The Trustees of the Port of Karachi (hereinafter referred to as "KPT") by Public Notice published in the daily Dawn of 13-5-2000 re-invited sealed Bids from interested parties for supply and operation of two Rail Mounted Gantry Container Handling Cranes (40 tons capacity at 36 m reach) for operation at Berth Nos. 4-5 East Wharf, Karachi Port for a period of ten years extendable to 20 years. In the said notice KPT incorporated a clause in the following terms, "Interested parties who are not in litigation with KPT may obtain further information and the bidding documents" from KPT.
Pak Shaheen Container Service (Pvt.) Limited (hereinafter referred to as "Pak Shaheen") which has been carrying on business of Container Handling in the Port of Karachi for the last several years has filed this suit alleging that the clause "who are not in litigation with KPT" has been deliberately included to exclude the plaintiff from bidding for the project as they had earlier filed Suit No,184 of 2000 in this Hon'ble Court challenging the impropriety and lack of transparency of KPT in issuing Letter of Intent to one M/s. Karachi International Container Terminal Limited Old TPX Area Keemari.
According to the plaintiff the motive of the KPT became clear when the latter refused to furnish the bid documents to the plaintiff. It is further alleged that another sister concern of the plaintiff, namely, M/s. Pak Shaheen (Pvt.) Ltd. Which is not involved in any litigation with KPT was also denied the Bid Documents on the ground that the Directors of Pak Shaheen (Pvt.) Ltd. And those of the plaintiff were common. After issuing notice to KPT on 15-5-2000 plaintiff filed this suit claiming, inter alia, the following reliefs: "(a) Declare that the said sentence vizwho are not in litigation with KPT' in paragraph 4 of the Invitation ,for Bid published on 13-5-2000 is illegal and of no legal effect;
(b) issue mandatory injunction directing the defendant No,1 to delete the aforesaid sentence from the invitation for Bid;
(c) issue mandatory injunction directing the defendant No,1 to furnish the bid documents to the plaintiffs and permit them to participate in the tender,"
2. Along with the suit, Pak Shaheen filed an application under Order 39, Rules 1 and 2 read with section 151, C.P.C. (C.M.A. No,4058 of 2000) requesting the Court to direct KPT to furnish Bid documents to them on payment of the required fee and restrain KPT from opening the Bid on 15-7- 2000 or any other extended date till disposal of the suit. The parties filed and exchanged Counter- Affidavit and Rejoinder-Affidavit in relation to the application.
3. On 3-7-2000 KPT filed an application under Order VII, Rule 11, C.P.C. (C.M.A. No,4478 of 2000) requesting the Court to reject the plaint, inter alia, on the ground that the suit was barred under section 42 and section 56(b) and (c) of the Specific Relief Act, 1877. As the issues involved in the aforesaid two applications are common, I propose to dispose of both the applications by this common order.
4. Mr. Salman Hamid, learned Advocate for KPT submitted the following arguments:
(i) Prayer (a) of the Plaint seeking a declaration that clause "who are not in litigation with KPT" cannot be granted under section 42 of the Specific Relief Act as Pak Shaheen is neither claiming any legal character nor any right as to any property as specified in section 42 of the Specific Relief Act and referred to the case of Alavi Sons Ltd. v. Government of East Pakistan and others PLD 1968 Kar. 222.
(ii) That prayers (b) and (c) of the Plaint reproduced above are barred under section 56(d) of the Specific Relief Act as it would interfere with the public duties of KPT which is a Department.Of and is controlled by the Ministry of Communication, Government of Pakistan.
(iii) The suit is also barred under section 56(i) of the Specific Relief Act because Pak Shaheen can be compensated in terms of money for loss suffered by them in their legitimate business if it is proved that the prohibition imposed by KPT was illegal.
(iv) He justified the inclusion of the impugned clause in the terms and conditions of the invitation for Bids on the ground that litigation by parties causes delay in the development of the port and loss of revenue to KPT and if a party has in the past filed a claim in Court against KPT it is most likely that he would do the same in future if he is allowed to participate in the bidding and again cause unnecessary impediment in the working of the port resulting in loss of revenue to the country. He submitted that Pak Shaheen had filed a frivolous action against KPT being Suit No,184 of 2000 in which on 10-2-2000 the Court ordered Status Quo till the next date of hearing which is continuing from one date to the other and is in force till today which is causing delay in the completion of the project and loss of revenue to the country. He denied any impropriety or lack of transparency in issuing a Letter of. Intent relating to the construction of Container Freight Station in respect of which Pak Shaheen had filed the suit in this Court and referred to para. 7 of the Counter-Affidavit and Report dated 19-2-2000 of the Pakistan Navy Special Monitoring Team in support of his submission.
(v) Under section 55 of the Specific Relief Act, mandatory injunction can be granted to prevent the breach of an obligation which one party owes to the other. As there was no contract between the parties KPT did not owe any obligation to Pak Shaheen and a mandatory injunction therefore could not be granted and referred to AIR 1921 Calcutta 129 and PLJ 1984 Quetta 95 in this connection.
5. In reply to the aforesaid arguments, Mr. Mansoor A. Shaikh, learned counsel for the plaintiff, submitted as follows:
(i) Articles 4 and 25 of the Constitution of the Islamic Republic of Pakistan assure that every citizen shall be treated in accordance with law and shall not be prevented or hindered in doing that which is not prohibited by law and that all citizens are equal before law and are entitled to equal protection of law without any discrimination. Consequently, Pak Shaheen like any other citizen of Pakistan is entitled, if it is not disqualified for valid reason, to bid for the supply of Country Ganes which right could not be denied by making unreasonable classification or deliberately inserting a clause to deprive Pak Shaheen from participating in the tender.
(ii) While awarding contracts it is the duty of the Government and every public functionary to award contracts without discrimination and not arbitrarily pick or choose persons" of their liking and disqualify persons whom they do not like and referred to the cases of Arif Builders and Developers v. Government of Pakistan PLD 1997 Kar. 627; Zohra and 5 others v. Government of Sir 4h PLD 1996 Kar. 1; Shoukat Ali and others v. Government of Pakistan PLD 1997 SC 342. '
(iii) Pak Shaheen has been carrying on the business of Container Handling in the Port of Karachi for several years and as such, they have personal interest in submitting a bid for supply of Gantry Cranes to KPT and it is the duty of KPT not to perform its duty in a manner which would result in discrimination and loss to Pak Shaheen.
(iv) That Pak Shaheen had filed an action in this High. Court being Suit No,184 of 2000 against KPT and others because the latter had not conducted, its proceedings in respect of Container Freight Station with transparency and in accordance with fair practice expected of a Government functionary and instead of issuing Letter of Intent to Pak Shaheen, who was the highest bidder, had issued the same to another party whose bid was much lower than that of Pak Shaheen.In view of these facts, Pak Shaheen was able to make out prima facie case and the Court had granted interim injunction. Their suit was bona fide and in the interest of the country as KPT would benefit if it awarded the CFS Project to Pak Shaheen. He added that KPT had included the impugned clause in order to repeat its mala fide conduct as done previously to favour the person of their choice and thereby cause loss to the country. ,
6. In his reply to the arguments submitted by Mr. Sheikh, Mr. Hamid submitted that the case of Arif Builders was distinguishable from the circumstances of the present case. In the said case the plaintiff had already participated in the bid whereby a vested right had come into existence thereby creating an obligation on the part of the defendant in favour of the plaintiff. With regard to the case of Shaukat Ali, he submitted that this case was also distinguishable from the present case as the question in the said case related to renewal of a licence for operating stalls or running wheel barrows for providing eatables, drinks etc. On railway platforms and as such a contractual relationship existed between the parties and consequently the Railway was under an obligation to renew the licence if the required conditions were fulfilled whereas in the present case there was no contractual relationship between the parties and consequently there was no duty on the part of KPT to perform any obligation in favour of Pak Shaheen.
7. This is a case involving the rights of citizens and duties of public functionaries in a democratic society. The law laying down the guidelines for awarding contracts by public functionaries is well- settled. In the 'case of Pacific Multinational (Pvt.) Limited v. Inspector-General of Police PLD 1992 Karachi 283, a learned Division Bench of this Court held as follows: However, it cannot be ignored that the State has a Constitutional .Obligation to act fairly even when performing an administrative function. Therefore, when a party complains before the Court that the State while awarding a contract to a party has acted in an unfair or arbitrary manner or has discriminated against one of the parties who contested for the award of the contract, such grievance can be looked into by superior Court in exercise of its powers of judicial review under Article 199 of the Constitution and if the Court is satisfied that the Government while entering into a contract has acted arbitrary or in an unfair manner or has discriminated between the parties before it in matter of awarding the contract, it can interfere and strike down such action." In the case of Arif Builders and Developers v. Government of Pakistan PLD 1997 Karachi 627, Kamal Mansur Alam, J. (as he then was) held as follows:- "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 isnon-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." The Hon'ble Supreme Court of Pakistan in the case of Shaukat Ali v. Government of Pakistan PLD 1997 SC 342, while dealing with the case of renewal of licence for operating stalls and wheel barrows etc. On railway platforms and after discussing section 56 of the Specific Relief Act, 1877 observed that: "3. There cannot be any cavil with the proposition propounded in the case of M.A. Naser (supra).
However, we may observe that even in case of a licence if the action of the State functionary concerned is prompted with malice/mala fide, the Court may interfere with. The case of the petitioners was that they were denied - the renewal of the licences because the Railways wanted to favour and in fact favoured third parties on political considerations. In order to support the above allegations, they had filed certain statements indicating that certain persons were given similar licences after the petitioners were denied."
8. On the basis of the above judgments, the duties of the administrative organ of the State and its functionaries may be summarized as follows:-
(i) It is the duty of the State which includes a Department of the Government or a Statutory Corporation to act fairly even while performing an administrative function.
(ii) The functionary must not act in an unfair or arbitrary manner or discriminate one of the parties who contests for the award of a contract.
(iii) In a civilized country and specially in a democratic society a public functionary cannot lay down arbitrary and capricious standards for the choice of persons with whom alone it will deal.
(iv) The discretionary power of the Government/Department in the matter of grant of jobs, contracts, quotas, licences etc. Must be based upon rational, relevant, reasonable and non- discriminatory standards and norms.
(v) In case the Government/Department/Statutory Body acts arbitrarily, discriminately, with malice or in an unfair and unreasonable manner, the superior Courts would have the power to interfere, strike down the action and rectify the impropriety unless it is established that the departure from the standard or norm was not arbitrary but was based upon valid reasons acceptable in and by civilized democratic societies.
9. Viewed in light of the above principles the impugned clause "Interested parties who are not in litigation, with KPT", prima facie, appears to be arbitrary, discriminatory, capricious, irrational and unreasonable as it clearly disqualifies any persons including Pak Shaheen from submitting bids and competing with other persons on merits without hindrance if he has in the past challenged any action of KPT on the ground that it had in any matter acted unfairly, unreasonably, arbitrarily, discriminately or in an transparent manner. The argument advanced by Mr. Hamid, learned counsel for KPT, that Pak Shaheen had filed Suit No,184 of 2000 in respect of Container Freight Station earlier and therefore, they are likely to repeat their action thereby causing hindrance in the present project, is not based upon sound reasoning. Mr. Hamid, learned counsel for KPT was asked to cite any judicial precedent or a copy of the terms and conditions from any part of the world where a similar condition had been incorporated in a bidding document. He was unable to do so.
Absence of such a precedent confirms the opinion that such a condition is not regarded as a reasonable one. On perusal of the file of Suit No,184 of 2000 it appears that Pak Shaheen had alleged that KPT had not acted fairly, had rejected their offer which was the highest and had issued LOI to another company whose bid was lower than that of Pak Shaheen. If their allegations were correct they were justified in filing the suit and seeking relief from a Court of law. It appears that because Pak Shaheen was able to make out a prima facie case for temporary relief that this Court granted interim injunction in their favour. The grievance of KPT that Pak Shaheen's suit is frivolous and the hearing of the Temporary Injunction Application is not proceeding to the satisfaction of KPT is another matter. If the suit is not proceeding swiftly, KPT is partly to blame. In such event, it should have brought to the attention of the Court the importance and urgency of the matter, the loss that was being caused to the national revenue on account of the delay in the hearing of the application and should have requested the Court to hear and decide the issue of temporary injunction as expeditiously as possible. KPT could and should have moved an application for Urgent Hearing of the application during vacations when Judges sit especially to deal with matters requiring their immediate and urgent attention. KPT did not take the required action which was within their power.
They are responsible for their own omission and should not therefore complain about any delay in the outcome of the proceedings. The filing of the suit alone by Pak Shaheen unless there are other valid reasons cannot be made the basis for disqualifying them from competing with other bidders in a project of national importance.
10. The contention of Mr. Hamid, learned counsel for KPT., that Pakistan Navy Special Monitoring Team in its Report dated 19-2-2000 has come to the conclusion that Pak Shaheen's complaint relating to the Container Freight Station was frivolous cannot be considered by the Court in this suit. It is a matter to be considered in Suit No,184 of 2000. KPT may use it in its arguments before the Court on the temporary injunction application in that suit. It is established law that administrative actions are subject to judicial review for which no precedent need be cited here. If the said suit is decided in favour of KPT, they would have a- cause of action against Pak Shaheen and would have the right to commence legal proceedings against Pak Shaheen for any loss suffered by it, if so advised.
11. The arguments of Mr. Hamid, learned counsel for the defendant, that KPT does not owe any duty or obligation to Pak Shaheen is misconceived. The work "obligation" according to section 3 of the Specific Relief Act "includes every duty enforceable by law" (Underlining added). The term law has not been defined in any statute but according to the Hon'ble Supreme Court of Pakistan "The law is that which is enforced by law Courts" (Saeedullah Kazim v. Government of Pakistan PLD 1981 SC 42 at 49). Therefore, a duty enforceable by law includes the duty arising under a contract which is enforceable pursuant to the provisions of the Contract Act, 1872, any other statute or a duty arising under the judgments of the superior Courts of Pakistan. Viewed in this light, it cannot be argued that the provisions of sections 54 and 55 of the Specific Relief Act, 1877 are confined to obligations arising under a contract only and the duty of a person to another or to the public at large or the duty of a department of the Government or a statutory body to the public at large declared by the superior Courts is excluded therefrom. Mr. Hamid cited the case of Inayatullah v. Amir Khan PLJ 1984 Quetta 95, in support of his contention. In the said case the petitioners had been using a certain place near the fruit market Quetta and stationing their taxis for a number of years and argued that they had thus acquired a right to park their taxis there which was being denied to them. The argument advanced by the petitioners was rejected on the ground that there was no contractual relationship between the petitioners and the Municipal Authorities, the position of the petitioners was nothing but that of trespassers and the long use of the municipal land did not create any right in their favour and consequently there was no breach of any obligation on the part of the corporation. The right that is being claimed here is not a contractual right or a right under the Easements Act, 1882 but the right of a citizen to be treated in accordance with law and the duty of KPT to treat all persons equally and conduct all its business with tansparency, reasonableness and fairness as required by law. This judgment accordingly is not relevant here. In the other case of Bhudeb Mukerjee v. Kalachand Mallik AIR 1921 Calcutta 129, cited by the learned counsel, the plaintiff had filed a suit to restrain the defendant from removing a tree which was alleged to have been consecrated and worshipped by the orthodox Hindus. The Court held that the word "obligation" used in section 54 of the Specific Relief Act refers to a legal obligation and not merely moral, social and religious one. As already stated above, the case of the plaintiff in the present suit is that KPT is under a legal obligation to conduct its business in accordance with the law laid down by the superior Courts as described above. This case also does not support the case of KPT. As discussed, it is the duty and obligation of every State functionary/Department to act fairly, impartially and without discrimination and if it does not do so, the person who is adversely affected by the unfair, impartial, unreasonable and discriminatory conduct would have the right to invoke the jurisdiction of this Court for relief including that of mandatory and temporary injunction and the Court would be justified in granting the same if it is satisfied that the Government functionary, Department or a statutory corporation has acted unfairly, arbitrarily, unreasonably, discriminately, capriciously, partially or maliciously in any matter.
12. In view of the above, it is not necessary to discuss the other points raised by the learned counsel as the injunction application can be disposed of on the basis of the law discussed and conclusion reached above. Consequently, defendant's Application under Order VII, Rule 11, C.P.C. (C.M.A.
No,4478 of 2000) is hereby dismissed with costs of Rs,5,000 only and plaintiff's application under Order 39, Rules 1 and 2 read with section 151, C.P.C. (C.M.A. No,4058 of 2000) is allowed to the extent that the Clause "Interested parties who are not in litigation with KPT" is deleted from paragraph 4 of the KPT Invitation for Bids in respect of Two Rail Mounted Gantry Container Handling Cranes published in the daily Dawn dated 13-5-2000 and KPT is directed not to refuse acceptance of plaintiff's Bid Documents on the ground of litigation which they have commenced against it.
13. The above are the reasons for the Short Order passed by this Court on 13-7-2000 in the terms reproduced in paragraph 12 above.