2021 C L C 515

[Lahore]

Before Muhammad Qasim Khan, CJ

Messra SPARCO CONSTRUCTION COMPANY----Petitioner

Versus

PROVINCE OF PUNJAB and others----Respondents

Writ Petition No.23950 of 2020, decided on 3rd December, 2020.

(a) Punjab Procurement Rules, 2014---

----R.5---Constitution of Pakistan, Art.199---Foreign funded project --- Technical and financial bids---Technical Evaluation Committee declared the bid submitted by the petitioner-company and its joint venture company as non-responsive---Petitioner-company challenged its disqualification from the bid process by filing a constitutional petition before the High Court---Maintainability---Project in question was regulated under a loan agreement entered into between the Government of Pakistan and an international financial institution--- In the bid process the terms of the loan agreement and that of the bid documents were also to be applied according to the satisfaction of the international financial institution itself, therefore, on the face of it there was no applicability of Punjab Procurement Rules 2014 ('the 2014 Rules') in the whole project---As the loan agreement had been executed between the Government of Pakistan and an international financial institution, the present constitutional petition was not maintainable --- High Court dismissed the constitutional petition with the directions that the Provincial Government should form a Committee to minutely probe into the entire process of awarding of the project and bring it to the notice of the international financial institution as well; that the said Committee shall see if there was any misuse of authority in the entire process at any level, whether transparency was properly taken care of, and that proper process was adopted in the project; and, that formation of said Committee shall not mean stay of further process on the project.

Messrs Power Construction Corporation of China Ltd. through Authorized Representative v. Pakistan Water and Power Development Authority through Chairman WAPDA and 2 others PLD 2017 SC 83 and Suo Moto Case No.5 of 2010 PLD 2010 SC 731 ref.

(b) Civil Procedure Code (V of 1908)---

----O.I, R.9---Constitution of Pakistan, Art. 199 --- Misjoinder or non-joinder of necessary parties --- Foreign funded project --- Technical and financial bids---Technical Evaluation Committee declared the bid submitted by the petitioner-company and its joint venture company as non-responsive---Petitioner-company challenged its disqualification from the bid process by filing a constitutional petition before the High Court---Maintainability---Like the petitioner-company the other company with which the petitioner had a joint venture, was also part of the bid, thus, it must also be adversely affected by the impugned action of procuring authority, as such, instead of citing the joint venture company as a respondent, it must have been arrayed as one of the petitioners in the present constitutional petition, which has not been done, thus the consequential inference would go against the petitioner---Furthermore, the claim of the petitioner had been that it fulfilled the requisite evaluation and qualification criteria set down in the Biding Document, as some projects identical to the present one were completed by certain groups and companies working under it---If that was so, then such groups and companies were necessary and proper party to present proceedings, but none of the said groups or companies was arrayed as a party in the constitutional petition---Inference which could be drawn in such circumstances was that those groups or companies, which the petitioner claimed worked under it, were either not interested/involved in the bid process, or were not supporting the stance of the petitioner in any manner --- Procuring authority appeared to be well within its right to urge that in fact those groups or companies had no liaison with the petitioner's joint venture --- Present constitutional petition was not maintainable due to misjoinder and non-joinder of necessary parties and was consequently dismissed.

Qazi Misbah ul Hassan and Muhammad Zain Qazi for Petitioner.

Malik Abdul Aziz Awan, Additional Advocate-General.

Asad Ali Bajwa, Deputy Attorney General-I.

Mustafa Ramday, Nadia Hafeez and Zoe K. Khan for Respondent No.3.

Barrister Ahmad Pansota and Shah Jehan Khan for Respondent No.4.

ORDER

MUHAMMAD QASIM KHAN, C.J.----Precisely the facts of the case are that a project with the name "Jalalpur Irrigation Project No.2 (JIP2)" for construction of main Canal (RD 52+0(l0 to RD 225+500), including distribution system and Flood Carrier Channels, Cross Drainage Structures, Road Bridges, etc. (Contract No.JIP/WKS/ICS-P2), was launched, where-for, bids were invited for award of contract and a Loan Agreement was entered into between the Government of Pakistan and the Mian Development Bank (ADB) to carry out the mid project. The petitioner after forming a joint venture with respondent No.5 (Top International Engineering Corporation (TIEC) of Peoples Republic of China), jointly participated in the tender by submitting their technical and financial bids. After opening technical bids, the Technical Bid Evaluation Committee formed by respondents Nos.2 and 3 declared the petitioner and its Joint Venture Company as non-responsive on multiple grounds, whereas, respondent No.4 was declared as successful bidder. Disqualification of petitioner's joint venture in the Technical Bid and the process of finalizing the contract in favour of respondent No.4, is in fact the grievance being voiced through the instant writ petition.

2. The contention of learned counsel for the petitioner is that qualification criteria set down in section 2.4.1 of the Bidding document required sufficient experience and minimum two successful/completed contracts identical to the one in hand, within last ten years, was fully met with by the petitioner. The petitioner also fulfilled the requirement as set in section 2.4.2 of the said document, but in violation of PPRA Rules, on both these aspects, the petitioner was disqualified and was not even provided the detailed reasons for non-considering of petitioner's documents and that the financial bid of respondent No.4 which is rupees one billion higher than the bid submitted by the petitioner, is being accepted. Lastly, it was argued that since no Grievance Redressal Committee had been constituted under Rule 67 of the PPRA Rules, therefore, the petitioner having been left with no remedy, hence the writ petition is maintainable.

3. On the other hand, during arguments the learned counsel for the respective respondents raised preliminary objections i.e. terms and conditions of financial arrangement between the Government of Pakistan and the Asian Development Bank (ADB) whereby the loan for JIP has been granted by ADB, have overriding effect and prevail over Punjab Procurement Rules, 2014 (PPRA), which exception is envisaged by Rule 5 of PPRA Rules, 2014. Secondly, the ADB is not an institution operating or carrying on its functions relating the affairs of Federal or Provincial governments in Pakistan, as such, on both above grounds the writ petition is not maintainable. On factual aspects, the stance of the respondents is that requirements as envisaged in Clauses 2.4.1 and 2.4.2 were not complied with by the petitioner, as the joint venture of the petitioner at the relevant time had submitted experience of other companies by alleging that those were part of the petitioner's joint venture group, thus, they could not claim to have fulfilled the pre-requisites of a valid bid. Lastly, that the result of technical bid evaluation was duly comminuted to all concerned through its publication in the newspaper as well as its display on websites of Irrigation Department, PPRA and the ADB, therefore, the petitioner being disqualified from the very beginning, could not claim that his bid was of lesser amount than the one submitted by other contestants

4 Heard. Record perused.

5. This court while entertaining this writ petition and issuing notices to the respondents was mainly influenced by the argument that procedural as also technical aspects of the bid process were manoeuvred in favour of other parties contesting the bid and that entire process was being carried out under PPRA. Further that as the bid offered by the petitioner was rupees One billion (approximately) less than the bid offered by respondent No.4, therefore, apparently, there appeared to be some foul play, which could have resulted in colossal loss to the national exchequer. But, having heard the learned counsel for the respective parties, scanning the relevant record and analyzing the last on the subject, the admitted facts remain:-

(a) The project "Jalalpur Irrigation Project No.2 (JIP2)" for construction of main canal RD 52+000 to RD 225+500, Contract No. JIP/WKS/ICS-P2), was to be carried out by the Province of the Punjab through its Irrigation Department;

b) For the said project, a Loan agreement was entered into between Government of Pakistan and the Asian Development Bank (ADB);

c) Bids were invited by adopting the mode of "Single Stage Envelope Bidding Procedure";

d) The petitioner formed a joint-venture with respondent No.5 with name as "TIEC-SPARCO JV" and participated in the tender process;

e) The Technical Bid Evaluation Committee through its report dated 08.11.2019 declared TlEC-SPARCO JV as non-responsive, whereas, respondent No.4 and M/s. Descon Engineering Limited, were declared successful bidders in the technical bids, out of eight participants.

As shall be seen from the above, on the face of it, the mode, mechanism or the procedure adopted in the process right from initiation till conclusion or finalization of the bid has not been questioned by any of the party. Although, the petitioner has pleaded violation of PPRA Rules, but has not questioned that the loan agreement was entered into between the Government of Pakistan and the Asian Development Bank, which undisputedly is an international financial institution. It has not been disputed that the entire process was initiated within the bounds of the loan agreement, as also according to the terms and conditions satisfactory to the Asian Development Bank. This fact is mentioned in the BIDDING DOCUMENT itself, calling bids for the project. Therefore, the argument of learned counsel for the petitioner about purported violation or infringement of PPRA Rules, 2004 in the process, subject matter of the instant writ petition, has no legs to stand on for the simple reason that as the entire matter was being regulated under a loan agreement entered into between the Government of Pakistan and the Asian Development Bank and further in the bid process the terms of the said loan agreement and that of the bid documents were also to be applied according to the satisfaction of Asian Development Bench itself, therefore, on the face of it there was no applicability of PPRA Rules in the whole project. In this respect specific reference may also be made to Rule 5 of the Punjab Procurement Rules, 2009, which precisely reads as under: -

"5. International and inter-governmental commitments of the Federal Government. -

Whenever these rules are in conflict with an obligation or commitment of the Federal Government arising out of an international treaty or an agreement with a State or States, or any international financial institution the provisions of such international treaty or agreement shall prevail to the extent of such conflict."

In view of the above factual and legal aspects, there remains no ambiguity to observe that as a matter of fact in the circumstances where the loan agreement has been executed between the Government of Pakistan and an international financial institution, the writ petition is not maintainable. Guidance is sought from the judgment of the Hon'ble Supreme Court of Pakistan in the case "Messrs Power Construction Corporation of China Ltd. through Authorized Representative v. Pakistan Water and Power Development Authority through Chairman WAPDA and 2 others" (PLD 2017 Supreme Court 83), wherein the apex Court with specific reference to Rule 5 of the PARA Rules, 2014, observed that the provisions of international treaties or agreements shall prevail, where any provision the PPRA Rules conflicts with an obligation or commitment of the Federal Government arising out of an international treaty or agreement. In this view of the matter the remaining arguments of learned counsel with reference to PPRA Rules, cannot be entertained in these proceedings under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973, before this Court.

6 Another aspect of the matter is that admittedly the petitioner had formed a joint venture with Top International Engineering Corporation (TIEC) of Peoples Republic of China, with its branch office House No.17, Street 61, F-8/4, Islamabad. Therefore, like the present petitioner the said Company being part of the bid, must also be adversely affected by the impugned action of respondents, whereby, their joint venture has been disqualified from the bid process, as such, instead of citing Top International Engineering Corporation (TIEC) as respondent No.5, it must have been arrayed as one of the petitioners in the writ petition, which has not been done thus the consequential inference would go against the petitioner. Furthermore, the claim of the petitioner has been that it fulfilled the requisite evaluation and qualification criteria set down in Section 3, Item 2.4.2 of the Biding Document, as some projects were completed by certain groups and companies working under it. If that is so, then they were necessary and proper party to these proceedings, but none of such groups or companies was arrayed as party in this writ petition. The ultimate inference which can be drawn is that those groups or companies, which the petitioner claimed to have worked under it, were either not interested/involved in the said bid process, or were not supporting the stance of the petitioner in any manner. As such, the respondents appear to be well within their right to urge that in fact those groups or companies had no liaison with the petitioner's Joint Venture. In any way, the instant writ petition is also not maintainable due to misjoinder and non-joinder of necessary parties.

7. As regards the argument that petitioner had offered a bid of rupees One billion less than the bid submitted by respondent No.4, this argument on the face of it looks convincing and attractive, but I am afraid any step of the process of such a big project cannot be considered in segregation with the rest. Every stage of the project right from its initiation till calling and submission of tenders, opening and then finalization of bids is a properly regulated mechanism and its every next step is netted with the previous one. Keeping this aspect in mind, unless the petitioner fulfilled its eligibility to submit the bid, he cannot be allowed to jump over to next stage and plead that as his bid was of the lesser amount, therefore, he may be considered. Before asking for it, the petitioner or anyone else, had to establish its very eligibility to enter in the process. As discussed above, as the petitioner failed to establish its construction experience etc., required by Clauses 2.4.1 and 2,4.2 of the bidding document, how so low his bid may be, he could not claim any benefit on this aspect.

8. For what has been discussed above, the instant writ petition is dismissed. However, this court while dismissing the writ petition has mainly confined itself to legal premises and deliberately has not touched the other allied factual aspects for some obvious reasons, because definitely it is a big project involving great financial implications and it was executed by the government functionaries. The transparency and fairness behind every such project is and shall be the hallmark of every civilized nation and further the public being the virtual owners of national exchequer must be kept satisfied that all such transactions and works are being carried out in a transparent manner, therefore, by seeking guidance from the judgment in "Suo Motu Case No.5 of 2010" (PLD 2010 Supreme Court 731), considering that as the instant matter is provincial subject, the Chief Minister, Government of the Punjab, is directed to immediately form a committee, consisting of men of sound caliber and integrity from all the concerned agencies, to minutely probe into the entire process and bring it to the notice of the Asian Development Bank as well. The Committee, so constituted, shall see whether there was any misuse of authority in the entire process at any level, whether the transparency and fair play was properly taken care of and that the proper process was adopted in the project. It is made clear that simple formation of such committee, shall not mean stay of further process on the project.

MWA/S-4/L Petition dismissed.