2026 PLP 54 (CLC)

SYED ARSHAD ALI, J.

Messrs Hashir Surgical Services ("petitioner"), through its authorized representative, has filed this Constitutional Petition challenging the validity of the impugned order dated 05.03.2021, issued by the Khyber Pakhtunkhwa Public Procurement Regulatory Authority ("Authority"), which returned the petitioner's appeal on the grounds of lack of jurisdiction.

2. The facts of the matter are that during the Covid-19 pandemic, the World Bank provided financial assistance to underdeveloped countries, including support for medical facilities for Covid-19 patients. Under this initiative, the Government of Khyber Pakhtunkhwa issued a bid invitation for the procurement of KN-95 Masks (GB 2626-2006). The procurement process was governed by the World Bank Procurement Regulations (Procurement in Investment Project Financing, Works, Non-Consulting, and Consulting Services, July 2016, revised in November 2017 and August 2018). The petitioner's bid to supply 300,000 KN-95 Masks at a price of Rs.350 per mask was accepted by the respondents through a letter dated 30.03.2020.

3. Subsequently, the petitioner imported the KN-95 Masks from China. As per the purchase order, the masks were to be delivered within 10 days. However, due to strict regulations in place at the time, the shipment arrived at a seaport in Pakistan on 14.05.2020. The petitioner notified the respondent-authority of the masks' availability through a facsimile dated 10.06.2020. The respondent-Health Department, after reviewing the matter, issued a letter dated 26.06.2020 to the Project Director of the Khyber Pakhtunkhwa Integrated Tourism Development Project, Peshawar. The letter noted that the supply was delayed and that the prevailing market price of KN-95 Masks at the time ranged between Rs.250 and Rs.280 per mask. Consequently, the department recommended a price reduction.

4. Subsequent correspondences ensued on the matter, culminating in the Government of Khyber Pakhtunkhwa's final offer to purchase the KN-95 Masks at a reduced rate of Rs.290 per piece, as communicated in a letter dated 09.07.2020. The petitioner accepted this offer through a letter dated 27.07.2020, leading to the execution of an agreement between the parties on 27.08.2020 for the supply of the masks at the discounted price. In compliance with the agreement, the petitioner supplied the KN-95 Masks to the Government of Khyber Pakhtunkhwa.

5. On 11.01.2021, the petitioner lodged a complaint under Section 35(1)(A) of the Khyber Pakhtunkhwa Public Procurement Regulatory Authority Act, 2012 ("Act of 2012"), read with Section 3 of the Khyber Pakhtunkhwa Public Procurement Grievance Redressal Rules, 2017 ("Rules of 2017"), before the Secretary of Health, Khyber Pakhtunkhwa, Peshawar, challenging the reduction in price. The petitioner contended that the complaint was not addressed within the statutory timeframe. Consequently, the petitioner filed an appeal under Section 35(1)(B) of the Act of 2012, read with Rule 7(1)(C) of the Rules of 2017, before the Authority. However, the Authority, through its order dated 05.03.2021, dismissed the appeal on the grounds of lack of jurisdiction, citing Section 17 of the Act of 2012.

6. We have anxiously considered the arguments of learned counsel for the parties and thoroughly examined the record and material placed before us.

7. The core grievance raised by the petitioner before the Authority revolved around the reduction in the agreed price of the KN-95 masks. In the appeal, the petitioner sought rectification of the contract agreement to restore the original price of Rs.350 per mask, instead of the renegotiated rate of Rs.290 per mask. Additionally, the petitioner requested recovery of Rs.19.74 million, along with the return of the bank guarantee.

8. Conversely, the respondent-Authority contended that the impugned procurement fell under international obligations, rendering the Act of 2012 inapplicable pursuant to Section 17 of the same Act. However, the primary issue before us for determination is whether the Authority has jurisdiction to entertain an appeal under Section 35 of the Act of 2012 in cases where the procurement contract has been finalized and the dispute pertains to the recovery of an amount arising from that concluded agreement or interpretation of the clause of the contract determining the liability of the parties arising of the contract.

9. The Act of 2012 establishes the legal and regulatory framework for public procurement and related matters. It introduces a comprehensive regulatory regime governing the procurement of goods, placing responsibility on procuring entities to conduct procurement activities in compliance with the provisions outlined in the Act. The Authority, established under the Act, is tasked with overseeing public procurement processes, adjudicating appeals against decisions made by procuring entities, and formulating standard bidding documents. Additionally, the Authority is mandated to ensure that all procuring entities implement and maintain a system for publishing public procurement opportunities, contract awards, and other relevant information on their official departmental websites.

10. In a similar vein, the Authority, in exercise of its powers under Section 36 of the Act of 2012, promulgated the Khyber Pakhtunkhwa Public Procurement of Goods, Works, and Services Rules, 2014 ("Rules of 2014"). These Rules outline the methods for procuring goods, services, and works, primarily through open bidding while also allowing for alternative procurement methods where applicable. The Rules of 2014 emphasize transparency in public procurement processes and mandate that procuring entities ensure equal opportunities for participation by facilitating open and competitive bidding.

11. Section 35 of the Act of 2012 confers jurisdiction upon the Authority to entertain and adjudicate appeals filed by aggrieved persons concerning any decision or omission in addressing grievances related to the procurement of goods, services, or works. This provision ensures a mechanism for and redressal, thereby promoting accountability transparency in the public procurement process.

12. Upon a comprehensive examination of the Act of 2012, along with the Rules of 2014 and 2017, it becomes evident that the Authority's jurisdiction is confined to regulating public procurement processes. However, once a procurement contract is formally executed between the procuring entity and the successful bidder, any disputes arising thereafter concerning the interpretation or enforcement of the agreement fall outside the Authority's purview. The Act of 2012 contains no provision granting the Authority the power to entertain appeals related to contractual disputes post-execution.

13. It is a trite law that when statutory jurisdiction is conferred upon an authority or executive body, the provisions conferring such powers must be strictly construed. Any forum constituted under the law is limited to exercising only the jurisdiction explicitly granted by the statute. The authority cannot assume jurisdiction through inference or conjecture beyond the clear language of the law. Accordingly, any action taken outside the ambit of the statutory framework would be without lawful authority. Justice G.P. Singh in his book on the Principles of Statutory Interpretation (11th Edn.) elaborated this principle as follow: "It is a principle by no means to be whittled down and has been referred to as a "fundamental rule". As a necessary corollary of this rule provisions excluding jurisdiction of civil courts and provisions conferring jurisdiction on authorities and tribunals other than civil courts are strictly construed. The existence of jurisdiction in civil courts to decide questions of civil nature being the general rule and exclusion being an exception, the burden of proof to show that jurisdiction is excluded in any particular case is on the party raising such a contention. The rule that the exclusion of jurisdiction of civil court is not to be readily inferred is based on the theory that civil courts are courts of general jurisdiction and the people have a right, unless expressly or impliedly debarred to insist for free access to the courts of general jurisdiction of the State. Indeed, the principle is not limited to civil courts alone, but applies to all courts of general jurisdiction including criminal courts. The rule as stated above relating to strict construction of provisions excluding jurisdiction of courts of general jurisdiction was recently expressly approved by the Supreme Court."

14. The Authority, established under the Act of 2012, serves as an appellate dispute resolution forum pursuant to section 35 of the Act and Rule 7 of the 2017 Rules. Its powers are strictly derived from the Act and its associated Rules. It is neither a court nor authorized to issue judgments as defined in section 2(9) of the Code of Civil Procedure, 1908. Therefore, the Authority cannot render judgments in rem or declare general rights and liabilities. Under Rule 7 of the 2017 Rules, it is limited to reviewing the decisions of procuring entities for compliance with the provisions of the Act of 2012 and the 2014 and 2017 Rules, acting as a regulator of public procurement. In this sense, the jurisdiction of an authority established under the Act is limited. In holding this view, we are fortified by the judgment rendered by Islamabad High Court in case of WSKB Operator Private Limited through Authorized Representative v. National Highway Authority through Chairman and 20 others (2023 MLD 674 Islamabad).

15. Upon a meticulous examination of the Contract Agreement executed between the parties, Clause 27 explicitly stipulates a dispute resolution mechanism through arbitration. Accordingly, the petitioner had the option to invoke this mechanism for the resolution of its grievances. However, given the limited jurisdictional scope of the Authority under the Act of 2012, the grievances raised by the petitioner fall outside the purview of the Authority's adjudicatory powers and cannot be entertained through the statutory appeal process.

16. For the foregoing reasons, the instant petition stands disposed of. MQ/50/P Order accordingly.