ALI NAWAZ CHOWHAN, J.---This Infra-Court Appeal is against the judgment, dated 1-12-2000 passed by a learned Single Judge of this Court in Writ Petition No.2254 of 2000, dismissing the same.
2. The appellant is a company limited by shares and registered under the Companies Ordinance, 1984, having its Head Office at Islamabad. It is involved in oil and gas industry and other engineering products and has filed the appeal through its General Manager.
3. The brief facts of the case are as follows: The respondent-- Privatization Commission, Government of Pakistan, herein referred to a respondent No.2, was constituted for the Privatization of State-owned business, projects and concerns. While acting on behalf of the Sui Northern Gas Pipelines Limited (SNGPL), Sui Southern Gas Company Limited (SSGC), and Pakistan State Oil Company (PSO) invited legal persons and individuals to submit their expressions of interest for the purchase of Liquefied Petroleum Gas (LPG) the assets of SNGPL etc. The petitioner also submitted his expression of interest in this connection.
4. The subsequent exercise involved pre-qualification process and pre --bidding meetings. In the pre-bidding meeting held on August 10, 2000 at the office of respondent No.2, the qualified parties were informed that the bidding shall take place on August 25, 2000.
5. However, in this pre-bidding meeting, the appellant was excluded. The appellant challenged this action through a Writ Petition bearing No. 1800 of 2000. The said writ petition was admitted for regular hearing by our learned brother Tasadduq Hussain Jilani, J. On August 16, 2000, who passed the following order on a Civil Miscellaneous Application bearing No.3440 of 2000, filed with the writ petition:--- "Learned counsel for the respondent accepts notice. As the main case has been admitted to regular hearing, respondent has not been able to show any ground tenable in law to justify petitioner's exclusion and as the petitioner shall suffer irreparable loss if he is not allowed to participate, it is directed that subject to the final order to be made in the main petition petitioner shall be allowed to participate in bidding to be held on 25-8-2000."
It was vehemently alleged that respondent No.2 was inimically deposed against the appellant from the very beginning.
6. The date for bidding was altered to August 24, 2000, wherein the appellant participated after fulfilling the requirements of respondent No.2. It is said that the bidding was telecast live on Pakistan Television. The appellant was the highest bidder for the Liquefied Petroleum Gas business of the SNGPL at Rs.121 Million. That the purpose for telecasting live the bidding process was to ensure that the auction process was open, fair, competitive and transparent. That the Chairman of respondent No.2 who happens to be a Federal Minister and who was present at the time of the auction proceedings, had expressed his satisfaction against the bidding and its results.
7. Later on the bidding result as in case of other public limited companies was placed in the case of SNGPL before its Director for consideration and for the passing of appropriate resolution. The SNGPL held its Board meeting on August 30, 2000, and its Board of Directors approved the highest bid of the appellant. However, on September 13, 2000, when the matter was placed before the Cabinet Committee on Privatization (respondent No.4), the highest bid of the appellant was not approved, whereas the bid of Messrs Caltex Oil who were bidding for the business of SSGC, was approved.
That in the latter case as well, their Board of Directors had approved the bid of the highest bidder.
That this act of respondent No.4 was arbitrary, highly discriminatory based on mala fides, capricious, whimsical and violative of Article 25 of the Constitution.
8. It came to the knowledge of the appellant subsequently that respondent No.4 had taken a decision for re-auctioning of the assets of SNGPL.
9. This act of the respondent No.4 had aggrieved the appellant. Firstly, the appellant was not provided with any reasons for the non-acceptance of his bid and, secondly, that no opportunity of being heard was afforded before the taking of the decision. The appellant, therefore, wanted a rectification of this wrong through judicial review by this Court.
10. It was further averred that the summary which had been submitted to the Cabinet Committee on Privatization by the respondent No.2, was in favour of the appellant and, therefore, there were no grounds for a contrary view.
11. The appeal accompanied a Civil Miscellaneous Application bearing No. 1226 of 2001 seeking temporary injunction. Vide its order of 21-2-2001, this Court injuncted as follows:-- "Respondent No.2 is permitted to re-auction the property but the said auction shall neither be confirmed nor any further auction shall be taken under it, in the meanwhile, subject to notice."
12. It has transpired that in the second auction, the highest bid made by Messrs Shell Gas (Pakistan)
Ltd., was for Rs.142. Million against the highest bid of Rs.121 Million which was offered by the appellant. Adverting to this increase in the amount of the highest bid, the learned counsel for the appellant offered to increase his bid accordingly so that his offer matched with the new highest bidder. When asked the learned counsel for the appellant as to why he failed to participate in the new, bid. His reply was that he was already an appellant in this case and his participation would have amounted to his acquiescence.
13. According to the learned counsel, his offer of matching his bid with the latest highest bid was not something new. That in India, this is something usual and he referred to the case of Ram & Shyam Company v. State of Haryana and others (AIR 1985 SC 1147) in support of his contention. He also referred to an order of the Honourable Supreme Court of Pakistan in Civil Petition No.1104 of 1999 and C.M. Application No.768 of 1999, where the Privatization Commission was involved in litigation with the City School and incidentally Raja Muhammad Akram, Advocate was a counsel for respondent No.2 in that case. The order referred to, reads as follows:-- "The operation of the impugned interim order, dated 23-6-1999 of the High Court shall remain suspended till the disposal of the main petition. The petitioners are allowed to re-auction the property but the said auction shall neither be confirmed nor any further action taken and the bid, shall be placed before the Bench if the highest bid offered in this auction happens to be for an amount in excess of the amount already offered by the respondent/writ petitioner, he may be allowed at the time of hearing of the petition to thatch the same. The main petition shall be fixed within two weeks after the placement of the bid, on the record by the petitioner."
14. The learned counsel for the appellant while alleging arbitrariness against respondent No.2 has stated that at the time of the auction the reference prices were never indicated and this was kept as a secret despite the request made by the appellant for proper information. That the reference price for SNGPL was at Rs.266 : 547 Million but this was later doctored to Rs.138 Million for the purpose of accommodating the Shell Gas whose subsequent highest bid was almost half of the reference price.
15. The learned counsel for the appellant went on to say that the assets belonged to the SNGPL and its Board of Directors, to whom a reference was made for approval of the highest bid on behalf of the appellant. Who having accepted it, the Privatization-Commission had only to fulfil the formalities pertaining to approval.
16. It was also argued by the learned counsel for the appellant that after his bid was approved by SNGPL Board of Directors, the appellant had a legitimate expectancy that his bid would be approved. Moreso, when the Privatization Commission (respondent No.2) had also approved it and had forwarded the summary to the Cabinet Committee on Privatization (respondent No.4), amongst whom the Chainman of respondent No.2 was. Also a Member, and who was the author of the summary.
17. The learned counsel appearing on behalf of the respondent No.2 was of theview that the judgment given by the learned Single Judge did not call for any interference and that the writ petition was not maintainable and that the same was the position with respect to this appeal as the acceptance or non-acceptance of the bid was the prerogative of respondent No.2 and respondent No-4 and as his bid was not approved, the appellant had no locus standi in this connection.
18. Learned counsel for the respondent has placed reliance on the following cases:--
(i) Meraj Din v. Noor Muhammad and 3 others 1970 SCMR 542, (ll) Munshi Muhammad and another v. Faizanul Haq and another 1971 SCMR 533, (iii) Muhammad. Sharif v. Sharifuddin and 3 others 1972 SCMR 63; (iv) Babu Parvez Qureshi v. Settlement Commissioner, Multan and Bahawalpur Divisions, Multan and 2 others 1974 SCMR.337, (v) Muhammad A.I v. District Council, Gujrat and another 1993 MLD 1500, (vi) Calicon (Pvt.) Ltd. Through Chief Executive v. The Federal Government of Pakistan through Secretary, Ministry of Finance,. Islamabad 1994 SCMR 1758.
19. It was also argued by the learned counsel for the respondents that the Privatization Commission (respondent No.2) and the Government of Pakistan through the Cabinet Committee on Privatization had to ultimately decide the fate of a bid. That the appellant had all along been addressing corresponding to the Privatization Commission and had accepted to agree to the decision of the Privatization Commission with respect to his bid.
20. In rebuttal, it was said that the order of respondent No.4 was not an order of the Privatization Commission. That respondent No.4 figures nowhere in this bidding and, therefore, it cannot be said that the appellant was duty bound to unconditionally accepted any decision whether made arbitrarily or otherwise, by respondent No.4.
21. For maximizing profits and for increasing income and revenues, the Government of Pakistan had constituted a Privatization Commission for the sale of public companies through public auctions.
The rationale behind the bidding is well-known to the commercial world and the purpose of which is to earn maximum price for a property through open competition in the market. The Government usually reserves for itself the right of accepting or rejecting a bid and this is invariably made known at the time of the auction proceedings. It is also true that no vested right accrues to a person whose bid is not approved. The bids are usually rejected when they do not represent adequate market considerations for the State largesse. However, while doing so, the Government has to act fairly and to arbitrarily. And where the Government acts arbitrarily, the cause of action arises.
Reliance may be placed on the following cases:--
(i) Shri Harminder Singh Arora v. Union of India and others AIR 1986 SC 1527 and (ii) Javed Hotel Ltd. v. C.D.A. PLD 1994 Lah. 315.
22. Our system adheres to the theory of the trichotomy of power. We believe that the Executive Branch of the Government has its own sphere of work which should not be interfered with nor its functions usurped. But the Branch of the Government which has to perform the judicial function i.e., the Courts have also to ensure that the discretion which is vesting in the Executive Branch of the Government was exercised fairly and not arbitrarily and wherever the discretion by the Executive Branch of the Government smacks of arbitrariness, discrimination or unfairness, a need arises for judicial review of administrative actions. The purpose obviously is to control abuse of power and unfairness. Because it is a Constitutional guarantee for every citizens that he shall be treated alike fairly and justly and which is the requirement of our faith and of a civilized society.
23. In the United States Engraved in stone on the Department of Justice Building in Washington where swa rms of bureaucrats and others pass by are the words from Willian Pitt and these are: "Where law ends tyranny begins". For most of the systems of Government in the civilized world this quotation may not be true. However, it can be said that where law ends, discretion begins and the exercise of discretion may mean either beneficence or tyranny, either justice or injustice, either reasonableness or arbitrariness.
24. What is meaning of discretion and what are the requirements for its just exercise. Discretion is a tool, indispensable for individualization of justice. All governments in history have been governments of laws and of men. Rules alone, untampered by discretion, cannot cope with the complexities of modern government and of modern justice. Discretion is our principal source of creativeness in government and in law. Yet every truth r extolling discretion may be matched by a truth about its dangers: Discretion " is a tool only when properly used; like an axe, it can be a weapon for mayhem or murder.
25. In the case of Rookke's (1598), 5 Co. Rep. (9-b) and as per Lord Halsbury in the case of Sharp v.
Wakefield (1891) A.C. 173, 179, the meaning of discretion was given as: Discretion means when it is said that something is to be done within the discretion of the authorities that something is to be done according to the rules of reason and justice, not humour. It is to be, not arbitrary, vague, and fanciful, but legal and regular. And it must be exercised within the limit to which an honest man competent to the discharge of his office ought to confine himself.
26. In an Australian case Shrimpton v. Commonwealth (1945), 69 CLR 613, at page 620, it -was described as:-- It has been held in this Court in a series of cases, that a discretion or power to grant a licence, though conferred in very general terms, does not entitle the authority to which the discretion is granted, or upon which the power is conferred, to take into account what have been described as extraneous conditions. The discretion must be used and the power exercised bona fide and with the view of achieving ends of objects not outside the purpose for which the discretion or power is conferred.
27. The need, therefore, arises for structuring discretion. In the words of Professor Kenneth Culp Davis, an authority on administrative law, a discretion should fulfil the following requirements; (i) open plans; (ii) open policy statement; (iii) open rules; (iv) open finding; (v) open reasons; (vi) open precedent and fair informal procedure. Obviously, when discretion is to be structured, the object is its regularization, its organization and giving it an order.
28. When the Government aims at Privatization, it enters into a commercial world like a private seller. It is bound by the norms of marketing and commercial activity. When it enjoins sale through bidding of its largesse, it has to follow all what market believe in and what public expects.
Obviously, if the results achieved at the time of bidding are not to be approved, there is demand of propriety and also of reasonableness that the successful bidder is informed of the reasons for the non-acceptance of his bid I and of providing him an opportunity of any view or explanation that he may be having about the rejection proposal so that his legitimate expectancy gets a satisfactory answer.
29. In the case of R v. Secretary of State for the Home Department, ex---parte Khan (1985) 1 ALL ER) on the question of legitimate expectency, the following words were of the Court of Appeal:-- "Where a member of the public affected by a decision of a public authority had a legitimate expectation based on a" statement or undertaking by the authority that it would apply certain criteria or follow certain procedures in making its decision, the authority was under a duty to follow those criteria or procedures in reaching its decision, provided that the statement or undertaking in question did not conflict with the authority's statutory duty. Thus, where the Secretary of State undertook to allow persons to enter the United Kingdom if certain conditions were met he could not resile from that undertaking without affording interested persons a hearing and then only if the overriding public interest required it. Accordingly, since a recipient of the Home Office Circular, such as the applicant, would have a reasonable expectation that the criteria and procedures there set out would be followed and since (per Dunn, LJ) those criteria and procedures in effect constituted rules made by the Secretary of State for deciding applications for entry, it followed that, vis-a-vis a recipient of the Circular, the Secretary of State could only apply different criteria and procedures in regard to granting leave to a child to enter for the purpose of its adoption if he first gave the recipient of the Circular a full opportunity of making representations why in his particular case criteria and procedures different from those set out in the Circular ought not to be followed. In the circumstances the Secretary of State had acted unfairly and unreasonably in deciding the applicant's application for entry clearance for the child by applying different criteria from those set out in the Circular. Accordingly, the appeal would be allowed and the refusal of entry clearance quashed."
30. The facts of this case reveal that the decision taken by respondent No.4 i.e., the Cabinet Committee on Privatization violates the principle of natural justice because while taking a deviation from the recommendations on the basis of the summary submitted to it, it ought to have provided a fair opportunity to the appellant of explanation as to why his bid was cancelled.
31. It is true that a higher bidder has now come on the scene at the time of the second bid where the appellant was absent for reasons expressed by him. But the question is not only of economics alone. It is also of Government's credibility without which the confidence of the people which they repose in a Government, can get shattered. This can be a bigger rather than an irreparable loss.
Besides, a civilized society does not sacrifice propriety, the rule of law and of natural justice and norms of business for just some amounts of money. Whereas, every citizens support the Government's efforts for getting the maximum profit against the sale of its largesse, but the citizens would equally require observance of propriety and norms known to the society.
32. As the Cabinet Committee for Privatization was taking an aberration from what was recommended to it by the Privatization Commission and the Board of Directors of the Sui Nothern Gas Pipelines, the propriety and norms required provision of an opportunity of hearing to the appellant and as this was not done, a wrong has come into being and this calls for correction.
33. Incidentally, it may be mentioned that although pre-admission notices were issued to the respondent's side, a full-fledged hearing has taken place before this Court and, therefore, we are inclined to dispose of this appeal today.
34. We are of the view that the matter ought to be referred to the Cabinet Committee for Privatization so that it may provide an opportunity-of hearing the appellant and taking a decision that it may deem fit and proper while keeping in view the principles of fairness and justice.
35. We, therefore, direct the Cabinet Committee on Privatization i.e. Respondent No.4 for the needful and ask respondent No.2 to arrange for this opportunity with convenient despatch. The early disposal of the matter, therefore, now rests with respondent No.4. However, it will be in the interest of justice that we further direct that until the appellant is heard and a decision is taken by respondent No.4, respondent No.2 shall not physically pass on the assets of the SNGPL to the highest bidder of the second auction. We have also noticed that in Calicon (Pvt.) Ltd. v. The Federal Government of Pakistan (supra), the leave was not refused on the ground that writ petition was not maintainable but on the ground that it was not agreed "that the petitioner has been dealt with either unfairness or with arbitrariness".
36. Under the circumstances we are of the view that the writ petition in this case was competent and we dispose of the appeal and the writ petition accordingly. There is no order as to costs.