Khalid & Brothers etc. vs Pop etc.

Stereo H C J D A 38.

JUDGMENT SHEET

IN THE LAHORE HIGH COURT LAHORE.

JUDICIAL DEPARTMENT.

W.P. No.4872/2014.

Khalid & Brothers Vs. Punjab Province etc.

JUDGMENT

Date of Hearing 06.03.2014.

Petitioners by: Mr. Riaz Karim Qureshi, Advocate.

Respondents by Mr. Khawar Ikram Bhatti, Addl. A.G.

ABID AZIZ SHEIKH-J., This writ petition has been filed with the following prayer:- “In view of submissions made above, it is therefore, most respectfully prayed the respondents may kindly be directed to issue the tender document for the works exhibited in “Annexures-O, P & Q” and the aforesaid impugned letters may kindly be declared as illegal and against the PPRA Rules and the petitioners be allowed to participate in the tenders as an interim arrangement subject to outcome of the writ petition on merits as the tenders have been called for 22.02.2014”.

2.Brief facts are that petitioners in pursuance to a notice for pre-qualification issued by respondent No.3 through a proclamation dated 13.02.2014 submitted their applications for pre-qualification. The respondent No.3 issued a letter dated 15.02.2014 prequalifying only seven companies and petitioners being not prequalified their names were not mentioned in the said letter. The petitioners being aggrieved filed this constitutional petition.

3.The learned counsel for the petitioners argued that respondents have malafidely not pre-qualified the petitioners who

are approved contractors of the respondents in different categories and also duly registered with Pakistan Engineering Council. Further submits that as per section 16 and 17 of the Punjab Procurement Rules, 2014, (“PPR”) the respondents were bound to give reasons for not qualifying the contractor but no such reasons were given in the impugned letter dated 15.02.2014. Reliance is placed on the order dated 21.11.2011 passed by this Court in W.P. No.25522/2011 to argue that petitioners are entitled to participate in the tender proceedings.

4.Conversely the learned counsel for the respondents argued that works for which applications for prequalification of firms were invited, are being executed by Faisalabad Development Authority (FDA) under Large Cities Package 2013-14 for Faisalabad City. Argued that admin approval of these works was accorded by District Development Committee in its meeting held on 13.01.2014. Adds that to ensure quality and timely completion of these works, application for prequalification of firms were invited through a prequalification notice published on 26.01.2014 in two national daily newspapers and also uploaded on the Punjab Procurement Regulatory Authority (“PPRA”) website as per PPR Rules, 2014. Contends that in response to this notice, forty six applications from the contractors were received and these applications were scrutinized as per standards of P&D Department, Govt. of the Punjab, PEC, and PPR Rules, by a Scrutiny Committee constituted by the Chief Engineer, FDA, for this purpose. Argued that according to final list prepared by this committee, eleven firms qualified for these works and this list was put up to the Chief Engineer, FDA, who approved the same on 15.02.2014. Contends that all the qualified and disqualified firms were promptly intimated through courier as required under PPR Rules. He further submits that as per clause 1 of the prequalification notice as well as Rule 17(4) of the Punjab Procurement Rules, 2014, the reasons for not being prequalified

were to be communicated on the request of the contractor who was not prequalified. Submits that till to date, no such request has been made by the petitioners requiring reasons which will be supplied on request. Further contends that petitioners have alternative remedy for redressal of their grievance before Redressal Committee constituted under Rule 67 of the PPR, 2014.

5.Arguments heard. Record perused.

6.The respondents though proclamation dated 13.02.2014, invited applications for prequalification for the following projects:-

Sr.No. Name of scheme

1.Dualization/Improvement of Sir Fazal Hussain road from Saleemi Chowk to SB Departmental Store (Phase-I Faisalabad.

2.Dualization/Improvement of Sir Fazal Hussain road from SB Departmental Store to KFC Chowk (Phase-II Faisalabad

3.Faisalabad Traffic & Energy Management Projects:

3 (a) Conversion of Traffic Signals on Solar Energy in Faisalabad.

3 (b) Conversion of existing street lights into LED lights in Faisalabad.

3 (c) Fixing of Traffic Sign boards, lane marking. Zebra crossing and other traffic signs.

The proclamation also specifies the details of information and documents which are required from the firms/contractors for their prequalification. The terms and conditions of the said proclamation also provide that competent authority under PPR Rules, reserves the right to reject any or all applications without assigning any reason, however, the authority will communicate

the grounds for rejection of any application on the request of the applicant.

7.The entire prequalification process took place under the PPR, 2014. The relevant rules 16 and 17 are prescribed under Chapter IV of the PPR. For convenience, the aforesaid rules are reproduced hereunder:-

“16. Prequalification.- (1) Subject to sub-rule (2), a procuring agency may, prior to floating the tenders or invitation to proposals or offers, engage in prequalification of bidders in case of services, civil works, turnkey projects and also in case of procurement of expensive and technically complex equipment to ensure that only technically and financially capable firms or persons having adequate managerial capacity are invited to submit bids.

(2). The procuring agency shall prequalify bidders under sub-rule (1) in case of procurement of goods of one hundred million rupees and above and large consultancy, except where a procuring agency, for reasons to be recorded in writing, dispenses with the requirement of prequalification of bidders.

(3). For purposes of the prequalification of bidders, a procuring agency shall take into consideration the following factors:-

(a)qualification;

(b)relevant experience and past performance;

(c)capabilities with respect to personnel, equipment, and plant;

(d)financial position;

(e)appropriate managerial capability; and

(f)any other factor that a procuring agency may deem relevant, not being inconsistent with these rules.

(4). The procuring agency shall ensure that the prequalification is based on the capacity of the interested parties to satisfactorily perform the services or works.

(5)In case of fast track projects where the time is the essence or where potential consultants are limited or the assignment is of a complex nature, the procuring agency may, after recording reasons and with the approval of Provincial Development Working Party, invite a request for proposals through public notice under rule 12.

17.Prequalification process.- (1) The procuring agency engaging in prequalification shall announce, in the prequalification documents, all information required for prequalification including instructions for preparation and submission of the prequalification documents, evaluation criteria, list of documentary evidence required by contractors to demonstrate their respective qualifications and any other information that the procuring agency deems necessary for prequalification.

(2)The procuring agency shall provide a set of prequalification documents to any contractor, on request and subject to payment of such price as the procuring agency may determine to defray the cost on account of printing and provision of the document.

(3)The procuring agency shall promptly inform contractor who has applied for the prequalification whether or not he has been prequalified and shall, on request from the applicant who had applied for prequalification, a list of contractors who have been prequalified.

(4)On a request, the procuring agency shall communicate to the contractor who has not been prequalified the reasons for not prequalifying the contractor.

(5)Only the prequalified contractors shall be entitled to participate in the subsequent procurement proceedings.

8.The perusal of rule 16 ibid shows that for prequalifying a bidder, the procuring Agency shall take into consideration its qualification, relevant experience, past experience, capabilities with respect to personal, equipment, plant, financial position, appropriate managerial capabilities and other factors which a procuring agency may deem relevant under the rules. The procuring Agency under the aforesaid rules while prequalifying a bidder requires to evaluate whether contractors or the bidders have the capacity and the resources to successfully execute the work. In this regard, it is incumbent upon the procuring agency to ensure

that prequalification is based on the capacity of the contractor for satisfactory performance of the services or work to be executed. Similarly under Rue 17 ibid, the procuring agency will inform the parties regarding the prequalification documents, evaluation criteria, list of documentary evidence required from the contractors to demonstrate their respective qualifications. The procuring agency in terms of Rule 17(3) shall promptly inform the contractor who has applied for prequalification whether or not he has been prequalified and under Rule 17(4) shall on request from the contractor communicate to him the reasons for not prequalifying the contractor.

9.In the context of aforesaid rules, the perusal of notice for prequalification through proclamation dated 13.02.2014 shows that all the contractors were duly informed to provide the relevant information and documents for prequalification. The notice also specify that reasons for not prequalifying the contractor will be supplied on request of the contractor. It is admitted position that the petitioners applied for prequalification under the aforesaid proclamation and total 46 firms/contractors including petitioners filed applications. In pursuance to PPR, 2014, the respondent FDA constituted a committee to scrutinize the prequalification applications. After scrutinizing the documents, out of forty six applications, only eleven firms prequalified for the work which was notified vide a letter dated 15.02.2014. The petitioners who were not prequalified have been intimated promptly through separate letters of even date i.e. 15.02.2014 regarding their non- prequalification. It is not the case of the petitioners that they applied for reasons and the same were not supplied rather the learned counsel for petitioners candidly conceded that no application or request was made by the petitioners to the procuring agency for supply of reasons for not prequalifying them. The petitioners have approached this Court on the plea that in violation of PPR no reasons are given in the impugned letter dated

15.02.2014 whereas legal position is that according to the PPR, rule 17(4) the petitioners had to apply for reasons to the procuring agency i.e. FDA for not prequalifying the petitioners. The aforesaid requirement is also specifically mentioned in Condition No.1 of the notice through proclamation dated 13.02.2014, produced by petitioners themselves.

10.The respondents have placed on record the criteria for prequalification, considered by the Committee alongwith the maximum marks secured by the petitioners firms, which was less than required passing marks of 65 out of 100 marks for these projects. The petitioners are also not in a position to point out any procedural illegality done by the procuring agency. The said agency in pursuance to PPR Rules has duly issued notices through proclamation in which the detail of documents and information required for prequalification of contractors was prescribed. The applications were duly accepted which was scrutinized by the prequalification committee which after scrutiny evaluated the applications and approved the contractors who fulfilled the prescribed criteria and also promptly informed those contractors who could not prequalify but no request was made by contractors (petitioners) for reasons of not qualifying them.

11.The question whether a particular contractor is prequalified or not is either a policy issue or commercial transaction requiring knowledge in the specialized fields and Courts lacks the expertise to express any opinion as to technical expertise or managerial capabilities of a contractor. The Courts ordinarily refrain from entering in policy making domain of executive authority unless those acts smacks of arbitrariness, favourtism and a total disregard of the mandate of law. In this context reliance is placed on Dr. Akhtar Hassan Khan and others Vs. Federation of Pakistan and others (2012 SCMR 455) where the august Supreme Court of Pakistan in Para 23 and 24 held as under:-

“In Tata Cellular v. Union of India (36(1994) 6 SCC 651), the Court while dilating on the parameters of judicial review in matters of awarding of contract by the Government candidly laid down as follows:-- “77. The duty of the Court is to confine itself to the question of legality. Its concern should be:

(1)whether a decision-making authority exceeded its powers,

(2)committed an error of law,

(3)committed a breach of the rules of natural justice, (4) reached a decision which no reasonable tribunal would have reached or,

(5)abused its powers,

Therefore, it is not for the Court to determine whether a particular policy of particular decision taken in the fulfillment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:-

(i). Illegality: This means the decision-maker must understand correctly the law that regulates his decision- making power and must give effect to it.

(ii). Irrationality, namely Wednesbury unreasonableness.

(iii). Procedural impropriety.

The above are only the broad grounds but it does not rule out addition of further grounds in course of time.”

In R v. Deptt. Of Constitutional Affairs [2006 All ER (D) 201] even some deviation from the best practice was found to be no justification for judicial review. The Court held that, “It is not every wandering from the precise paths of best practice that lends fuel to a claim for judicial review.” In Reliance Airport Developers (P) Ltd. v. Airport Authority of Indian and others [(2006) 10 SCC], the ratio of the afore-referred judgment was reiterated and it was

observed that the power of judicial review would be available “only if public law element is apparent which would arise only in a case of “bribery, corruption, implementation of unlawful policy and the like.” In the cases of commercial contracts, the Courts’ lack of expertise was taken note of in Paras 50 and 51, in terms as follows:- “It does not have the material or expertise in this context to ‘second guess’ the judgment of the panel. Furthermore, this process is even more clearly in the realm of commercial judgment for the defendant, which judgment cannot properly be the subject of public law challenge on the ground advanced in the evidence before me.”

Similarly in Afzal Motors Company (Pvt.) Limited Vs. Province of Sindh and others (2009 SCMR 659), the august Supreme Court of Pakistan held as under:

“Simply to level vague and unsubstantiated allegation of malafide on the part of the public functionaries does not advance the case of the petitioners. It is very easy for a litigant to allege malafide but it is very difficult to prove it. It has now fairly been settled that the allegation of malafides requires proof of a high order and the burden of proof lies on the person who makes it. Reference can be made to Federation of Pakistan v. Saeed Ahmed (PLD 1974 SC 151), Shabbir Hussain v. Registrar, Lahore High Court (PLD 2004 SC 191) and Hazara (Hill Tract) Improvement Trust v. Qaisara Elahi (2005 SCMR 678)”.

The aforementioned dictum laid down by apex Court was followed by this Court in Public Health Contractors Welfare Association Vs. Province of Punjab and others (2004 MLD 21).

12.In the above perspective, the petitioners could not point out any such patent illegality, infirmity or malafide in the process adopted or acts done by the respondents. In absence of same, no ground for interference in judicial review is made out. Further the question whether the petitioners were qualified or not being a factual controversy cannot be resolved by this Court in the Constitutional jurisdiction. The case law relied upon by the petitioners relates to Punjab Procurement Rules, 2009 already

repealed and not PPR, 2014 discussed above, therefore not applicable to the facts and circumstances of this case.

12.In view of above, I find no illegality on the part of respondent-authorities. For the reasons discussed above, this petition has no merits and same is dismissed.

(ABID AZIZ SHEIKH)

JUDGE.

Approved for reporting.

JUDGE

Riaz Ahmad