1. ' NAZIM HUSSAIN SIDDIQUI, J.---The petitioners have challenged the order dated 5-3-1994 of the respondent No, 2, whereby a Committee was constituted to negotiate and finalise implementation agreement with the respondent No,3 regarding establishment of Container Terminal at Port Qasim.
2. The facts relevant for decision of this petition are as follows: ' The respondent No,2, which is a statutory authority and has been established under section 4 of the Port Qasim Authority Act, 1973 as a body corporate, had, in July, 1992, invited proposals for the development of an integrated container terminal on Berth Nos. 5 to 7 of Port Muhammad-BinQasim and only two formal proposals were received which were found inadequate and were rejected.
3. Thereafter, proposals were re-invited for the project on Boo (Build Own and Operate) basis. The respondent No,2 acquired the services of National Engineering Services Pakistan (Pvt.) Ltd.
4. (NESPAK), which is an independent authority, in April, 1993 to evaluate the proposals so received.
5. Amongst others, the petitioners and respondent No,3 submitted their bids/proposals for the said project. After the scrutiny of proposals of all the bidders the bids/proposals of the petitioners and respondent No,3 were shortlisted for final consideration.
6. ' It is the case of the petitioners that the respondent No,1 had directed the respondent No,2 that the petitioners and the respondent No,3 may be asked to improve and upgrade their proposals by providing them copies of model agreement. The petitioners have claimed that the respondent No,2 neither asked the petitioners to improve their proposals nor provided them with a copy of model agreement. According to the petitioners, the respondent No,2 contrary to the direction of the respondent No,1, had constituted a committee comprising of its six Officers to negotiate and finalise the Implementation Agreement with the respondent No,3 regarding construction of said project. The petitioners have asserted that since the respondent No,2 is dealing with public money it is not open to it to award contract to the respondent No,3 worth million of rupees, without affording fair opportunity of competition to the petitioners. Accordingly, the petitioners prayed for the following reliefs:-
(a) Declare that the order passed by the respondent No,2 on March 5, 1994, marked 'F', is without lawful authority and of no legal effect and quash the same.
(b) Declare that the respondents Nos. 1 and 2 cannot award the contract by excluding the petitioners who are anxious and willing to compete.
(c) Declare that the respondents Nos.1 and 2 cannot award the work to the respondent No,3 without allowing the petitioners to compete.
(d) Direct the respondents Nos.1 and 2 to award the works after the petitioners have been allowed to improve and upgrade proposals and after the same are considered by the respondents Nos.1 and 2.
(e) Prohibit the respondents Nos.1 and 2 from negotiating, finalising and/or implementing the agreement with the respondents Nos3 And/or direct the respondents Nos.1 and 2 to cancel any such agreement made with the respondent No,3.
(f) Prohibit the respondents Nos. 1 and 2 from allowing the respondent No,3 to commence the works.
(g) Grant any other relief which this Hon'ble Court deems just and proper in the circumstances of the case.
(h) Grant costs of the petition.
7. ' The case of the respondent No,2 is that it is an autonomous body and control of respondent No,1 is only to the extent of determining 'Policy Matters' as laid down in Port Qasim Authority Act. It is also the case of this respondent that it made first attempt of establishing the Container Terminal in May, 1993 and selected a consortium consisting of Al-Ghurair and others for the job, but ran into difficulties because of the lack of expertise, will, and commitment on the part of Al-Ghurair, who eventually abandoned the project. It is alleged that in this way a great loss was suffered by the Port Qasim Authority in terms of money and also due to the fact at the establishment of terminal has been delayed by almost about five years. The respondent No,2 appointed (NESPAK) as Consultants to rate various proposals submitted by the bidders and to determine their order of merit. It is the case of this respondent that NESPAK had rated the proposals of respondent No,3 as first and that of the petitioners as second. Thereafter, the report of NESPAK was sent to the respondent No,1 for information and the latter wrote a letter dated 29th July, 1993. The respondent has claimed that tenor of this letter is merely advisory and not directive. According to above letter, the proposals of both the parties viz. The petitioners and respondent No,3 were deficient and needed improvement in line with the model agreement prepared by the respondent No,2 with a view to give an equal chance and fair competition to the parties.
8. ' The respondent No,2 has claimed that it felt that the objectives of fair competition and giving of equal chance would be better met not by inviting the two competitions to submit improved proposals, but by having existing proposals scrutinized by an accredited Committee of experts.
9. Accordingly, a Committee of six qualified persons was constituted to examine various bids and NESPAK's report. The Committee rated the respondent No,3 as the first and the petitioners as the second and recommended that the proposals of the respondent No,3 be accepted and letter of intent be issued to them. The Committee's report was then placed before the Board of respondent No,2, which approved the Committee's recommendation vide Board resolution No,2547 dated 3rd January, 1994. Thereafter, a draft letter of intent (LOI) for the respondent No,3 was prepared and was submitted for approval to the respondent No,1. The respondent No,1 approved the letter of intent with certain modifications, which were duly incorporated in the letter of intent and it was finally issued to the respondent No,3 vide letter dated 6-2-1994. Negotiations for the terms and conditions of the contract on Build, Own, Operate (BOO) basis were commenced between the respondent No,2 and respondent No,3 on 19-3-1994 and were nearing completion. The respondent has maintained that the entire process is as transparent as possibly it could be.
10. ' The counter-affidavit of the respondent No,3 is also on the same lines as that of the respondent No,2.
11. ' Mr. Mukhdoom Ali Khan learned counsel for the petitioners contended that the respondents Nos. 1 and 2 are not free like private individualls in their contracts dealings and since emergence of Government as a major source of wealth, the grant, denial, revocation and administration of all types of Government largess shall be subject to scrupulous observance of fair procedure and denial of any individual's right on the basis of undisclosed or partly disclosed reason shall, as a rule, be struck down. According to the learned counsel, when the question of survival of valuable right of any individual arises, there is no justification for keeping alive arbitrary procedure as has been done in this case. In support of these contentions, he cited (1) Pacific Multi-national v. I.G. PLD 1992 Kar. 283; (2) Abdullah & Co. v. Province of Sindh 1992 M LD 293; (3) Jones v. Swansea (1989) 3 All ER 162; (4) Balckpool. Fylde Aero Club Ltd. v. Blackpool Borough Council (1990) 25 All ER; (5)
12. Guruswa my v. State of Maysore AIR 1954 SC 592; (6) Ras Bihari v. State of Orissa AIR 1969 SC 1081; (7)
13. DFO South Kheri v. Ram Shone AIR 1973 SC 205; (8) Remana v. IAA AIR 1979 SC 1628. In Pacific Multi national's case, it was held by a Division Bench of this Court that although the enforcement of a purely contractual obligation could not properly form the subject-matter of proceedings under Article 199 of the Constitution, however, it could not be ignored that the State had a Constitutional obligation to act fairly, even when performing an administrative function. Further, it, was observed that if the Court was satisfied that the Government while entering into a contract had acted arbitrarily, or in an unfair manner, or had discriminated between the parties before it in matters of awarding the contract, it could interfere and strike down such action.
14. ' In Abdullah's case, the question before the D.B. Of this Court was regarding auction for collection of Octroi. Contract for collection of octroi was awarded to the respondent company in a surreptitious manner on the basis of mock-auction. It was held that since the authority concerned acted in an arbitrary, unjust and unfair manner, the petitioner was entitled to relief in Constitutional petition.
15. ' In Jone's case, it was held that in case of abuse of a public office by a public authority, action was maintainable if malice was established.
16. ' In Blackpool's case, it was held that in case of improper cancellation of bid, remedy was by way of writ.
17. ' In Ras Bihari's case, Government invited offers for advance purchase only from purchasers during_ previous years, who had carried out their obligations to the satisfaction of the Government in preference to open competition. It was held that the action of the Government was not valid in law, and the fundamental rights were violated.
18. ' In DFO South Kheri's case, it was observed that where the action of a public authority invested with statutory powers is challenged, the writ petition is maintainable even if right to relief arises out of an alleged breach of contract.
19. ' In Ramana's case, tenders were called for running a Restaurant and Snack bar at Airport. It was held that the concerned authorities could not accept tenders of a person who did not fulfil the requisite qualifications.
20. There can be no cavil with the above propositions nor Mr. M. Shaiq Usmani learned counsel for the respondent No,2 has challenged any of them. These are indeed, settled principles of law, which hold the field in respect of control of administrative discretion. The question for consideration with reference to the facts of the case is as to what extent the Court can review the merits of the exercise of a statutory discretion, which is neither subject to appeal, nor restricted by any express provision of Port Qasim Authority Act, 1973. No doubt the exercise of statutory discretion directly affecting individual's interest is invariably reviewable, but the Courts have declined to substitute their own discretion for that of an authority where the discretionary power was not arbitrarily exercised. This is for the reason that an authority in which discretion is vested can be compelled to exercise its discretion but not to exercise it in any particular manner. In the instant case, the respondent No,2 had done, whatever possibly could be done in fair exercise of its discretion, particularly keeping in view the prime object of the project for which the proposals were invited. No illegality was done, nor arbitrary procedure was followed. The entire transaction was transparent from its beginning till its end.
21. ' Learned counsel for the petitioners next argued that principles of natural justice were not followed by the respondent No,2, in spite of clear direction of the respondent No,1 to the respondent No,2 that the petitioners and respondent No,3 may be asked to improve and upgrade their proposals by providing them copies of model agreement, yet so was not done, and instead, the respondent No,2 constituted a committee comprising of its six officers to negotiate and finalise the implementation of agreement with the respondent No,3 regarding construction of said container terminal on BOO basis. We did not find any violation of principles of natural justice in this case. The model draft agreement was supplied by the respondent No,2 to the petitioners and so has been admitted by them in Annexure '13' (reply to queries). The Committee was formed on 20-7-1993, whereas the letter of the Government advising the respondent No,2 to ask the petitioners and respondent No,3 to improve and upgrade their proposals is dated 29-7-1993. It being so, it cannot be said that the Committee was hurriedly formed to obliterate the advice contained in said letter. Besides the tenor of said letter, prima facie, is advisory and not directive. NESPAK in detail examined the proposals of the petitioners on factors, such as terminal lay out, structure up gradation and modification, expansion prospects, operator's qualification, equipment and facilities, staff and training, marketing, financial etc. All these factors were again examined by the Board of respondent No,2, committee of experts, and finally by the Government and all concurred with the finding of NESPAK.
22. In a situation like this, when evaluation of proposals was done on the basis of written information provided by the petitioners themselves, the personal hearing at every stage of examination of those proposals was neither necessary, nor justified, and principles of natural justice on that count cannot be said to have been violated. The administrative adjudication is mostly done by informal process. The written representation in a case, like the present one, is sufficient compliande of the principle of natural justice. In any case the petitioners were heard at length when they appeared before NESPAK.
23. ' Mr. Mukhdoom Ali Khan learned counsel for the petitioners submitted that if the petitioners would have been given an opportunity to improve and upgrade their proposal probably they would have offered much better terms than the respondent No,3.
24. ' Mr. Shaiq Usman learned counsel for the respondent No,2 submitted that the respondent No,2 is more interested in the construction of container terminal of international standard. According to him, compared to the petitioners, the proposals submitted by the respondent No,3 are well- researched, comprehensive, and technically the best. He also submitted that the respondent No,2 being the owner of the project is within its rights to see that the project is constructed by the most experienced persons. According to NESPAK report, the respondent No,3 seems to have full comprehension of the project, and have the experience and expertise to implement and operate a container terminal of international standard. It is evident from this report that the respondent No,3 has submitted the proposals in association with a sister-concern Meckinnon Meckenzie & Co. Of Pakistan Limited, Cullen Grummite & ROE and Pak-Aust, Pakistan. The P & 0 Australia Ltd. Is the most experienced concern in Port privatisation throughout the world. Their activities range from container shipping, material, handling, container terminal operation etc. Worldwide, and Cullmen Grummite offers full services of planning and design of ports and harbours. According to the said report, the group represented the strongest credential as prospective terminal operators at Port Qasim and their worldwide experience and expertise would be an asset to the Port Qasim Container Terminal. NESPAK report about the petitioner states that they have no experience in container handling. According to this report, although the petitioners have shown Port of Rostock Germany and Port of Colombo Srilanka as their associates but details about these two Organizations were not provided to NESPAK. a fax from Colombo Port included in the proposals of the petitioners was found totally non-committal, and a report of Rostock indicates that they do not have experience in operating container terminal. It is significant to note that findings of NESPAK have not been challenged by the petitioners nor there is any allegation of NESPAK being favourably inclined towards the respondent No,3. In fact, there is no allegation against the respondent No,3 either. For valid reasons the respondent No,2 was not satisfied with the technical experience and expertise of the petitioners, who were not in a position to compete with the respondent No,3. It being the factual position, nothing comes out to establish that any illegally was done by the respondents Nos. 1 and 2 in not awarding the contract to the petitioners.
25. ' Learned counsel for the petitioners criticised the report of the Committee which was constituted to evaluate/examine the report of NESPAK. He submitted that the Committee followed the guidelines provided by NESPAK and did not submit the report on the basis of its own evaluation. The Committee in the last para. Of its report submitted as follows:-- "B. Since M/s. P & 0 have been judged and ranked No,1 Both by NESPAK's evaluation as well as by the PQA Committee's Evaluation, it is, therefore, submitted that a conditional letter of intent may be issued to M/s. P & 0 Group to further hold detailed negotiations with them to finalise the terms and conditions of implementation agreement of container terminal project.
26. C. In case of breakdown of negotiations and unwillingness by M/s. P & 0 Group to accept the laid down terms and conditions of our Draft Model Agreement, then PQA may call the other proposers according to their ranking for negotiations in this regard."
27. ' It appears that the report of the Committee was examined by the board of respondent No,2 and finally by the Government. The fact that the Committee was constituted by itself suggests that the respondent No,2 wanted to thoroughly examine the proposals of the petitioners and the respondent No,3 before taking final decision in the matter. It being so, the criticism on the report of the Committee is of no use.
28. ' In consequence, we do not find any merit in this petition, and the same is dismissed.