1. ' DR. GHOUS MUHAMMAD, .J.---The facts forming the background of this petition are that the petitioner has been engaged in the business of civil engineering and construction for the past several years and is also an approved contractor of the respondent in category A-1, without any limit and had carried out various projects of the respondent in the past. 1 he petitioner has alleged that in 1997 the respondent had invited bids for the work of Rehabilitation/Restoration of Service Jetty in the port. The petitioner's bid for Rs,3,99,29,500 was found to be the lowest in view whereof vide Resolution No,3029, dated 18-8-1997 the Board of the respondent awarded the contract to the petitioner. However, subsequently, the Board reviewed its decision and did not award the work to the petitioner and invited fresh tenders for awarding the said contract through notice in the daily 'Dawn', dated 30-8-1998. The petitioner challenged the attempt of the respondent for inviting fresh tender by filing C.P. No,D-1331 of 1998 in this Court. Preadmission notices of that petition were given to the respondent and ultimately the petition was dismissed on 24-11-1998. The petitioner challenged the order, dated 24-11-1998 before the Hon'ble Supreme Court, at Karachi, the latter declined to interfere and dismissed the petition for leave to appeal vide order, dated 2-4-1999.
2. ' After dismissal of the petition, once again fresh tenders were invited, now for the third time, for the same job, by the respondent vide notice published in the daily 'Dawn' dated 24-3-1999. It is the case of the petitioner that they had possessed the requisite qualifications to participate in the tender invited by the respondent, however, for reasons best known to the respondent, it did not issue to petitioner the tender documents. In this manner the petitioner has been precluded from participating in the tender. In filing the present petition the petitioner has claimed the following relief:
(I) Declaration that the entire proceedings relating to the tender as invited by public notice, dated 21-3-1999 are illegal and void.
(II) Direction to respondent not be award work to any person on the basis of tenders submitted pursuant to the aforesaid notice.
(III) Direction to respondent to invite fresh tender and also allow the petitioner to participate in the tender for awarding the work mentioned in the aforesaid public notice.
(IV) Cost of the petition.
(V) Any other relief which this Honourable Court may deem fit and proper.
3. ' Pre-admission notice of this petition was served on the respondent, who through its Deputy General Manager (M.P.) has filed a counter-affidavit. In the said counter-affidavit the respondent has averred that the petitioner has failed to meet the pre-qualification requirements, in view whereof the petitioner has not legal right to insist on being considered as a possible contractor for the execution of the work in question. In para. II of the counter-affidavit the respondent has in particular contended that through advertisement, dated 21-3-1999 which appeared in daily 'Dawn' attached as Annexure 'B' to the petition, inter alia, four requirements had been prescribed which the petitioner has not been able to nieet. These four requirements have been spelt out to be as follows:---
(i) Vast experience in Marine structure.
(ii) Financial turnover of Rs,50 million per year.
(iii) Organizational set-up.
(iv) Equipment.
4. ' In response the petitioner has filed a rejoinder while the parties have also filed synopsis of their written arguments after exchanging copies thereof.
5. ' In the rejoinder read with the written arguments the petitioner has submitted that in the documents marked as Annexure 'R' to the counter-affidavit, the respondent has admitted the factual position about the participation of the petitioner in the previous tender being the lowest therein and the fact that the Board vide Resolution No,3029, dated 18-8-1997 had approved such bid of the petitioner. With regard to the four requirements appearing in daily 'Dawn', dated 21-3- 1999 to which the respondent stated that the petitioner has not been able to comply therewith, the learned counsel for the petitioner has submitted that:---
(a) the petitioner fulfilled all these requirements and was entitled to participate in the fresh tender but no valid reason at all had been given by the respondent to exclude the petitioner from the tender. Therefore, this conduct of the respondent is ex facie mala fide;
(b) the nature of the work and the requirements as given in the fresh tender are exactly the same as were given in the previous notices calling for the tender;
(c) the parameters of the work in question are not different from the work previously advertised in which the petitioner's bid being the lowest, was accepted;
(d) moreover, the petitioner has the requisite qualification to participate in the fresh tender.
6. Recently i,e, January, 1999 the petitioner was awarded the contract for 'Channel Maintenance Dredging Work' by the respondent and the letter of intent, dated 26-12-1998 has been filed as Annexure A/2 to the rejoinder by the petitioner. The petitioner has satisfactorily completed the work.
7. The work awarded to the petitioner under the said letter of intent was for Rs,22,81,50,000. Similarly the petitioner was awarded the work for supply and installation of 'Rubber' Finders' at Port Qasim by the respondent and letter of intent in that regard, dated 18-6-1998 for Rs,34,01,90,654 is filed as Annexure A/1 to the rejoinder of the petitioner. 75% of this work has been successfully completed;
(e) other participations mentioned in Annexure R/2/1 to the counter-affidavit i,e, those who have been allowed to participate in the tender, also do not meet all the prescribed requirements mentioned in the advertisement, dated' 21-3-1999. In particular Messrs. Housing Enterprises (Pvt.)
8. Ltd., which is shown as the lowest bidder and whose bid the respondent wants to accept has no experience in marine work and that no document has been produced to confirm that the entity conforms to all the prescribed requirements;
(f) the other organization namely F & W which was associated with the petitioner in submitting the tender has a vast experience in marine work including marine structure, now for the last '30 years'.
9. ' The learned counsel for the respondent has in turn submitted that the entire matter rests on the answer to the question as to whether or not in terms of notice, dated 21-3-1999 the petitioner could prequalify for the issuance of tender for the subject work. Referring to para. 11 of the counter- affidavit and para. 8 of the affidavit in rejoinder the learned counsel for the respondent has submitted that the petitioner was not so qualified and thus, was not entitled to get the tender documents. Furthermore, the petitioner had no marine structure project experience and did not possess the required turn-over of Rs,50 million. It was vehemently stressed that the employer/owner is fully entitled in law to prescribe conditions and pre-conditions for the purposes of pre-qualifications so as to shortlist contractors. It was emphatically asserted that this right of the employer/owner cannot be taken away by any contractor. Referring to the work experience and income standing of the petitioner (Annexures 'D & E') it was submitted that on the basis of these documents the petitioner did not prequalify. Lastly it was stated that the project was reavaluated for work and costs under order, dated 7-11-1999 of the respondent's Board. Therefore, no illegality was committed and the petitioner being misconceived is liable to be dismissed.
10. ' We have heard learned counsel for the parties and perused the record as well as the law on the subject.
11. Before touching up the merits of the case it may be pointed out that with the consent of the parties we had proceeded to hear the main case and dispose of .The entire petition at Katcha Peshi stage.
12. In doing so we were guided by the judgment of the Supreme Court of India reported as Sterling Computers Ltd. v. M & N Publication Ltd. And others AIR 1996 SC 51, wherein the apex Court of India has expressed the desire for expeditious disposal of cases touching upon the award of Government contracts and tenders in view of the escalating cost failing which the power which is to be exercised in the interest of public and for public good may become even counter- productive. In this regard the following observations are cited with approval: "It is a matter of common experience that whenever applications relating to award of contracts are entertained for judicial review of the administrative action, such application remains pending for months and in some cases for years. Because of interim orders passed in such applications, the very execution of the contracts are kept in abeyance. The cost of different projects keep on escalating with the passage of time apart from the fact that the completion of the project itself is deferred. This process not only affects the public exchequer but even the public in general, who are deprived of availing the facilities under different projects."
13. ' The learned counsel for the respondent has vehemently stressed that the respondent, as the employer/owner, was absolutely free to prescribe any condition and precondition for the award of work. The argument is not entirely correct. It is pointed out that the employer may prescribe precondition to the award of the contract/tender, however, when the employer is the Government or its owned or controlled authority or entity, it is expected that the Government shall act fairly, reasonably, justly and not arbitrarily and in a discriminatory manner. The entire process of tendering and a subsequent award should also be transparent, fair and reasonable. This seems to be the settled statement of law on the subject. In Pacific Multinational (Pvt.) Ltd. v. I.-G. Police PLD 1992 Kar. 283, a Division Bench of this Court accepted the proposition that the State has a Constitutional obligating to act fairly even when performing administrative functions; when a party complains to the Court that the State while awarding a contract to a party had acted in an unfair or arbitrary manner or had discriminated against one of the parties, who contested for the award of the contract such grievance could be judicially reviewed and the Court could strike down such action, which was found to be unfair or arbitrary or discriminatory. In this case the Court judicially reviewed the purchase of two 'Bell Helicopters' from a higher bidder and found the Government's decision to be based upon sound judgment and valid consideration, thus dismissing the petition. In Jawed Hotel (Pvt.) Ltd. v. C.D.A. PLD 1994 Lah. 315 a learned Single Judge of the Lahore High Court after extensively reviewing the law on the subject had come to the conclusion that the highest bidder could not have a vested right to have his bid accepted, however, his bid could not be rejected arbitrarily without considering the documents given by him. It was also held that the public functionaries were required to perform their duties fairly, justly and in accordance with law.
14. Dadabhay Investment (Pvt.) Ltd. v. Federation of Pakistan PLD 1995 Kar. 33 is another authority relevant to this case. In this judgment the petitioners were the highest bidderS and they were subsequently asked to raise the bid to the maximum reserved price. Once that was done by the petitioners, their bid was cancelled without assigning any reason. It was held that Government had the discretion to accept or reject the bid, however, that discretion could only be exercised fairly, justly, reasonably and honestly and the petitioner's bid could not be rejected without assigning any reasons. In the circumstances of the case, the Court directed the Government not to auction the subject property except to the petitioner. In another case i,e, the Port Services (Pvt.) Ltd. v.
15. Federation of Pakistan PLD 1995 Kar. 374 a Division Bench of this Court has held that though the Court would be reluctant to substitute its discretion with that of the authority, however, such discretion could not be exercised in an arbitrary, unjust and unreasonable manner. In the facts and circumstances of the case the Court found the tender procedure to be fair and transparent, thus declining to interfere. In Jawed lqbal Abbasi and others v. Province of Punjab 1996 SCMR 1433, our own Hon'ble Supreme Court while dealing with award of export contract has taken the view that the highest bidder does not acquire vested rights for acceptance of his did which could be rejected for good and sufficient reasons satisfying the test of reasonableness and public interest.
16. Arif Builders and Developers v. Government of Pakistan PLD 1997 Kar. 627, is another important decision in which a learned Single Judge of this Court has held that the Government would not have unfettered powers to deal with its properties or to award contracts, licences or other benefits and unlike other private individuals it could not arbitrarily pick and choose persons for bestowing favours; Government action should be based on reasonable and rational procedure, which was non-discriminatory and aimed at, on one hand to provide equal opportunity to eligible persons and on the other to avoid loss to exchequer; discretion vested in the State functionaries must be exercised judiciously not arbitrarily and should be based on sound principles of justice and fairness. It was further held that the rule against arbitrary and discriminatory Government action was enshrined in Articles 2A and 25 of the Constitution.
17. ' The position in the Indian jurisdiction is somewhat similar. In V. Punnan Thomas v. State of Kerala AIR 1969 Kerala 81, it was observed that 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. Commenting upon the powers of the Government to award contracts and tenders, the Hon'ble Supreme Court of India in Ramana Dayaram Shetty v.
18. International Airport Authority of India AIR 1979 SC 1628 has particularly observed as follows:--- "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 guaranteeing 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 (sic) 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 deviates 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."
19. ' Rather recently the Supreme Court of India has reiterated the above golden principles for structuring discretion with regard to the award of public contracts etc. In Sterling Computers (Pvt.)
20. Ltd. v. M. & N Publication (Pvt.) Ltd. (cited supra). In this case the Indian Supreme Court has found the award of a Government contract for printing, by way of extension in the contract for printing, by way of extension in the contract through a supplemental agreement, without invitation of any tender, to be without lawful authority and void. Dilating upon the powers of judicial review in this area the Supreme Court observed that the Court is primarily concerned with any infirmity in the decision-making process. The Supreme Court observed that by way of judicial review the Court cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State as the Court has inherent limitation on the scope of such enquiry; but at the sametiatt, the Court can examine whether the decision making process was reasonable, rational, not arbitrary and violative of Article 14 of the Indian Constitution, guaranteeing fundamental rights.
21. The Supreme Court of India has further observed as follows:--- "If the contract has been entered into without ignoring the procedure which can be said to be basis in nature and after objective consideration of different options available, taking into account the interest of the State and the public, then the Court cannot act as an Appellate Authority by substituting its opinion in respect of selection made for entering into such contract. But once the procedure adopted by an authority for purpose of entering into a contract is held to be against the mandate of Article 14 of the Constitution, the. Court cannot ignore such action saying that the authorities concerned must have some latitude or liberty in contractual matters to encroachment on the exclusive right of the executive to take such decision."
22. There is no cavil with all of the above. The respondent is a statutory body performing functions under the Port Qasim Authority Act, 1973. Being a State functionary, the respondent in awarding contracts must act fairly, reasonably, honestly and justly. Though the Court cannot substitute its opinion with that of the State functionary, yet it certainly has the power to judicially review administrative actions to check their fairness, reasonableness and transparency. One of the main reasons why the earlier case bearing. C.P. No, D-1331/ 1998 was dismissed by this Court was that fresh tenders were invalid and the petitioner was allowed to participate therein. In this respect the following observations in the judgment dated 24-11-1998 in the earlier case are relevant and read as follows:--- "Mere calling fresh tender cannot be considered a mala fide act, all the more when no restriction was placed on the petitioner to participate in such tender and in fact, we are informed that the petitioner has participated and submitted its bid."
23. ' The moment C.P. No,D-1331 of 1998 and its appeal to the Hon'ble Supreme Court were dismissed, the respondent issued a fresh tender claiming to raise the qualification standards. In para. 11 of the counter-affidavit the respondent stated that the petitioner has not been able to comply with four requirements viz. Vast experience in marine structure, financial turnover .50 million per year, organization set-up and equipment's. Out of these four, three requirements are very important i,e, experience; organizational setup and equipment. If the petitioner now lacks these three essential qualifications how could it qualify on the first two occasions when the tenders were scrapped and fresh one invited. Or is it the case that in order to disqualify the petitioner alone standards are being altered for the same work? If the latter is the state of affair then certainly the entire action would be mala fide. However, we do not wish to express -a. 'conclusive opinion forthwith. On the contrary the petitioner stated that along with its associate company F & W they have vast experience of 30 years in marine structure whereas the entities qualified, thus far in particular Housing Enterprises (Pvt.) Ltd, have no experience in marine structure. The respondent in declining the' petitioner to participate had even failed to give any reasons. As far as the condition of having 50 million turn-over per year the key question would be as to whether this condition has any nexus with the performance of the work. In India in the. Ramana case (cited supra) the Supreme Court has held that concerned authorities cannot accept tenders of persons, who do not fulfil the requisite qualifications, thereby implying that the - authorities could impose any condition in their discretion. In Pakistan we have gone a step further. In Arnanullah Khan v. Federation of Pakistan, PLD 1990 SC 1092, our Hon'ble Supreme Court has held that the prescribed condition must have nexus with the object of the purpose. In other words, a prescribed condition having no nexus with the object can be judicially reviewed, red or struck down. In the context of tenders and award of contracts the prescribed condition must not be unreasonable, irrational and must have a direct nexus with the performance of the work sought to be preformed by the contractors in the totality of circumstances. Whether or not a condition would have nexus with the object will depend upon the facts and circumstances of each case.
24. ' The admitted position is that the respondent has failed to accord any reason to the petitioner in declining it to participate in the tender. This is more so in the given facts and circumstances of the case inasmuch as that for the same contract the petitioner has participated in the earlier bids, which were later scrapped, and the petitioner claims to have satisfied the bid conditions and states that it has the necessary experience whereas those allowed to participate lack the same.
25. Section 24-A of the General Clauses Act, 1897, inter alia, requires an executive authority to give reasons for its actions and orders. The failure of the respondent to record reasons, in the present case, and for declining to allow the petitioner to participate is unlawful and declared to be so. In the facts and circumstances of the instant case we feel that subject to the following, the respondent shall communicate reasons in writing to the petitioner for declining the petitioner to participate in the tender. The reasons should, inter alia, contain the following:
(i) How the petitioner fails to meet the requirements of the tender in terms of experience of marine structure, organizational set-up and equipment and how other participants meet these conditions?
(ii) Whether the tender requirements this time differ from the requirements in the earlier two cases?
(iii) In case the requirements are substantially the same as to why the petitioner has been declined to even participate when on the earlier two occasions the petitioner was allowed to participate for the same tender?
(iv) In case the requirements are substantially different, the rational behind prescription of different standards. This is essential to see as to whether the change in standards are only made to disqualify the petitioner for mala fide reasons?
(v) The circumstances, rationality and nexus behind the prescription of the condition of 50 million turn-over per year with the object of the work; and whether the petitioner fulfils this condition?
26. ' It is also observed that within the days hereof the petitioner shall be at liberty to file any further documents or material with the respondent to establish that it complies the four requirements mentioned by the respondent in para. 11 of its counter-affiavit as stated aforesaid. After the lapse of three days hereof the respondent should communicate the reasons to the petitioner as above within 15 days following three days hereof after pursuing all the documents on record supplied by the petitioner in the next three days. The award of contract shall not be finalized till lapse of three days from the date of communication of reasons by the respondent to the petitioner. In case the respondent finds the petitioner to be eligible, it may permit the petitioner to participate in the tender and further process the tender without delay, strictly in accordance with law, fairly, justly, reasonably and without fear or favour. In such a case there will be no need to formulate or communicate any reasons as described hereinabove. The petition is allowed and stands disposed of in terms as above with no order as to costs along with miscellaneous applications.
27. ' Before parting, one Muhammad Jawed through his counsel Mr. Syed Nazir Abbas Rizvi, Advocate had moved an application under Order 1, rule 10, C.P.C. Requesting to be joined as a party in this case. The learned counsel thereafter chose not to press the application, which is dismissed as withdrawn.