MIAN ALLAH NAWAZ, J.---This Constitutional petition by M/s. Calicon (Pvt.) Ltd., herein petitioner, raises an important question relating to interpretation of Article 173(1) of the Constitution of Islamic Republic of Pakistan, 1973, as to whether an Act of appropriate legislature is sine qua non for the exercise of executive authority for the purpose of sale, disposal of properties, owned by the Federal Government or Provincial Government and whether the Federal Government had framed Rules providing for structuring of discretionary jurisdiction in matters of privatisation.
2. The facts giving rise to this Constitutional petition are, fortunately, not much in dispute. These are; that the petitioner is a private limited company incorporated under the provisions of Companies Ordinance, 1984 (hereinafter shortly stated as Ordinance). It was incorporated in 1995 with a paid- up share capital of Rs.5 lacs. Respondent No. l is Federal Government while respondent No.2 is Privatisation Commission. Respondent No.2 are State Cement Corporation of Pakistan Ltd.
(hereinafter stated as S.C.C.P.) and D.G. Khan Cement Company Ltd. (hereinafter referred to as the "DGKCL"), respectively. Both these companies i.e. Respondents Nos.3 and 4 are also incorporated under the "Ordinance". It will not be out of place to mention over here that the "DGKCL" was set up by the Federal Government of Pakistan. Its shares are wholly owned by the SCCP, which is also a State-owned, managed and controlled Corporation being run through the Federal Ministry of Production. The dispute in this petition relates to the sale of controlling shares of the ' DGKCL' by the Federal Government, through Privatisation Commission (hereinafter referred to as 'Commission').
Respondent No.5 Pak Land Cement is one of the tenderers/companies.
3. The case of the petitioner, shortly stated, is that respondent No.4 was set up by the Federal Government. It was wholly owned by the Federal Government through instrumentality of S.C.C.P.
Which was also a State-owned agency. Neither the S.C.C.P. Nor the D.G.K.C.L. Were listed Companies for the purposes of Stock Exchange.
4. By notification dated 22-1-1991 the President of Pakistan constituted Commission with following terms of reference:--- (i)To invite application for the total or partial privatisation of public sector industries and enterprises and ensure widest possible participation; (ii)To evaluate bids received according to criteria prescribed by Government and formulate recommendations for consideration by Government; (iii)To recommend to the Government such labour/manpower rehabilitation programme as may be necessary whilst privatising units and to develop a roster of such employees who may need rehabilitation or develop plans which can enable employees to adopt self employment on the basis of small financing; (iv)To advise the Government for implementing a development programme for improvement of public sector units till their privatisation; (v)To assist in the implementation of Government policies on deregulation and privatisation and advise the Government on deregulating the economy to the maximum possible extent; and
(vi) To review and recommend measures for the revival and rehabilitation of those industries which are shut down and are under the control of the N.C.Bs. And D.Fs.
This Commission issued an invitation through advertisement in daily 'DAWN' dated 14-10-1991, inviting individuals,- groups, Companies, Corporations and Firms to make their offers for the purchase of shares/net-assets of the DGKCL. Pursuant to this notification, the petitioner as well as other bidders obtained necessary documents on 10-10-1991. The petitioner submitted his tender.
The tenders received by the Commission were opened in the presence of petitioner and eight other bidders. Offer made by the petitioner was the highest, which will be amply reflected by the chart of offers which is as follows:--- RANKING NAME PERSHARE VALVETOTAL AMOUNT First Calicon (Pvt.) Ltd. Rs. 359 1,799,677,000 SecondPakland Cement Ltd. Rs.269 1,348,497,000 Third First Interfund Mod. Rs.250 1,253,250,000 FourthTariq Saigol & AssociatesRs.229.5 1,150,517,925 Fifth Dr. Gaith Pharon. Rs.225 1,127,925,000 Sixth Karan Khan & AssociatesRs.150 751,950,000 SeventhRainbow Rs.130 751,690,000 Eight Fauji Foundation Rs.114 571,482,000 NinethDera Management GroupRs.109 546,417,000
5. In pursuance of this exercise, the Commission accepted the offer and issued letter of intent dated 26-10-1991. This letter, was withdrawn and subsequently was followed by another letter, dated 3-11-1991 making some minor clarification therein. The petitioner was communicated to deposit 26 % of the offer within 30 days of the receipt of the letter, and then to deposit further 14 % at the time of execution of agreement and had to furnish security for remaining 60% of the offered amount. Since then erupted some serious differences between the Commission and the petitioner with respect to certain terms of letter of intent received by the petitioner who did not deposit 26% and instead asked the Commission to remove the Managing Director of respondent No.4 in order to ensure the smooth finalisation of sale transaction. It was complained that the petitioner had purchased the share of respondent No.4 on "as is where is" basis as an on-going concern and the Managing Director was making an attempt to diminish the assets of respondent No.4. It was further alleged that the Managing Director of respondent No.4 had transferred Rs.8,35,50,000 as dividends of respondent No.3. It was quite contrary to the letter and spirit of letter of intent. A letter was addressed to the Commission on 30-11-1991 but without any fruit. On 1-12-1991, there was a meeting between the petitioner and respondent No.2, which failed to yield any result. Letter after letter was sent to the Commission which failed to give any attention to them. On 11-12-1991, the Commission sent a memorandum of rejecting the offer of the petitioner. The earnest money deposited by the petitioner amounting to Rs.1 million, was also forfeited. The petitioner was informed that the bid of second tenderer was accepted. The Court was further informed that even the offer of the second- bidder i.e. The Pak Land Cement, had also been rejected on account of default of payment of 26% of the offered amount within the prescribed period.
6. The arguments put forth by the learned counsel for the petitioner can be conveniently summerised as follows: -- Firstly (a) that respondent ~o.4 (DGKCL) was wholly owned, managed and controlled by respondent No.3, who was also wholly controlled, managed and owned by the Federal Government. On the strength of this uncontradicted circumstance, it was argued that the Federal Government under Article 173 'of the Constitution had no power to make the sale of the property in the absence of appropriate legislation by the Parliament.
According to him the act of legislation is prerequisite for the exercise of executive authority by Federal Government for the purpose of sale/disposal of public property. Since admittedly there was no legislation by appropriate legislature, the Federal Government had no authority whatsoever to initiate the process of sale of its property. According to the learned counsel the exercise from commencement to finish was wholly invalid. Elaborating this contention further, the learned counsel' placed reliance upon Brochure titled "'Privatisation Policy and Implementation" (Annexure E'.) According to the learned counsel on this Brochure it was specifically stated that the Government had the necessary legal frame-work in support of Privatisation Policy. Furthermore the learned counsel sought help from various legislative instruments namely; WPIDC Ordinance, 1962 read with Act XXVIII of 1974 and section 3 of Evacuee Property and Displaced Persons Laws (Repeal)
Act, 1975 (Act XIV of 1975), Banks Nationalisation Act, 1974, Economic Reforms Ordinance, 1972 read with Transfer of Managing Establishment Order, 1978, Hydrogenated Vegetable Oil Industry (Control and Development) Act, 1973 read with Ordinance XXXV of 1991 and Pakistan Maritime (Shipping and Control) Act, 1974. These Acts showed that the Federal Government had been making the sale/disposal of its properties under the law, which demonstrated that under Article 173 an Act of appropriate Legislature was a must.
(b) The learned counsel also placed emphasis on the words used 'subject to any' to show that the Act of Legislature was necessary for the exercise of executive authority by the Federal Government under Article 173 ibid. It was stated that 'any' means 'one or some' but manifestly not none'. Relying upon the meaning given the word 'any' in Muhammad Sharif and 41 others v. Government of West Pakistan and 92 others PLD 1972 Lah. 858 it was canvassed that the use of word 'any' in Article 173(1) showed that the framer of the Constitution intended that the property of Federal Government should not be disposed of at the whims or caprice of the Federal Government and without any appropriate legislation. Help was sought from the meaning of the word 'subject' given in K.R.C.S. Balakrishna Chetty and Sons & Co. v. The State of Madras AIR 1961 SC 1152, to support the submission noted above: Secondly; that the Commission had no authority under the law to reject the offer of the petitioner.
According to the learned counsel the Commission was constituted most probably under the provisions of Pakistan Commission of Inquiry Act, 1956. This institution was constituted in order to make preliminary inquiry. As such the Commission had illegally and incorrectly rejected the offer of the petitioner. According to the learned counsel, in the light of these submissions, it should be declared that the offer of the petitioner was still pending decision.
Thirdly; that the total shares of respondent No.4, were owned by respondent No.3 which was a State-owned Corporation. According to the learned counsel respondents Nos.3 and 4 were, therefore, the sole proprietorship and not a Corporation/Company incorporated under the provisions of the Ordinance on the doctrine of lifting of veil of incorporation. Reliance was placed on the rule laid down in Ramana Dayaram Shetty v. The International Airport Authority of India and others AIR 1979 SC 1628 and Fauji Foundation and another v. Shamimur Rehman PLD 1983 SC 457.
According to the learned counsel the sale, in fact, was not of the shares of respondent No.4 but of its net assets.
Fourthly; it was suggested without conceding that if under Article 173(1) ibid, no legislation was required then even the Federal Government will be required to frame necessary Rules/Instructions in order to structure its discretion in order to ensure the confidence of the public at large where the owner of the property was the Federal Government. Reliance was placed on Ittefaq Foundry v.
Federation of Pakistan PLD 1990 Lah. 121 and Chairman, Regional Transport Authority, Rawalpindi v.
Pakistan Mutual Insurance Co. Ltd., Rawalpindi PLD 1991 SC 14.
Fifthly; it was lastly contended that even the Act of the Commission in rejecting the offer of the petitioner suffered from the principle of unfaigiess. According to the learned counsel the offers were called for by the Commission through Advertisement dated 14-10-1991. This was totally devoid of details regarding valuation of shares, curtail of net--assets of the project, the prospective terms of agreement, the mode of the payment. All these details were left to whims of the Federal Government/Commission. Before the execution of the agreement, the Managing Director of respondent No. 1, transferred Rs.8,35,50,000 to the account of respondent No.3 which was contrary to letter of intent as the petitioner had made an offer for the project on "as is and where is" basis. In short, the petitioner's offer was dealt with capriciously, whimsically, and unreasonably. In view of this conduct, the action of the Commission could not be sustained. Reliance was placed on Rashid A. Khan v. West Pakistan Railway Board, Lahore through its Chairman and another PLD 1973 Lah. 733 and Ramana Dayaram Shetty v. The International Airport Authority of India and others AIR 1979 SC 1628.
7. On the contrary, the arguments on behalf of respondent No.2 were led by Raja Muhammad Akram, Advocate. The Attorney-General of Pakistan, despite intimation/notice, did not enter appearance on account of reasons unknown to us and we could not have the benefit of his assistance. Mr. Muhammad Khalid Alvi, the learned Standing Counsel, for the Federal Government at Multan, communicated to the Court that he will argue on behalf of the Federal Government on the instructions of the learned Attorney-General. He further stated that he would adopt the submissions made by the learned counsel for respondent No.2.
8. The arguments advanced by Raja Muhammad Akram, Advocate in reply to the learned counsel for the petitioner, can also be briefly described as follows: (i)It was stated without any reservation that respondent No.4 was set up by the Federal Government and its, shares were owned by the SCCP which is a Public Ltd. Company whose shares are owned by the Federal Government of Pakistan. It was further pointed out that the Commission was constituted by the President of Pakistan not under the Pakistan Commission of Inquiry Act, 1956 but under Article 173 of the Constitution. The function of the Commission was specifically described in the notification of its Constitution. The Federal Cabinet had decided to sell the shares of respondent No.4 by inviting tenders. Pursuant to this decision, the Commission invited offers from the persons described in the advertisement. The offers were opened in the presence of all the tenderers including the petitioner on 17-10-1991. The offer of the petitioner being the highest was accepted and the letter of intent was issued to him on 26-10-1991/3-11-1991, requiring him to pay 26% of the amount within 30 days in accordance with the decision of the Federal Cabinet. The petitioner defaulted, therefore, in accordance with the decision of the Cabinet the Commission communicated to the petitioner rejection of his offer and negotiations were commenced with respondent No.5, which was next bidder. He was asked to raise his offer to the highest offer.
Respondent No.5 accepted the offer but failed to pay 26% in accordance with the terms of the offer and so the Federal Cabinet decided to reject the offer by the second highest bidder as well.
Negotiations are -being carried with third highest bidder. After giving this factual background the learned- counsel contended that the executive authority of the Federal Cabinet to make sale of its property was not dependent upon any legislation. Reliance was placed on R.I Sahib Ram Jawaya Kapur and others v. The State of Punjab AIR 1955 SC 549 and Haji T.M. Hassan Rawther v. Kerala Financial Corporation AIR 1988 SC 157.
On the basis of the rule laid down in the aforenoted authorities,, it was emphasised that the Federal Government, needed no legislative sanction for exercise of the executive power of making sale of its properties under Article 173(1) ibid. (ii)That even otherwise if it was assumed tha t the legislation was necessary then the Income Tax Ordinance, 1984 was in the field. The Commission receives the offers and after due inquiry, it processes the offers to the Privatisation Committee of Cabinet (hereinafter stated to be PCC), who is entitled to accept or reject an offer and then ultimately the agreement is executed by the owner/company.
(iii)That the doctrine of lifting the veil of incorporation was hardly applicable to the facts and circumstances of this case. Similarly the Economic Reforms Order as well as the other Acts relied upon by the learned counsel for the petitioner had no bearing on this case. Reliance was placed on an unreported judgment of the Division Bench of this Court titled Cement Industries Employees'
Union v. The Federation of Pakistan (W.P. 11445 of 1991).
(iv) As regards the status of the Commission, it was admitted with candour that the Commission had no power to accept or reject the offers made by the tenderers. Its duty was to forward the offers to PCC which had the sole authority to accept or reject the offers.
(v) It was further contended that the PCC had evolved a mathematical, fool-proof procedure for the purposes of transfer/disposal of its property to the private Sector. No loop-hole is left and no room is left for any discriminatory treatment to any prospective bidder wishing to participate in the process of Privatisation. According to the learned counsel the P.C.C. Decided to make sale of respondent No.4 through invitation of tenders which were to be opened in the presence of tenderers in order to ensure the fairness and transparency in this ,process, if the offer of the highest bidder fails on account of default, then the offer is made to- the second highest bidder and so on and so forth, if they are prepared to purchase the project in consonance with the highest offer received.
(vi) It was contended with vehemence that the petitioner had come to the Court with soiled hands and had filed this petition for the benefit of respondent No.5. From the facts noted above, it is crystal clear that the petitioner was incorporated in 1990 with a limited paid-up capital of five lac rupees; had participated in the process of offering tenders for 3 projects worth Billions of rupees.
The offers of the petitioner were highest in all the 3 projects. In none of the projects, the petitioner had deposited the initial amount of 26% in consonance with the letter of intent. The petitioner- Company had even no telephone connection and used the telephone of respondent No.5. On the basis of this circumstance, it was suggested that the petition be dismissed on this ground alone.
(vii) Apart from the above arguments, the learned 'counsel for respondent No.2, raised a preliminary objection to the maintainability of the petition by saying that the petitioner had not deposited 26% as required under the letter of intent, so had no locus standi to file this Constitution petition and furthermore the grievance in the petition related to the domain of contract. As such the petition was not competent.
9. In rebuttal the learned counsel for the petitioner submitted that this Constitutional petition related to structuring of exercise of discretionary jurisdiction by the Federal Government and so was not relatable to contractual obligation. It was submitted that the petition was, so, competent.
As regards the question of locus standi it was urged that the petitioner had been treated with discrimination and was entitled to invoke the Constitutional jurisdiction on the basis of violation of Article 4 of the Constitution.
10. Before we proceed to examine the contentions of the parties on merits, we consider it proper to take the preliminary objection of respondent No.2 regarding the maintainability of petition on the premise of locus standi. This objection, in short, is that no one can invoke Constitutional jurisdiction of this Court until he can show that he has suffered some personal injury to his property, body, mind or reputation. This flows from the word "aggrieved party" used in Article 199 of the Constitution. This question has not been entirely free from difficulty. The problem, of locus standi/aggrieved party/standing has been dealt with by Courts in the context of variety of the circumstances. A.K.M. Fazlul Quader Chowdhury v. Government of Pakistan PLD 1957' Dacca 342, Saeed Khan v. Chairman, District Council of Bannu and others PLD 1967 Pesh. 347, Standard Vacuum Oil Company v. Trustees of the Port of Chittagong PLI) 1961 Dacca 289; Miss Asima Jillani v.
Government of the Punjab and others PLD 1972 SC 139, Muhammad Boota and 77 others v.
Commissioner, Sargodha Division PLD 1973 Lah. 580, Ramamoorthi AIR 1953 Mad. 94, Abonindra Kumar v. A.K. Mujumdar AIR 1956 Cal. 273, Charanjit Lal v. Union of India AIR 1951 SC 41 and M/s. Associated Cement Co. Ltd. v. Pakistan through the Commissioner of Income Tax and 7 others PLD 1978 SC 151 are the authorities in support of the preposition that Article 199 does not confer any substantive right in a party but provides a party only an additional remedy under the extraordinary jurisdiction of this Court conferred by the Constitution provided he is able to show that any of his personal or proprietary rights as recognised by law has been invaded or denied to him.
11. However with the passage of time the superior judiciary has not adhered to this rigid view but has accorded liberal construction to the word "aggrieved party". In Mian Fazal Din v. Lahore Improvement Trust, Lahore and another PLD 1969 SC 223, it was held that right considered sufficient for maintaining a proceeding is not necessarily a right in the strict juristic sense but it is enough if the applicant discloses that he had a personal interest in the performance of the legal duty which if not performed or performed in a manner not permitted by law would result in the loss of some personal benefit or advantage or the curtailment of a privilege or liberty or franchise.
12. Even the superior Courts in foreign countries have been interpreting the principle of focus standi in the context of changing dynamics of socio-economic circumstances operating on humanity. In the words of Chief Justice Earl Warren (of Supreme Court of America) "Our Judges are not monks or scientists but participants in the living steam of national life.... Our system faces no theoretical dilemma, but a single continuous problem; how to apply to Never-changing conditions the never changing principle of freedom. "
13. These principles seem to be entirely applicable to the changing facts and circumstances of socio-economic life of each country. With each day, there is enormous increase in the activities of Executive Authority of Federation or Provinces in our country. The society is being transformed from totally under--developed one to semi-developed society with the object of making it egalitarian society on the golden principles of Islam. With this task, the functions of Executive Department in our State are growing rapidly and so need increased or greater judicial review of acts of subordinate authorities by the superior judiciary in order to check and keep these functionaries within the spheres allotted to them by law. We consider appropriate at this very juncture to quote a passage from law of Economic Development in Sub-Saharan Africa by Prof. Robert which is ''as follows: -- "If there are to be some reasonable norms for administrative behaviour in Africa, the formulation of codes of administrative law is desirable. But such codes are not self-enforcing. Without institutional devices to support them they become meaningless. "Wisconsin Law Review, VI. 1966, 999 at p.1064.
Continuing, he further said:--- "If the tone of public life is sufficiently honest and fair-minded, formal norms are relatively unneeded. This is not the position in Africa; on the contrary, there is a notable lack of restraints on the exercise of State power. This betrays itself most blatantly in the widespread West Africa. When corruption permeates the entire fabric of Government, legality is the first sufferer, for State power is exercised on ground unrelated to its nominal purpose."
In English-speaking Africa, the devices for enforcement of the few standards of administrative probity that exist are in the common law tradition. In some cases there are internal administrative appeals. Resort to the Courts for relief is theoretically available if any ascertainable norm has been violated. Relief can be sought in a civil action brought by the extreme cases, in a criminal action brought by the director of public prosecutions.
The civil remedies for administrative wrongdoing thus depend upon the action of individual citizens. In such an action, the individual is pitted against the State always an unequal contest. The individual does not have even the few procedural devices that the common law imports into criminal actions to try to redress the balance. At his own expense, he must challenge the vast monopoly of State power, with all its resources in personnel, money, and legal talent, by a civil action for a declaratory judgment or for an extraordinary remedy.. Injunction, writ of mandamus, or writ of prohibition. Aside from the manifold technical insufficiencies of these forms of action, the financial impediments to such an action are staggering as a result of these impediments, in the United States, where almost the sole institutional protection against administrative error or arbitrariness is such an action, usually only great corporations or individuals who are supported by large voluntary associations have been able to carry through litigation. To rely upon such individual actions as the primary means of policing administrative action in Africa is to rely upon what is non- existence". (Wisconsin Law Review, Vol. 1966, p.1065).
Even this problem was attended to by a Jurist by the name of Black in New Zealand who stated: -- ......Today it is unreal to suggest that a person looks to the law solely to protect his interest in a narrow sense. It is necessary to do no more than read the newspapers to see the breadth of the interest that today's citizen expects the law to protect, and he expects the Court where necessary to provide that protection. He is interested in results, not procedural niceties. (Black "The Right to be Heard", New Zealand L.J. No.4, 1977 p.66).
14. The survey of the opinions of jurist on this subject will not be complete without mention of opinion of Australian Law Reform Commission which is as follows: -- "Windened standing rules may assist consumers in attaining relevant injunctive or declaratory relief but they do not assist in recovering losses inflicted by illegal trading practices, nor do they threaten the illegal trader where he is most hurt, his pocket book. The most potent legal instrument in that regard so far devised is the modern class action, to some an 'engine of destruction', to others a mighty force for good. Consider the New York Commissioner of Consumer Affairs giving evidence before a United States Senate Committee in 1970. (Evidence of Mrs. Bess Myerson, Commr. Of Consumer Affairs of the City of New York, before the Consumer Sub-Committee of the U.S. Senate Committee on Commerce, No. 91-48, at 172" .
15. This question came up for consideration before our Supreme Court in Miss Benazir Bhutto's case PLD 1988 SC 416. In this case Benazir Bhutto the Co-Chairperson of Pakistan People's Party filed a petition in. The Supreme Court, under Article 184 of the Constitution of Islamic Republic of Pakistan, 1973 challenging the Amendment made in Political Parties Act, 1962 as violative of Articles 17 and 25 of the Constitution and vires of the Freedom Association Orders, 1978 (PO. 20 of 1978) as being un- Constitutional, for the reason being void ab initio. On behalf of the Federation of Pakistan, the learned Attorney---General took objection to the maintainability of petition on the ground that the petitioner neither has suffered any proprietary right nor any personal right, as such is not an aggrieved party. It was further contended by the Attorney-General on facts and circumstances, if the petitioner had some remedy, it was under Article 199 of the Constitution and not under Article 184 ibid. After surveying the whole case-law on the subject, the objection was repelled on the ground of dictum laid down in Mian Fazal Din v. Lahore Improvement Trust, Lahore and another PLD 1969 SC 223.
16. From the forgoing discussion, we are clear in our mind that the objection of the learned counsel for respondent No.2 is misconceived. From the narration of the facts and circumstances given above, it is evident that the petitioner had submitted tender which according to him was rejected illegally and discriminately. According to the learned counsel for the petitioner, the action of respondent No.2 is in defiance of Article 2A, Article 4 and Article 25 of the Constitution, which embody the golden principles of equal protection. On these facts, the petitioner is found to be an aggrieved party within the meaning of Article 199 of the Constitution. For-the above reason the objection of the respondent is repelled.
17. Having disposed of the question of locus standi herein we proceed to determine the first argument of the learned counsel for the petitioner. The contention of the petitioner, as noted above, is that the Federal Government had no authority under Article 173 of the Constitution to make sale, dispose of or mortgage its property without the necessary legislative sanction. That is premised upon the words subject to any Act of appropriate Legislature in Article 173 ibid. According to the learned counsel, the Federal Government is charged with the function of executing the laws and not to make laws. The reply of the learned counsel for respondent No.2, in short, is that the executive power is in fact a residual power left after the legislative and judicial power vested in Federal/Provincial Government. According to the learned counsel the exercise of this authority is not dependent on the presence of an Act of legislation by the appropriate Legislature. ,
18. In order to appreciate the contentions of the learned counsel for the parties it will lie useful to be set out the provisions of Article 173 of the Constitution of Islamic Republic of Pakistan, 1973. It reads as under: -- "173. Power to acquire property and to make contracts etc.---(1) The executive authority of the Federation and of a Province shall extend subject to any Act of the appropriate Legislature to the grant, sale, disposition or mortgage of any property vested in, and to the purchase or acquisition of property on behalf of the Federal Government or, as the case may be, the Provincial Government, and to the making of contracts. '
(2) All property acquired for the purposes of the Federation or of a Province shall vest in the Federal Government or, as the case may be, in the Provincial Government.
(3) All contracts made in the exercise of the executive authority of the Federation or of a Province shall be expressed to be made in the name of the President or, as the case may be, the Governor of 'the Province, and all such contracts and all assurances of property made in the exercise of that authority shall be executed on behalf of the President or Governor by such persons and in such manner as he may direct or authorize. '
(4) Neither the President, nor the Governor of a Province, shall be personally liable in respect of any contract or assurance made or executed in the exercise of the executive authority of the Federation or, as the case may be, the Province, nor shall any person making or executing any such contract or assurance on behalf of any of then, be personally liable in respect thereof.
(5) Transfer of land by the Federal Government or a Provincial Government shall be regulated by law."
19. From the plain look at this Article, it is clear that it is divided into five sub-Articles. Sub-Article (1) relates to property while sub-Article (5) postulates that the transfer of land by Federal Government or Provincial Government shall be regulated by law. Sub-Article (2) states that all the property acquired for the purposes of Federal Government or a Provincial Government shall vest in such Government. Sub-Article (3) indicates that all contracts made in exercise of this authority on behalf of Federation of a Province shall be expressed to be made in the name of President or as the case may be the Governor of Province. This sub-Article further says that all such contracts and all such assurances of the property made in exercise of that authority shall be executed on behalf of the President/Governor by such person and in such manner as he may direct or authorize. The question calling for decision is "as to whether subject to any Act of appropriate legislature" sub- Article (1) of Article 173 ibid means the existence of a legislative instrument before the exercise of authority under this Article.
20. In this context it is to be noticed that the word "executive power" is nowhere defined in our Constitution. Learned counsel for the parties frankly submitted that this was the case of first impression and there was no authoritative pronouncement on this question by our superior Judiciary. In view of this, learned counsel for respondent No.2 heavily relied -upon the decision of Supreme Court of India while the learned counsel for the petitioner stated that no reliance should be placed upon the judgments of the Supreme Court of India as our Constitution has an orientation which was foreign to Indian Constitution.
21. The nature of executive power came up for consideration in R.I Sahib Ram Jawaya Kapur and others v. The State AIR 1955 SC 549. In this case six persons preferred petitions under Article 32 of the Indian Constitution stating therein that they carried on business of preparing, printing, publishing and selling Textbooks for different classes in Schools of Punjab particularly for Primary and Middle Classes. It was alleged that Education Department of Punjab Government in pursuance of their policy of nationalisation of Textbooks issued a series of notifications since 1950 in respect of printing, publication and sale of these books which has not only placed restrictions upon the right of the petitioner to carry on their business but practically ousted them. It was said that no restriction can be placed upon the petitioner's right to carry on trade which is guaranteed under Article 19(1)(g) of the Constitution by mere executive order without proper legislative sanction under Article 298 of the Constitution. These Constitution petitions were dismissed by the High Court.
Feeling aggrieved of this judgment, the petitioners preferred appeal before the Supreme Court and reiterated the contentions raised before the High Court. After the survey of the Scheme of the Constitution and case-law on the subject it was held that a specific registration by an appropriate Legislature was not necessary for the purpose of exercise of executive authority under Article 298 of the Indian Constitution. It will not be without advantage to quote the relevant paragraphs from the aforenoted authority on this point, these are paragraphs Nos. 12, 13 and 14 which are as follows: -- "(12). It may not be possible to frame an exhaustive definition of what executive function means and implies. Ordinarily the executive power connotes the residue of governmental functions that remain after legislative arid judicial functions and are taken away.
The Indian Constitution has not indeed recognised the doctrine of separation of powers in its absolute rigidity but the functions of the different parts or branches of the Government have been sufficiently differentiated and consequently it can very well be said that our Constitution does not contemplate assumption, by one organ or part of the State, of functions that essentially belong to another. The executive indeed can exercise the powers of departmental or subordinate legislation when such powers are delegated to it by the Legislature.
It can also, when so empowered, exercise judicial functions in a limited way. The executive Government, however, can never go against the provisions of the Constitution or of any law. This is clear from the provisions of Article 154 of the Constitution but, as we have already stated, it does not follow from this that in order to enable the executive to function there must be a law already in existence and that the powers of the executive are limited merely to the carrying out of these laws.
(13) The limits within which the executive Government can function under the Indian Constitution can be ascertained without much difficulty by reference to the form of the executive which our Constitution has set up. Our Constitution, though Federal in its structure, is modelled on the British Parliamentary system where the executive is deemed to have the primary responsibility for the formulation of Governmental - policy and its transmission into law though the condition precedent to the exercise of this responsibility is its retaining the confidence of the legislative branch of the State.
The executive function comprises both the determination of the policy as well as carrying it into execution. This evidently includes the initiation of legislation, the maintenance of order, the promotion of social and economic welfare, the direction of foreign policy, in fact the carrying on or supervision of the general administration of the State.
(14) In India, as in England, the executive has to act subject to the control of the Legislature; but in what why is this control exercised by the legislature? Under Article 55(1) of our Constitution, the executive power of the Union is vested in the President but under Article 75 there is to be a Council of Ministers with the Prime Minister at the head to aid and advise the President in the exercise of his functions. The President has thus been made a formal or Constitutional head of the executive and the real executive powers are vested in the Ministers or the Cabinet.
The same provisions obtain in regard to the Government of States; the Governor or the Rajpramukh, as the case may be, occupies the position of the head of the executive in the State but it is virtually the Council of Ministers in each State that carries on the executive Government. In the Indian Constitution, therefore, we have the same system of Parliamentary executive as in England and the Council of Ministers constituting, as it does, of the members of the Legislature is, like the British Cabinet, "a hyphen which joins, a buckle which fastens the legislative part of the State to the executive part".
The Cabinet enjoying, as it does, a majority in the legislative concentrates in itself the virtual control of both legislative and executive functions and as the Ministers constituting the Cabinet are presumably agreed on fundamentals and act on the principle of collective responsibility the most important questions of policy are all formulated by them."
22. As to question, what was meant by words "subject to any law made by appropriate Legislature" used in Article 298 of the Indian Constitution, it was observed: -- "It may be, as Mr. Pathak contends, that the Appropriation Acts are no substitute for specific legislation and that they validate only the expenses out of the consolidated funds for the particular years of which they are passed; but nothing more than that may be necessary for carrying on of the trade or business. Under Article 266(3) of the Constitution no moneys out of the consolidated funds of India or the consolidated fund of a State shall be appropriated except in accordance with law and for the purposes and in the manner provided in this Constitution.
The expression "law" here obviously includes the Appropriation Acts. It is true that the Appropriation Acts cannot be said to give a direct legislative sanction to the trade activities themselves. But so long as the trade activities are carried on in pursuance of the policy which the executive Government has formulated with the tacit support, of the majority in the Legislature, no objection on the score of their not being sanctioned by specific legislative provision can possibly be raised.
Objections could be raised only in regard to the expenditure of public funds for carrying on of the trade or business and to these the Appropriation Acts would afford a complete answer. "
23. The rule laid down in R.I Sahib Ram Jawaya Kapur and others v. The State of Punjab AIR 1955 SC 549 was examined in Haji T.M. Hassan Rawther v. Kerala Financial Corporation AIR 1988 SC 157. The facts of this case are somewhat similar to the facts of the present case. We, therefore, propose to notice this case in detail. A tea estate of 100 acres with some buildings, machinery and equipment was given as .Security to Kerala Financial Corporation (Corporation) against the loan taken by one Haji T.M. Hussain Rawther/appellant. He failed to clear the loan. The Corporation obtained a decree for the recovery of the arrears for an amount of Rs.1,20,000. In the execution of the decree the aforesaid estate was purchased by the Corporation for a sum of Rs.1,65,000. The Corporation was involved in dispute with workman and, therefore, decided to dispose of the property. It, therefore, invited tenders for the sale of this estate by means of an advertisement in daily newspapers. The daughter-in-law of the appellant offered a tender of Rs.5,10,505. The Corporation accepted the tender but the tenderer defaulted to make the payment. Hence the Corporation again invited tenders for the sale of the property through advertisement. This time the Corporation received three tenders i.e. Appellant for six lac, P.M. Jacob of Rs.4,15,550 and K.K. Mathew for Rs.2,07,451. Being the highest bidder the bid of the appellant was accepted by the Corporation. A letter of intent was issued to him but he failed to pay the amount except earnest money. The Corporation however, extended time for payment again and again, but without any success. Ultimately the Corporation negotiated with P.M. Jacob who was the next highest tenderer. He offered Rs.5,16,550. After negotiation, he enhanced the offer to 4-1/2 lacs. The Corporation accepted the same. The property, however, was sold to M/s. Oumraj Plantations at the asking of P.M. Jacob. The appellant filed a suit but without success. Meantime sale-deed was executed in favour of vendee. Feeling aggrieved, he filed Constitution petition alleging therein that the Corporation had deflected from normal practice of inviting tenders from the public, that the Corporation being public authority was bound to act reasonably and fairly and ought not to have accepted the bid of second tenderer. The High Court repelled these contentions and rejected the petition. Being aggrieved, the petitioner filed appeal before the Supreme Court in which almost the points urged before the High Court were reiterated.
After surveying the case-law and relying upon the dictum laid down in R.I Sahib Ram Jawaya Kapur and others v. The State of Punjab AIR 1955 SC 549, the appeal was dismissed in following words: -- "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. Their dealings should be above board. Their transactions should be without aversion or affection.
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 O. 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.
What is the position in the present case. Here is a case where the Corporation invited tenders for the sale of the property under notification dated January 18, 1983. The appellant submitted the highest tender in response to the said notification. He was given all concessions for payment of the tender amount. But he did not. He negotiated with the Managing Director of the Corporation for facilities for payment of instalments. That was also granted to him. There again he failed, if the appellant could act according to his tender, we fail to see why the property should not be offered to the person who was next in order. The Corporation, in our opinion, did not do anything unfair with P.M. Jacob. The Corporation got the tender amount raised from Rs.4,16,550 to Rs.4,50,000. It shows the fairness with which the Corporation dealt with the property.
On a consideration of all the facts and circumstances of the case, we are statisfied that the action of the Corporation in offering the property to P.M. Jacob and selling the same at his request to M/s. Gumraj Plantations was perfectly justified and cannot be found fault with."
24. We have compared the provisions of sub-Article (1) of Article 173 of our Constitution with unamended sub-Article (1) of Article 298 of the Indian Constitution and find that practically the language of Article 173(1) ibid, is similar to that of Article 298(1) (unamended) of the Indian Constitution. Both of them read as under:--- Constitution of Pakistan Constitution of India Article173(1).---TheexecutiveArticle298(1).---The executive authority of the Federation and of a power of the Union and of each Province shall extend, subject to any State shall extend, subject to any law Act of the appropriate Legislature, made by the appropriate Legislature, to the grant, sale disposition orto the grant, sale, disposition, or mortgage of any property vested in,. Mortgage of any property held for and to the purchase or acquisition of the purposes of the Union or of such property on behalf of, the Federal State, as the case my be, and to the Government or, as the case may be, purchase or acquisition of property the Provincial Government, and to for those purposes respectively and the making of contracts to the making of contracts.
It is thus clear that Article 173 is in pari materia with Article 298 of the Indian Constitution. We find no reason to differ with the approach of the Indian Supreme Court in R.I Sahib Ram's case which is in accord with the principle of interpretation of Constitutional instruments that the Constitutions are to be D interpreted organically and harmoniously. Every word in the Constitution is to be given effect by harmonising the various provisions of the Constitution and nothing is to be rendered surplus or redundant.
We, are, thus of the view that no specific legislation is necessary for the exercise of executive authority under Article 173(1) ibid of our Constitution for the purpose of sale, mortgage or disposal of the property by the Federal/Provincial Government. Of course if an Act of the appropriate E Legislature holds the field its provisions shall be followed by the executive authority in the matter of sale, mortgage or disposal of the property vested in the Federal or Provincial Government. However, existence of an Act of the appropriate Legislature is not a prerequisite for the exercise of the executive authority under Article 173(1) of the Constitution.
26. In the light of foregoing discussion the objection of the learned counsel for the petitioner, is found to be devoid of any force and is thus repelled.
27. As regards the point raised by the learned counsel for the respondents that the impugned action/order, was taken or passed under the discretionary authority of the executive and is not open to scrutiny by this Court, it is sufficient to state that this question stands fully resolved in the Full Bench judgment of the Lahore High Court, reported as Khawaja Muhammad Sharif v.
Federation of Pakistan through Secretary, Cabinet Division, Government of Pakistan, Islamabad and 18 others PLD 1988 Lahore 725. In this case number of Constitutional petitions were filed in order to challenge the order of the late President General Muhammad Zia-ul-Haque, dissolving the Parliament (Majlis--e-Shoora) in exercise of authority under Article 48 of the Constitution. The learned Attorney-General of Pakistan, took up a preliminary objection to the maintainability of the petitions by urging that the impugned order was passed in exercise of the discretionary authority and so was not amenable to interference under the Constitutional jurisdiction of this Court. The Full Bench rejected the objection and held that the action/order taken/passed by the late General Muhammad Zia-ul-Haque in exercise of discretionary authority under Article 48 of the Constitution was amenable to scrutiny under the principle of judicial review embodied in Article 199 of the Constitution. The leading opinion was delivered by His Lordship Mr. Justice Abdul Shakurul Salam (the then Chief Justice of the Lahore High Court). He said: -- Forensic syllogism may perhaps be not called for, whether it is 'subjective' or 'objective' satisfaction of the President or it is in his 'discre tion' or ' opinion' , this much is quite clear that the President cannot exercise his powers under the Constitution on wish or whim. He has to have facts, circumstances which can lead a person of his status to form- an intelligent opinion requiring exercise of discretion of such a grave nature that the representatives of the people who are primarily entrusted with the duty of running the affairs of the State are removed with a stroke of the pen. His action must appear to be called for end justifiable under the Constitution if challenged in a Court of Law. No doubt, the Courts will be chary to interfere in his 'discretion' or formation of the 'opinion' about the 'situation' but if there be no basis or justification for the order under the Constitution, the Courts will have to perform their duty cast on them under the Constitution."
Since the relief was not granted to the petitioners, both the Federation of Pakistan as well as Haji Muhammad Saifullah Khan, petitioner, preferred appeals before the Supreme Court of Pakistan.
These appeals were dismissed. Speaking for the Courts, his Lordship Mr. Justice Nasim Hasan Shah, in Federation of Pakistan and others v. Haji Muhammad Saifullah Khan and others PLD 1989 SC 166, said: -- "It must further be noted that the reading of the provisions of Articles 48(2) and 58(2) shows that the President has to first form his opinion, objectively and then, it is open to him to exercise his discretion one way or the other, i.e. Either to dissolve the Assembly or to decline to dissolve it. Even if some immunity envisaged by Article 48(2) is available to the action taken under Article 58(2) that can possibly be only in relation to the exercise of his 'discretion' but not in relation to his 'opinion'. An obligation is cast on the President by the aforesaid Constitutional provision that before exercising his discretion he has to form his 'opinion' that a situation of the kind envisaged in Article 58(2)(b) has arisen which necessitates the grave step of dissolving the National Assembly. In Abul A'la Maudodi v. Government of West Pakistan PLD 1964 SC 673, Cornelius, C.J. While interpreting certain provisions of the Criminal Law Amendment Act, 1908, construed the word 'opinion' as under:--- It is a duty of Provincial Government to take into consideration all relevant facts and circumstances. That imports the exercise of an honest judgment as to the existence of conditions in which alone the opinion must be formed, consequent upon which the opinion must be formed honestly, that the restriction is necessary. In this process, the only element which I find to possess a subjective quality as against objective determination, is the final formation of opinion that the action proposed is necessary. Even this is determined, for the most part, by the existence of circumstances compelling the conclusion. The scope for exercise of personal discretion is extremely limited---.As I have pointed out, if the action be construed in a -comprehensive manner the requirement of an honest opinion based on the ascertainment of certain matters which are entirely within the grasp and appreciation of the Governmental agency is clearly a prerequisite to the exercise of the power. In the period of foreign rule, such an argument, i.e. That the opinion of the person exercising authority is absolute may have at time prevailed, but under autonomous rule, where those who exercise power in the State are themselves citizens of the same State, it can hardly be tolerated."
Thus, though the President can 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. In the present case the President himself chose to state the grounds on which he was basing his action. As the grounds have been disclosed their validity can be examined. The first four grounds stated in the order for dissolution, were, as already noticed, extraneous having no nexus with the preconditions prescribed by Article 58(2)(b) of the Constitution empowering the president to dissolve the National Assembly in his discretion. As for the fifth and last ground, namely, that "a situation has arisen in which the Government of the Federation cannot be carried on in accordance with the provisions of the Constitution" nothing was show either before the High Court or before us that the machinery of the Government of the Federation had come to a standstill or such a breakdown had occurred therein which was preventing the orderly functioning of the Constitution. Indeed, it appears that the first- mentioned four grounds are the bases for the assertion made in the last-mentioned ground that the Government could not be carried on in accordance with the provisions of the Constitution. But as observed already all the first-mentioned four grounds were extraneous to and had no nexus with the preconditions prescribed by Article 58(2)(b). Hence, in the eyes of law, no basis existed on which the President could form the opinion "that a situation had arisen in which the Government of Pakistan cannot be carried on in accordance with the provisions of the Constitution and an appeal to the electorate is necessary. But unless the President be of the said 'opinion' he cannot pass an order of dissolution even in exercise of his discretion because under sub-clause (b) of clause (2) of Article 58, his 'opinion' in this behalf is a condition precedent to the exercise of the discretion. Thus, if it can be shown that no ground existed on the basis of which an honest opinion could be formed, the exercise of the powers would be unconstitutional and open to correction through judicial review (See Ghulam Jillani v. Government of West Pakistan PLD 1967 SC 373 at page 393).
The circumstance that the impugned action has political overtones cannot prevent the Court from interfering therewith if it is shown that the action taken is violative of the Constitution, the superior Courts had an inherent duty together with the appurtenant power in any case coming before them to ascertain and enforce the provisions of the Constitution and as this duty is derivable from the, express provision of the Constitution itself, the Court will not be deterred from performing its Constitutional duty, merely because the action impugned has political implications (See Mr. Fazlul Quader Chowdhry and others v. Mr. Muhammad Abdul Haque PLD 1963 SC 486 at page 504). The High Court was, therefore, right in proceeding to examine the validity of the order of dissolution passed by the President on 29-5-1988, with a view of Article 58(2)(b) of the Constitution and- holding that the prerequisites prescribed for the exercise of powers conferred by Article 58(2)(b) did not exist in finding that the said action was not justified in law."
28. Our history is marked with expansion of activities of Executive in different directions. In different eras the Federal Executives had been pursuing radically different socio-economic policies in order to better the lot of ordinary citizens. The year of 1971 can be termed as the era of nationalisation of privately-owned Industries by the State. Since 1990, the Government had changed the orientation altogether. The Government had decided to leave the commercial activities in the hands of Private Sector and has thus started to disinvest. This policy is being known as "the privatisation". The controlling share of the Federation in various commercial projects, the incorporated companies are being transferred to private sector. Since this process relates to sale/disposal of property owned, controlled and run by the Federation, the executive is required not to act arbitrarily but must act in conformity with the standards or norms which must be free from capriciousness, irrationality and 1 discrimination. This principle is mandated by the golden principles of Islam. If the Government departs from these standards or norms, this Court will not hesitate to strike down such actions on the doctrine of being irrational, unreasonable and discriminatory. At- this juncture, we feel it our duty to state that on these circumstances we were not assisted by the parties. On facts, it is clear to us that the petitioner had participated in the process of privatisation by submitting his tender. The letter of intent was issued to him where under he was required to deposit 26 % of his offer within 30 days of the communication of letter of intent. Instead of complying with the terms of acceptance of offer, he started to pick up quarrel with respect to the terms of agreement which still had not been signed. The Federal Government rejected his offer and directed the Commission to start negotiations with the second highest tenderer by offering him the sale if he was prepared to purchase the company on the price offered by the petitioner. This course was strictly in accord with the commercial practice and the approved procedure. We are, therefore, clear that the petitioner was neither dealt with discriminately nor arbitrarily. On this examination, we are left with no doubt that the petitioner has no right to enforce through Constitutional jurisdiction.
29. There is yet another aspect of the case, After examination of the whole case, we are of opinion that the petitioner has come to Court with unclean hands. The petitioner-company .Was incorporated in 1990 with paid-up capital of Rs.5,00,000. It participated in the tender of three Cement Projects owned and controlled by Federal Government. The offers of the petitioner were the highest. In all these cases his tenders were accepted. In none of the cases, he had f deposited the 26% of the price in consonance with the letter of intent. This aspect of the case fully demonstrates that the petitioner had participated in the process with ulterior motives. It is a settled principle of law that Constitutional jurisdiction of this Court cannot be exercised in favour of persons who come to Court with soiled hands. Reference be made to S.K. Masood and 3 others v.
Special Committee through Member, Board of Revenue and others 1990 CLC 1174.
30. In the light of foregoing discussion we do not find any merit in this Constitution petition which is dismissed. There shall be no order as to costs.