2017 CLC 178 Lahore
2017 C L C 178
[Lahore]
Before Shezada Mazhar, J
A.M. CONSTRUCTION COMPANY (PVT.) LIMITED through Chief Executive Officer and another----Petitioners
Versus
NATIONAL HIGHWAY AUTHORITY through Chairman and 2 others----Respondents
W.P. No.33295 of 2013, decided on 24th January, 2014.
(a) Constitution of Pakistan---
----Art. 199---Territorial jurisdiction of (Lahore) High Court---Scope---Constitutional petition filed against the National Highway Authority ("NHA") before the Lahore High Court---Plea that all acts and documents in relation to contract between NHA and contractor were signed at Islamabad, therefore Lahore High Court did not have jurisdiction in the matter---Validity---National Highway Authority was a statutory authority performing functions in whole of Pakistan, therefore, any action or inaction on part of the statutory body could be challenged in any High Court of any Province---Lahore High Court did have territorial jurisdiction to adjudicate upon the present matter---Constitutional petition was allowed accordingly.
LPG Association of Pakistan v. Federation of Pakistan and others 2009 CLD 1498 and Messrs Sethi and Sethi sons through Humayun Khan v. Federation of Pakistan through Secretary, Ministry of Finance, Islamabad and others 2012 PTD 1869 rel.
(b) Constitution of Pakistan---
----Art. 199--- Constitutional petition--- Maintainability--- Factual controversy---Scope---National Highway Authority ("NHA") projects---Tender floated by NHA---Tender documents, interpretation of---Controversy revolved around the interpretation of certain clauses of tender documents for periodic maintenance contract and application of some provisions of certain Public Procurement Rules, in such circumstances it could not be said that present case involved factual controversies---Constitutional petition was held to be maintainable accordingly.
(c) Constitution of Pakistan---
----Art. 199---Constitutional jurisdiction of the High Court---Scope---Constitutional petition highlighting loss to the public exchequer/loss of public money ---Maintainability---High Court would have jurisdiction to consider the merits of such a constitutional petition.
Arshad Waheed v. Province of Punjab and others PLD 2010 Lah. 510 rel.
(d) Public Procurement Rules, 2004---
----Rr. 4, 23 & 38---Constitution of Pakistan, Art. 199---Constitutional petition---National Highway Authority ("NHA") projects---Tender floated by NHA---Tender documents, interpretation of---Bid security,
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ambiguity in---"Non-responsive"/ "not acceptable" bid---Scope---Substantial but not complete compliance with bidding documents---Scope---NHA floated tenders for certain projects---Company/petitioner submitted bid security for said projects at 2% of the "Estimated Cost" of the projects mentioned in the tender notice---NHA contended that according to instructions provided in tender documents bid security had to be 2% of the "Bid value" and not 2% of the "Estimated cost" of the project, thus bid security submitted by company was deficient and could not be accepted---Contention of company was that no guidance was available in the tender documents as to whether bid security was to be 2% of the "Estimated Cost" or 2% of the "Bid value" submitted by the bidder---Validity---Tender documents showed that bidders were required to submit bid security at 2% of either "Bid Price" or "Bid value"---Neither words, i.e. "Bid Price" or "Bid value" were defined in the bidding documents, therefore there was an ambiguity in the bidding documents---Act of NHA of not clearly drafting the tender documents should not prejudice the company---Difference between bid security deposited by company at 2% of "Estimated cost" and bid security of 2% of "Bid value" which should have been allegedly deposited according to NHA was (only) Rs.1,876,081---On the other hand company was the lowest bidder and difference between its bid and the next lowest bid was of about Rs.35 million---NHA in such circumstances would suffer a minimum loss of over Rs.35 million in case bid of company was not considered by it---Submission of bid security by company at 2% of "Estimated cost" although a bit less than the amount allegedly required under the tender documents as per contention of NHA, it should still be considered as substantial compliance of the bidding documents---Shortfall in bid security was caused due to bona fide confusion/ambiguity in the tender documents, therefore rule of substantial compliance would apply and bid security submitted by company should not be considered as non-responsive---Constitutional petition was allowed and NHA was directed to consider bid of company for evaluation purposes along with other bidders.
Muhammad Ayub and Brothers v. Capital Development Authority Islamabad and 5 others PLD 2011 Lah. 16 distinguished.
(e) National Highway Authority Act (XI of 1991)---
----Preamble--- National Highway Authority ("NHA")--- Public organization---Custodian of public money/property---NHA being a public organization was the custodian of public money/property, and was required to protect and safeguard the same---NHA was required to obtain services at the best possible price.
(f) Public functionary---
----Acts---Nobody should be penalized for the acts of public functionaries.
Province of the Punjab through Collector District Khushab Jauharabad and others v. Haji Yaqoob Khan 2007 SCMR 554 and Overseas Pakistanis Foundation and others v. Sqn. Ldr. (Retd.) Syed Mukhtar Ali Shah and another 2007 SCMR 569 rel.
(g) Interpretation of documents---
----Tender document, interpretation of---Purposive and commercial interpretation---Scope---One should give purposive and commercial interpretation to tender documents and not restrictive or literal construction.
Data Steel Pipe Industries (Pvt.) Ltd. v. Sui Southern Gas Co. Ltd. 2012 CLD 832 rel.
(h) Public Procurement Rules, 2004---
----R. 4---Procurement by public authority---Terms of tender---Non-compliance with---Technical irregularity,
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waiving of---Scope---Public authority should not be bound to give effect to every term mentioned in the tender document, as it had the power to waive technical irregularity of little or no significance---Public functionaries had the power/ authority to deviate from and not insist upon strict compliance of a condition (in the tender).
Dr. Akhtar Hassan Khan and others v. Federation of Pakistan and others 2012 SCMR 455 and Messrs Nishat Mills Ltd. v. Superintendent of Central Excise Circle II and 3 others PLD 1989 SC 222 rel.
ORDER
Uzair Karamat Bhandari and Mian Muhammad Kashif for Petitioners.
Muhammad Shabbir Ahmad for Respondents.
Muhammad Shahid Paracha for Applicant.
SHEZADA MAZHAR, J.--- Present writ petition has been filed as the respondent/National Highway Authority (NHA) failed to respond to the request/representation made by the petitioner (AMCC) in respect of deficiency in the amount of bid securities submitted along with the Bids for Motorway Projects by the Petitioner.
2.Facts necessary for the disposal of the present writ petition are that NHA invited tender regarding thirteen (13) maintenance projects. AMCC submitted bids for twelve (12) out of thirteen (13) maintenance projects. Bids were called on the basis of "One stage two envelope" process whereby the bidders were required to submit technical and financial bids in two separate envelopes simultaneously.
3.Out of thirteen projects as per the petitioner only six bids have so far been opened and in all the six bids AMCC was found responsive and in each of the six bids AMCC was the lowest in the financial bids. Out of the six open bids three relates to the motorway and are hereinafter called as the Motorway Projects and the present controversy is with regard to the said three projects only.
4.As per the contentions of the petitioner, AMCC being technically responsive and lowest in financial bids, become entitled to the award of the Motorway Projects. AMCC claimed that its bids are at least Rs.35,000,000/- (Rupees thirty five million) lowest than the next lowest bidders.
5.Financial bids were opened on 04.11.2013, however, the result of bid evaluation has not been declared by the NHA till date. Meanwhile petitioner learnt that NHA is not considering petitioner's bids for the Motorway Projects on the basis that the bid security submitted by the AMCC was deficient. On coming to know about this fact, AMCC wrote a letter dated 11.11.2013 to the NHA and offered to meet the alleged shortfall. However, when no response was received from the NHA, AMCC sent another letter on 12.12.2013 along with legal opinion of his solicitor with regard to validity of the bid securities. Still no response was received by the petitioner from the NHA. However, on 17.12.2013, AMCC received a letter from NHA asking AMCC to extend the validity of its bids submitted for the highway, projects upto 10.02.2014. No such request was received with regard to the Motorway Projects by the AMCC therefore, it become clear to AMCC that the NHA is not considering the bids submitted by it for Motorway Projects, hence, the present writ petition.
6.Learned counsel for the petitioner submits that Tender Notice states an Estimated Cost in respect of each project. In respect of highways projects petitioner had submitted its bid at the value mentioned in the Tender Notice and submitted bid security at 2% of the Estimated Cost, whereas in respect of Motorway
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Projects petitioner submitted bids at a value which is higher than the Estimated Cost and bid security is submitted at the 2% of the Estimated Cost mentioned in the Tender Notice. Submits that under clause IB 15.1 of the Instruction to Bidder each bidder was required to submit Bid Security in the amount mentioned/stipulated in the Bidding Data Sheet. In the Bidding Data Sheet it is mentioned at clause 14.1 that bid security shall be at 2% of the Bid Value. Submits that the words Bid Value have not been defined in the Bidding Documents; that no guidance is available in the Tender Documents as to whether the Bid Securities were to be 2% of the Estimated Cost or 2% of the offer being made by the bidders; that the bid security at the Estimated Cost by the petitioner fulfills the requirement of the bidding documents and therefore NHA should consider the petitioner's bids for Motorway Projects for evaluation. Submits that even otherwise, the bid security is neither deficient nor inadequate as any alleged deficiency in the quantum of Bid Security is attributable exclusively to the ambiguity in the meaning of the term "Bid Value". Submits that it is settled law, if two constructions of a document are possible then the document should be interpreted contrary to the interests of the party responsible for drafting the document. In this regard relied upon Sandoz Limited v. Federation of Pakistan and another (1995 SCMR 1431) and Data Steel Pipe Industries (Pvt.) Ltd. v. Sui Southern Gas Co. (2012 CLD 832). Submits that petitioner's bids were "substantially responsive" in terms of the bidding documents and therefore cannot be ignored for evaluation. Submits that it is settled law that nobody should be penalized for the acts of public functionaries and in this regard relied upon Province of the Punjab v. Haji Yaqoob Khan (2007 SCMR 554) and Overseas Pakistani Foundation v. Mukhtar Ali Shah (2007 SCMR 569). Further submits that if two options are reasonably available to interpret and apply a provision in a bidding document, the one that results in a larger pool of bidders is to be preferred over one that restricts the potential bidders to only a few participants. In this regard referred to Data Steel Pipe Industries (Pvt.) Ltd. v. Sui Southern Gas Co. Ltd. (2012 CLD 832). Submits that Tender Documents are to be given a purposive and commercial interpretation by the courts and not a restrictive or literal construction. In this regard once again referred Data Steel Pipe Industries (Pvt.) Ltd. v. Sui Southern Gas Co. Ltd. (2012 CLD 832). Submits that by submitting bid security at 2% of the Estimated Cost petitioner has substantially complied with the condition and respondent/NHA should not seek rigorous compliance of terms of a tender as the same is not required in all cases. Submits that only essential conditions are mandatory, while ancillary provisions and procedural terms are not mandatory and substantial compliance with them is enough. In this regard referred Poddar Steel Corporation v. Ganesh Engineering Wroks ((1991) 3 SCC 273), GJ Fernaandez v. State of Karnataka (1990) 2 SCC 488, Dr. Akhtar Hassan Khan and others v. Federation of Pakistan and others (2012 SCMR 455) and B.S.N.Joshi and Sons Ltd. v. Nair Coal Services Ltd. and others ((2006) 11 SCC 548). Also relied upon Messrs Nishat Mills Ltd. v. Superintendent of Central Excise Circle II and 3 others (PLD 1989 SC 222) to state that substantial compliance of even statutory rules is sufficient and a rigorous compliance is not required in all cases. Learned counsel further submits that even if there is a shortfall in the bid security the same is a de-minimize error which has been caused due to the ambiguity in the Tender Documents and therefore can be ignored. Further submits that being a statutory body NHA is required to enter into a contract which is least expensive to the public exchequer. Submits that non-consideration of petitioner's bid for Motorway Project should be declared illegal and NHA may be directed to consider the bids of the petitioner during evaluation of Motorway Projects.
7.On the other hand, learned counsel for the respondent NHA has raised preliminary objection that the tender was issued and the same was opened at Islamabad, therefore this Court has no territorial jurisdiction to entertain the present writ petition. In this regard reliance has been placed on Regional Development Finance Corporation v. Haji Gul Hassan and another (2009 SCMR 706). Submits that the present writ petition has been filed on the basis of apprehension and therefore is not maintainable. No decision with regard to award of Motorway Projects has been made by the NHA and therefore writ petition is not maintainable. In this regard relied upon Arshad Waheed v. Province of Punjab and others (PLD 2010 Lahore 510). Submits that the present writ petition involved factual controversy which too cannot be considered in writ jurisdiction and
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therefore, the same is liable to be dismissed. In this regard relied upon Muhammad Mahmood Bawani v. Deputy Controller Building Zone-B and others (2007 SCMR 1209). Further submits that the petitioner is not an aggrieved person and therefore the present petition is not maintainable in view of law laid down in Province of the Balochistan through Secretary Excise and Taxation Department, Civil Secretariat, Quetta and 2 others v. Murree Brewery Company Ltd. through Secretary (PLD 2007 SC 386). Submits that no action of the NHA has been impugned in the present writ petition and on this ground also the same is liable to be dismissed. Submits that admittedly the petitioner's bid was not accompanied with a bid security of 2% of bid value as provided in clause 15.1 of the Tender Documents and therefore, the same is not acceptable and is a non-responsive bid under clause 15.3 of the Tender Documents. Submits that the petitioner's confession about spying in the NHA is a violation of integrity pack which too is part of bid and for this reason also the present writ petition is liable to be rejected. Submits that where petitioner has submitted correct securities the bids of the petitioner are being evaluated along with other bids, however, in case of Motorway Projects petitioner himself has stated that bids are not accompanied with bid security as per the Tender Documents, therefore, cannot be considered for evaluation. Submits that petitioner's bid is not acceptable in terms of Tender Documents. Submits that as per the conditions set out in the Tender Documents as well as Rule 40 of the Public Procurement Rules, 2006 NHA was not required to respond to the representation made by the petitioner and therefore this writ is liable to be dismissed on this ground. Submits that NHA has not informed petitioner regarding alleged deficiency in bid security therefore, the writ as well as representation are based on apprehension; that "minimum amount of bid security" has been clearly given in the Tender Documents and there is no ambiguity or doubt exists in the Tender Documents. Submits that guidance with regard to the value of bid security is given in IB 26.2 of the Tender Documents; that petitioner being experienced contractor, very familiar with the terms of bid, the bid value and estimated cost and such lame and incorrect excuses are being preferred to hoodwink the law and other bidders in biding competition; that Bid Value is no term but an English expression for bid price or bid amount or cost of bid. Submits that all these expressions are extensively used in bidding process and all contractors are familiar with it therefore, no issue of ambiguity or doubt exits. Submits that clause IB 8 of the Tender Documents very clearly requires bidder to ask for clarifications if there is any doubt in bidding documents. No such clarification was sought by the petitioner at the relevant time. Submits that as per admission of the petitioner, the bid was not accompanied by 2% of bid price as required in Tender Notice therefore, cannot be considered by the NHA for evaluation in view of clause IB 15.3 of the Tender Documents. The bid is inconsistent with bidding documents and its adoption will affect unfavorably the competitive position of bidders who have deposited the bid along with bid security with 2% of bid value. Submits that NHA will definitely consider public interest viz-a-viz Public Procurement Regulatory Authority (PPRA) Rules, 2006 and transparent bidding process while making decision on the matters. Seek dismissal of the writ petition.
8.In rebuttal learned counsel for the petitioner submitted that present writ petition has been filed on the basis of inaction taken on part of the NHA and proceedings are in violation of best public interest, therefore, the writ petition is maintainable. Regarding territorial jurisdiction, learned counsel for the petitioner has relied upon LPG Association of Pakistan v. Federation of Pakistan (2009 CLD 1498), Messrs Sethi and Sethi sons through Humayun Khan v. Federation of Pakistan through Secretary, Ministry of Finance, Islamabad and others (2012 PTD 1869) and Barrister Sardar Muhammad v. Federation of Pakistan and others (PLD 2013 Lahore 343) to state that this Court has territorial jurisdiction to entertain such like matters.
9.I have heard the arguments advanced by both the learned counsel for the parties and have also gone through the record available on the court file.
10.I will first deal with the preliminary objections of the learned counsel for the NHA. The first objection was with regard to the territorial jurisdiction of this court. According to the learned counsel this Court lacks
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territorial jurisdiction as the acts and documents between the parties were performed at Islamabad.
11.It is not denied by the learned counsel for the respondent that the NHA is a statutory authority performing functions in whole of Pakistan. Therefore, any action or inaction on part of the statutory body can be challenged in any High Court of any Province. I am fortified in my above view from the judgments of this Hon'ble Court in LPG Association of Pakistan v. Federation of Pakistan and others (2009 CLD 1498) wherein it was held:-
(A)The Federal Government or any body politic or a corporation or a statutory authority having exclusive residence or location at Islamabad with no office at any other place in any of the Provinces, shall still be deemed to function all over the country.
(B)If such Government, body or authority passes any order or initiates an action at Islamabad, but it affects the aggrieved party at the place other than the Federal Capital. Such party shall have a cause of action to agitate about his grievance within the territorial jurisdiction of the High Court in which said order/action has affected him.
12.Similarly this Court in Messrs Sethi and Sethi sons through Humayun Khan v. Federation of Pakistan through Secretary, Ministry of Finance, Islamabad and others (2012 PTD 1869) has held as under:-
A PERSON performing functions in connection with the affairs of the FEDERATION as compared to a Province or local authority, is a PERSON who besides carrying the attributes listed in Salahuddin Case is by law vested with territorial jurisdiction that spans across the country i.e. possessing a national or country wide territorial jurisdiction. Federal Government or any person performing functions in connection with the affairs of the Federation enjoys ubiquitous presence everywhere across the country having territorial jurisdiction of every High Court in the country. In this case it will be up to the aggrieved person to choose the High Court of his convenience. Similarly, the territorial jurisdiction of a person performing functions in connection with affairs of the Provinces or the Local Authority enjoys precedence all over the Province and within the territorial jurisdiction of the local authority.
It was further held in this case that even the receipt of correspondence or effect of order is immaterial and what is material is the territorial jurisdiction of Person. The Court held:-
Additionally, "act done" or proceedings taken are closely linked with the local of the Officer or authority doing that act or initiating the proceedings. Hence, the location of the effect of the act or order passed against the aggrieved person or the receipt of correspondence of any proceedings initiated against the aggrieved person is immaterial. What matters is the territorial jurisdiction of the PERSON and not of the "aggrieved person".
13.Therefore, I am of the affirmed view that this Court has the territorial jurisdiction to adjudicate upon the matter agitated in the present writ petition.
14.The second preliminary objection is with regard to the non-maintainability of the writ petition as the same has been filed allegedly on apprehension of the petitioner. In this regard learned counsel for the respondent NHA has referred to the judgment of this Court reported as Arshad Waheed v. Province of Punjab and others (PLD 2010 Lahore 510). The perusal of the said judgment reveals that in the said matter writ was filed on receipt of a notice inviting the petitioner for a meeting and the said notice was challenged on the contention that the Government decided to terminate the agreement and the meeting called was just a sham.
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In this back ground it was held that constitutional petition on the basis of apprehension is not maintainable.
15.In the case in hand, perusal of the writ petition and the comments filed by the respondent NHA reveals that although no decision was communicated to the petitioner but in parawise comments respondent NHA has stated in reply to para 6.2 of the writ petition as under:-
Admitted as faithful re-production of IB 15.3. The bid security submitted less than the one given in Tender Notice at Annex B/1 i.e. 2% of the bid price are not acceptable.
16From the above it is clear that the writ petition has not been filed on the basis of apprehension but a decision with regard to non-consideration of the petitioner's bids for the Motorway Projects have already been made. Therefore this writ petition is maintainable. Furthermore when the writ was filed, validity of the bid security submitted by the petitioner was going to expire and respondent NHA had not sought any extension of the bid securities submitted for the Motorway Projects whereas in the Highway Projects NHA had already issued letter for extension of the bid securities. This too was the reason for the petitioner to approach this Court in writ petition and on this ground also the writ is maintainable.
17.The third objection of the NHA was that the writ petition involves factual controversy, therefore, the same is not maintainable. From the facts of the case mentioned above, I do not see any factual controversy involved in the present case. The controversy revolves around the interpretation of certain clauses of the Tender Documents for Periodic Maintenance Contract and application of some provisions of Public Procurement Rules, 2004, therefore, this objection is not sustainable and as such is over-ruled.
18.The last preliminary objection was with regard to the aggrieved person on the ground that as no decision was made or communicated to the petitioner by the NHA therefore, petitioner was not an aggrieved person. In this regard suffice it to say that the writ petition was filed to seek direction for decision on the representation filed by the petitioner. Moreover, the reply given by the NHA to Para 6.2.1 clearly shows that a decision has been made and therefore, the petitioner is an aggrieved person.
19.I feel it necessary to mention here that had I reached the conclusion that this writ petition was not maintainable on any of the objections raised by the learned counsel for the NHA, then I preferred to proceed further in this matter as this Court has the jurisdiction to entertain the present writ petition on the ground that if the petitioner's bids for the Motorway Projects are not considered for evaluation the NHA will suffer a minimum loss of rupees thirty five million which is actually a loss to the public exchequer. This loss of public money gives jurisdiction of this Court to consider the merits of the present case.
20.I find support of my above view from the judgment of this Court reported as Arshad Waheed v. Province of Punjab and others (PLD 2010 Lahore 510). The relevant portion is reproduced hereunder:-
"Non-maintainability of the petition and the power of this Court to proceed further
Non-maintainability of the petition on merits does not oust the jurisdiction of this Court to address other violations of public law, which have come to force during the course of arguments or the petition and after the perusal of the record. Stark violations in the disposal and transfer of public property and heartless breach of public trust by the public functionaries (public trustees) cannot be overlooked. This Court is under oath to preserve, protect and defend the Constitution and in all circumstances do right to all manner of people without fear and favour. For the Court to dismiss the petition on the ground of maintainability alone would not only result in failure of justice, it would also make the Court and its constitutional jurisdiction hostage to technicalities, which cannot be allowed.
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Once grave violation of law and transparency in the disposal/transfer of public property comes before this court, it transforms the lis into public interest litigation conferring inquisitorial jurisdiction on this Court. No constitutional court can shy away from fully discharging this responsibility. It is useful here to revisit Article 199(1)(a)(ii) of the Constitution, which provides that on an application of the aggrieved person, the court can make an order "declaring that any act done or proceedings taken within the territorial jurisdiction of the Court have been done or taken without lawful authority and is of no legal effect". Again under Article 199(1)(c) this Court can "make an order giving such directions to any person" within territorial jurisdiction of the Court for enforcement of fundamental rights conferred under the Constitution. There are loud reminders of the jurisdictional expanse enjoyed by this constitutional Court. This Court is, therefore, at all times equipped with the jurisdiction to probe into any public wrong affecting public at large, when the same has come before it through a petition. It does not matter if the said wrong has been specifically agitated or has coincidentally surfaced during the proceedings. This jurisdiction should not be confused with suo motu jurisdiction exercised by the august Supreme Court of Pakistan under Article 184 of the Constitution, as in the present case jurisdiction of this court has been invoked through a petition placed before the Court by an aggrieved party. I, therefore, proceed further to assess if the Joint Venture Agreement entered into between PUNJMIN and ERPL passes the test of law and transparency.
21.Now I shall take up the grievance raised by the petitioner in his writ petition that there is an ambiguity in the tender documents as in the Tender Notice the requirement of bid security is mentioned as "2% of Bid Price", whereas in the clarification of Bidding Documents at IB12 Bid prices are mentioned as under:-
12.1Unless stated otherwise in the Bidding Documents, the Contract shall be for the whole of the Works as described in IB 1.1 hereof, based on the units rates and/or prices submitted by the bidder.
12.2The bidders shall fill in rates and prices for all items of the Works described in the Bill of Quantities on the basis of percentage (%age) above or below, of the, rates already provided in the Bill of Quantities. Items against which no rate or price is entered by a bidder will not be paid for by the Employer when executed and shall be deemed covered by rates and prices for other items in the Bill of Quantities.
12.3All duties, taxes and other levies payable by the Contractor under the Contract, or for any other cause, as on the date 28 days prior to the deadline for submission of bids shall be included in the rates and prices and the total Bids price submitted by a bidder. Additional/reduced duties, taxes and levies due to subsequent additions or changes in legislation shall be reimbursed/deducted as per Sub-Clause 70.2 of the General Conditions of Contract Part-I.
12.4The rates and prices quoted by the bidders are subject to adjustment during the performance of the Contract in accordance with the provisions of Clause 70 of the Conditions of Contract. The bidders shall furnish the prescribed information for the price adjustment formulae in Appendix C to Bid and shall submit with the bids such other supporting information as required under the said clause.
In the same clarification of Bidding Documents at clause IB.15.1 Bid Security is mentioned in the following words:-
15.1Each bidder shall furnish, as part of his bid, a Bid Security in the amount stipulated in the Bidding Data Sheet in Pak Rupees or an equivalent amount in a freely convertible currency.
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22.From the bare reading of clause 15.1 it is cleared that the bid security will be of the amount mentioned/stipulated in the Bidding Data Sheet. The Bidding Data Sheet at clause 14.1 states as under:-
14.1The amount of Bid Security shall be 2% of the Bid Value.
23.From the above, it is revealed that the bidders are required to submit bid security at 2% of either Bid Price or Bid Value. Both the words Bid Price and Bid Value have been mentioned in capital words which show that they are defined words.
24.Perusal of the Bidding Documents reveals that neither the Bid Value nor Bid Price is defined in the Bidding Documents, therefore, there is an ambiguity in the Bidding Documents and due to which this ambiguity in the Bidding Documents petitioner has claimed that the bid security submitted by him should not be considered as "not acceptable" or "non-responsive" under clause IB 15.3 which is reproduced hereunder:-
15.3 Any bid not accompanied by an acceptable Bid Security shall be rejected by Employer as non-responsive.
25.Learned counsel for the NHA has referred the judgment of Hon'ble Division Bench of this Court reported as Muhammad Ayub and Brothers v. Capital Development Authority Islamabad and 5 others (PLD 2011 Lahore 16) to state that the bid of the petitioner is not accompanied by 2% of the Bid Value, therefore, non-responsive in view of clause 15.3 and as such cannot be considered.
26.I have gone through the said judgment in detail. In the said judgment, the bidders were required to submit bid security in the shape of Deposit at Call and the respondent No.6 submitted an insurance guarantee therefore, his bid was rejected initially. It is relevant to mention here that in the said judgment a pre-bid meeting was also held between the pre-qualified bidders and CDA and it was clarified in the meeting that being mega project bidders should be able to submit Deposit at Call or a Bank Guarantee. As the respondent No.6's bid was not accompanied by Call Deposit therefore, CDA allowed respondent No.6 being lowest bidder to furnish Deposit at Call and later issued letter dated 27.05.2010 intimating respondent No.6 that its offer was being scrutinized. The said letter dated 27.05.2010 was challenged in the writ petition by the petitioner which was dismissed against which an ICA was filed. In para No.13 of the said judgment, the learned Division Bench of this Court held as under:-
The bid of respondent No.6, being non-responsive by reference to the bidding requirements, could not have been considered at all but had to be rejected. In fact, the said offer was initially rejected as invalid but was unlawfully revived and an opportunity was unlawfully and unduly given to respondent No.6 to make, amend and substitute its insurance guarantee with a Deposit at Call one day later.
27.Relying upon the above, learned counsel for the NHA has sought dismissal of the present writ petition on the ground that the bid was "non-responsive". However the facts of the said case are totally different from the case in hand. No pre bid meeting was held in the present case. Further none of the parties have been given opportunity to submit fresh bid bond. Moreover, there is an ambiguity in the Tender Documents, therefore the said judgment was not applicable to the case in hand.
28.In the present case petitioner is the lowest bidder and the difference between the petitioner and the next lowest bidder is of about 35 million, this fact has not been denied by the NHA. The difference between the bid submitted by the petitioner and the next lowest bid is given hereunder:-
Tender/ProjectAMCC's BidNext LowestDifference (Rs.)
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Tender/ProjectAMCC's Bid Security (2% of Estimated Cost) (Rs.)
(Rs.)Bidder (Rs.) 447,657,139450,475,7212,818,582
PM-2010-13-M2-01 PM-2012-13-M2-02 PM-2012-13-M2-03 TOTAL1,243,108,4311,278,764,40335,655,972
353,228,679378,257,45425,028,775
442,222,613450,031,2287,808,615
The difference in the bid security submitted by the petitioner and the actual bid security which petitioner was to submit is given as under:-
Bid Security @ 2% of amount offered by AMCC (Rs.) 8,289,9478,953,143663,196
PM-2010-13-M2-01 PM-2012-13-M2-02 PM-2012-13-M2-03 TOTAL22,986,08724,862,1691,876,081
6,728,165,7,064,574336,808
7,976,9758,844,452876,477
Difference (Rs.)
Keeping in view the above facts as well as Rule 4 read with Rule 38 of Public Procurement Rules, 2004, which reads as under:-
Rule 4. Principles of procurements.--- Procuring agencies, while engaging in procurements, shall ensure that the procurements are conducted in a fair and transparent manner, the object of procurement brings value for money to the agency and the procurement process is efficient and economical.
Rule 38. Acceptance of bids.--- The bidder with the lowest evaluated 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.
29.I am of the considered view that the bid of the petitioner cannot be disregarded only on the ground that the petitioner has not deposited the bid security equal to the amount of 2% of the bid offered by him. The difference between the two bids is only of Rs.1,876,081/- whereas the difference between the petitioner bid and the next lowest bid is of Rs.35,655,972/-. This means NHA will suffer minimum loss of over thirty five million in case the bid of the petitioner is not considered by the NHA.
30.The NHA being public organization is the custodian of public property/money. They are required to protect and safeguard the public money/property like a lioness guards her cubs. NHA is required to obtain services at the best possible price.
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31.Even otherwise the act of NHA of not clearly drafting the Tender Documents should not prejudice the petitioner as it is settled law that nobody should be penalized for the acts of public functionaries. In this regard reliance is placed on Province of the Punjab through Collector District Khushab Jauharabad and others v. Haji Yaqoob Khan and others (2007 SCMR 554) and Overseas Pakistanis Foundation and others v. Sqn. Ldr. (Retd.) Syed Mukhtar Ali Shah and another (2007 SCMR 569).
32.I am of the affirmed view that while dealing with the commercial documents it is required that one should give purposive and commercial interpretation to the tender documents and not restrictive or literal construction. In this regard reliance is placed on Data Steel Pipe Industries (Pvt.) Ltd. v. Sui Southern Gas Co. Ltd. (2012 CLD 832) where in it is held:-
In my view, the terms of a tender document like the one at hand should be interpreted and understood by taking a purposive and commercial approach.
33.In the case in hand if the bid of the petitioner is rejected on the ground that the same is not accompanied with the bid security of 2% of the amount for which petitioner submitted his bid, the respondent NHA will suffer loss of over thirty five million, therefore, I am of the view that the bid of the petitioner should be considered at the time of the evaluation of the bids along with all other bids which qualify for consideration.
34.The bid of the petitioner should also be considered as in case petitioner or any other bidder is declared successful after evaluation by the NHA, the successful bidder will be required to submit performance guarantee as per clause IB 32.1 which states as under:-
32.1 The successful bidder shall furnish to the Employer a Performance Security in the form and the amount stipulated in the Bidding Date Sheet and the Conditions of Contract within a period of 28 days after the receipt of Letter of Acceptance.
On providing performance guaranteed, signing of Contract Agreement and Integrity Pact the bid security submitted with the bid will be returned to the successful bidder. In this view of the fact a lesser amount of bid security should not be considered so fatal that public functionaries/NHA proceeded to award contract to a person whose bid is much higher than the lowest bid. In the case in hand this will result in clear loss of minimum Rs.35 Million to the NHA if the bid of the petitioner is not considered.
35.The submission of bid security at 2% of the Estimated Cost, although a bit lesser amount than required amount under the Tender Documents by the petitioners, should be considered as a substantial compliance of the Bidding Documents by NHA.
36.Under IB 26 of the Tender Documents, NHA is required to determine prior to evaluation of bids whether each of the bid is substantially responsive to the Bidding Documents or not. For substantially responsive bid following is required under IB 26:-
(i)meets the eligibility criteria;
(ii)has been properly signed;
(iii)is accompanied by the required Bid Security;
(iv)Includes signed Integrity Pact where required as per clause 18.35 and
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(v)Conforms to all the terms, conditions and specifications of the Bidding Documents, without material deviation or reservation.
In the same clause material deviation or reservation is defined as under:-
(i)Which affect in any substantial way the scope, quality or performance of the Works;
(ii)Which limits in any substantial way, inconsistent with the Bidding Documents, the Employer's rights or the bidders obligations under the Contract;
(iii)Adoption/rectification whereof would affect unfairly the competitive position of other bidders presenting substantially responsive bids.
37.The bid security submitted by the petitioner does not fall in any of the condition mentioned for material deviation. Even the rectification of the same would not affect the other bidders.
38.Further, a public authority should not be bound to give effect to every term mentioned in the tender document. It has the power to waive a technical irregularity of little or no significance. I am of the view that even if the bid security is of lesser amount the same can be overlooked/ignored by the respondent. In appropriate cases, as in the present case petitioner being lowest bidder and the difference between petitioner and second lowest bid is of rupees 35-Million, public functionaries have the power/authority to deviate from and not to insist upon strict compliance of a condition. For my above view I find support from the case law reported as Dr. Akhtar Hasan Khan and others v. Federation of Pakistan and others (2012 SCMR 455) wherein it was held as under -
A careful perusal of the steps taken in the process for privatization of HBL referred to in the preceding paragraph would indicate that there was substantial compliance with the relevant provisions of the Privatization Commission Ordinance, 2000 and the Rules/Regulations framed thereunder. A minor deviation of Rules or Regulation, if any, in absence of any credible allegation of mala fides or corruption would not furnish a valid ground for interference in judicial review.
39.Even the Hon'ble Supreme Court in the case reported as Messrs Nishat Mills Limited v. Superintendent of Central Excise Circle II and 3 others (PLD 1989 SC 222) has held as under:-
It is not denied that the Pakistan superior Courts while insisting on compliance with the statutory rules in accordance with their provisions as also the parent laws; have also by and large accepted the rule of 'substantial compliance' with a view to see, as observed in the case of Mrs. Dino Mankaji Chinoy, that they are not applied and operated as "stumbling blocks", instead of "stepping stones". And we may add that they should also be not used simply to trap people by technicalities of these rules instead of advancing he purpose for which they are framed.
40.The rule of substantial compliance is also to be applied in this case as the short fall in the bid security as caused due to bona fide confusion/ambiguity in the Tender Documents. Therefore, the bid security submitted by the petitioner should not be considered non-responsive. Even otherwise, the error/short fall is a de-minims and can be ignored.
41.For what has been discussed above, the present writ petition is allowed and the respondent NHA is directed to consider the bids of the petitioner for evaluation purposes along with other bidders.
MWA/A-77/LPetition allowe
[Lahore]
Before Shezada Mazhar, J
A.M. CONSTRUCTION COMPANY (PVT.) LIMITED through Chief Executive Officer and another----Petitioners
Versus
NATIONAL HIGHWAY AUTHORITY through Chairman and 2 others----Respondents
W.P. No.33295 of 2013, decided on 24th January, 2014.
(a) Constitution of Pakistan---
----Art. 199---Territorial jurisdiction of (Lahore) High Court---Scope---Constitutional petition filed against the National Highway Authority ("NHA") before the Lahore High Court---Plea that all acts and documents in relation to contract between NHA and contractor were signed at Islamabad, therefore Lahore High Court did not have jurisdiction in the matter---Validity---National Highway Authority was a statutory authority performing functions in whole of Pakistan, therefore, any action or inaction on part of the statutory body could be challenged in any High Court of any Province---Lahore High Court did have territorial jurisdiction to adjudicate upon the present matter---Constitutional petition was allowed accordingly.
LPG Association of Pakistan v. Federation of Pakistan and others 2009 CLD 1498 and Messrs Sethi and Sethi sons through Humayun Khan v. Federation of Pakistan through Secretary, Ministry of Finance, Islamabad and others 2012 PTD 1869 rel.
(b) Constitution of Pakistan---
----Art. 199--- Constitutional petition--- Maintainability--- Factual controversy---Scope---National Highway Authority ("NHA") projects---Tender floated by NHA---Tender documents, interpretation of---Controversy revolved around the interpretation of certain clauses of tender documents for periodic maintenance contract and application of some provisions of certain Public Procurement Rules, in such circumstances it could not be said that present case involved factual controversies---Constitutional petition was held to be maintainable accordingly.
(c) Constitution of Pakistan---
----Art. 199---Constitutional jurisdiction of the High Court---Scope---Constitutional petition highlighting loss to the public exchequer/loss of public money ---Maintainability---High Court would have jurisdiction to consider the merits of such a constitutional petition.
Arshad Waheed v. Province of Punjab and others PLD 2010 Lah. 510 rel.
(d) Public Procurement Rules, 2004---
----Rr. 4, 23 & 38---Constitution of Pakistan, Art. 199---Constitutional petition---National Highway Authority ("NHA") projects---Tender floated by NHA---Tender documents, interpretation of---Bid security,
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ambiguity in---"Non-responsive"/ "not acceptable" bid---Scope---Substantial but not complete compliance with bidding documents---Scope---NHA floated tenders for certain projects---Company/petitioner submitted bid security for said projects at 2% of the "Estimated Cost" of the projects mentioned in the tender notice---NHA contended that according to instructions provided in tender documents bid security had to be 2% of the "Bid value" and not 2% of the "Estimated cost" of the project, thus bid security submitted by company was deficient and could not be accepted---Contention of company was that no guidance was available in the tender documents as to whether bid security was to be 2% of the "Estimated Cost" or 2% of the "Bid value" submitted by the bidder---Validity---Tender documents showed that bidders were required to submit bid security at 2% of either "Bid Price" or "Bid value"---Neither words, i.e. "Bid Price" or "Bid value" were defined in the bidding documents, therefore there was an ambiguity in the bidding documents---Act of NHA of not clearly drafting the tender documents should not prejudice the company---Difference between bid security deposited by company at 2% of "Estimated cost" and bid security of 2% of "Bid value" which should have been allegedly deposited according to NHA was (only) Rs.1,876,081---On the other hand company was the lowest bidder and difference between its bid and the next lowest bid was of about Rs.35 million---NHA in such circumstances would suffer a minimum loss of over Rs.35 million in case bid of company was not considered by it---Submission of bid security by company at 2% of "Estimated cost" although a bit less than the amount allegedly required under the tender documents as per contention of NHA, it should still be considered as substantial compliance of the bidding documents---Shortfall in bid security was caused due to bona fide confusion/ambiguity in the tender documents, therefore rule of substantial compliance would apply and bid security submitted by company should not be considered as non-responsive---Constitutional petition was allowed and NHA was directed to consider bid of company for evaluation purposes along with other bidders.
Muhammad Ayub and Brothers v. Capital Development Authority Islamabad and 5 others PLD 2011 Lah. 16 distinguished.
(e) National Highway Authority Act (XI of 1991)---
----Preamble--- National Highway Authority ("NHA")--- Public organization---Custodian of public money/property---NHA being a public organization was the custodian of public money/property, and was required to protect and safeguard the same---NHA was required to obtain services at the best possible price.
(f) Public functionary---
----Acts---Nobody should be penalized for the acts of public functionaries.
Province of the Punjab through Collector District Khushab Jauharabad and others v. Haji Yaqoob Khan 2007 SCMR 554 and Overseas Pakistanis Foundation and others v. Sqn. Ldr. (Retd.) Syed Mukhtar Ali Shah and another 2007 SCMR 569 rel.
(g) Interpretation of documents---
----Tender document, interpretation of---Purposive and commercial interpretation---Scope---One should give purposive and commercial interpretation to tender documents and not restrictive or literal construction.
Data Steel Pipe Industries (Pvt.) Ltd. v. Sui Southern Gas Co. Ltd. 2012 CLD 832 rel.
(h) Public Procurement Rules, 2004---
----R. 4---Procurement by public authority---Terms of tender---Non-compliance with---Technical irregularity,
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waiving of---Scope---Public authority should not be bound to give effect to every term mentioned in the tender document, as it had the power to waive technical irregularity of little or no significance---Public functionaries had the power/ authority to deviate from and not insist upon strict compliance of a condition (in the tender).
Dr. Akhtar Hassan Khan and others v. Federation of Pakistan and others 2012 SCMR 455 and Messrs Nishat Mills Ltd. v. Superintendent of Central Excise Circle II and 3 others PLD 1989 SC 222 rel.
ORDER
Uzair Karamat Bhandari and Mian Muhammad Kashif for Petitioners.
Muhammad Shabbir Ahmad for Respondents.
Muhammad Shahid Paracha for Applicant.
SHEZADA MAZHAR, J.--- Present writ petition has been filed as the respondent/National Highway Authority (NHA) failed to respond to the request/representation made by the petitioner (AMCC) in respect of deficiency in the amount of bid securities submitted along with the Bids for Motorway Projects by the Petitioner.
2.Facts necessary for the disposal of the present writ petition are that NHA invited tender regarding thirteen (13) maintenance projects. AMCC submitted bids for twelve (12) out of thirteen (13) maintenance projects. Bids were called on the basis of "One stage two envelope" process whereby the bidders were required to submit technical and financial bids in two separate envelopes simultaneously.
3.Out of thirteen projects as per the petitioner only six bids have so far been opened and in all the six bids AMCC was found responsive and in each of the six bids AMCC was the lowest in the financial bids. Out of the six open bids three relates to the motorway and are hereinafter called as the Motorway Projects and the present controversy is with regard to the said three projects only.
4.As per the contentions of the petitioner, AMCC being technically responsive and lowest in financial bids, become entitled to the award of the Motorway Projects. AMCC claimed that its bids are at least Rs.35,000,000/- (Rupees thirty five million) lowest than the next lowest bidders.
5.Financial bids were opened on 04.11.2013, however, the result of bid evaluation has not been declared by the NHA till date. Meanwhile petitioner learnt that NHA is not considering petitioner's bids for the Motorway Projects on the basis that the bid security submitted by the AMCC was deficient. On coming to know about this fact, AMCC wrote a letter dated 11.11.2013 to the NHA and offered to meet the alleged shortfall. However, when no response was received from the NHA, AMCC sent another letter on 12.12.2013 along with legal opinion of his solicitor with regard to validity of the bid securities. Still no response was received by the petitioner from the NHA. However, on 17.12.2013, AMCC received a letter from NHA asking AMCC to extend the validity of its bids submitted for the highway, projects upto 10.02.2014. No such request was received with regard to the Motorway Projects by the AMCC therefore, it become clear to AMCC that the NHA is not considering the bids submitted by it for Motorway Projects, hence, the present writ petition.
6.Learned counsel for the petitioner submits that Tender Notice states an Estimated Cost in respect of each project. In respect of highways projects petitioner had submitted its bid at the value mentioned in the Tender Notice and submitted bid security at 2% of the Estimated Cost, whereas in respect of Motorway
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Projects petitioner submitted bids at a value which is higher than the Estimated Cost and bid security is submitted at the 2% of the Estimated Cost mentioned in the Tender Notice. Submits that under clause IB 15.1 of the Instruction to Bidder each bidder was required to submit Bid Security in the amount mentioned/stipulated in the Bidding Data Sheet. In the Bidding Data Sheet it is mentioned at clause 14.1 that bid security shall be at 2% of the Bid Value. Submits that the words Bid Value have not been defined in the Bidding Documents; that no guidance is available in the Tender Documents as to whether the Bid Securities were to be 2% of the Estimated Cost or 2% of the offer being made by the bidders; that the bid security at the Estimated Cost by the petitioner fulfills the requirement of the bidding documents and therefore NHA should consider the petitioner's bids for Motorway Projects for evaluation. Submits that even otherwise, the bid security is neither deficient nor inadequate as any alleged deficiency in the quantum of Bid Security is attributable exclusively to the ambiguity in the meaning of the term "Bid Value". Submits that it is settled law, if two constructions of a document are possible then the document should be interpreted contrary to the interests of the party responsible for drafting the document. In this regard relied upon Sandoz Limited v. Federation of Pakistan and another (1995 SCMR 1431) and Data Steel Pipe Industries (Pvt.) Ltd. v. Sui Southern Gas Co. (2012 CLD 832). Submits that petitioner's bids were "substantially responsive" in terms of the bidding documents and therefore cannot be ignored for evaluation. Submits that it is settled law that nobody should be penalized for the acts of public functionaries and in this regard relied upon Province of the Punjab v. Haji Yaqoob Khan (2007 SCMR 554) and Overseas Pakistani Foundation v. Mukhtar Ali Shah (2007 SCMR 569). Further submits that if two options are reasonably available to interpret and apply a provision in a bidding document, the one that results in a larger pool of bidders is to be preferred over one that restricts the potential bidders to only a few participants. In this regard referred to Data Steel Pipe Industries (Pvt.) Ltd. v. Sui Southern Gas Co. Ltd. (2012 CLD 832). Submits that Tender Documents are to be given a purposive and commercial interpretation by the courts and not a restrictive or literal construction. In this regard once again referred Data Steel Pipe Industries (Pvt.) Ltd. v. Sui Southern Gas Co. Ltd. (2012 CLD 832). Submits that by submitting bid security at 2% of the Estimated Cost petitioner has substantially complied with the condition and respondent/NHA should not seek rigorous compliance of terms of a tender as the same is not required in all cases. Submits that only essential conditions are mandatory, while ancillary provisions and procedural terms are not mandatory and substantial compliance with them is enough. In this regard referred Poddar Steel Corporation v. Ganesh Engineering Wroks ((1991) 3 SCC 273), GJ Fernaandez v. State of Karnataka (1990) 2 SCC 488, Dr. Akhtar Hassan Khan and others v. Federation of Pakistan and others (2012 SCMR 455) and B.S.N.Joshi and Sons Ltd. v. Nair Coal Services Ltd. and others ((2006) 11 SCC 548). Also relied upon Messrs Nishat Mills Ltd. v. Superintendent of Central Excise Circle II and 3 others (PLD 1989 SC 222) to state that substantial compliance of even statutory rules is sufficient and a rigorous compliance is not required in all cases. Learned counsel further submits that even if there is a shortfall in the bid security the same is a de-minimize error which has been caused due to the ambiguity in the Tender Documents and therefore can be ignored. Further submits that being a statutory body NHA is required to enter into a contract which is least expensive to the public exchequer. Submits that non-consideration of petitioner's bid for Motorway Project should be declared illegal and NHA may be directed to consider the bids of the petitioner during evaluation of Motorway Projects.
7.On the other hand, learned counsel for the respondent NHA has raised preliminary objection that the tender was issued and the same was opened at Islamabad, therefore this Court has no territorial jurisdiction to entertain the present writ petition. In this regard reliance has been placed on Regional Development Finance Corporation v. Haji Gul Hassan and another (2009 SCMR 706). Submits that the present writ petition has been filed on the basis of apprehension and therefore is not maintainable. No decision with regard to award of Motorway Projects has been made by the NHA and therefore writ petition is not maintainable. In this regard relied upon Arshad Waheed v. Province of Punjab and others (PLD 2010 Lahore 510). Submits that the present writ petition involved factual controversy which too cannot be considered in writ jurisdiction and
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therefore, the same is liable to be dismissed. In this regard relied upon Muhammad Mahmood Bawani v. Deputy Controller Building Zone-B and others (2007 SCMR 1209). Further submits that the petitioner is not an aggrieved person and therefore the present petition is not maintainable in view of law laid down in Province of the Balochistan through Secretary Excise and Taxation Department, Civil Secretariat, Quetta and 2 others v. Murree Brewery Company Ltd. through Secretary (PLD 2007 SC 386). Submits that no action of the NHA has been impugned in the present writ petition and on this ground also the same is liable to be dismissed. Submits that admittedly the petitioner's bid was not accompanied with a bid security of 2% of bid value as provided in clause 15.1 of the Tender Documents and therefore, the same is not acceptable and is a non-responsive bid under clause 15.3 of the Tender Documents. Submits that the petitioner's confession about spying in the NHA is a violation of integrity pack which too is part of bid and for this reason also the present writ petition is liable to be rejected. Submits that where petitioner has submitted correct securities the bids of the petitioner are being evaluated along with other bids, however, in case of Motorway Projects petitioner himself has stated that bids are not accompanied with bid security as per the Tender Documents, therefore, cannot be considered for evaluation. Submits that petitioner's bid is not acceptable in terms of Tender Documents. Submits that as per the conditions set out in the Tender Documents as well as Rule 40 of the Public Procurement Rules, 2006 NHA was not required to respond to the representation made by the petitioner and therefore this writ is liable to be dismissed on this ground. Submits that NHA has not informed petitioner regarding alleged deficiency in bid security therefore, the writ as well as representation are based on apprehension; that "minimum amount of bid security" has been clearly given in the Tender Documents and there is no ambiguity or doubt exists in the Tender Documents. Submits that guidance with regard to the value of bid security is given in IB 26.2 of the Tender Documents; that petitioner being experienced contractor, very familiar with the terms of bid, the bid value and estimated cost and such lame and incorrect excuses are being preferred to hoodwink the law and other bidders in biding competition; that Bid Value is no term but an English expression for bid price or bid amount or cost of bid. Submits that all these expressions are extensively used in bidding process and all contractors are familiar with it therefore, no issue of ambiguity or doubt exits. Submits that clause IB 8 of the Tender Documents very clearly requires bidder to ask for clarifications if there is any doubt in bidding documents. No such clarification was sought by the petitioner at the relevant time. Submits that as per admission of the petitioner, the bid was not accompanied by 2% of bid price as required in Tender Notice therefore, cannot be considered by the NHA for evaluation in view of clause IB 15.3 of the Tender Documents. The bid is inconsistent with bidding documents and its adoption will affect unfavorably the competitive position of bidders who have deposited the bid along with bid security with 2% of bid value. Submits that NHA will definitely consider public interest viz-a-viz Public Procurement Regulatory Authority (PPRA) Rules, 2006 and transparent bidding process while making decision on the matters. Seek dismissal of the writ petition.
8.In rebuttal learned counsel for the petitioner submitted that present writ petition has been filed on the basis of inaction taken on part of the NHA and proceedings are in violation of best public interest, therefore, the writ petition is maintainable. Regarding territorial jurisdiction, learned counsel for the petitioner has relied upon LPG Association of Pakistan v. Federation of Pakistan (2009 CLD 1498), Messrs Sethi and Sethi sons through Humayun Khan v. Federation of Pakistan through Secretary, Ministry of Finance, Islamabad and others (2012 PTD 1869) and Barrister Sardar Muhammad v. Federation of Pakistan and others (PLD 2013 Lahore 343) to state that this Court has territorial jurisdiction to entertain such like matters.
9.I have heard the arguments advanced by both the learned counsel for the parties and have also gone through the record available on the court file.
10.I will first deal with the preliminary objections of the learned counsel for the NHA. The first objection was with regard to the territorial jurisdiction of this court. According to the learned counsel this Court lacks
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territorial jurisdiction as the acts and documents between the parties were performed at Islamabad.
11.It is not denied by the learned counsel for the respondent that the NHA is a statutory authority performing functions in whole of Pakistan. Therefore, any action or inaction on part of the statutory body can be challenged in any High Court of any Province. I am fortified in my above view from the judgments of this Hon'ble Court in LPG Association of Pakistan v. Federation of Pakistan and others (2009 CLD 1498) wherein it was held:-
(A)The Federal Government or any body politic or a corporation or a statutory authority having exclusive residence or location at Islamabad with no office at any other place in any of the Provinces, shall still be deemed to function all over the country.
(B)If such Government, body or authority passes any order or initiates an action at Islamabad, but it affects the aggrieved party at the place other than the Federal Capital. Such party shall have a cause of action to agitate about his grievance within the territorial jurisdiction of the High Court in which said order/action has affected him.
12.Similarly this Court in Messrs Sethi and Sethi sons through Humayun Khan v. Federation of Pakistan through Secretary, Ministry of Finance, Islamabad and others (2012 PTD 1869) has held as under:-
A PERSON performing functions in connection with the affairs of the FEDERATION as compared to a Province or local authority, is a PERSON who besides carrying the attributes listed in Salahuddin Case is by law vested with territorial jurisdiction that spans across the country i.e. possessing a national or country wide territorial jurisdiction. Federal Government or any person performing functions in connection with the affairs of the Federation enjoys ubiquitous presence everywhere across the country having territorial jurisdiction of every High Court in the country. In this case it will be up to the aggrieved person to choose the High Court of his convenience. Similarly, the territorial jurisdiction of a person performing functions in connection with affairs of the Provinces or the Local Authority enjoys precedence all over the Province and within the territorial jurisdiction of the local authority.
It was further held in this case that even the receipt of correspondence or effect of order is immaterial and what is material is the territorial jurisdiction of Person. The Court held:-
Additionally, "act done" or proceedings taken are closely linked with the local of the Officer or authority doing that act or initiating the proceedings. Hence, the location of the effect of the act or order passed against the aggrieved person or the receipt of correspondence of any proceedings initiated against the aggrieved person is immaterial. What matters is the territorial jurisdiction of the PERSON and not of the "aggrieved person".
13.Therefore, I am of the affirmed view that this Court has the territorial jurisdiction to adjudicate upon the matter agitated in the present writ petition.
14.The second preliminary objection is with regard to the non-maintainability of the writ petition as the same has been filed allegedly on apprehension of the petitioner. In this regard learned counsel for the respondent NHA has referred to the judgment of this Court reported as Arshad Waheed v. Province of Punjab and others (PLD 2010 Lahore 510). The perusal of the said judgment reveals that in the said matter writ was filed on receipt of a notice inviting the petitioner for a meeting and the said notice was challenged on the contention that the Government decided to terminate the agreement and the meeting called was just a sham.
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In this back ground it was held that constitutional petition on the basis of apprehension is not maintainable.
15.In the case in hand, perusal of the writ petition and the comments filed by the respondent NHA reveals that although no decision was communicated to the petitioner but in parawise comments respondent NHA has stated in reply to para 6.2 of the writ petition as under:-
Admitted as faithful re-production of IB 15.3. The bid security submitted less than the one given in Tender Notice at Annex B/1 i.e. 2% of the bid price are not acceptable.
16From the above it is clear that the writ petition has not been filed on the basis of apprehension but a decision with regard to non-consideration of the petitioner's bids for the Motorway Projects have already been made. Therefore this writ petition is maintainable. Furthermore when the writ was filed, validity of the bid security submitted by the petitioner was going to expire and respondent NHA had not sought any extension of the bid securities submitted for the Motorway Projects whereas in the Highway Projects NHA had already issued letter for extension of the bid securities. This too was the reason for the petitioner to approach this Court in writ petition and on this ground also the writ is maintainable.
17.The third objection of the NHA was that the writ petition involves factual controversy, therefore, the same is not maintainable. From the facts of the case mentioned above, I do not see any factual controversy involved in the present case. The controversy revolves around the interpretation of certain clauses of the Tender Documents for Periodic Maintenance Contract and application of some provisions of Public Procurement Rules, 2004, therefore, this objection is not sustainable and as such is over-ruled.
18.The last preliminary objection was with regard to the aggrieved person on the ground that as no decision was made or communicated to the petitioner by the NHA therefore, petitioner was not an aggrieved person. In this regard suffice it to say that the writ petition was filed to seek direction for decision on the representation filed by the petitioner. Moreover, the reply given by the NHA to Para 6.2.1 clearly shows that a decision has been made and therefore, the petitioner is an aggrieved person.
19.I feel it necessary to mention here that had I reached the conclusion that this writ petition was not maintainable on any of the objections raised by the learned counsel for the NHA, then I preferred to proceed further in this matter as this Court has the jurisdiction to entertain the present writ petition on the ground that if the petitioner's bids for the Motorway Projects are not considered for evaluation the NHA will suffer a minimum loss of rupees thirty five million which is actually a loss to the public exchequer. This loss of public money gives jurisdiction of this Court to consider the merits of the present case.
20.I find support of my above view from the judgment of this Court reported as Arshad Waheed v. Province of Punjab and others (PLD 2010 Lahore 510). The relevant portion is reproduced hereunder:-
"Non-maintainability of the petition and the power of this Court to proceed further
Non-maintainability of the petition on merits does not oust the jurisdiction of this Court to address other violations of public law, which have come to force during the course of arguments or the petition and after the perusal of the record. Stark violations in the disposal and transfer of public property and heartless breach of public trust by the public functionaries (public trustees) cannot be overlooked. This Court is under oath to preserve, protect and defend the Constitution and in all circumstances do right to all manner of people without fear and favour. For the Court to dismiss the petition on the ground of maintainability alone would not only result in failure of justice, it would also make the Court and its constitutional jurisdiction hostage to technicalities, which cannot be allowed.
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Once grave violation of law and transparency in the disposal/transfer of public property comes before this court, it transforms the lis into public interest litigation conferring inquisitorial jurisdiction on this Court. No constitutional court can shy away from fully discharging this responsibility. It is useful here to revisit Article 199(1)(a)(ii) of the Constitution, which provides that on an application of the aggrieved person, the court can make an order "declaring that any act done or proceedings taken within the territorial jurisdiction of the Court have been done or taken without lawful authority and is of no legal effect". Again under Article 199(1)(c) this Court can "make an order giving such directions to any person" within territorial jurisdiction of the Court for enforcement of fundamental rights conferred under the Constitution. There are loud reminders of the jurisdictional expanse enjoyed by this constitutional Court. This Court is, therefore, at all times equipped with the jurisdiction to probe into any public wrong affecting public at large, when the same has come before it through a petition. It does not matter if the said wrong has been specifically agitated or has coincidentally surfaced during the proceedings. This jurisdiction should not be confused with suo motu jurisdiction exercised by the august Supreme Court of Pakistan under Article 184 of the Constitution, as in the present case jurisdiction of this court has been invoked through a petition placed before the Court by an aggrieved party. I, therefore, proceed further to assess if the Joint Venture Agreement entered into between PUNJMIN and ERPL passes the test of law and transparency.
21.Now I shall take up the grievance raised by the petitioner in his writ petition that there is an ambiguity in the tender documents as in the Tender Notice the requirement of bid security is mentioned as "2% of Bid Price", whereas in the clarification of Bidding Documents at IB12 Bid prices are mentioned as under:-
12.1Unless stated otherwise in the Bidding Documents, the Contract shall be for the whole of the Works as described in IB 1.1 hereof, based on the units rates and/or prices submitted by the bidder.
12.2The bidders shall fill in rates and prices for all items of the Works described in the Bill of Quantities on the basis of percentage (%age) above or below, of the, rates already provided in the Bill of Quantities. Items against which no rate or price is entered by a bidder will not be paid for by the Employer when executed and shall be deemed covered by rates and prices for other items in the Bill of Quantities.
12.3All duties, taxes and other levies payable by the Contractor under the Contract, or for any other cause, as on the date 28 days prior to the deadline for submission of bids shall be included in the rates and prices and the total Bids price submitted by a bidder. Additional/reduced duties, taxes and levies due to subsequent additions or changes in legislation shall be reimbursed/deducted as per Sub-Clause 70.2 of the General Conditions of Contract Part-I.
12.4The rates and prices quoted by the bidders are subject to adjustment during the performance of the Contract in accordance with the provisions of Clause 70 of the Conditions of Contract. The bidders shall furnish the prescribed information for the price adjustment formulae in Appendix C to Bid and shall submit with the bids such other supporting information as required under the said clause.
In the same clarification of Bidding Documents at clause IB.15.1 Bid Security is mentioned in the following words:-
15.1Each bidder shall furnish, as part of his bid, a Bid Security in the amount stipulated in the Bidding Data Sheet in Pak Rupees or an equivalent amount in a freely convertible currency.
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Case Judgementhttp://www.plsbeta.com/LawOnline/law/content21.asp?Casedes=2017L208
22.From the bare reading of clause 15.1 it is cleared that the bid security will be of the amount mentioned/stipulated in the Bidding Data Sheet. The Bidding Data Sheet at clause 14.1 states as under:-
14.1The amount of Bid Security shall be 2% of the Bid Value.
23.From the above, it is revealed that the bidders are required to submit bid security at 2% of either Bid Price or Bid Value. Both the words Bid Price and Bid Value have been mentioned in capital words which show that they are defined words.
24.Perusal of the Bidding Documents reveals that neither the Bid Value nor Bid Price is defined in the Bidding Documents, therefore, there is an ambiguity in the Bidding Documents and due to which this ambiguity in the Bidding Documents petitioner has claimed that the bid security submitted by him should not be considered as "not acceptable" or "non-responsive" under clause IB 15.3 which is reproduced hereunder:-
15.3 Any bid not accompanied by an acceptable Bid Security shall be rejected by Employer as non-responsive.
25.Learned counsel for the NHA has referred the judgment of Hon'ble Division Bench of this Court reported as Muhammad Ayub and Brothers v. Capital Development Authority Islamabad and 5 others (PLD 2011 Lahore 16) to state that the bid of the petitioner is not accompanied by 2% of the Bid Value, therefore, non-responsive in view of clause 15.3 and as such cannot be considered.
26.I have gone through the said judgment in detail. In the said judgment, the bidders were required to submit bid security in the shape of Deposit at Call and the respondent No.6 submitted an insurance guarantee therefore, his bid was rejected initially. It is relevant to mention here that in the said judgment a pre-bid meeting was also held between the pre-qualified bidders and CDA and it was clarified in the meeting that being mega project bidders should be able to submit Deposit at Call or a Bank Guarantee. As the respondent No.6's bid was not accompanied by Call Deposit therefore, CDA allowed respondent No.6 being lowest bidder to furnish Deposit at Call and later issued letter dated 27.05.2010 intimating respondent No.6 that its offer was being scrutinized. The said letter dated 27.05.2010 was challenged in the writ petition by the petitioner which was dismissed against which an ICA was filed. In para No.13 of the said judgment, the learned Division Bench of this Court held as under:-
The bid of respondent No.6, being non-responsive by reference to the bidding requirements, could not have been considered at all but had to be rejected. In fact, the said offer was initially rejected as invalid but was unlawfully revived and an opportunity was unlawfully and unduly given to respondent No.6 to make, amend and substitute its insurance guarantee with a Deposit at Call one day later.
27.Relying upon the above, learned counsel for the NHA has sought dismissal of the present writ petition on the ground that the bid was "non-responsive". However the facts of the said case are totally different from the case in hand. No pre bid meeting was held in the present case. Further none of the parties have been given opportunity to submit fresh bid bond. Moreover, there is an ambiguity in the Tender Documents, therefore the said judgment was not applicable to the case in hand.
28.In the present case petitioner is the lowest bidder and the difference between the petitioner and the next lowest bidder is of about 35 million, this fact has not been denied by the NHA. The difference between the bid submitted by the petitioner and the next lowest bid is given hereunder:-
Tender/ProjectAMCC's BidNext LowestDifference (Rs.)
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Case Judgementhttp://www.plsbeta.com/LawOnline/law/content21.asp?Casedes=2017L208
Tender/ProjectAMCC's Bid Security (2% of Estimated Cost) (Rs.)
(Rs.)Bidder (Rs.) 447,657,139450,475,7212,818,582
PM-2010-13-M2-01 PM-2012-13-M2-02 PM-2012-13-M2-03 TOTAL1,243,108,4311,278,764,40335,655,972
353,228,679378,257,45425,028,775
442,222,613450,031,2287,808,615
The difference in the bid security submitted by the petitioner and the actual bid security which petitioner was to submit is given as under:-
Bid Security @ 2% of amount offered by AMCC (Rs.) 8,289,9478,953,143663,196
PM-2010-13-M2-01 PM-2012-13-M2-02 PM-2012-13-M2-03 TOTAL22,986,08724,862,1691,876,081
6,728,165,7,064,574336,808
7,976,9758,844,452876,477
Difference (Rs.)
Keeping in view the above facts as well as Rule 4 read with Rule 38 of Public Procurement Rules, 2004, which reads as under:-
Rule 4. Principles of procurements.--- Procuring agencies, while engaging in procurements, shall ensure that the procurements are conducted in a fair and transparent manner, the object of procurement brings value for money to the agency and the procurement process is efficient and economical.
Rule 38. Acceptance of bids.--- The bidder with the lowest evaluated 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.
29.I am of the considered view that the bid of the petitioner cannot be disregarded only on the ground that the petitioner has not deposited the bid security equal to the amount of 2% of the bid offered by him. The difference between the two bids is only of Rs.1,876,081/- whereas the difference between the petitioner bid and the next lowest bid is of Rs.35,655,972/-. This means NHA will suffer minimum loss of over thirty five million in case the bid of the petitioner is not considered by the NHA.
30.The NHA being public organization is the custodian of public property/money. They are required to protect and safeguard the public money/property like a lioness guards her cubs. NHA is required to obtain services at the best possible price.
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Case Judgementhttp://www.plsbeta.com/LawOnline/law/content21.asp?Casedes=2017L208
31.Even otherwise the act of NHA of not clearly drafting the Tender Documents should not prejudice the petitioner as it is settled law that nobody should be penalized for the acts of public functionaries. In this regard reliance is placed on Province of the Punjab through Collector District Khushab Jauharabad and others v. Haji Yaqoob Khan and others (2007 SCMR 554) and Overseas Pakistanis Foundation and others v. Sqn. Ldr. (Retd.) Syed Mukhtar Ali Shah and another (2007 SCMR 569).
32.I am of the affirmed view that while dealing with the commercial documents it is required that one should give purposive and commercial interpretation to the tender documents and not restrictive or literal construction. In this regard reliance is placed on Data Steel Pipe Industries (Pvt.) Ltd. v. Sui Southern Gas Co. Ltd. (2012 CLD 832) where in it is held:-
In my view, the terms of a tender document like the one at hand should be interpreted and understood by taking a purposive and commercial approach.
33.In the case in hand if the bid of the petitioner is rejected on the ground that the same is not accompanied with the bid security of 2% of the amount for which petitioner submitted his bid, the respondent NHA will suffer loss of over thirty five million, therefore, I am of the view that the bid of the petitioner should be considered at the time of the evaluation of the bids along with all other bids which qualify for consideration.
34.The bid of the petitioner should also be considered as in case petitioner or any other bidder is declared successful after evaluation by the NHA, the successful bidder will be required to submit performance guarantee as per clause IB 32.1 which states as under:-
32.1 The successful bidder shall furnish to the Employer a Performance Security in the form and the amount stipulated in the Bidding Date Sheet and the Conditions of Contract within a period of 28 days after the receipt of Letter of Acceptance.
On providing performance guaranteed, signing of Contract Agreement and Integrity Pact the bid security submitted with the bid will be returned to the successful bidder. In this view of the fact a lesser amount of bid security should not be considered so fatal that public functionaries/NHA proceeded to award contract to a person whose bid is much higher than the lowest bid. In the case in hand this will result in clear loss of minimum Rs.35 Million to the NHA if the bid of the petitioner is not considered.
35.The submission of bid security at 2% of the Estimated Cost, although a bit lesser amount than required amount under the Tender Documents by the petitioners, should be considered as a substantial compliance of the Bidding Documents by NHA.
36.Under IB 26 of the Tender Documents, NHA is required to determine prior to evaluation of bids whether each of the bid is substantially responsive to the Bidding Documents or not. For substantially responsive bid following is required under IB 26:-
(i)meets the eligibility criteria;
(ii)has been properly signed;
(iii)is accompanied by the required Bid Security;
(iv)Includes signed Integrity Pact where required as per clause 18.35 and
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(v)Conforms to all the terms, conditions and specifications of the Bidding Documents, without material deviation or reservation.
In the same clause material deviation or reservation is defined as under:-
(i)Which affect in any substantial way the scope, quality or performance of the Works;
(ii)Which limits in any substantial way, inconsistent with the Bidding Documents, the Employer's rights or the bidders obligations under the Contract;
(iii)Adoption/rectification whereof would affect unfairly the competitive position of other bidders presenting substantially responsive bids.
37.The bid security submitted by the petitioner does not fall in any of the condition mentioned for material deviation. Even the rectification of the same would not affect the other bidders.
38.Further, a public authority should not be bound to give effect to every term mentioned in the tender document. It has the power to waive a technical irregularity of little or no significance. I am of the view that even if the bid security is of lesser amount the same can be overlooked/ignored by the respondent. In appropriate cases, as in the present case petitioner being lowest bidder and the difference between petitioner and second lowest bid is of rupees 35-Million, public functionaries have the power/authority to deviate from and not to insist upon strict compliance of a condition. For my above view I find support from the case law reported as Dr. Akhtar Hasan Khan and others v. Federation of Pakistan and others (2012 SCMR 455) wherein it was held as under -
A careful perusal of the steps taken in the process for privatization of HBL referred to in the preceding paragraph would indicate that there was substantial compliance with the relevant provisions of the Privatization Commission Ordinance, 2000 and the Rules/Regulations framed thereunder. A minor deviation of Rules or Regulation, if any, in absence of any credible allegation of mala fides or corruption would not furnish a valid ground for interference in judicial review.
39.Even the Hon'ble Supreme Court in the case reported as Messrs Nishat Mills Limited v. Superintendent of Central Excise Circle II and 3 others (PLD 1989 SC 222) has held as under:-
It is not denied that the Pakistan superior Courts while insisting on compliance with the statutory rules in accordance with their provisions as also the parent laws; have also by and large accepted the rule of 'substantial compliance' with a view to see, as observed in the case of Mrs. Dino Mankaji Chinoy, that they are not applied and operated as "stumbling blocks", instead of "stepping stones". And we may add that they should also be not used simply to trap people by technicalities of these rules instead of advancing he purpose for which they are framed.
40.The rule of substantial compliance is also to be applied in this case as the short fall in the bid security as caused due to bona fide confusion/ambiguity in the Tender Documents. Therefore, the bid security submitted by the petitioner should not be considered non-responsive. Even otherwise, the error/short fall is a de-minims and can be ignored.
41.For what has been discussed above, the present writ petition is allowed and the respondent NHA is directed to consider the bids of the petitioner for evaluation purposes along with other bidders.
MWA/A-77/LPetition allowe
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