1. ' SHABBIR AHMED, J.---Trustees of Port of Karachi (hereinafter referred to as the KPT) invited application from the interested Firms/Companies for pre-qualification for the grant of tender for the construction of Container Terminal at Berth No,6-9 East Wharf, Karachi on built operate and transfer basis (hereinafter referred to as BOT), through public notice in newspaper. The last date of application was 10-2-1998, which was extended to 20-2-1998 by corrigendum dated 7-2-1998 of daily "The News". In terms of clause 7.1.9., one, of the requisites for pre-qualification of bidder was the disclosure of litigation/dispute with other agencies if any. The plaintiff, Premier Mercantile Services (Pvt.) Ltd. (hereinafter referred to as PMS) was pre-qualified with seven other firms. The bid documents were issued. The PMS and six others amongst the pre qualified firms, purchased the bid document, the bids were opened on 10-7-1999. The PMS was found to be the sole bidder.
2. Confronted with this situation though there was no bar, in the bid document for acceptance of single bid, the representative of PMS present was not inclined for its bid to be opened, unless the KPT agreed to consider the single bid for evaluation for the reasons that once single bid is opened that would disclose the plaintiffs' financial offer to all and sundry. The Tender Committee in its minutes of meeting dated 12-7-1999, on the recommendation of Mr. Don Wotlon, a representative of the Foreign Consultant of KPT and after due approval of the members of the Tender Committee, General Manager (P & 0), confirmed that single bid would be considered, thus bid was opened and the offer of PMS was revealed. The foreign consultant of the KPT for container terminal, technically evaluated the PMS bid and were of the opinion that single offer for BOT contract exceed the minimum revenue demand of KPT and there was no harm in acceptance of such single bid. The consultants also recommended that bid be accepted on merits. The KPT Technical Committee also evaluated the bid and recommended for acceptance of single bid. The conclusion of bid evaluation report was in the following terms:-- "PMS have submitted a thorough and well-prepared meets all the eligibility criteria, is complete, unconditional and responsive.
3. ' Single bid does not invalidate the bidding process. A BOT bid should not be compared with a tender to construct works or procure goods or services when it is necessary to have number of .Tenders to establish that the offer is competitive and in line with the budget estimates.
4. ' The financial terms offered by PMS far exceed the minimum rates set in the bid document which were set at a comparable rate to those in KICT's agreement. In place of minimum royalty of US$ 7.05, PMS have offered a rate of US$ 11.51 and in place of the minimum rental of Rs,365 per square metre per annum, they have offered to pay Rs,411. With these rates, the annual revenue to KPT is some 33% over the revenue which have been due if the minimum rates had been quoted.
5. ' From our scrutiny of the bid we see no reason why KPT should not enter into discussion with PMS to conclude the agreement on the basis of the submitted bid and seek an early financial closure."
6. ' Evaluation Committee of KPT in its evaluation report concluded as follows:--
10. CONCLUSION
(a) PMS have submitted a thorough and well prepared bid which meets all the eligibility criteria, is complete, unconditional and responsive.
(b) In our view, the receipt of a single bid does not invalidate the biding process. A BOT bid should not be compared with a tender to construct works or procure goods of services when it is necessary to have a number of tenders to establish that the offer is competitive and in line with the budget estimates.
(c) In the BOT situation it is the bidder who is making the investment and taking the risk not KPT. The bid document clearly stated the minimum criteria to be adopted by the bidder in setting up the terminal and set the minimum revenues which were acceptable to KPT. These revenues were based on those agreed for KICT and increased to take account of inflation. In this way the interests of KPT are protected and KPT receive the benefit without the investment and risk.
(d) PMS plan to use international consultants to assist with the planning and design of the terminal civil works and Hamburg Port Consultancy to assist with the management and operational aspects. ANZ Invest Bank have prepared their financial model and ANZ Grind lays have confirmed that they will act as financial advisor and debt arranger.
(e) PMS bring with them substantial traffic as they have handled in excess of 200,000 TEU per annum over the last 5 yeas. They have positive strategy to attract more traffic and believe that they will be able to handle 400,000 containers by the year 2009.
(f) The financial terms offered by. PMS far exceed the minimum rates set in the 'bid document, which were set at a comparable level to those in. KICT's agreement. In place of the minimum royalty of US$ 7.05, PMS have offered a-rate of US$ 11.51 and in place of the minimum rental of Rs,365 per square metre per annum, they have offered to pay Rs,411. With these rates, the annual revenue to KPT is some 33% over the revenue which would have been due if the minimum rates had been quoted.
(g) Further PMS have offered to pay these rates as soon as they are given possession of the Berth 6-9 area, using their existing equipment while the new equipment is on order. This would bring forward the. KPT revenue stream and would provide KPT with a revenue of Rs,187 million in the first year instead of the Rs,90 million they would get from rental alone.
(h) KPT have invested heavily in the recently completed reconstruction of the Berth 6-9 quay walls.
7. The return on this investment will be improved under the offer made by PMS.
(i) From our scrutiny of the bid we see no reason why KPT should not enter into discussion with PMS to conclude the agreement on the basis of the submitted bid and seek an early financial closure.
8. ' The Committee's comment on single bid was as follows:--
(b) With regards to considering single bid, it is pointed that consideration of single bid for BOT Project is allowed under the Board of Investment, refer Letter No,1(116)-D1(BOT) dated 7th November, 1998 (Enclosure-B).
(c) Secondly KPT has also considered the single bid in case of award of Container Terminal at Berth 22-24A, reference of the P&D proposal and Board Resolution No,606 dated 12th January, 1994 (Enclosure-C) is quoted below.
9. ' The matter was placed before the Board Tender's Committee which concluded thus:-- "The Board's Tender Committee considered the above matter and recommends to the Board that proposal submitted by M/s. PMS may be accepted and negotiated with the firm to finalize the contract award for the work 'Setting up Container Terminal at Berths 6-9, East Wharf', as recommended by General Manager (P&D) and General Manager (F) duly cleared by the Law Officer, KPT."
10. ' The tender was placed before the KPT's Board on 15-11-1999 before the consideration of the offer, the PMS was asked by letter dated 23-11-1999, to settle the KPT outstanding dues/dispute as early as possible.
11. ' The matter was placed in the Board of Trustees meeting on 1-12-1999, which resolved as under:-- "The Board considered agenda Item No,17 in pursuance of its Resolution No,301, dated 15-11-1999 and in the light of General Manager (P&D)'s Note No,P&D-G (428)/98/VI, dated 30-11-1999.
12. ' The Board had threadbare discussions based on the previous decisions of Board, Government approval and legal implications particularly in the light of B.R. No,384 of 5-12-1991 and keeping in view the overall interest of KPT reached the conclusion that award of contract of this project to this firm who is a defaulter of payment of KPT's outstanding dues to the tune of Rs,27.5 million (approx) and has gone into litigation against KPT on these dues will not be advisable.
13. The Board therefore resolved that the existing tender be discharged and re-invited with modification to ensure maximum participation of bidders."
14. ' The PMS was informed through letter dated 16-12-1999 that bid for the work of the container Terminal at Berth No,6-9 is discharged in accordance with the KPT resolution on the subject and was asked to collect the bid form from the office. Hence the suit with following prayer:-- A. Declare that defendants' letter dated 15-12-1999 whereby plaintiffs' bid for construction of Container Terminal was discharged, is of no legal effect. B. Direct that the defendant No,1 consider plaintiffs' bid in a thorough and transparent manner as undertaken by them at the time of opening plaintiffs' single bid. C. Issue permanent injunction restraining defendant No,1 from calling for fresh tenders for construction of container terminal on Berth 6-9 East Wharf, Karachi Port till plaintiffs' single bid is not considered thoroughly and in a transparent manner.
15. ' The learned counsel for the parties have agreed that in view of the admitted facts no evidence is required and they have agreed for the disposal of the suit instead of the application.
16. ' I have heard Mr. Shaiq Usmani, learned counsel for the plaintiff and Mr. Kazim Hassan, learned counsel for the defendants.
17. ' Mr. Shaiq Usmani, learned counsel for the plaintiff has raised the following points:--
(1) That the KPT Board has given PMS as discriminatory treatment by not negotiating with the PMS for the work of Container Terminal, though the KPT had pre-qualified the P.M.S. And the tender could not have been opened as requested by its representative. Fresh tenders could have been called, but by opening the bid of P.M.S., its financial offer was disclosed to all and sundry and ultimately discharged the single bid solely on the ground that the P.M.S. Was in litigation with the K.P.T., amounts to discrimination. He contended that no doubt plaintiff was in litigation, which was withdrawn and the Government was approached about its dues and got an order in its favor but the KPT has not released the amount.
(2) Mr. Shaiq Usmani contended that prosecuting a legal remedy was not considered a bar, and the PMS was pre-qualified. He further contended that refusal to issue tender documents to an intending party remained subject of the litigation in Suit No,773 of 2000 (Pak Shaheen Container Services (Pvt.) Ltd. v. Trustees of Port of Karachi), and by order dated 13-7-2000, learned Single Judge held that the action of KPT in non-issuance of tender documents on the ground of litigation with the KPT, to be arbitrarily, discriminatory, capriciously and irrational. The above view was expressed after considering appraisal of rule laid down in cases (1) Pacific Multinational (Pvt.)
18. Limited v. Inspector-General of Police (PLD 1992 Karachi 283), (2) Arif Builders and Developers v.
19. Government of Pakistan (PLD 1997 Karachi 627), (3) Shoukat Ali and others v. Government of Pakistan (PLD 1997 SC 342) and the duties of the administrative organ of the State and its functionaries were 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 functions.
(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 person 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 norms was not arbitrary but was based upon valid reasons acceptable in and by civilized democratic societies.
20. ' Mr. Shaiq Usmani further submission was that there was no bar in acceptance of single offer. He also, contended that the work of container terminal at Berth No,22-24-A was awarded on BOT Basis to APL Consortium on the basis of Board Resolution dated 18-10-1993. He in this regard, contended that the Government had given guidelines for the modalities to be adopted in case of single bid and referred the Letter No,2(3)/97-P&S-II-Vol. II, dated 2-3-1999 Government of Pakistan, Ministry of Communications, whereby the modality to be adopted in case of single bid Was explained/highlighted. The relevant contents are as follows:-- "In case there are a few pre-qualified bidders who have purchased the bidding documents but only one submitted bid, provided apparently there is no collusion among the pre-qualified forms and the bid price is not much higher than the estimate, then the contract should be awarded to this bidder. In ' this re-bidding is not justified because even if only open bid was received, there was competition since this bidder did not know that other pre-qualified firms would not submit their bids.
21. ' However, in case this bidder is the only pre-qualified firm for the only firm who purchased the bidding documents, a re- bidding is justified on the grounds of lack of competition.
22. ' Re-bidding is also justified if the bid price is much higher than the estimate and negotiation with this bidder is not successful provided further that there was a fair chance of having a greater number of bidders with lower bid prices."
23. ' On above submission, Mr. Shaiq Usmani, learned counsel of the plaintiff maintained that the action of the defendants in discharge of PMS was discriminatory, arbitrary and unjust.
24. ' Mr. Kazim Hussain, learned counsel for the KPT has not disputed the grant of work of Container Terminal on BOT basis to single bidder but contended that the officers have faced the action. He contended that guidance issued by the Government for acceptance of single bid is directly in nature. Mr. Kazim Hassan, learned counsel for the KPT submitted that the KPT was within its right to discharge the tender of the PMS, due to its conduct, who was in litigation with the KPT in respect of the outstanding dues. He referred the case of Messrs Arshad & Company v. Capital Development Authority, Islamabad (2000 SCMR 1557), wherein the non-pre-qualification of the petitioner by CDA due to their past conduct/performance of execution of work under contract was not found a discriminatory treatment.
25. ' Mr. Kazim Hassan, learned counsel for the KPT further submitted that mere accepted of bid by KPT will not create any right in favor of the PMS. He in support of the contention referred the view taken by Division Bench of this Court in Bagh Construction Company v. Federation of Pakistan and others (2001 YLR 2791), wherein the Division Bench held that in absence of concluded contract, .No right has accrued in favor of the petitioner to enforce the same in exercise of Constitutional jurisdiction.
26. It was further held that mere acceptance of the bid offered by the petitioner and intention to sell did not amount to contract.
27. ' In the present case, the tender was discharged on the ground of PMS litigated with the KPT. The plaintiff was pre-qualified in spite of the information given by the PMS and its tender was not only opened but different evaluation committees examined the same and recommended for "BOT" basis and most favorable to the KPT. It may also be pointed out that there is vast difference in contract for execution of work on BOT basis and contract for execution of work under budget estimate. In former case, no finance is involved on whose behalf the contract is to be executed, whereas, in later case the finance is the responsibility of the authority on whose behalf the work is being executed. The Evaluation Report has already been referred to above and the Board's tender Committee considered the mater and recommended to the Board that proposal submitted by M/s. PMS may be accepted and negotiated with the firm to finalize the contract for award of the work for setting up Container Terminal at Berth 6-9, East Wharf, as recommended by General Manager (P&D) and General Manager (F) duly cleared by the Law Officer of the KPT.
28. ' A party (PMS), who had been in litigation, disclosed such fact during pre-qualification process, in spite of such disclosure was pre-qualified, its bid was found to be unconditional, responsive and exceed the minimum Revenue demand of KPT. All in house Evaluation .Committee including Committee of the Board recommended for negotiation, the action of KPT in discharge of tender on the ground of litigation, is not only irrational but unjust and unfair. The view taken by Indian Supreme Court in Ramana Dayaram Shetty v. The International Airport Authority of India and others (AIR 1979 SC 1628) can be referred the following paragraph, which is instructive is reproduced as follow:-- "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 granting 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 power- 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 nondiscriminatory standard or norms and if the Government departs from such standard or norms 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 irrational, unreasonable or discriminatory."
29. ' The conduct of a party, who litigated for its right cannot be equated with a party whose past conduct in execution of work was poor.
30. ' The view taken in Arshad & Company case (supra) has no application to the present case.
31. ' So far the question of single bid is concerned, no doubt earlier a single bid was accepted since the bid was not refused being single, it F would not be proper to discuss such issue.
32. ' As a result of above discussions, the suit of the plaintiff is decreed in terms of prayers (a) and (b) and the defendant. No,1 is directed to consider the PMS bid in thorough and transparent manner, but this order will not be a direction to the KM to accept the bid.
33. ' The suit stands disposed of with no order as to costs. e.