StereoHCJDA38

JUDGMENT SHEET
IN THE LAHORE HIGH COURT
MULTAN BENCH MULTAN
JUDICIAL DEPARTMENT
WritPetitionNo.426 of 2020

M/s Bio-Labs Private Limited V/S Province of Punjab and others

JUDGMENT
Dates of hearing 14.01.2020, 04.02.2020, 12.02.2020,
04.03.2020, 09.03.2020
Petitioner(s)by M/s. Mahmood Ashraf Khan ASC, Rana Ali
Imran and Khalid Ashraf Khan ASC, Advocates.
Respondent(s)by M/s Tariq Nadeem and Azhar Saleem Kamlana,
Assistant Advocates General
Haji Muhammad Aslam, Legal Advisor for the
RespondentsNo.3 to10 with Ms. Tanzeela Huma,
Junior Law Officer.
Syed Muhammad Ghazanfar, Advocate for the
Respondent No.11.

Judges are meant to interpret laws but, increasingly, they

make them. In the past few decades, legislatures
throughout the world have suffered from gridlock. In
democracies, laws and policies are just as soon unpicked
as made. It seems that Congress and Parliaments cannot
forge progress or consensus. Moreover, courts often
overturn decisions made by elected representatives.

In the absence of effective politicians, many turn to the

courts to solve political and moral questions. Rulings from
the Supreme Courts in the United States and United
Kingdom, or the European court in Strasbourg may seem to
end the debate but the division and debate does not subside.
In fact, the absence of democratic accountability leads to
radicalisation. Judicial overreach cannot make up for the
shortcomings of politicians.1

JAWAD HASSAN, J. It needs to be emphasized, as a prefatory, that the

core question which garners the indulgence of this Court and lies at the

heart of the controversy is the interpretation of Rule 63 of the Punjab

1
Trials of the State: Law and the Decline of Politics, (Profile Books, London UK-First Edition 2020) by
Lord Jonathan Sumption, UK Supreme Court
Writ Petition No.426 of 2020 2

Procurement Regulatory Authority Rules, 2014(the “PPRA Rules”).

Threading the relevant rules of the procurement law regime along with the

holistic reading of the case law developed so far by our Courts around this

question can surely provide an answer as will be seen in my findings in the

latter half. Through the instant Constitutional petition, filed under Article

199 of the Constitution of the Islamic Republic of Pakistan, 1973(the

“Constitution”), the Petitioner has impugned the letter dated 04.01.2020,

issued by the Respondent No.10/Grievance Redressal Committee, Nishtar

Hospital Multan (the “Committee”).

I. BACKGROUND OF THE CASE

2. The Petitioner/M/s. Bio Labs Private Limited (the “Petitioner

Company”) claims to be a pharmaceutical company and is in the

production of high quality medicines since 1989 and is also a license

holder under the Drug Regulatory Authority of Pakistan. Bids for

procurement of different medicines, surgical disposable items, lab kits and

X-Ray Films, etc. were invited by the Respondent No.4/Medical

Superintendent Nishtar Hospital, Multan under Rule 38(2) of the PPRA

Rules. In response thereof the Company participated in the bidding process

and ultimately framework contract for the procurement of drugs/medicines

for the financial year 2019-2020 was awarded vide letter dated 27.11.2019.

After the award of contract, allegedly the Company started importing

various items from the foreign companies including M/s. ZHUHAI United

Laboratories Trading Company Ltd. China. Meanwhile one M/s. Wilshire

Laboratories Pvt. Ltd./the Respondent No.11 (the “Respondent-

Company”) assailed order dated 09.11.2019 by filing Writ Petition

Writ Petition No.426 of 2020 3

No.18535 of 2019 which eventually was disposed of on 29.11.2019 with a

direction to the Respondent No.4 to place the same before the Grievance

Redressal Committee for redressal of grievance however, the

representation of the Respondent-Company was rejected vide minutes of

meeting dated 03.12.2019. The said order was again challenged before this

Court through W.P.No.19408 of 2019 with the specific ground that the

Committee was not constituted in accordance with the Law and Rules, as a

result of which the learned Legal Advisor of Nishtar Hospital appeared

before this Court and made conceding statement regarding constitution of

the Committee being illegal. Consequently, vide impugned letter dated

04.01.2020 the Committee ordered for retender of award/contract.

II. PETITIONER’S SUBMISSION

3. Learned counsel for the Petitioner-Company, Mr. Khalid Ashraf

Khan, ASC and Mr. Mahmod Ashraf Khan ASC, inter-alia contended that

framework contract awarded vide letter dated 27.11.2019 regarding

procurement of eight drugs/medicines mentioned at Sr.No.55,56, 60, 61,

62, 66, 124, 260 still holds the field because that award has never been

challenged at any forum as such the Grievance Committee has no authority

to retender the same; that while passing impugned letter, the Respondent

No.4 has ignored the important aspect that the supply order has already

been issued in favour of the Petitioner-Company; that the Committee was

constituted on 04.01.2020 to hold meeting and on the same day the

impugned order was passed as such the same is self-contradictory; that

there was no objection with regard to acceptance of Technical Evaluation

Writ Petition No.426 of 2020 4

Report as well as approval of the bid of financial aid of the Petitioner-

Company hence no adverse order could be passed against the order dated

27.11.2019; that before rescinding the award already granted to the

Petitioner-Company, neither any notice was issued nor an opportunity of

hearing was afforded hence the Company has been condemned unheard

which is violation of Article 10-A of the Constitution; that by award of

contract to the Petitioner-Company, vested rights have been created in

terms of Rule 35 and 63-A of the PPRA Rules; that till today the bid has

not been cancelled and re-tendering of the same is not permissible under

the PPRA Rules. Learned counsel for the Petitioner-Company relied on

―ABDUL MAJEED through L.Rs. Versus MUHAMMAD BOOTA‖(2004

SCMR 807),―DIRECTOR GENERAL, ORDNANCE SERVICES,

GENERAL HEADQUARTER, RAWALPINDI Versus MUHAMMAD

ABDUL LATIF‖(2003 SCMR 410),―Messrs ARMY WELFARE SUGAR

MILLS LTD. Versus FEDERATION OF PAKISTAN and others‖(1992

SCMR 1652),―Dr. MARIAM RAZA SYED and another Versus PAKISTAN

MEDICAL AND DENTAL COUNCIL through Registrar and others‖(PLD

2019 Lahore 558), ―Messrs FUN INFOTAINMENT NETWORK (SMC-

PVT) LIMITED/NEO TV, through Muhammad Nasrullah Khan Versus

PAKISTAN ELECTRONIC MEDIA REGULATORY AUTHORITY through

Chairman and others‖(PLD 2019 Lahore 486),―Messrs EASTERN

MEDICAL TECHNOLOGY SERVICES Versus PROVINCE OF PUNJAB

and others‖(PLD 2019 Lahore 395),―KHUSHDIL KHAN MALIK Versus

SECRETARY, MINISTRY OF DEFENCE RAWALPINDI CANTT and

others‖(PLD 2017 SC 173),―GHULAM AHMAD CHAUDHRY Versus

Writ Petition No.426 of 2020 5

AKBAR HUSSAIN through Legal Heirs and another‖(PLD 2002 SC

615),―Ch. MUHAMMAD YUNUS Versus The ISLAMIC REPUBLIC OF

PAKISTAN through the Secretary, Ministry of Communication,

Government of Pakistan, Islamabad and 3 others‖ (PLD 1972 Lahore

847),―CHIEF COMMISSIONER, KARACHI and another Versus Mrs.

DINA SOHRAB KATRAK‖(PLD 1959 Supreme Court (Pak.) 45),―JDW

SUGAR MILLS LTD. and others Versus PROVINCE OF PUNJAB and

others‖(PLD 2017 Lahore 68), ―ANWAR SAIFULLAH KHAN Versus

THE STATE, etc.‖(PLD 2001 Peshawar 7), ―Messrs NEW ERA

TECHNOLOGIES PRIVATE LIMITED through Chief Executive Officer,

Lahore Versus PROVINCE OF PUNJAB through Chief Secretary, Lahore

and others‖(2019 CLC 1128)and ―PETROSIN ENGINEERS AND

CONTRACTORS P.T.E. Ltd. Versus FEDERATION OF PAKISTAN and

others‖(2003 MLD 646).

III. RESPONDENTS SUBMISSIONS

i. Arguments of Respondents No.1&2 (Government of

Punjab)

4. Learned Law Officer, Mr. Tariq Nadeem, states that once contract

has been awarded to the Company, vested right has been created in its

favour, which cannot be cancelled or withdrawn.

ii. Arguments of Respondents No.3 to 10 (Nishtar

Hospital)

5. Learned Legal Advisor for the Respondents No.3 to 10 argued that

the contract has rightfully been awarded to the Petitioner-Company which

still holds the field. He further argued that the Respondent No.11 has been

given proper right of hearing before the Grievance Committee which

Writ Petition No.426 of 2020 6

perused the previous decisions of the Technical Evaluation Committee

dated 14.10.2019 and of the Grievance Committee of Nishtar Hospital

Multan, dated 06.11.2019, wherein the Respondent No.11was declared as

non-eligible/non-responsive for the procurement process for the purchase

of Drugs/Medicine items for the financial year 2019-2020. He adds that the

RespondentNo.11 did not challenge the framework Contract for the

financial year 2019-20 awarded to the Company for items having

comparative statement No.55, 56, 60, 61, 62, 66 and 260 on 27.11.2019.

iii. Arguments of the Respondent No.11 (Wilshire

Laboratories)

6. Syed Muhammad Ghazanfar, Advocate for the Respondent-

Company inter-alia contends that that the Respondent-Company is the

lowest bidder than that of the Petitioner-Company, therefore, the impugned

order regarding re-tendering is in accordance with law; that under Rule

63(b) of the PPRA Rules the procurement contract can only commence

from the date of which signatures of both the procuring agency and the

successful bidder are affixed to the written contract and the issuance of

award letter in and of itself does not vest any rights in favour of the

Petitioner-Company; that acceptance of bid award letter dated 27.11.2019

is a mere letter of intent which can be cancelled by the competent authority

and the whole process can be put to re-auction if a valid contract has not

been entered in to between the parties; that as the contract has not been

signed and no vested right has been created in favour of the Petitioner-

Company, therefore, the procuring agency had ample powers under Rule

36 of PPRA Rules to proceed to re-tender the products; that the bidding

Writ Petition No.426 of 2020 7

documents clarify where Rule 63(a) and 63(b) are applicable; that the

bidding document is defined under 2(g) of the PPRA Rules which states

that „bidding document‟ means a document or a set of documents

prescribing the quantity, quality, characteristic, conditions and procedures

of the transactions proper to the actual procurement and on the basis of

which bidders prepare their bids and under Rule 2(n) the contract means

the agreement proposed to be entered in to between the procuring agency

and the successful bidder; that the Committee has no power to withdraw its

re-tendering order. He relied on the judgments cited as “PETROSIN

CORPORATION PVT. LTD. SINGAPORE and 2 others Versus OIL AND

GAS DEVELOPMENT COMPANY LTD. through Managing Director,

Islamabad”(2010 SCMR 306), “MUNSHI MUHAMMADAND ANOTHER

Versus FAIZAN UL HAQ AND ANOTHER”(1971 SCMR 533),“Messrs

AL-NOOR through Partner Versus The PROVINCE OF SINDH through

Chief Secretary Sindh and 8 others” (PLD 2019 Sindh 400),“KITCHEN

CUISINE PVT. LTD. Versus PAKISTAN INTERNATIONAL AIRLINES

CORPORATION and others” (PLD 2016 Lahore 412),“Messrs

PAKISTAN GAS PORT LTD. Versus Messrs SUI NORTHERN GAS CO.

LTD. and 2 others” (PLD 2016 Sindh 207),“A.M. CONSTRUCTION

COMPANY PVT. LIMITED through Chief Executive Officer and another

Versus NATIONAL HIGHWAY AUTHORITY through Chairman and 2

others”(2017 CLC 178),“SINO TEC CO. LIMITED through Authorized

Representative Versus PROVINCE OF KHYBERPAKHTUNKHWA

through Secretary, Energy and Power Department and 5 others” (2015

CLC 1589),“Messrs MEGA SIGN and others Versus CAPITAL

Writ Petition No.426 of 2020 8

DEVELOPMENT AUTHORITY and others”(2014 CLC 516), “AFZAL

MOTORS PVT. LTD. through Managing Director Versus HIGHER

EDUCATION ARCHIVES AND LIBRARIES DEPARTMENT through

Secretary and 7 others” (2010 CLD 1182),“PLATINUM INSURANCE

COMPANY LTD. Versus DIRECTOR INSURANCE”(2010 CLD 1190),

and “SIGNAGE SECURITY SYSTEM PVT. LTD. Versus CAPITAL

DEVELOPMENT AUTHORITY and others” (2010 CLC 567), “CITY

SCHOOLS PVT. LTD. LAHORE CANTT. Versus PRIVATIZATION

COMMISSION, GOVERNMENT OF PAKISTAN and another”(2002 CLD

1158) and “Messrs BAGH CONSTRUCTION COMPANY Versus

FEDERATION OF PAKISTAN and others”(2001YLR2791).

IV. CONSTITUTIONAL MOOT POINTS

7. In order to resolve the controversy in the matter, this Court deems it

appropriate to frame the following constitutional moot points:

i. Whether the Company was duly awarded contract under the

PPRA Rules?
ii. Whether the Grievance Redressal Committee can re-tender
the contract without hearing the parties under the Rules?
iii. Whether the Grievance Redressal Committee can pass any
order without hearing the Petitioner?

8. I have heard the learned counsel for the parties at length and have

also perused available record.

V. DETERMINATION BY THE COURT

A. Prologue –Philosophy and Legal Anthropology of

procurement law regime

9. Legal practices, processes, and claims are among the most powerful

forces that shape our lives. Legal anthropology has historically tried to
Writ Petition No.426 of 2020 9

understand the relationship between legal processes and other aspects of

social, cultural, economic, and political life as well as the meanings and

implications of legal practices on their own terms. For our purpose, while

dealing with the procurement law regime it needs to be understood that the

concept of procurement has always been in existence but mostly developed

due to the strict requirements of the international financial institutions and

the international donor agencies. Maybe not in the same regulated way

that it is now; but people and businesses have always had to purchase

goods, material and labour to complete projects.

10. A book written by Charles Babbage in 1832 titled „On the

Economy of Machinery and Manufactures‘ discussed the need for an

introduction of a so-called „materials man‟ in the mining industry. He said

that the materials man should be someone who selects, purchases and

tracks the goods used on a project – essentially the modern-day

procurement agency. It has been established that the procurement is

primarily the process of finding and agreeing to terms, and acquiring

goods, services, or works from an external source, often via a tendering or

competitive bidding process. However, the procurement is used to ensure

the buyer receives goods, services, or works at the best possible price when

aspects such as quality, quantity, time, and location are compared. The

corporations and the public bodies often define processes intended to

promote fair and open competition for their business while minimizing

risks such as exposure to fraud and collusion. Hence, the bidding is a most

important element of procurement. It is an offer (often competitive) to set a

price tag by an individual or business for a product or service or a demand

Writ Petition No.426 of 2020 10

that something be done. Moreover, the bidding is used to determine the

cost or value of something which can be performed by a person under

influence of a product or service based on the context of the situation.

Formalized acquisition of goods and services has its roots in Military

logistics, where the ancient practice of foraging and looting was taken up

by professional quarter masters, a term which dates from the 17th Century.

The first written record of what would be recognized now as the

purchasing department of an industrial operation is in the railway

companies of the19th Century.

"The intelligence and fidelity exercised in the purchase,

care and use of railway supplies influences directly the

cost of construction and operating and affect the

reputations of officers and the profits of owners.‖

An early reference book from 1922 explains that:

"The modern purchasing agent is a more important man by

far than he was in older days when purchasing agents

were likely to be rubber stamps or bargainers for an extra

penny. A Purchasing agent of the modern breed is a

creative thinker and planner and now regards his work as

a profession.‖

11. Correspondingly, Government or public procurement is the formal

process through which official government agencies obtain the necessary

goods, services and work to carry out government activities.2

2
1 Government procurement generally covers two main types of public expenditure: consumption
expenditure and expenditure on capital formation, that is, investment expenditure The OECD. The
Size of Government Procurement Markets. 2015
Writ Petition No.426 of 2020 11

12. Every Government across the globe needs some material,

equipment and services (including consultancy services) to perform its

activities. The acquisition of these materials, equipment and services

warrants that the whole activity should be undertaken in the most

transparent, economical and efficient manner that results in best value to

the government and the people. Transparency and accountability in a

public procurement system essentially covers important aspects of the

procurement system that includes stakeholders as part of the system. It

requires an enabling environment, an institutional framework, management

capacity and a legislative framework.

B. Global Practices in Public Procurement Policy Making

13. The research on the historical development of the procurement laws

identifies that most countries have public procurement laws that set out the

rules and processes to be followed for all forms of public procurement.

Most international financial institutions, such as World Bank (IBRD), the

Asian Development Bank (ADB), the European Bank for Reconstruction

and Development (EBRD) and the Inter-American Development Bank

(IDB), require a transparent, competitive bidding process as a condition of

financing for major Infrastructure projects. In most cases the process to be

followed for procurement of PPP projects that are supported by IFIs are

included in their procurement guidelines. The World Bank has issued a

specific Guidance Note on Procurement Arrangements Applicable to PPP

Contracts Financed under World Bank Project in September 2010 and its

Procurement Guidelines 2011.

Writ Petition No.426 of 2020 12

14. Another useful source of guidance in this area, specifically related

to procurement in infrastructure projects, is UNCITRAL – Legislative

Guide on Privately Finance Infrastructure Projects, 2001, in Chapter III

and Recommendations 14 to 29. This provides guidance and draft

legislative provisions. This can also be found in different languages on the

UNCITRAL website. There is also UNCITRAL Model Law and guidance

on Public Procurement, 2011 on general public procurement.

15. An extract from the report ―Curbing Corruption in Public

Procurement in Asia and the Pacific‖ Progress and Challenges in 25

Countries Asian Development Bank Organisation for Economic

Co-operation and Development states that

―A majority of the countries in the region (Australia; Bangladesh;

P.R. China; Hong Kong, China; Indonesia; Japan; Korea; the

Kyrgyz Republic; Mongolia; Pakistan; Palau; Philippines;

Singapore; Vanuatu; Vietnam) have passed comprehensive and

widely applicable public procurement laws or regulations. Some of

these frameworks are the fruit of recent efforts to establish or

substantially modernize procurement. Indonesia and Mongolia

passed new procurement frameworks in 2000; Mongolia, in 2005,

was preparing institutional and procedural improvements. The

Philippines established new procurement rules in 2002. P.R. China

did the same in 2003, as did Bangladesh, the Kyrgyz Republic, and

Pakistan in 2004. A similar reform process started in Kazakhstan

in 2002. In 2005 India revised its General Financial Rules, which

lay down the principles for central government procurement, and

Writ Petition No.426 of 2020 13

passed new procedures for the defense sector. Indonesia has

adjusted its procurement framework repeatedly in 2003–2006.

Vietnam enacted procurement legislation in mid-2006, and

supplementary decrees are expected to be passed in the second

half of 2006. Papua New Guinea‘s procurement system was

undergoing reform in 2006, following the promulgation of new

legislation on finance instructions in relation to procurement.

Bangladesh, the Fiji Islands, and Nepal are preparing new

procurement legislation, and Thailand is modernizing its

procurement regulations by revising the existing regulation.

Some of the recently adopted laws and regulations—notably those

of Bangladesh, the Kyrgyz Republic, Mongolia, and Pakistan—

have been strongly inspired by the model law on public

procurement of the UN Commission on International Trade Law

(UNCITRAL). The proposal to revise Thailand‘s procurement

regulations is also based on the model law. However, regulations

on public procurement in Cambodia, Malaysia, and Nepal are still

fragmented and are spread over several legal documents.

Procurement rules need to be unambiguous and reliable over time

to provide for steady and consistent practice and transparency,

and to ensure that training programs in the subject are not made

obsolete by constant changes in the procurement framework.

Today, there is a growing consensus that the stability of the

framework over time clearly benefits from the establishment of the

Writ Petition No.426 of 2020 14

constitutive elements of procurement rules in parliamentary law.

Regulation at this level protects the framework against short-lived

modifications through government decrees and confusion caused

by overriding or conflicting parliamentary laws. Violations of

procurement rules laid down as guidelines or in manuals may also

fall out of the scope of judicial review and may thus go

unsanctioned, as such rules are often not legally binding. Given

the specific legal traditions and very particular circumstances of

some countries, regulation at a lower level may also achieve the

goal of stability‖.

C. National Underpinnings- Pakistani Example

16. Government procurement in Pakistan is overseen by the Public

Procurement Regulatory Authority (PPRA), an autonomous body based in

Islamabad which was established by the Public Procurement Regulatory

Authority Ordinance of May 2002. The PPRA is responsible for issuing

regulations and procedures for public procurement undertaken by federal

level public sector organizations. Its brief is to improve the governance,

management, transparency, accountability and quality of Pakistan's public

procurement.

The PPRA also monitors other public sector agencies' procurement

activity. Pakistan has observer status with respect to the Government

Procurement Agreement. In Pakistan current procurement regime started

functioning in 2002 when the Government of Pakistan created PPRA at

Federal level through a presidential ordinance. The system was strengthened

Writ Petition No.426 of 2020 15

by adding Public Procurement Rules 2004 and Public Procurement

Regulations 2008. The Punjab Province adopted the system in 2007 through

an ordinance which was under the same nomenclature was converted into an

Act 2009. Punjab Procurement Rules 2009 were also notified in the same

year to beef-up the procurement system in the province.

Subsequently Rules of 2014 are in place. The salient features of the

current procurement system include a regulatory body mandated to monitor

the public procurement activities, legal framework elaborating a mechanism

as well as procedure on public acquisition of goods, works and services by

the public sector enterprises, establishment of grievance redressal/appeal

mechanism exclusively for settlement of complaints on the contract

management issue, a mechanism for wide dissemination of Government

policy decision, procurement opportunities and results of evaluation

exercises for award of contracts and regulatory arrangements for ensuring

access to information on the public procurement system.

D. Contextual Perspective: Punjab Procurement Rules 2014

17. The Punjab Procurement Regulatory Ordinance was promulgated in

2007 to establish the Punjab Procurement Regulatory Authority.

Thereafter, Punjab Procurement Rules 2009 were framed and

implemented under the Punjab Procurement Regulatory Ordinance 2009.

Some amendments were made in 2013 in Punjab Procurement Rules 2009

which were renamed as Punjab Procurement Rules 2009 (Amended).

These rules have been repealed in 2014 and new Punjab Procurement

Rules have been enforced as Punjab Procurement Rules 2014. Like all the
Writ Petition No.426 of 2020 16

government departments and public sector corporations that are using

public funds, the City Districts Governments/District

Governments/WASAs/Development Authorities have to follow Punjab

Procurement Rules 2014 for procurement of goods, works, services and

consultancy services.

E. Redreesal Mechanism under the PPRA Rules

18. In order to determine the moot points framed in this case, the Rule

67 of PPRA Rules has to be examined first which deals with the redressal

of grievances of the bidders. It enjoins the procuring agency to constitute

a committee having odd number of persons with proper powers and

authorization to address the complaints of bidder occurring before

enforcement of the procurement contract. Furthermore, it would also be

instructive to refer to the judgment cited in ―MESSRS MIA

CORPORATION (PVT) LTD Versus PAKISTAN PWD AND OTHERS‖

(PLD 2017 Islamabad 29) in which it has held as under:

“PPRA Rules are not exhaustive and do not cater for

each and every eventuality that can be thought of in
the realm of tender- bidding. The PPRA Rules are
codified norms and requirements of a fair, open,
competitive and transparent tender bidding required to
be conducted by the Government or Public Sector
Organizations. The mere fact that a certain process
adopted for bidding by a procuring agency is not
expressly prohibited by the PPRA Rules will not pose
as an obstacle before this Court to examine the
process on the touchstone of fairness, reasonableness
and transparency. These requirements are also
stipulated in Rule 4 of the PPRA Rules, which provides
that procuring agencies, while engaging in
procurements, shall ensure that the procurements are
conducted in a fair and transparent manner, the object
of the procurement brings value for money to the
Writ Petition No.426 of 2020 17

agency and the procurement process is efficient and

economical.

F. DE LEGE LATA (of the law as it is) Guiding Principles

for Procurement

19. It is very much important to mention firstly the principles of the

procurement law which have in fact been provided in Rule 4;

Principles of Procurements.–A procuring agency, while making

any procurement, shall ensure that the procurement is made in a
fair and transparent manner, the object of procurement brings
value for money to the procuring agency and the procurement
process is efficient and economical.

In ―KITCHEN CUISINE (PVT) LTD Versus PAKISTAN

INTERNATIONAL AIRLINES CORPORATION and others‖ (PLD 2016

Lahore 412), this Court observed that:

―19. The grundnorm of the PPRA Rules is section 4 of the

Rules. It says:
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.

20. Fairness, transparency, value for money, and the

process being efficient and economical lie at the heart of the
procurement process. None of these factors can be nullified or
brushed under the carpet to the detriment of the process and
those who offer their tenders for the procurements. Since the
promulgation of PPRA Rules, superior courts have
proactively and vigorously sought their enforcement so that
they are not reduced to a painting, to be looked at only. A
cluster of case-law signifies the overreaching policy of the
courts in such matters and that policy is driven by the concept
of public trust and that it be preserved inviolate. Thus it is
immutable rule now that all public bodies making contracting
or procurement decisions must adhere to the statutory scheme
of things and chime with the intent and the purpose of the law,
so that these are not tainted with invidious discrimination.

21. It will be noticed from the entire reading of PPRA

Rules that the word 'shall' has been used to denote and
accentuate the mandatory nature of the duty as against
Writ Petition No.426 of 2020 18

permissive words which grant distinction. This runs through

the length and breadth of the Rules.

In ―Messrs MEGA SIGN and others Versus CAPITAL DEVELOPMENT

AUTHORITY and others‖ (2014 C L C 516), the Court further observed
that;
―whenever a right belonging to the State is going to be
alienated, the inventor/public functionary is under obligation
to protect at preserve the transparency and to ensure the
maximum gain for the public exchequer.
It is also the duty of the Public functionary to ensure
transparency and where a right has been accrued without
adhering to the parameters highlighted above, the principle of
locus poenitentiae would not be applicable.‖

In ―Messrs AL-NOOR through Partner Versus The PROVINCE OF

SINDH through Chief Secretary Sindh and 8 others‖ (P L D 2019
Sindh 400), the Hon‟ble Sindh High Court observed that

―Transaction involving public money must be made in a

transparent manner for the satisfaction of the people who
were the virtual owners of the national exchequer which
was being invested in such projects
…in the case reported as Asaf Fasihuddin v. Government of
Pakistan (2014 SCMR 676) wherein the apex Court has
been pleased to hold that it is the duty of the Court to
ensure that relevant laws are adhered to strictly, to exhibit
transparency. It has been further held that it is universally
recommended that the transaction involving public money
must be made in a transparent manner for the satisfaction
of the people who are the virtual owners of the national
exchequer which is being invested in such projects…..
…. And to this I may observe that the very purposes of
calling bids in respect of public funds is to ensure that the
best and lowest price is quoted by the bidders; and at the
same time, the process is transparent and without any
ambiguity….
… It is settled law that every state functionary, while
dealing with public money is required to show ultimate
fidelity and is burdened with extraordinary obligation to
maintain fairness, equity, and impartiality….
The discretion of public functionaries in awarding tenders
and spending of public money always requires a vigilant
and vibrant scrutiny by the Courts. The public authority
cannot mess up with public funds as it is not permitted to
give largess in its arbitrary discretion or at its sweet will or
Writ Petition No.426 of 2020 19

in such terms as it chooses in its absolute discretion. The

award of tenders by a Governmental agency always have a
public interest, and therefore, it ought to have fairness and
equality in its conduct. When it awards a tender, it must do
so with fairness and without discrimination and favour, and
must also follow the procedure as far transparent as
possible. In the case of Kasturi Lal Lakshmi Reddy v The
State of Jammu and Kashmir and another (AIR 1980 SC
1992), the Indian Supreme Court has been pleased to hold
as under;
11. So far as the first limitation is concerned, it flows
directly from the thesis that, unlike a private individual, the
State cannot act as it pleases in the matter of giving largess.
Though ordinarily a private individual would be guided by
economic considerations of self-gain in any action taken by
him, it is always open to him under the law to act contrary
to his self-interest or to oblige another in entering into a
contract or dealing with his property. But the Government
is not free to act as it likes in granting largess such as
awarding a contract or selling or leasing out its property.
Whatever be its activity, the Government is still the
Government and is, subject to restraints inherent in its
position in a democratic society. The constitutional power
conferred on the Government cannot be exercised by it
arbitrarily or capriciously or in and unprincipled manner;
it has to be exercised for the public good. Every activity of
the Government has a public element in it and it must
therefore, be informed with reason and guided by public
interest. Every action taken by the Government must be in
public interest; the Government cannot act arbitrarily and
without reason and if it does, its action would be liable to
be invalidated. If the Government awards a contract or
leases out or otherwise deals with its property or grants any
other largess, it would be liable to be tested for its validity
on the touchstone of reasonableness and public interest and
if it fails to satisfy either best, it would be unconstitutional
and invalid.
14. Where any governmental action fails to satisfy the test of
reasonableness and public interest discussed above and is
found to be wanting in the quality of reasonableness or
lacking in the element of public interest, it would be liable
to be struck down as invalid. It must follow as a necessary
corollary from this proposition that the Government cannot
act in a manner which would benefit a private party at the
cost of the State; such an action would be both
unreasonable and contrary to public interest. The
Government, therefore, cannot, for example, give a contract
or sell or lease out its property for a consideration less than
Writ Petition No.426 of 2020 20

the highest that can be obtained for it, unless of course

there are other considerations which render it reasonable
and in public interest to do so......‖

G. Discourse on the Essential Moot Points with Law

20. The case of the Petitioner-Company is that it was awarded

framework contract by the Respondent No.4 as per Rule 63(a) of the PPRA

Rules on 27.11.2019 and as such vested rights have been accrued in its

favour while the stance of the Respondent-Company is that aforesaid award

is mere a letter of intent which does not vest any rights under the law and

for a valid contract it has to fulfill the requirement of Rule 63(b) of the

PPRA Rules. In order to resolve the controversy in hand, it is vital to look

at the evolution of the jurisprudence on the point of procurement law and

its application. In Punjab, The Punjab Procurement Regulatory Authority

Act, 2009 is relevant statute and the procedure for public procurement has

been given in The Punjab Procurement Rules 2014. It has 10 chapters

and 70 rules. It is important to reproduce relevant provisions of the statute

and principles given by the superior courts of the country connected to the

lis in hand to determine the controversy amongst the parties.

Rule 2 of the PPRA Rules has defined certain terms as under:-

Rule 2(f) ‘bid’ means a tender or an offer, in response to an

invitation, by a person, consultant, firm, company or an
organization expressing his or its willingness to undertake a
specified task at a price;
Rule 2(g) ‘biding document’ means a document or a set of
documents prescribing the quantity, quality, characteristics,
conditions and procedures of the transactions prior to the actual
procurement and on the basis of which bidders prepare their bids;
Writ Petition No.426 of 2020 21

Rule 2(n) ‘contract’ means the agreement proposed to be entered

into between the procuring agency and the successful bidder;
Rule 2(r) ‘evaluation committee’ means a committee constituted
by the procuring agency to evaluate tender or proposal to ascertain
whether the bid‘s proposal or tender correspond to the evaluation
criteria formulated by the procuring agency;
Rule 2(s) ‘evaluation report’ means the report prepared after the
evaluation of tenders, quotations, expression of interest, or
proposal;
Rule 2(ae) ‘value for money’ means the best returns for each rupee
spent in terms of quality, timeliness, reliability, after sales service,
up-grade ability, price, source, and the combination of whole-life
cost and quality to meet the procuring agency‟s requirements

Meaning of Bidder

21. Although term „bidder‟ is not defined in PPRA Rules but some of

its definitions given in various dictionaries are as under;

WORDS AND PHRASES, VOLUME 5A by THOMSON WEST,

pg 42

“….Natural persons who were dominant and motivating principles

behind series of corporations and partnerships formed specifically

for purpose of making tender offer were to be deemed as

“bidders…..”

THE MAJOR LAW LEXICON 4th Edition pg 768

“ a person who makes an offer at an auction….”

“someone who makes a bid”

BLACK’S LAW DICTIONARY 10thEdition defines „bidder‟ as

―someone who makes a bid; esp., at an auction, one who signals a

specific offer to buy the property being auctioned at an announced
price‖
Writ Petition No.426 of 2020 22

As per CAMBRIDGE DICTIONARY,

―someone who offers to pay a particular amount of money for
something:
In an auction, goods or property are sold to the highest bidder
(= the person who offers the most money).

As per BUSINESS DICTIONARY:

―Contractor, supplier, or vendor who responds to an invitation to
bid (ITB). Also called offeror or quoter‖

COLLINS DICTIONARY defines it as:

―A bidder is someone who offers to pay a certain amount of money
for something that is being sold. If you sell something to the highest
bidder, you sell it to the person who offers the most money for it‖.

As per OXFORD LEARNER DICTIONARY

“bidder (for something) a person or group that offers to do
something or to provide something for a particular amount of
money, in competition with others‖.

22. These rules also provide its scope and applicability and give

principles of procurements, principal method of procurement, evaluation

criteria, rejection of bids, re-bidding, procedures for selection of

contractors, acceptance of bids, commencement of procurement contract

and redressal of grievances by the procuring agency.

23. By virtue of this petition, the Petitioner-Company has disputed the

letter dated 04.01.2020 issued by the Respondent No.4 whereby the

Committee recommended for retendering of certain disputed items in the

best interest of Government Exchequer. It is necessary to quote the

decision given by the Committee which reads as follows and is self

explanatory:

1. As per technical report, some of the DRCs were missing. It was

observed that the numbering on the technical bid was
inappropriate. The actual status of presence of DRCs does not
exist in the technical report of Technical Evaluation Committee
Writ Petition No.426 of 2020 23

and at this time it is very difficult to assess the actual position of

DRCS.
2. The Grievance Committee was told that the tendering process
was started on 27.07.2019. The financial bids were opened on
13.11.2019 and award letters have been issued on 27.11.2019
for items.
3. The patients are suffering a lot due to non-completion of the
process and non-issuance of supply orders.
4. So keeping in view the above situation, the Grievance Redressal
Committee recommended that the following disputed items
quoted by M/s Wilshire Lab be retendered in the best interest of
the Govt. Exchequer.

Sr.N C.S. Name of Specifications Tentative Qty. Approved rate in Rs.

o. No. Items (As per tender) With the Names of Mfg.
Firm/Firms/Sole Agent
of Foreign Principal with
Brand Name
1 55 Ceftazidime Inj. 250mg. 20400 Rs.88/-
Per Vial
Inj.Biozid 250mg
2 56 Ceftazidime Inj. 500mg. 15500 Rs.124/-
Per Vial
Inj.Biozid 500mg
3 60 Ceftriaxone Inj.250mg/vial 50000 Rs.62/- Per Vial
Inj. Tuff 250 mg/I.V
4 61 Ceftriaxone Inj.500mg/vial 150000 Rs.67/- Per Vial
Inj. Tuff 500 mg/I.V
5 62 Ceftriaxone Inj.1gm/vial 565590 Rs.77/- Per Vial
Inj. Tuff 1 gm/I.V
6 66 Cefepime Inj. 1gm 45600 Rs.402/-
Per Vial.
Inj. Bioprim 1000 mg
7 124 Ketorolac Inj.30mg/ml 316150 Rs.41/- Per amp.
Trometamol Inj. Biorolac Amp 30mg
8 260 Pantoprazole Inj. 40 mg 110090 Rs.235/-
Per Lyophilized vial
Inj. Pancap 40mg

24. It is not disputed by the parties that a tender notice dated

05.07.2019 was floated by the Respondent No.4 inviting bids under Rule

38(2)(a) of PPRA Rules and in response thereto, the Petitioner-Company

submitted its bid. In the said notice, date for opening tender (Technical

Offers) was fixed as 29.07.2019 in terms of Rule 38(2)(a)(iii) of PPRA

Rules and later on Technical Evaluation Committee issued its evaluation

report on 12.10.2019 and the Petitioner-Company was informed with

regard to award of frame work contract through letter dated 17.10.2019

Writ Petition No.426 of 2020 24

issued by the Respondent No.4 and consequently, on 27.11.2019, the

Respondent No.4 issued framework contract along with certain terms and

condition on which the Petitioner-Company is claiming vested right being

a valid contract.

25. In the present case, procedure laid down under Rule 38(2)(a) of

PPRA Rules was adopted by the Respondent No.4 where the Petitioner-

Company submitted its bid which was evaluated as per Rule 32(1). The

reading of aforesaid Rule depicts that all bids have to be evaluated in

accordance with the evaluation criteria and other terms and conditions set

forth in the prescribed bidding document. The term ‗Bidding Document‘

is defined under Rule 25 of the PPRA Rules which states that ―a

procuring agency shall formulate precise and unambiguous bidding

documents that shall be made available to the bidders immediately after

the publication of the invitation of bid‖. Criteria for evaluation and

comparison of bids were given in Clause 60 of the Bidding Document

(Annex-C of the Petition), which reads as follows:-

“Evaluation & Comparison of Bids”

i. The technical evaluation committee of this institution
shall evaluate and compare the bids, which have been
determined to be substantially responsive.
ii. The technical evaluation committee‘s evaluation of
technical proposal/bid shall be on the basis of previous
performances, previous test reports, inspection of
plant/factory/premises (if not previously conducted),
previous experience, financial soundness and such
other details as the Procuring Agency, at its discretion,
may consider appropriate, shall be considered.
However, the evaluation of financial proposals shall be
on the basis of price inclusive of prevailing taxes and
duties in pursuant to instruction to bidders and bid
Security.
Writ Petition No.426 of 2020 25

iii. All bids shall be evaluated in accordance with the

evaluation criteria and other terms & conditions set
forth in these bidding documents.
iv. A bid once opened in accordance with the prescribed
procedure shall be subject to only those rules,
regulations and policies that are in force at the time of
issuance of notice for invitation of bids.
26. From the reading of above clause as well as what is referred herein

below, it is clear that Technical Evaluation Committee has to evaluate

technical proposal which reserves the right to accept any tender or part of

the tender by assigning the reason in terms of Clause 70 of the Bidding

Document which reads as follows:

The Technical Evaluation Committee of this institution

reserves the right to reject or accept any tender or part of the
tender by assigning the reason.

27. As per tender notice dated 05.07.2019, „Technical Proposal‟ was

opened under Rule 38(2)(a)(iii) of the PPRA Rules which was evaluated

as per Rule 38(2)(a)(iv) of the PPRA Rules. Whereafter the Petitioner-

Company was informed through letter dated 17.10.2019 about technical

evaluation report in the following manner:

―Your firm has been declared Responsive by the Technical

Evaluation Committee of this institution, for all of your
quoted items, except items nos. 123, 169, 170, 261, 307, &
308 DRC not attached. Items nos. 123, 169, 170, 179, 259,
307, 308 & 577 samples not submitted.

The meeting regarding opening of financial bids for the

purchase of Drugs/Medicines etc., for the financial year
2019-2020 is scheduled to be held on 26.10.2019 at 10:00
a.m. in the committee room of this institution. You are
requested to depute your authorized representative to attend
the said meeting on the specific date and time positively‖.
Writ Petition No.426 of 2020 26

28. As per report and parawise comments submitted by the Respondents

No.3 to 10, the financial bid was opened on 13.11.2019 and thereafter,

alleged award of framework contract was issued to the Petitioner-

Company on 27.11.2019 with certain terms and conditions mentioned

therein.

29. The crux of the matter involved in this case is, inter alia, the

interpretation of PPRA Rules specially Rule 63(a) and 63(b) because the

Petitioner-Company claims to have a valid contract by relying upon the

Rule 63(a), whereas the Respondent-Company negates aforesaid stance

and is depending on Rule 63(b) of the PPRA Rules. For ready reference

the Rule 63 is reproduced as under

Rule 63. Commencement of procurement contract.– A

procurement contract shall come into force:
(a) where no formal signing of a contract is required,
from the date the notice of the acceptance of the bid or
purchase order has been given to the bidder whose bid
has been accepted and such notice of acceptance or
purchase order shall be issued within a reasonable
time; or
(b) where the procuring agency requires signing of a
written contract, from the date on which the signatures
of both the procuring agency and the successful bidder
are affixed to the written contract and such affixing of
signatures shall take place within a reasonable time;
and
(c) where the coming into force of a contract is
contingent upon fulfillment of a certain condition or
conditions, the contract shall take effect from the date
whereon such fulfillment takes place.
30. Aforesaid rule starts with wording ―procurement contract‖. The

word ‘contract ’ in terms of law of procurement has been defined in

Rule 2(n) ‘contract’ means the agreement proposed to be entered into

Writ Petition No.426 of 2020 27

between the procuring agency and the successful bidder, Its means mere

intent to award the contract does not constitute a concluded contract.

31. It is the argument of learned counsel for the Petitioner-Company

that framework contract awarded on 27.11.2019 still holds the field as the

Petitioner-Company was declared lowest bidder for the purchase of

drugs/medicines whereas this stance was totally negated by learned

counsel for the Respondent-Company on the ground that letter dated

27.11.2019 was a mere letter of intent which does not vest any rights under

the law.

32. It evinces from the perusal of record that the bid submitted by the

Petitioner-Company was evaluated by the Technical Evaluation

Committee constituted by the Respondent No.4 which informed the

Petitioner-Company on 17.10.2019 about its being responsive for the

quoted items and resultantly the Petitioner-Company was awarded

framework contract on 27.11.2019 for the supply of items Nos.55, 56, 60,

61, 62, 66, 124 and 260 along with certain terms and conditions mentioned

therein. It is very important to reproduce Clause-27 of alleged award of

contract which is as follows:-

―The firm will be bound to give an agreement on judicial paper

worth Rs.100/- for the acceptance of all the terms and conditions of
the tender enquiry No.IBP No.6016 dated 05.07.2019 and this
contract for the financial year 2019-2020. The firm will be bound to
abide by all the terms & conditions of the tender inquiry IPL
No.6016 dated 05.09.2019.

33. From the bare reading of aforesaid clause, it is clear that after

acceptance of bid and award of framework contact, firstly the Petitioner-

Company was bound to give an agreement on judicial paper for the

Writ Petition No.426 of 2020 28

acceptance of terms and conditions of tender inquiry dated 05.07.2019 and

secondly it was bound to do it for the contract. Needless to add that neither

the Petitioner-Company attached any document with regard to acceptance

of terms and conditions nor an agreement on judicial paper for acceptance

of term and conditions was submitted. The Respondent No.4 in its report

submitted on 09.03.2020 has stated that ―the firm M/s Bio. Labs has been

awarded of Frame work contract for the financial year 2019-2020 for

items having comparative statement No.55, 56, 60, 61, 62, 66 & 260 on

27.11.2019‖ however, neither document regarding fulfillment of

Clause-27 was produced/attached nor was discussed during arguments.

34. Furthermore, above discussed Clause-27 also finds mention in

Terms and Conditions of Bidding Document (Annex-C of the petition). A

look at Claue-84 of the Biding Document attached with the writ petition

would reveal as follows:-

―The successful firm/bidder will be bound to submit an agreement

on judicial paper worth Rs.100/- for the acceptance of the terms
and conditions of the contact issued by the authority of this
institution prior to issuance of the supply order, failing which the
firm will be held responsible under the rules‖.
35. Bare reading of aforesaid clause reveals that the Petitioner-

Company has to submit an agreement for the purpose of accepting terms

and conditions prior to issuance of supply orders meaning thereby that

alleged award of framework contract is just an offer to accept or not the

terms and conditions mentioned therein which leads toward execution of a

contract. Rule 63 of the PPRA Rules clearly stipulates the manner of

commencement of contract. If, for the sake of argument, the stance of the
Writ Petition No.426 of 2020 29

Petitioner-Company is considered as correct according to Rule 63(a) which

requires no formal signing of a contract from the date of the notice of

acceptance of the bid or giving of purchase order to the bidder, in the case

in hand, the bid of Petitioner-Company was accepted and it was issued an

award of framework contract on 27.11.2019, terms and conditions thereof

are binding upon the Petitioner-Company which it has not fulfilled in terms

of Clause-80 read with Clause-27 of the alleged award of contract.

36. Rule 38 of PPRA Rules explains the procedure for selection of

contractors, according to which in a single stage-two envelope procedure

two separate envelopes containing financial and technical proposals

separately are submitted and initially the envelope marked as technical

proposal is opened for evaluation while the envelope marked as financial

proposal is retained by the procuring agency. Sub-rule (vi) to above Rule

(38) indicates that upon approval of technical proposals the financial

proposals are publically opened at the appointed time. The approval of

technical proposal has been equated there with acceptance of technical bid,

but that admittedly cannot be construed as acceptance of bid for all the

future purposes creating inalienable right in favour of technically

successful bidder. Rule 55 of PPRA Rules has a very clear concept of what

the acceptance of bid, means, the bid is accepted only when, in addition to

being the lowermost financially, it is not in conflict with any other law,

rules, regulation or Policy of the Federal Government, and it culminates

into a procurement contract in terms of rules 55 and 63. For convenience of

reference I would like to reproduce Rule 55:-

Writ Petition No.426 of 2020 30

Acceptance of bids.–Subject to these rules, the bidder with the

lowest evaluated bid, if not in conflict with any other law, shall be
awarded the procurement contract within the original or extended
bid validity period.

37. From plain reading of aforesaid Rule it is obvious that the award of

the contract is contingent upon acceptance of the bid. A declaration at the

time when financial proposals are opened that a particular party is a lowest

bidder would not mean that its bid stands accepted. The procedure in terms

of Rules 37 and 55 has to be followed before a bid can be declared to have

resulted into contract. In ―Messrs PAKISTAN GAS PORT LTD Versus

Messrs SUI SOUTHERN GAS CO. LTD. and 2 others‖ (P L D 2016 Sindh

207), it is observed by the court that:

―..Acceptance of bid leads to the stage where concluded

contract comes into force either by putting signatures on it or
where signatures are not required by placing purchase order
to the bidder. However the lowest bid so determined does not
inevitably usher in immediate acceptance of it, and before the
contract comes in force the examination to ensure that it is
not in conflict with the any other law, rules, regulations or
any Government policy, is undertaken and only after getting
satisfied in all respects, the acceptance is announced through
a report at least ten days before the award of the contract…‖
32. After survey of above mentioned provisions and case laws,
it is crystal clear that no concluded contract has been
constituted between the petitioner and the procuring
agency/authority as there was only intention to award the
contract to the petitioner which does not constitute vested
right in favour of the petitioner to claim concluded contract.
So rule 63 (b) ibid is very well attracted in this case which
postulates that procurement contract shall commenced where
the procuring agency requires signing of a written contract,
from the date on which the signatures of both the procuring
agency and the successful bidder are affixed to the written
contract and such affixing of signatures shall take place
within a reasonable time;

38. The success at technical evaluation stage is a procedural step

forward for the competing bidder, then his/its status of being the lowest
Writ Petition No.426 of 2020 31

one or not is determined at the time of opening of the financial proposals.

Rule 37 comprehensively speaks out about the stage where either a bid's

acceptance or rejection is announced through a report at least ten days

before the award of the procurement contract. The superior courts time and

again have held that intent to award the contract does not create the vested

right to claim a concluded contract.

39. What is a vested right? According to the Oxford English

Dictionary, "vested" means "clothed, robed, dressed especially in

ecclesiastical vestments. A close examination of these meanings and

explanations reveals that vested right is free from contingencies, but

not in the sense that it is exercisable anywhere and at any moment. By

`vested right` can be meant no more than those rights which under

particular circumstances will be protected from legislative interference

(unless it is clearly intended). But as it is a right which vests upon

equities, it has reasonable limits and restrictions.

40. In ―PETROSIN CORPORATION (PVT.) LTD. SINGAPORE and 2

others Versus OIL AND GAS DEVELOPMENT COMPANY LTD. through
Managing Director, Islamabad‖ (2010 S C M R 306), the august
Supreme Court of Pakistan ruled out that:

“7. …….The mere letters of intent to award the contract in present

cases would not constitute a concluded contract. There may
be cases in which a contract may involve a number of
documents including exchange of correspondence between
the parties in the process of finalization of the award of a
contract. The principle of natural justice was not attracted
in the absence of infringement of any vested rights of the
appellants. Reference may usefully be made to the case of
Ittehad Cargo Services v. Syed Tasleem Hussain Naqvi (PLD
2001 SC 116). Since the bids of the appellants had not been
confirmed finally, therefore, the contract could not be said to
have been completed. Reference may be made to the cases of
Writ Petition No.426 of 2020 32

Union of India v. Bhimsen Walaiti Ram (AIR 1971 SC 2295)

and Babu Parvez v. Settlement Commissioner (1974 SCMR
337). Even the lowest bid would not confer an absolute title
for award of a contract. In such like mega projects host of
other considerations become relevant to avoid any
unnecessary risk. The general letter of interest merely
implies an intention to enter into a contract and authority to
the contractor to start the work before completion of the
contract in anticipation of the signing of the contract with a
right to the contractor for compensation of the work, if any,
he already done. Therefore, the letter of intent could not be
treated to be synonymous to a completed contract. The
present ones are not the cases in which bid of any other
bidder had been accepted. Rather the respondent had decided
quite justifiably to re-advertise the tenders. We leave the
question open for consideration in some other appropriate
case whether or not a writ could be issued against the
respondent company under Article 199 of the Constitution. In
our opinion, the impugned judgment of the High Court is
plainly correct to which no exception can be taken.‖

In “Messrs BAGH CONSTRUCTION COMPANY Versus FEDERATION

OF PAKISTAN and others‖ (2001 Y L R 2791), the Court has stated that:
―….The letter of intent, Annexure ' B' was only in the nature
of an offer or a promise and would have turned into a valid
agreement of sale only after an agreement of sale had been
executed by the aforesaid parties in pursuance thereof on the
terms and conditions embodied in the letter of intent,
Annexure 'B'. However, on failure of the petitioners to execute
an agreement of sale no concluded contract/agreement of sale
ever came into existence.

In view of the fact that no valid, legal and proper

contract/agreement of sale had been executed by the
aforesaid parties, and there was no concluded contract
between the parties, the petitioners did not acquire any right,
whatsoever, which could be enforced by this Court in
exercise of its Constitutional jurisdiction. Mere acceptance
of the bid offered by the petitioners and an intention/desire
to sell/dispose of the two properties in question to it on
payment of a sum of Rs.67 Million did not amount to
coming into existence of a contract or an agreement of sale,
which would have bound the respondents to dispose of/sell
the two properties in question to the petitioners. The
petitioners have miserably failed to establish that it had
acquired a legal rights to claim the sale of the two properties
in question by the respondents for consideration of a sum of
Rs.67 Million and as no right had been created in its favour,
Writ Petition No.426 of 2020 33

it would not be deemed to be an aggrieved party as

contemplated in Article 199 of the Constitution of the
Islamic Republic of Pakistan, which is a necessary condition
for invoking the Constitutional Jurisdiction of this Court
under Article 199 of the Constitution of the Islamic Republic
of Pakistan. The petitioner did not have any legal or vested
right, which was violated by any act of commission or
omission by the respondents. Another essential condition
that a party invoking the jurisdiction of this Court would
have suffered legal injury resulting in loss to him was also
not available as in the absence of any right neither the
question of violation thereof nor question of legal injury
would arise.”

In ―Messrs PAKISTAN GAS PORT LTD Versus Messrs SUI SOUTHERN

GAS CO. LTD. and 2 others‖ (P L D 2016 Sindh 207), it is observed by the
Court that:-
―Acceptance of bid leads to the stage where concluded
contract comes into force either by putting signatures on it
or where signatures are not required by placing purchase
order to the bidder. However the lowest bid so determined
does not inevitably usher in immediate acceptance of it, and
before the contract comes in force the examination to ensure
that it is not in conflict with the any other law, rules,
regulations or any Government policy, is undertaken and
only after getting satisfied in all respects, the acceptance is
announced through a report at least ten days before the
award of the contract. After having had general contours of
what the law requires when it comes to seeking procurements
of services, works etc. in public sector we tend to have a word
on rule 48, 2004 Rules meant for redressal of grievances of
the bidders. It enjoins the procuring agency to constitute a
committee having odd number of persons with proper powers
and authorization to address the complaints of bidder
occurring before enforcement of the procurement contract. It
was in line with that provision of law the petitioner lodged its
complaint before the committee but failed to succeed.
However if for certain reasons the contract has not been
executed and the offer or a proposal has not become a
promise against some consideration as provided under
Section 2(a) (b) (d) and (e) of the Contract Act, 1872, no
contract comes into force creating certain rights in favour of
the parties that might be enforced through the Court's
intervention.

It deserves reiteration here; the lowest bidder cannot claim

its right to the contract to be absolute and unquestionable
Writ Petition No.426 of 2020 34

till acceptance of its bid and signing of the contract. For

reliance the case of Petrosin Corporation (Pvt.) Ltd.
Singapore and 2 others v. Oil and Gas Development
Company Ltd. (2010 SCMR 306) can be cited with reference
to the relevant portion:-

7. "Even the lowest bid would not confer an absolute title for
award of a contract. In such like mega projects host of other
considerations become relevant to avoid any unnecessary
risk. The general letter of intent merely implies an intention
to enter into a contract and authority to the contractor to
start the work before completion of the contract in
anticipation of the signing of the contract with a right to the
contractor for compensation of the work, if any, he already
done. Therefore, the letter of intent could not be treated to
be synonymous to a completed contract. The present ones are
not the cases in which bid of any other bidder had been
accepted. Rather the respondent had decided quite justifiably
to re-advertise the tenders."
In ―CITY SCHOOLS (PVT.) LTD., LAHORE CANTT versus
PRIVATIZATION COMMISSION, GOVERNMENT OF PAKISTAN and
another‖ (2002 C L D 1158), the august Supreme Court of Pakistan says that:-
―11. Perusal of different provisions of the Contract Act
reveals that a tender notice is merely an invitation for making
an offer and not by itself an offer or proposal. The
advertisement does not constitute a proposal. Only by
acceptance of offer or proposal by the person calling for
tender it becomes a promise or agreement. When offer of
tenderer is not accepted by the relevant authority, no legal
right accrues to such tenderer. An agreement enforceable by
law becomes a contract. The true test for deciding whether a
valid contract is made between the partied or not is to
ascertain if the parties were of one mind on all the material
terms at the time it is said to have been finalized and
whether they intended that the matter was closed arid
concluded between them. For this purposes, the
correspondence exchanged between the parties is also to be
looked into.‖

In ―MUNSHI MUHAMMAD AND ANOTHER versus FAIZANUL HAQ AND

ANOTHER‖ (1971 S C M R 533), the apex court observed that:-
―The view formed by the High Court is unexceptionable.
Since the auctions in favour of the petitioners were not
finally approved, they did not acquire any right in the
properties, and had, therefore, no locus standi to ask for
their transfer. According to the terms and conditions of the
Writ Petition No.426 of 2020 35

auction itself, the highest bids offered in the auctions were

subject to the approval of the Additional Settlement
Commissioner concerned, who may or may not accept the
bids, without assigning any reasons for his action.

The manner of the exercise of this discretion by the relevant

authorities, as conferred by law, is not amenable to writ
jurisdiction of the High Court, unless it be found to be
arbitrary or fanciful. This is not so in the present case.‖

41. In the light of case law, referred above, the alleged award of

framework contract is a mere letter of intent and cannot be said as a valid

concluded contract.

42. A ground was agitated by the Petitioner-Company that supply

orders have been issued in its favour pursuant to which it placed orders to

certain companies for the purchase of drugs/medicines. In this regard, no

document was placed on record either by the Petitioner-Company or by the

Respondents No.3 to 10 to substantiate this version. The Respondent No.4

in report and parawise comments submitted on 31.01.2020 stated that

―supply orders were not issued for these items. Now these items are not

included in tender of list of re-advertisement‖ which fact is further

strengthened through the decision given by the Committee in the impugned

letter dated 04.01.2020 under heading Decision (3) meaning thereby that

supply orders have not been issued so far hence argument of learned

counsel for the Petitioner-Company that supply orders have been issued

has no weight.

43. The ground taken by the Petitioner-Company is that while passing

impugned order, no opportunity of hearing was provided to it as such it

remained condemned unheard. In this regard, Minutes of Meeting of

Grievance Redressal Committee (Regarding Purchase of Drugs/Medicines)

Writ Petition No.426 of 2020 36

for the financial year 2019-2020 for Nishtar Hospital, Multan) attached

with report and parawise comments submitted by the Respondent No.4

reveals as under:

―The meeting of the Grievance Redressal Committee was held on

26.10.2019 at 9:30 A.M. in the committee room of this institution to
decide upon the grievance lodged by following firms regarding
purchase of Drugs/Medicines for the financial year 2019-2020,
Nishtar Medical University Hospital, Multan.

In the abovesaid meeting following proceedings were conducted

1. As the meeting started, it was told to the committee that every
firm has been intimated by the Purchase Department of Nishtar
Hospital Multan about the meeting and the firms were requested
to send their authorized representatives to attend the meeting in
person for hearing of their grievances.
2. The committee called the representatives of the firms one by one
and gave them the opportunity of being heard regarding their
grievance
In the said meeting, following decision was given.
Sr.No. Name of Firm
27 The representative Mr. Muhammad Jamil attended the meeting. He
was asked to present his case to the committee. The committee
perused the contention of the firm. The committee also examined
the technical offer/bid of the firm. Item No.80 was declared NTS &
signed copy of terms and conditions was not attached with the
technical offer/bid. After detailed discussion and giving a fair
opportunity to the firm, the grievance committee allowed the
representative of the said firm to sign the already submitted copy of
terms and conditions & relax to accept item No.80 due to
typographical mistake in Hospital Formulary for financial year
2019-2020 and over ruled the decision of the technical evaluation
committee for further purchase process. The firm also obtains
minimum qualifying marks. So, the firm is responsive for further
purchase process for all of its quoted items except Item No.53, 54,
55, 56, 57, 60, 61, 62, 66, 247, 248, 260 (DRC).

44. The perusal of above minutes of meeting conducted on 26.10.2019

reveals that only those firms, who had grievances, were heard by the

Committee wherein, the Respondent-Company was declared responsive for

further purchase. Record reveals that the Respondent-Company was

initially disqualified by the Technical Evaluation Committee through

Writ Petition No.426 of 2020 37

Technical Evaluation Report dated 12.10.2019 on the ground of

non-providing signed copy of terms and conditions of tender/bid

documents. A grievance complaint under Rule 67 of PPRA Rules was

submitted by the Respondent-Company on 17.10.2019 before the

Committee. Subsequently, the Respondent-Company received a letter dated

09.11.2019 from the Respondent No.3 against which complaint was filed

under Rule 67(2) of PPRA Rules which was to be decided within fifteen

days as per Rule 67(3) of the PPRA Rules after the announcement of bid

evaluation report. However, non-decision of complaint by the Respondent

No.3 prompted the Respondent-Company to file W.P.No.18535 of 2019

which was disposed of with direction to the Respondent No.3 to place the

complaint before the Committee however; pursuant to aforesaid directions

the said Committee rejected the complaint. The Respondent-Company

challenged aforesaid rejection through another writ petition bearing

No.19408 of 2019 which was allowed and decision of the Committee was

set-aside pursuant to which the impugned order was passed. Since the

Petitioner-Company was not aggrieved of and he had not lodged complaint

regarding redressal of his grievance, if any, before the Committee

therefore, his ground of being unheard does not arise.

45. Yet another ground was agitated by the Petitioner-Company with

regard to it‟s non-impleadment as party to the writ petitions filed by the

Respondent-Company. Available record reveals that the Respondent-

Company in response to tender notice also submitted its bid however, it

was informed by the Respondent No.4 vide letter dated 12.10.2019 that as

per technical evaluation report the firm was not responsive for further
Writ Petition No.426 of 2020 38

process for all of its goods items as the firm did not meet compulsory

criteria at Sr.No.vi. Upon this the Respondent-Company challenged

aforesaid letter by filing Grievance Complaint under Section 67 of the

PPRA Rules dated 19.10.2019 before the Committee and non-decision of

that complaint within the statutory period prescribed under Rule 67(3) of

the PPRA Rules, promoted the Respondent-Company to approach this

Court by filing W.P.No.18535 of 2019. The said writ petition was

disposed of on 29.11.2019 with the following observation:

―The instant petition is disposed of with the direction to the

Medical Superintendent, Nishtar Hospital, Multan-
respondent No.2 to place the grievance petition of the
petitioner before the Committee if still pending and ensure
that the same is finally adjudicated, by affording right of
audience to the petitioner, in accordance with law at the
earliest and in any case within seven days from today and for
this purpose the petitioner will appear before respondent
No.2 today.
It is further directed that while deciding the grievance
petition, the Committee will take into consideration the
Technical Evaluation Report of Drugs/Medicines for
Financial Year 2018-2019 (Annex-C) and all the other
documents which the petitioner places before the Committee.
If the final order for supply of medicines has not been issued
till date, respondent No.2 will not issue the same, prior to
decision of grievance petition or above period whichever is
earlier‖.
Pursuant to aforesaid directions, the Committee, after providing an

opportunity of hearing to the Respondent No.11, decided as under:

―After perusal of all the record in presence of the counsel

and taking into consideration the circular issued by PPRA
authorities dated 20.05.2019, vide No.L&M(PPRA)10-
01/2011, the Grievance Redressal Committee rejected the
contention/grievance of the firm and maintained the previous
decision of Technical Evaluation Committee & Grievance
Redressal Committee‖.
Writ Petition No.426 of 2020 39

The Respondent-Company once again approached this Court and

filed W.P.No.19408 of 2019 against rejection of grievance petition as well

as formation of the Committee however, said writ petition was allowed in

the following manner:

―Learned law officer on the instructions of officer in

attendance has conceded that the grievance redressal
committee was not constituted in accordance with the
law/rules and has undertaken that the competent authority
will reconstitute the grievance redressal committee in line
with above referred circular and the grievance petition of the
petitioner will be decided afresh. As such the instant petition
is allowed, the impugned order passed by the grievance
redressal committee at page No.42 is set-aside and grievance
petition already filed by the petitioner will be deemed
pending, with the direction to the Grievance Redressal
Committee (newly constituted under the above referred
circular) to decide the matter afresh in accordance with
law/rules..

In the light of aforesaid directions, the Committee decided to

retender the disputed products/drugs vide impugned letter dated

04.01.2020.

46. Above-stated facts are clear and manifest in the manner that the

Respondent-Company had no grievance against the Petitioner-Company

rather the Respondent-Company availed remedies provided under the

relevant Rules for redressal of grievance as such the ground urged by the

Petitioner-Company that it was not made party to the writ petitions,

mentioned above, is of no relevance.

47. It is argued by learned counsel for the Petitioner-Company that the

Committee had no authority to re-tender the items quoted by it. In this

regard it is evident from the perusal of impugned letter that the Committee

has only made a recommendation for re-tendering. Rule 67(1) of the

Writ Petition No.426 of 2020 40

PPRA Rules talks about constitution of Grievance Redressal Committee

by the Procuring Agency in order to address the complaints of bidders

prior to entry into force of the procurement contract under Rule 63 of the

PPRA Rules. The Committee performs its functions with respect to

complaints only lodged by any bidder before entering into procurement

contract and if it gives any recommendations then the Procuring Agency

has to pass an order under Rules 35 and 36 of PPRA Rules. Perusal of

record reveals that at present, no order, as such, of the Procuring Agency

is in field hence the question with regard to validity of process of

re-tendering does not call for determination at this stage, therefore,

premature. However, in the passing reference to Rules 35 & 36 of the

PPRA Rules which deal with the criteria of rejection of bids and re-

bidding process respectively are reproduced for ready reference:

Rule 35. Rejection of bids.– (1) The procuring agency may

reject all bids or proposals at any time prior to the
acceptance of a bid or proposal.
(2) The procuring agency shall upon request communicate to
any bidder, the grounds for its rejection of all bids or
proposals, but shall not be required to justify those grounds.
(3) The procuring agency shall incur no liability, solely by
virtue of its invoking sub-rule (1) towards the bidders.
(4) The bidders shall be promptly informed about the
rejection of the bids, if any.
(5) A procuring agency may, for reasons to be recorded in
writing, restart bidding process from any prior stage if it is
possible without violating any principle of procurement
contained in rule 4 and shall immediately communicate the
decision to the bidders.
Rule 36. Re-bidding.– If the procuring agency rejects all the
bids under rule 35, it may proceed with the process of fresh
bidding but before doing that it shall assess the reasons for
rejection and may, if necessary, revise specifications,
evaluation criteria or any other condition for bidders.
Writ Petition No.426 of 2020 41

In this regard, reference could be made to a judgment reported

in ―Messrs PAKISTAN GAS PORT LTD Versus Messrs SUI
SOUTHERN GAS CO. LTD. and 2 others‖(P LD 2016 Sindh
207)where the court while interpreting Public Procurement Rules of
2004 observed that:-
―Thus rule 33 does not oblige the procuring agency to
justify its grounds of scrapping the entire bidding process.
On account of doing so it also incurs no liability. When all
bids are rejected under rule 33 the procuring agency is
empowered to call for rebidding under rule 34. So once rule
33 is invoked then in such eventuality none of the bidders
can insist that the procuring agency should proceed with the
unfinished bidding process, announce the result and accept
the lowest bid. Insisting on proceeding with the bidding
process that has been annulled under rule 33 would come in
direct conflict with the procuring agency's right to exercise
its options under rules 33 and 34. Therefore, when rules 33
and 34 are invoked by the procuring agency, the bidders
cannot make a grievance out of it. It cannot be said that in
such eventuality the "duty to act fairly" has not been
discharged. The expectations of the participating bidders
that once the procuring agency commences the process to
award procurement contract then it must finalize the same
and not to cancel the process cannot be said to be a vested
right of the bidders as rules 33 and 34 fully empower the
procuring agency to reject all bids without incurring any
liability and call for rebidding.
8. The exercise of discretion under rules 33 and 34 does
not give any undue advantage to any of the participants of
the bidding process. Such an occasion would only arise when
the procuring agency discloses its intention to grant the
contract in favour of any of the bidders. Only in such
eventuality the decision of the procuring agency can come
under scrutiny. The rules do not envisage that once the bids
are invited, the process cannot be annulled by invoking rule
33. The discretion under the said rules having been conferred
upon the procuring agency, vires of which have not been
called in question in these proceedings, the Court has to give
effect to such rules if the occasion so warrants.
9. Where it is decided by the procuring agency to annul
the entire bidding process under rule 33 then there is also no
occasion for seeking remedy under rule 48. The purpose of
rules 33 and 34 can never be achieved if even after the entire
bidding process is annulled by the procuring agency, the
Writ Petition No.426 of 2020 42

participating bidders can stall the process of procurement by

litigating for years to seek award of contract under the very
same bidding process. One of the reasons for incorporating
rules 33 and 34 is to put to an end to a controversy in which
bidding process stand submerged. The expectations of
unsuccessful bidders cannot take precedent over the purpose
for which bidding process was started. It is for such reason
that rule 33 puts an end to the bidding process without
leaving any room for the participating bidders to seek
justification from the procuring agency. If the exercise of
discretion under rule 33 is made justiciable then the whole
procurement process would remain suspended till the legal
battle comes to an end. Additionally, such an interpretation
would amount to doing violence to the provisions of rule
33(1) wherein it is stated that procuring agency is not
required to justify the grounds for calling for rebidding.
Thus, to seek direction from a Court to the procuring agency
to continue with the bidding process that has already been
scrapped under rule 33 is not warranted in law…….‖

48. Since the Procuring Agency has not passed any order till filing of

this petition therefore, no cause of action has accrued to the Petitioner-

Company to challenge the recommendations given by the Committee.

49. Furthermore, the case law relied upon by the learned counsel for the

Petitioner-Company, with utmost respect, are distinguishable from the

facts and circumstances of the instant case.

50. In view of what has been discussed above, this writ petition having

no merit is dismissed accordingly.

(JAWAD HASSAN)
JUDGE

Approved for Reporting

JUDGE

Usman*