan Cement Limited and/or to open or accept any bids or enter into any negotiations for the said purpose with any other person except the petitioner. The petition is allowed to the above extent with no order as to costs.