1. ' The controversy involved in this revision pertains to the sale of a plot of land measuring about 12222 sq. Yds. Situated on I.I. Chundrigar Road (near the Stock Exchange Building). In pursuance of the decision of the Federal Government, several surplus plots belonging to the Pakistan Railways were earmarked for sale for generating fund and one of such plots to be sold was the plot in dispute in the present revision. The Pakistan Railways vide public notice, published in several newspapers on 9-10-1992 and again on 16-10-1992 invited bids for the sale of three plots including the plot in dispute. The bids were to be submitted by 19th October, 1992, to the Joint Director of Pakistan Railways at Lahore alongwith a Bank Draft in the sum equivalent to 10% of the bid value by way of earnest money. It is not denied that three bidders submitted bids in respect of the disputed plot, of these the applicant's bid of Rs,26,000 per sq. Yds. Was the highest. The other two bids were for Rs,19,000 and 12,876 per sq. Yd. The lowest bid of Rs,12,876 was that of respondent No,5, namely, The Karachi Stock Exchange. The applicant, however, did not enclose with its bid the requisite bank draft equivalent to 10% of the bid value and instead submitted a cheque for Rs,3,17,77,200 being 10% of its bid, together with a further sum of Rs,5,00,000 by way of guarantee money for the encashment of the cheque. The reason stated by the applicant in its letter of offer for not submitting the Bank Draft was that it learnt of the proposed sale through newspapers on 16-10-1992 at Hyderabad and the site was shown to its representative on 18-10-1992 after the banking hours and, therefore, it was not possible for it to arrange the bank draft in time and be present at Lahore for submission of the bid.
2. ' Subsequently, it appears that the Cabinet Committee for disposal of surplus Railway land, comprising of Federal Minister for Railways, Secretary Planning Division, Secretary Finance Division and Secretary Railways found the bids inadequate, and therefore, while rejecting all the bids decided to dispose of the said plot through negotiations. Thereupon, according to the 3rd respondent, the relevant parties, including the applicant, were invited for negotiations for the sale of the plot but the applicant failed to appear before the competent authority whereupon the highest offer of Rs,27,000 per sq. Yds. Made by the 5th respondent was accepted. The applicant has, however, denied that it had either been informed of the scrapping of all the bids or was invited for negotiation for the sale of the plot. Applicant's case has been that without inviting the other bidders the official respondents, in connivance with the 5th respondent, decided to sell the plot to that respondent at a price lower than the market price and when this came to the knowledge of the applicant its representative rashed to Islamabad, discussed the matter with the Minister concerned and made an offer to purchase the said plot at the rate of Rs,29,000 per sq. Yds., but, when it found that the concerned officers were bent upon selling the plot to the 5th respondent at a lower price, it was compelled to file Suit No,1606 of 1992 in the Court of VIth Senior Civil Judge, Karachi (South) praying for declaration, injunction and damages. In that suit it also filed an application under Order 39, Rules 1 and 2, read with section 151, C.P.C. Praying for interim injunction, restraining the official respondents Nos.1, 2 and 3, inter alia, from finalising the sale of the said plot in favour of the 5th respondent. This application was granted by the trial Court, which by its order dated 10-12-1992 directed the parties to maintain status quo in respect of the plot in question subject to the condition that, "if the defendants Nos.1 to 3 wish to dispose of land afresh in order to saveguard the interest of Government of Pakistan, this order will not come in their way and they are at liberty to do so after inviting fresh tenders and the contesting bidders also be allowed to participate". Against this order the 5th respondent filed Civil Miscellaneous Appeal No,1 of 1993, which was allowed by the impugned order and the order of the trial Court directing the parties to maintain status quo was set aside.
3. ' Mr. Muhammad Ali Sayeed, learned counsel for the applicant has attacked the impugned order on the ground that it failed to consider that the decision of the official respondents to sell the land in question to the 5th respondent behind the back of other bidders was collusive and arbitrary exercise of executive authority and was, therefore, of no legal consequence. It was contended that, the concerned authorities having decided to scrap the auction and sell the land through negotiations, the applicant, by reason of being the highest bidder, had an equal right, if not better, with other bidders including the 5th respondent, to be associated with the negotiations and as such official respondents' action of bypassing the applicant and entering into negotiations only with the 5th respondent was discriminatory, mala fide and with a view to granting favour to that respondent at the cost of public exchequer. It was argued that in the present case, in the first place, there was no justification to scrap the auction on ground of inadequacy of bids as applicant's bid of Rs,26,000 per sq. Yd. Was not at all inadequate, judging from the fact that subsequently the concerned authorities offered to sell the land to the 5th respondent at the rate of Rs,27,000 per sq.
4. Yds. Secondly, that, even if it was considered that the bids fell short of expectations it was incumbent upon the Government functionaries to have invited all the three bidders for negotiations and not to hold negotiation with the lowest bidder, ignoring the two higher bidders. In aid of his submissions the learned counsel placed reliance on the cases of Messrs Dadabhoy Investment (Pvt.) Ltd., Karachi through Abdullah Dadabhoy, Managing Director v. Federation of Pakistan, through Secretary, Ministry of Finance, Islamabad and another PLD 1995 Kar. 33; Jawed Hotel (Pvt.) Limited v. Capital Development Authority, Islamabad through Chairman and another PLD 1994 Lah. 315; Messrs Abdullah & Company v. Province of Sindh through Additional Chief Secretary, Local Government Rural Development Department and 2 others 1992 MLD 293.
5. ' The first was a case where the petitioner therein submitted highest bid in response to the public notice issued by the Privatisation Commission, inviting bids for the sale of shares/assets of a cement plant but its bid having fallen short of the reference price the Commission required it to increase the same to a minimum of 90 per cent. Of reference price to enable the Government declare it as successful bidder; however, in spite of the petitioner having complied with the requirement its bid was rejected and the earnest money paid by it was returned. On these facts the learned Judges have observed that: "After hearing the argument and going through the case-law submitted by both the learned counsel, we are of the view that no doubt that 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. 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 passed on sound principles of justice, equity, fairness and in accordance with the spirit of the provisions in which it occurs and shall not be merely at the whims of the authority."
6. ' The relevant observation in the second case, pertaining to highest bid in an auction, is as follows:- - "The petitioner being highest bidder after satisfying conditions for pre-qualification has a right to see that the same is finalised in accordance with the terms of the bid. It is true that the petitioner has got no vested right that his highest bid be accepted but certainly he has got a right that his bid be properly considered by the public functionaries."
7. ' The third case arose out of auction of right to collect octroi. On the complaint of the petitioner therein that the auction had been manipulated by the Chairman, Union Council, the Government in the first instance refused to award the contract to collect octroi to the party recommended by the Chairman and directed the reauction of the right, but later withdrew its direction and confirmed the award of the contract to the same party. Government's action was challenged by the petitioner and it was disapproved by the learned Judges in the following terms: "In our view, orders of the Government withdrawing the letter, dated 11-5-1991, by which letter it had declined to accept the offer/bid of Rs,11 lacs of the Company, and scrapping the reauction, and the award of the octroi contract for the year 1991-92 by the Union Council as confirmed by the Government in favour of the Company (Dewan Sugar Mills Limited) mala fide. We may not be taken to hold power to withdraw the letter, dated 11-5-1991 but, in our view, this power or discretion which affected individual rights was required to be exercised in a fair, reasonable and just manner.
8. An executive discretion which affects private rights cannot be exercised. At the whim of the executive authority. It must have a basis and such basis must be reasonable, fair and just in the circumstances of the case."
9. There seems no doubt that the Government does not have unfettered powers to deal with its properties or to award contracts, licences or other benefits, and unlike private individuals, it cannot arbitrarily pick and choose persons for bestowing favours. Its action should be based on a reasonable and rational procedure which is non-discriminatory and aimed at, on the one hand, to provide equal opportunity to eligible persons and on the other to avoid loss to the exchequer. The discretion vested in the State functionaries must be exercised judicially and not arbitrarily and should be based on sound principle of justice and fairness. The rule against arbitrary and discriminatory Government action is enshrined in Articles 2A and 25 of the Constitution which ensure equality of opportunities and before law. This rule is also well-established by judicial pronouncements of the superior Courts. In all the abovereferred cases cited by the applicant's counsel arbitrary State actions were disapproved and struck down. Reference in this regard may also be made to two cases from Indian jurisdiction. In the case reported as V. Punnan Thomas v.
10. State of Kerala AIR 1969 Kerala 81 the relevant observation reads: "The Government, is not and should not be as free as an individual in selecting the recipients for its largess. Whatever its activity, the Government is still the Government and will be subject to restraints inherent in its position in a democratic society. A democratic Government cannot lay down arbitrary and capricious standards for the choice of persons with whom alone it will deal."
11. ' In the other case of Ramana Dayaram Shetty v. The International Airport Authority of India and others AIR 1979 SC 1628 the Indian Supreme Court held that:-- "It must, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largess, the Government cannot act arbitrarily at its sweet-will and like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norm which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largess including award of jobs, contracts, quotas, licences etc., must be confined and structured by rational relevant and non-discriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory."
12. ' Adverting now to the present case, there can be no dispute that the procedure adopted by the official respondents for selling the plot in question, by inviting bids from the public, was appropriate and the subsequent scrapping of the auction on the ground of inadequacy of the bids can perhaps also not be objected to, but the following action of the official respondents of offering to sell the plot to the 5th respondent, who with its bid of Rs,12,876 per sq. Yd. Was the lowest amongst the bidders at the auction, at a price of Rs,27,000 per sq.Yd., which was slightly higher than that of Rs,26,000 offered by the applicant at the auction, had semblance of arbitrariness and discrimination. The undue haste with which the proposed sale of the plot to the 5th respondent was attempted to be rushed through also lends support to the allegations of collusion and mala fides.
13. Once the auction had been scrapped by the authorities for want of adequate bids they could have invited fresh bids from the public, but if they had decided to dispose of the plot through negotiations then too the procedure should have been such as was reasonable, fair and transparent, was in public interest, inspired public confidence and was above board. If the purpose of selling the plot was to generate funds, as indeed it was, then there could apparently be no justification for picking up only the lowest bidder at the auction and leaving out the highest. Of course, the official respondents do not admit that they had chosen the 5th respondent alone for negotiations; their case is that the applicant was contacted on phone and invited to participate in the negotiations but it failed to appear. However, there is no material available on record in support of the assertion. On the contrary, the records show that after the auction had been scrapped, the Railway Board by letter dated 24-10-1992 offered to sell the plot to the 5th respondent at Rs,27,000 per sq. Yd. but no such offer was made to the applicant. The applicant claims that as soon as it learnt of the ongoing negotiations between the officials and the 5th respondent its representative immediately went over to Islamabad and offered to purchase the plot at Rs,29,000 per sq. Yd. i,e, it offered to pay Rs,2,44,44,000 more than that offered by the 5th respondent. Be that as it may, these factual controversies can be resolved only on evidence and it is neither possible nor appropriate to express any opinion on these in the present proceedings which have arisen out of an interim order of the trial Court. Prima facie, however, it does appear that the action of the concerned authorities in picking and choosing the 5th respondent for the sale of the plot to the exclusion of other bidders, was discriminatory and unprincipled; it deprived the applicant of equality of opportunity to purchase the land and would apparently also result in substantial loss to the State. If this be so perhaps the so-called deal between the Government and the 5th respondent for the sale of land needs serious scrutiny.
14. ' Mr. Faisal Arab, the leaned counsel appearing for the 5th respondent opposed the revision on several grounds. His first contention was that the applicant had no locus standi to file the suit as its bid was liable to outright rejection by reason of the applicant having failed to comply with one of the conditions of tender, in that, instead of submitting bank draft for the earnest money amount, equivalent to 10 per cent. Of the bid, it submitted a cheque. No doubt the applicant had tendered a cheque for the amount of earnest money, but apparently, as the applicant's was the only respectable bid for the plot the railway authorities overlooked the minor irregularity for, it appears from the record, that applicant's bid was received for consideration alongwith the other two bids.
15. However, later, all the three bids were admittedly rejected on the ground of inadequacy, as such, perhaps it is now too late to raise the objection in these proceedings. In any case, the objection may be raised before the trial Court for its consideration.
16. ' The second ground urged by the learned counsel was that merely by submitting the highest bid, the applicant did not acquire any right to purchase the plot and that, the railway authorities even after calling for bids from public were entitled to reject all the bids and sell the plot through negotiations, as they did, and there could be no scope for objection from the applicant to this mode of disposal of the plot. Reliance was placed on a decision of the Indian Supreme Court in the case of Haridwar Singh v. Begum Sumbrui and others AIR 1972 SC 1242. That case is, however, clearly distinguishable. There the facts were that the Forest Department called for bids from public for settlement of the right to exploit a Bamboo coup. Though all the bids at the auction fell short of the reserve price, the Forest Officer provisionally accepted the highest bid and forwarded it to the concerned authorities for confirmation. In the meanwhile, however, another person offered to take the settlement of the coup for an amount in excess of the reserve price, which offer was accepted by the Government. On these facts the Court found Government's action in accord with the rules, which rules obviously have no relevance to the present case.
17. It is true that merely by reason of being the highest bidder at the auction the applicant had not acquired any right to have its bid accepted and it is also true that the Railway had the right to reject all the bids received at the auction, on the ground of inadequacy, but the applicant was certainly entitled to be treated equally with others. If the authorities had decided to dispose of the plot through negotiations with the bidders then they should have afforded opportunity to all the bidders to participate in the negotiation and not just to offer the plot to the lowest bidder, at a predetermined price. It would be reasonable to expect that where the auction is scrapped on the ground of inadequacy of bids and the authorities opt for sale through negotiations, the negotiations would be purposeful and an effort to attract maximum price and not a mere formality for granting benefit to a choosen party. If the authorities do not adhere to the rule of equality and act arbitrarily or discriminately or in connivance with some one their action is liable to be struck down.
18. ' Next, it was submitted that, by letter dated 24-10-1992 the Railway Board offered the plot to the 5th respondent at the rate of Rs,27,000 per sq. Yd. Which was accepted by that respondent by letter dated 25-10-1992 and 10 per cent. Of the proposed price was also paid, as such, a binding contract came into existence, which cannot now be called into question by the applicant. The argument would have perhaps held water had the plot been a private property but being State' property its sale would be open to serious doubt if, ultimately found to be collusive or arbitrary or discriminately or in violation of some just and fair procedure.
19. ' It was lastly contended that the fundamental rights guaranteed under the Constitution are enforceable only through constitution petition and not otherwise, and therefore, the principle of equality secured under the Constitution cannot be relied upon or agitated by the applicant in these proceedings or its pending suit. The counsel was, however, unable to point out any Constitutional provision in his support. The argument, if accepted, would lead to the anomalous situation that in cases where violation of fundamental right forms part of disputed facts, necessitating recording of evidence for the determination of the issue, the aggrieved party should first take up ordinary proceedings for the determination of that issue on evidence and then file constitution petition for its enforcement. There seems no reason why a Court seized of a cause cannot take into consideration and enforce the fundamental rights embodied in the Constitution, if its contravention is in issue in such proceedings. Quite apart from that, the judicially evolved rule of equality amongst citizens and against arbitrary, discriminatory and whimsical State actions is firmly entrenched and is binding on the Courts by virtue of Articles 189 and 201 of the Constitution.
20. ' Mr. Fazal-e-Hussain, the learned counsel for respondents 1, 2 and 3 confined his arguments on the question of non-maintainability of the suit itself. However, these points have neither been dealt with in the impugned order nor in that of the trial Court and, therefore, I do not consider it proper to go into these in the present proceedings. If the respondents so desire, these objections may be appropriately raised and pursued in the trial Court.
21. ' For the reasons discussed above, this revision is allowed and the impugned order is set aside. It may, however, be clarified that opinion expressed in this judgment is of tentative nature only and will have no bearing on the merits of the case.