NAZIM HUSSAIN SIDDIQUI, J. -This judgment will dispose of Civil Appeals Nos. 1585 and 1586 of 1995, wherein common questions of facts and law are involved.
2. In these appeals, the judgment dated 2.10.1995 of a learned Judge in Chamber, Lahore High Court, Rawalpindi Bench, has been impugned, whereby the Writ Petitions Nos. 301 and 302 of 1995 filed by the appellant, Kay Bee International (Pvt.) Ltd., were dismissed.
3. The facts relevant for decision of these appeals are that the respondent No. 2, Director of Industries and Mineral Development, Lahore, hereinafter referred to as "the Licensing Authority" invited Sealed Tenders on 2.1.1995, under Rule 101 of the Punjab Mineral Concession Rules, 1986, which were framed by the Governor (Government) in exercise of powers conferred upon him by Section 2 of the Regulation of Mines & Oilfields & Mineral Development (Government Control) Act, 1948, to lease out an area of 519:65 acres situate near Mattan Kalan in District Chakwal for 20 years as mining lease of coal. The tender notice contained terms and conditions, including that the Licensing Authority reserves the right to reject or accept an offer without assigning any reason and that each tender shall be accompanied by 1/4th amount of the offered bid.
4. It appears that six tenders were received for the aforesaid mining lease. The appellant offered a bid of Rs.4,00,000/- and submitted a call deposit of Rs. 1,00,000/- alongwith its offer. Respondent No. 3 (In Civil Appeal No. 1586/1995), Major (Retd.) Javed Karim, hereinafter referred to as "the private respondent", offered a bid of Rs. 4,20,000- but his tender was accompanied by a call deposit of Rs. 20,700/- only, which meant that, in fact, his offer was for Rs. 82,800/- as the amount deposited by him was 1/4th of the just aforesaid amount. One Rana Intizar Ali had also offered a bid of Rs. 5,04,000/-, which straightaway was turned down on the ground that this officer was received after two days of the relevant date.
5. The Licensing Authority rejected the bids of all the bidders, including the appellant and the private respondent. The bids of the appellant and of the private respondent were rejected on 31.1.1995 and 2.2.1995 respectively.The Licensing Authority had ordered to invite fresh tenders. Both orders were challenged separately first before the Appellate Authority i.e. the respondent No. 1, Secretary to the Government of Punjab, Industries and Mineral Development Department, and after the decisiOn of it before High Court.
6. It is significant to point out that after the bid of the private respondent was rejected by the Licensing Authority, he withdrew the earnest money vide letter dated 3.1.1995.
7. The respondent No. 1/Appellate Authority by order dated 22.2.1995 accepted the appeal of private,,respondent with a direction to him to deposit the entire amount of bid viz. Rs. 4,20,000/- within five days from communication of the order and in case of failure to do so, it was ordered that lease be offered to the appellant. After above order, the private respondent deposited the aforesaid amount. The appellant challenged the order of the Appellate Authority through writ petitions before High Court and the same were dismissed by a common judgment; which has been impugned in these appeals.
8. Vide order dated 17.2.1995, leave to appeal was granted to consider; "whether learned High Court was competent in maintaining the order of respondent No. 1 even though Javed Karim has failed to comply with the pre-requisite i.e. 1/4th of the call deposit with his tender and the effect of his withdrawal of the deposit amount even though it was deficient".
9. Learned Appellate Authority interpreted Rule 101 of PMC Rules, 1986 and reached the conclusion that this rule does not lay down any definite mechanism or procedure for realization of tender money. It was also held that there was no mala fide intention on the part of the private respondent, as such, the Licensing Authority should have asked him (private respondent) to clarify and confirm the actual amount of his bid. Learned Appellate Authority held that it was proper to give benefit of doubt to the private respondent. Learned High Court agreed with the interpretation of Rule 101 ibid by the Appellate Authority and dismissed the petitions filed by the appellant.
10. Said Rule 101 is as follows:--
101. Auction of area with proved mineral reserves. -- In case of cancellation of licence or lease in respect of an area containing proved mineral reserves the Licensing Authority may lease out the area by inviting sealed tenders on such terms and conditions as may be prescribed by it."
11. It is contended on behalf of the appellant that both the Appellate Authority and High Court have failed to appreciate the facts and the relevant law and reached wrong conclusion. Learned counsel also argued that, by accepting the bid of the private respondent, the Appellate Authority not only flagrantly violated the terms of tender notice but also eroded the concept of clean financial dealings which is an integral part of contract, made through the process of tenders.
12. As against above, learned counsel for respondents Nos. 1 and 2 submitted that the order of the Appellate Authority-and of High Court are based upon sound reasonings and do not require any interference.
13. We have heard the learned counsel for the parties and have perused the record with their assistance.
14. Material facts are not disputed. It is an admitted fact that 1/4th of the tender amount of the bid was not deposited by the private respondent. It is also an admitted fact that after rejection of bid, he withdrew the amount, which he had deposited as bid money. It is settled proposition of law that approach of the government in awarding contracts and licences shall be rational, reasonable and transparent and it should not be based upon arbitrariness and discrimination. Once the private respondent withdrew the earnest money, he was out of arena and could not be considered for the award of contract. The condition, as incorporated in the tender notice, were violated and special favour was shown to the private respondent.
15. In case of contract through process of tenders, the mode once adopted shall be strictly followed. The observation of the Appellate Authority that there was some confusion relating to the terms and conditions in the tender notice, is incorrect. The record reveals that there was no confusion, but the confusion was created by the first Appellate Authority by passing- am--order contrary to the rules applicable to the matter. One of the. object of inviting sealed tender is to promote healthy competition and to provide equal opportunities to all the prospective bidders.. By following different modes, the above object was frustrated and must have shaken the confidence of the public:also'. Learned Appellate Authority held that short deposit towards 1/4th of the bid money was a bona fide mistake on the part of the private respondent. It is not clear from record that on what basis the Appellate Authority reached the above conclusion. Every thing was absolutely clear if he had offered the bid of Rs. 4,20,00,0/-, then its 1/4th was Rs.1 ,05,000/- and not Rs. 20,70.0/-. ..16. Rule 101 ibid was incorrectly construed :both -by the Appellate Authority and High Court. High Court opined that the phrase "terms and conditions" appearing in above rule qualify the term "lease" and not "sealed tenders", as such, the terms and conditions of tender notice were not statutory Rules, as they lacked the necessary characteristics of mandatory provisions. Further, it was held that, at the most, these were departmental instructions and could not be sole basis for determining the validity of the bids. It is significant to note that, as per above-quoted rule, the Licensing Authority may lease out the area by inviting sealed tenders on such terms and conditions, as may be prescribed ,by it. It is clear that under above rule, the Licensing. Authority is competent to prescribe some additional terms and conditions, as it may deem fit. Therefore, the terms and conditions prescribed in the tender notice are to be considered, as additional terms and conditions in addition to the conditions of grant of lease. Above rule cannot be interpreted in a way, which may render the terms of tender notice as null and void. Process of awarding contract through sealed tenders would become meaningless if it is left to be modified/altered at- the costs of other bidders, only to accommodate a person of choice. Both the rules of "tender notice" and of "grant of lease" under PMC Rules, 1986 are inseparable for. just and fair transaction.
17. In consequence, we allow these appeals with no order as to costs, set aside the judgment of High Court, cancel the contract of the private respondent and direct, the Licensing Authority to invite fresh sealed tenders within two months for grant of lease according to law.