The petitioner's case is that it is a Company registered under the Companies Ordinance, 1984 and is engaged in the business of maritime activity of transportation of goods on international level.
The company is promoted by the Baghpatee Group with an extensive know-how of chartering, shipping and other services such as stevedoring and terminal operation with a wide experience and knowledge of cargo movement in the Middle East and the Western countries. The Economic Coordination Committee, Government of Pakistan decided that Pakistan National Shipping Corporation (hereinafter called the P.N.S.C.) in case of exercising the "first right of refusal" would share 50 per cent of the contract with Pakistani Shipping Companies which would be placed at par with the said Corporation. This decision was communicated by the Government of Pakistan, Ministry of Communications, Islamabad, vide letter dated 15-7-1993 addressed to Mr. Masood T.
Baghpatee, Chief Executive of the petitioner-Company and the petitioner-Company was entitled of the said facility. The decision of the Economic Coordination, Government of Pakistan, had been followed for quite sometime whereby the P.N.S.C. Had been sharing the contracts with the petitioner-Company to the extent of 50 per cent as the petitioner-Company was the only Pakistani Shipping Company owning bulk carriers.
2. According to the learned counsel for the petitioner, the dispute arose when the tenders were invited for vessels for shipment of 200,000 Metric Tons U.S. White wheat in bulk shipment from U.S. Ports to Qasim Port, Pakistan, in March, 1996. The petitioner-Company was pre-qualified by the Government of Pakistan, Ministry of Food, Agriculture and Live Stock, Islamabad, for the said work alongwith other 12 bidders being U.S. Dollar 21.99 P.M.T. And deposited bid bond of 50,000 U.S. Dollars. An objection was raised by respondents, in that, the Performance Bond had not been submitted. This was done although the PNSC did not exercise its first "right of refusal." The petitioner made a representation dated 6-10-1996 to the Minister of State for Food, Agriculture and Live Stock as well as to the Special Advisor to the Prime Minister for Economic Affairs stating therein that the petitioner-Company was to be placed in the same position as the said Corporation and that no Performance Bond could be required from the petitioner in view of para 5 of the tenders as.Was the case of the P.N.S.C. No decision was communicated on the representation of the petitioner- Company. However, by a letter dated 21-10-1996, the Embassy of Pakistan (Economic Division), in Washington, U.S.A., asked the petitioner--Company to show cause by 25-10-1996 as to why the petitioner-Company should not be blacklisted from participating in future Pakistan wheat freight tenders. The petitioner-Company filed the reply dated 24-10-1996 to the Embassy of Pakistan requesting them to give reasonable time for explaining, the matter in detail followed by another representation dated 6-11-1996 by the petitioner-Company with the Minister of State for Food, Agriculture and Live Stock, Islamabad. The petitioner-Company received the impugned order dated 16-12-1996 subsequently.
3. The learned counsel for the petitioner has argued that the impugned action dated 16-12-1996 was violative of the principles of natural justice and was an arbitrary action on the part of the Economic Minister of the Embassy of Pakistan (Food And Agriculture Division), Washington, which is under the Federal Government at Islamabad. He further argued that no reasons were assigned for blacklisting the petitioner-Company nor any such reasons were available with the respondents. He adds that the impugned action of blacklisting the petitioner-Company was taken in order to do favour to the other competitors in the business and there was no justification for cancelling the contract to the petitioners on the ground of non7submission of Performance Bond which facility was available to the P.N.S.C. The learned Standing Counsel has opposed the contentions of the learned counsel for the petitioner and has stated that' the impugned order dated 16-12-1996 was validly passed inasmuch as the petitioner-Company had already been put to notice by show- cause notice dated 21-10-1996 of the allegations they were to meet and that the reply to the show- -cause notice was duly considered by the competent Authority.
4.I have considered the arguments of the learned counsel for the partiesThe blacklisting of a contractor entails serious consequences of attaching a stigma against him apart from suffering financial. Losses and goodwill in business with the Government. The same cannot be resorted to without observing the due process of law as envisaged in Article 4 of the Constitution. Such an action if not supported by any valid reasons may generate a discriminatory treatment against persons sought to be blacklisted which may in turn benefit some other persons for whom the Governmental authorities may have liking. Such a procedure may be adopted with invidious discrimination which is prohibited by Article 25 of the Constitution. The arbitrary exercise of power , in such like cases cannot be countenanced by the judiciary. The impugned order dated 16-12-1996 is silent as to the reasons which had weighed before the authorities concerned in blacklisting the petitioner-Company whose huge business may be A ruined by any arbitrary action of the public officer. The impugned order does not show as to whether the reply and the subsequent representations of the petitioner were taken into consideration in the passage thereof: Thi Court has already held in the case of Shahid Afzal v. Government of Pakistan through Secretary, Education, Islamabad and 3 others (PLD 1977 Lahore 117) that the public functionaries dealing with the rights and obligations of persons are required to give valid reasons in the orders which purport to operate adversely against such persons. Not only that the petitioner was required to be given a hearing by considering his reply and representations, but the result thereof should also have been reflected in the impugned orders. It was incumbent upon the respondents to justify as to for what reasons the position taken by the petitioner was not being accepted. The right to know the reasons for the adverse order is also a valuable right of the citizens or other persons when such an order prejudicially affects their interest. The principles of natural justice are to be followed not only as a formality but as a well-meaning and effective requirement of law. In the case of Dawood Corporation (Private) Limited and another v. The Director-General, Department of Supplies, Government of Pakistan, Ministry of Industries, Karachi and 2 others (1988 CLC 788) (Karachi), a learned Division Bench of the Sindh High Court struck down the Government order of blacklisting where the opportunity of being heard was not provided for. The similar view was taken by the Indian Supreme Court in the cases of M/s Erusian Equipment and Chemicals Ltd. v. State of West Bangal and another (AIR 1975 SC 266), Joseph Vilangandan v. The Executive Engineer, (P.W.D.)
Ernakulam (AIR 1978 SC 930) and Preetam Pipes Syndicate v. Tamil Nadu Slum Clearance Board, Madras (AIR 1986 Madras 310), wherein it was held that the order ofbalcklisting, forfeiting security and terminating contract could not be passed without hearing the contractor where the order of balcklisting did not relate to' any particular contract. Here, I do not want to lay it down as a rule as if the personal hearing of a person is the only manner of providing an opportunity of hearing. Even due consideration of a written representation of a persons to the public authorities dealing with the relevant aspects in a particular case would meet the requirements of the principles of natural justice. The impugned order dated 16-12-1996 is a non-speaking order which is not sustainable in the eye of law.
5.For the foregoing reasons, the writ petition is accepted, the impugned order dated 16-12-1996 is declared to be without lawful authority and of no legal effect.6. The petitioner is directed to submit a detailed reply to the show-cause notice to the Economic Minister of the Embassy of Pakistan (Food and Agriculture Division), Washington, within a period of 14 days from today who shall decide the matter afresh in accordance with law.
7.There shall be no order as to costs