M/s Shani Travels VS Pakistan International Airlines

JUDGMENT SHEET

IN THE ISLAMABAD HIGH COURT, ISLAMABAD

JUDICIAL DEPARTMENT

W.P. No.3838 of 2022 M/s Shani Travels-Rent A Car Versus Pakistan International Airlines and others

Date of Hearing: 28.10.2022 Petitioner by: Syed Riaz Hussain, Advocate for the petitioner in W.P. No.3838/2022.

Syed Zawad-ul-Hassan Najam, Advocate for the petitioner in W.P. No.3731/2022.

Respondents by: Mr. M. Umer Khan Vardag, Advocate for

P.I.A.C.

MIANGUL HASSAN AURANGZEB, J:- Through this judgment, I propose to decide writ petition No.3731/2022 and 3838/2022 since they entail certain common features.

2.Through writ petition No.3731/2022, the petitioner, M/s Airport Limousine Services (“A.L.S.”), impugns the order dated 26.08.2022 passed by the Public Procurement Regulatory Authority (“P.P.R.A”) whereby the appeal filed by M/s Shani Travels Rent-a-Car (“S.T.”) under Section 48(7) of the Public Procurement Rules, 2004 (“P.P.R. 2004”) against the decisions of the Grievance Redressal Committee (“G.R.C.”) of the procuring agency, Pakistan International Airlines Company Limited (“P.I.A.C.”) dated 06.07.2022, was allowed and it was held that respondent No.4 / M/s Airport Limousine Services (“A.L.S.”) was not entitled to be declared as a responsive bidder.

3.Through writ petition No.3838/2022, the petitioner, S.T., seeks a direction to P.I.A.C. to implement the order dated 26.08.2022 issued by P.P.R.A. on an appeal filed by S.T. against the decision of G.R.C. whereby A.L.S. was permitted to deposit bid security after the last date for the submission of the bids.

4.The facts essential for the disposal of these petitions are that on 29.04.2022, P.I.A.C. invited sealed bids for the award of the contract for “hiring of transport services for cockpit crew and aircraft engineers at Karachi, Lahore and Islamabad Stations.” The bidders were required to submit their bids on/or before 23.05.2022.

5.A.L.S. and S.T. participated in the bidding process and both were prequalified. On 27.06.2022, S.T. filed a complaint before G.R.C. constituted by P.I.A.C. objecting to A.L.S.’s bid on the ground that A.L.S.’s financial proposal was not accompanied by bid security.

6.The proceedings pursuant to the said complaint culminated in G.R.C.’s decision to reject S.T.’s complaint. S.T. filed an appeal before P.P.R.A. under Rule 48(7) of the P.P.R. 2004. The said appeal was accepted vide order dated 26.08.2022 and it was held that A.L.S. was not entitled to be declared as a responsive bidder, and that P.I.A.C. could not allow A.L.S. to submit bid security beyond the deadline for the submission of the bids. Furthermore, G.R.C.’s decision rejecting S.T.’s complaint was set-aside and it was declared that S.T. was the most responsive bidder. A.L.S. has assailed the said order dated 26.08.2022 in writ petition No.3731/2022.

7.After P.P.R.A.’s said order dated 26.08.2022, P.I.A.C. did not award the contract to S.T. This caused S.T. to file writ petition No.3838/2022 seeking a direction to P.I.A.C. to implement P.P.R.A.’s order dated 26.08.2022 and award the contract to S.T. Furthermore, S.T. assails P.I.A.C.’s decision to require A.L.S. to provide the transport services to the cockpit crew.

8.Learned counsel for A.L.S. submitted that the financial bid of A.L.S. was accompanied by the bid security but somehow it was lost in transit; that A.L.S.’s bank has, vide letter dated 18.08.2022, confirmed that pay order No.02446406 had been issued in the name of P.I.A.C. on 21.05.2022; that after A.L.S. came to know that P.I.A.C. had not found the bid security along with A.L.S.’s financial proposal, it prepared a new pay order No.02446702 on 27.06.2022; that it was not A.L.S.’s fault that the bid security was lost in transit; that G.R.C. constituted by P.I.A.C. did not commit any illegality by holding that A.L.S. had submitted a responsive bid; and that the impugned order dated 26.08.2022 passed by P.P.R.A. is not reasonable and liable to be set- aside by this Court. Learned counsel for A.L.S. prayed for writ petition No.3731/2022 to be allowed.

9.On the other hand, learned counsel for S.T., while responding to the submissions of the learned counsel for A.L.S., also made

submissions in support of writ petition No.3838/2022. He submitted that A.L.S. had not prepared a pay order as bid security prior to the last date for the submission of the bid; that had A.L.S. prepared such a pay order, a copy of the same would have been on the record; that after G.R.C.’s decision to accept A.L.S.’s bid was set-aside by P.P.R.A. vide order dated 26.08.2022, it was obligatory on P.I.A.C. to have awarded the contract to S.T., which has been declared by P.P.R.A as the most responsive bidder; that S.T. had a vested right for the award of the contract in terms of Rule 38 of the P.P.R. 2004; that rebidding for the award of the contract cannot take place unless all the bids are rejected by the procuring agency; and that although under Rule 33(1) of the P.P.R. 2004, a procuring agency can reject all the bids but it has to be for valid and plausible reasons. Learned counsel for S.T. prayed for writ petition No.3838/2022 to be allowed in terms of the relief sought therein.

10.Learned counsel for P.I.A.C. submitted that it was decided to request A.L.S. to provide the transport services after the request made by P.I.A.C. to S.T. to provide such services was rejected; that in the meeting dated 30.09.2022 chaired by the Chief Executive Officer of P.I.A.C., it was decided to initiate a re-tendering process for an advantageous procurement of transport services for the cockpit crew of P.I.A.C.; that at no material stage was any contract executed with S.T.; and that P.I.A.C. decided not to assail the order dated 26.08.2022 passed by P.P.R.A. through which S.T. was declared as the most responsive bidder. Learned counsel for P.I.A.C. prayed for both the petitions to be dismissed.

11.I have heard the contentions of the learned counsel for the contesting parties and have perused the record with their able assistance. The facts leading to the filing of these petitions have been set out in sufficient detail in paragraphs 4 to 7 above and need not be recapitulated.

12.A.L.S. is assailing P.P.R.A.’s order dated 26.08.2022 primarily on the ground that since the bid security which A.L.S. asserts was submitted along with its financial proposal had been lost in transit, no illegality was committed by G.R.C. of P.I.A.C. to accept pay order

dated 27.06.2022 which was submitted after the deadline of 23.05.2022. This Court asked learned counsel for A.L.S. to produce a copy of the pay order No.02446406 dated 21.05.2022 which according to A.L.S. had been submitted along with its financial proposal. Learned counsel for A.L.S. was unable to do so. Instead he referred to a letter dated 18.08.2022 from Dubai Islamic Bank according to which pay order No.02446406, dated 21.05.2022 in favour of P.I.A.C. had been prepared on A.L.S.’s instructions.

13.Now, paragraph 25 of the impugned order dated 26.08.2022 shows that A.L.S. had relied on a police report registered at Police Station Malir, Karachi on 27.06.2022 reporting loss of pay order No.02446406 for an amount of Rs.1,650,000/-. The opening of the financial bid was scheduled for 27.06.2022 i.e., the date of the registration of the police report. According to the police report, the pay order was lost during the journey on 27.06.2022. This caused P.P.R.A. to hold that the bid security remained in possession of A.L.S. up to 27.06.2022.

14.The non-submission of a bid security along with the bid / financial proposal would render the same liable to be rejected. P.P.R.A., in its order dated 26.08.2022, has correctly relied upon the law laid down by the Superior Courts in the judgments reported as PLD 2022 Islamabad 378, 2021 YLR 1886, 2017 CLC 178 and PLD 2011 Lahore 16, by holding that the financial proposal submitted by A.L.S. was not in conformity with the requirements of the tender documents.

15.As regards the question whether this Court can issue a writ of mandamus directing P.I.A.C. to enter into the contract with S.T., it is an admitted position that although S.T. had been prequalified, its financial bid had not been formally accepted by P.I.A.C. Even if it is assumed that P.I.A.C. required S.T. to provide the transport services, this cannot be equated with the acceptance of S.T.’s bid or with the award of a contract.

16.Rule 38 of P.P.R. 2004 provides that the bidder with the most advantageous bid, if not in conflict with any other law, rules, regulations or policy of the Federal Government, shall be awarded the procurement contract, within the original or extended period of bid

validity. The use of the word “shall” in Rule 38 ibid makes it obligatory to award the procurement contract to a bidder with the most advantageous bid unless the bid is in conflict with any law, rules, regulations or policy of the Federal Government. If the procuring agency does not award the contract to a bidder which submits the most advantageous bid, it has to be for reasons sustainable in law and after affording an opportunity of a hearing to a bidder that submits the most advantageous bid. Such reasons are to be justiciable and must show as to how the most advantageous bid is in conflict with any other law, rules, regulations or policy of the Federal Government. In the case at hand, P.I.A.C. before deciding to initiate a process of rebidding for the award of the contract has neither afforded an opportunity of a hearing to S.T., which had admittedly submitted the most advantageous bid nor has it given any reasons for not accepting S.T.’s bid.

17.Additionally, indeed a procuring agency has a right under Rule 34 of the P.P.R. 2004 to call for re-bidding but that right can be exercised only if the procuring agency has rejected all the bids under Rule 33 ibid. For the purposes of clarity, Rule 34(1) of the P.P.R. 2004 provides that if the procuring agency has rejected all bids under Rule 33 of the P.P.R. 2004, it may call for a re-bidding. Rule 33(1) of the P.P.R. 2004 gives a right to a procuring agency to reject all bids or proposals at any time prior to the acceptance of a bid or proposal. Furthermore, the said rule obligates the procuring agency to furnish grounds for the rejection of all the bids or proposals at the request of any bidder. In the case at hand, at no material stage has P.I.A.C. invoked the provisions of Rule 33(1) of the P.P.R. 2004 to reject all the bids before deciding to go for re-bidding under Rule 34. It is only after the rejection of all the bids under Rule 33(1) of the P.P.R. 2004 that the procuring agency can go for re-bidding. The omission by P.I.A.C. to reject all the bids prior to deciding to invite fresh bids renders its decision to invite fresh bids without lawful authority and of no legal effect.

18.In view of the above, writ petition No.3731/2022 is dismissed. Writ petition No.3838/2022 is disposed of with the direction to P.I.A.C.

to afford an opportunity of a hearing to S.T.’s representatives within a period of one week from the date of the receipt of this order and thereafter to pass a reasoned order if it decides not to accept the most responsive bid submitted by S.T.

(MIANGUL HASSAN AURANGZEB)

JUDGE

ANNOUNCED IN AN OPEN COURT ON 02.11.2022.

(JUDGE)

Sultan*