M/s Zenner Metering Technology (Shaghai) Limited VS SNGPL

ORDER SHEET

IN THE ISLAMABAD HIGH COURT, ISLAMABAD

JUDICIAL DEPARTMENT

W.P. No.3571 of 2017 M/s Zenner Metering Technology (Shanghai) Limited Versus.

Sui Northern Gas Pipelines Limited and others S. No. of order Date of Order with signature of Judge and that of parties or counsel / proceedings order/ where necessary. Proceedings 30.11.2017 Sheikh Muhammad Ali and Mr. Waqas Ahmad Aziz, Advocates for the petitioner.

Through the instant writ petition, the petitioner, M/s Zenner Metering Technology (Shanghai) Limited, seeks the setting aside of respondent’s decision to cancel the tender enquiry vide letter dated 08.08.2017. Furthermore, the petitioner seeks a direction to the respondents to award the contract regarding the said tender enquiry to the petitioner.

2.Learned counsel for the petitioner submitted that respondent No.1 (Suit Northern Gas Pipelines Limited) flouted a tender enquiry No.SND-1871/16 for the procurement of inter- alia G-4 gas meters; that through its local agent, the petitioner participated in the said tender; that after the evaluation of the petitioner’s bid, its bid was accepted; that the bid evaluation report was placed before the Board of Directors of respondent No.1 for their approval; that prior to the award of the contract, another bidder initiated litigation at Islamabad; that the process for the award of the contract came to a halt when the learned civil Court at Islamabad passed an ad-interim status-quo order at the instance of M/s PAKMACO (Pvt.) Ltd; that vide order dated 27.02.2017, the learned civil Court vacated the

ad-interim status-quo order; that against the said order dated 27.02.2017, M/s PAKMACO (Pvt.) Ltd. preferred an appeal before this Court; that vide an ad-interim order, this Court stayed the proceedings before the learned civil Court. Vide order dated 06.07.2017, this Court clarified that there was no injunction against the procurement process; that regardless of the same, respondent No.1 on 08.08.2017, cancelled the tender enquiry and returned the bid bonds to the bidders.

3.Learned counsel for the petitioner further submitted that respondent No.1 could not exercise its powers of rejecting all the bids under Rule 33 of the Public Procurement Rules, 2004 (“P.P.R., 2004”) without just cause; that since the petitioner was the most responsive bidder, it had the legitimate expectancy for the contract to be awarded to it; that the petitioner’s bid stood accepted because the same was not rejected by respondent No.1; that the tender enquiry could not be cancelled after a lapse of six months; and that the cancellation of the tender enquiry is a result of respondent No.1’s malafide intention to award the contract in question to a pre-selected bidder. Learned counsel for the petitioner prayed for the writ petition to be allowed, for respondent No.1’s letter dated 08.08.2017, whereby the tender enquiry was cancelled, to be set aside, and for the contract to be awarded to the petitioner. In making his submissions, learned counsel for the petitioner placed reliance on the judgments reported as “PLD 2016 Sindh 207, PLD 2002 Karachi 60, PLD 1994 Lahore 351, PLD 1992 Karachi 283, 2003 MLD 646 and 1994 CLC 1967,”.

4.I have heard the contentions of the learned counsel for the petitioner, and perused the record with his able assistance.

5.The record shows that the petitioner participated in the tender bidding process initiated by respondent No.1 for the procurement of domestic gas meters. The petitioner has annexed a copy of its bid documents to this petition. There is absolutely nothing on the record to show that the petitioner was evaluated as the lowest and the most responsive bidder, or that respondent No.1 had accepted its bid.

6.True, M/s PAKMACO (Pvt.) Ltd., who was the petitioner’s competing bidder, had filed a civil suit before the learned civil Court at Islamabad and had obtained an ad-interim status-quo order. After this status-quo order was vacated by the learned civil Court, M/s PAKMACO (Pvt.) Ltd. filed F.A.O. No.65/2017 before this Court. Vide order dated 25.04.2017, this Court stayed the proceedings before the learned civil Court. Vide order dated 06.07.2017, this Court clarified that vide ad-interim order dated 25.04.2017, the proceedings before the learned civil Court have been stayed, but no injunction has been issued regarding the procurement process. Vide letter dated 08.08.2017, respondent No.1 informed the petitioner’s legal representative that the tender enquiry in question had been cancelled. Respondent No.1 also returned the petitioner’s bid bond.

7.In the case at hand, the petitioner has not brought any document to show that its bid was the lowest. There is also nothing on the record that the petitioner’s bid was accepted

by respondent No.1. What respondent No.1 has decided to do is to cancel the tender enquiry altogether. It has not decided to award the contract to any other party. No restrain has been placed on the petitioner from participating in the re-tendering process whenever the same is initiated by respondent No.1. Rule 33 of the P.P.R, 2004, empowers the procuring agency to reject all bids or proposals at any time prior to the acceptance of a bid or proposal. However, if a request is made by a bidder to the procuring agency to give the grounds for the rejection of all the bids and proposals, the procuring agency is supposed to give the grounds for the rejection of all the bids or proposals. There is no document on the record to show that the petitioner had requested the procuring agency to give reasons for the rejection of all the bids and proposals. Reference, at this stage, to the following case law would be apposite:- i. In the case of “Petrosin Corporation (Pvt.) Ltd. Vs Oil and Gas Development Company Ltd. (2010 SCMR 306 = 2010 CLD 15)”, a writ petition filed by the lowest bidder, who had also been issued a letter of intent by the procuring agency, was dismissed primarily on the ground that the petitioner’s lowest bid had not been accepted by the procuring agency. In that case, the procuring agency had decided to re- initiate the procurement process. The Hon’ble Supreme Court upheld the dismissal of the writ petition filed by the lowest bidder. In the said report, it was inter-alia held as follows:

“... Even the lowest bid would not confer an absolute title for award of a contract. In such like mega projects host of other considerations become relevant to avoid any unnecessary risk. The general letter of intent merely implies an intention to enter into a contract and authority to the contractor to start the work before completion of the contract in anticipation of the signing of the contract with a right to the contractor for compensation of the work, if any, he already done. Therefore, the letter of intent could not be treated to be synonymous to a completed contract. The present ones are not the cases in which bid of any other bidder had been accepted. Rather the respondent had decided quite justifiably to re- advertise the tenders...”

ii. In the case of Captain-PQ Chemical Industries (Pvt.) Ltd. Vs. A.W. Brothers (2004 SCMR 1956), it has been held inter-alia that mere floating of a bid, whether it is the highest or the lowest, does not create a legal right in favour of the bidder.

iii. In the case of Meraj Din Vs. Noor Muhammad (1970 SCMR 542) it was held that even the highest bidder at an auction who had deposited a substantial amount of auction money did not acquire any right whatsoever in the property as the auction was subject to confirmation in terms of relevant conditions of auction which provided that even the highest bid could be rejected without assigning any reason. iv. In the case of Munshi Muhammad Vs. Faizanul Haq (1971 SCMR 533), it was held that the highest bidder in an auction in absence of final approval

was not clothed with any right in the auctioned property and had no locus standi in the matter.

v. In the case of Pervez Qureshi Vs. Settlement Commissioner (1974 SCMR 337), it was held that a mere bid at an auction does not create any contractual right until the bid is confirmed if it is subject to confirmation and the bidder cannot be considered to be a person aggrieved by cancellation of the auction.

vi. In the case of Fawwad and Fareen Enterprises Ltd. Vs. Director of Industries, Government of Sindh, Karachi (PLD 1983 Karachi 340), a Division Bench of the Hon’ble Sindh High Court, which was a case of tenders, observed that where the authority had reserved the right to accept or reject the bid the mere fact that the bid was lowest would not confer any right unless the petitioner could prove that the offer had been accepted.

vii. In the case of Patrosin Engineers and Contractors (Pte.) Ltd. Vs. Federation of Pakistan (2013 MLD 646), it was inter-alia held that making of the bid simply amounts to making an offer, and unless the bid is accepted, and the acceptance is communicated to the bidder, it does not mature into a valid contract.

8.In none of the cases, relied upon by the learned counsel for the petitioner did the Court

direct the procuring agency to enter into a contract with a bidder, even though, its bid has not been formally accepted. Therefore, the said precedents do not in any manner come to the petitioner’s aid.

9.In view of the view I do not find any merit in this petition, which is dismissed in limine.

(MIANGUL HASSAN AURANGZEB)

JUDGE

Sanaullah*

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