1999 PLP 771 (YLR)

It is proposed to decide Writ Petitions Nos.17455 of 1998 and 17233 of 1998 by this common judgment as the legal and factual controversy is the same.

2. The relevant facts are that respondent invited sealed bids for grant of contract for Dining Cars/Lift Cars/Rail Cars and Station Restaurant from pre‑qualified companies/ firms/persons. The petitioners took exceptions to this and filed the Constitutional petitions mainly with the prayer that the impugned action of the respondents inviting the sealed bids for catering contracts of Railways on 31‑8‑1998 on the basis of Bid -Forms be declared to be arbitrary, mala fide, without jurisdiction, without lawful authority and of no legal effect. The petitions were admitted to regular hearing in view of the judgment of Honourable Supreme Court reported as Shaukat Ali v. Government of Pakistan PLD 1997 SC

342. Notices were issued to the respondents who appeared and contested the petition.

3. Sheikh Sair Ali, Advocate, learned counsel for the petitioner in Writ Petition No.17455 of 1998 argued that the Railways had a licensing system for vending and catering. The same was scraped and instead the function was entrusted to a Committee. This resulted in lack of merit, political consideration, administrative exigencies, unjust, unfair, and discrimination leading to rule of mightier and wealthier persons. The discretion was absolute, therefore, exercised arbitrarily and mala fide. This gave rise to about 3500 Court cases out of which ultimately 45/45 matters came up before the Honourable Supreme Court. In the meanwhile the Railways decided to privatize these catering/ vending contracts vide Policy dated 13‑1‑1997. The result was that when matters came up for hearing on 27‑1‑1997 in the Honourable Supreme Court an undertaking was given that in future the contracts would be awarded through open auction. It was argued that this undertaking is binding. In this behalf reliance is placed on Muhammad Ashiq v. Razia Begum PLD 1982 Lah. 459 and Mst. Kishwar Sultan Jehan Begum v. Aslam Awais PLD 1976 Lah. 580.

4. It is argued that party cannot resile or withdraw from the undertaking, which has been accepted by the Court, and on that basis the lis before the Court was disposed of. It is added that the new policy tried to be enforced was again an attempt to set at naught the judgment of the Honourable Supreme Court in case of Shaukat Ali (supra) and now again the absolute power to reject a bid has been reserved by the Railways administration. The scrutiny has also been provided in order to show benefits on their favourites. It is argued that it is out to out mala fide action on the part of the respondents as is clear from sub para. C at page 10 of the Writ Petition No.17455 of 1998. It is argued that C.C.M. was a Secretary of PRACS and simultaneously member of the Contract and pre‑qualification Committees. This way respondents are judge of their own cause. It is added that the PRACS was owned by Railways and this way department is in competition itself. This is violative of the Privatization Policy and judgment of the Honourable Supreme Court in case of Shaukat Ali (supra). It is argued that this devise has been coined to do whatever the respondents like. It is argued that PRACS is incompetent as it was disqualified and it has no experience in catering.

5. On the other hand, learned legal Advisor of Railways argued that as far Dining Cars are concerned, the rates and quality has been prescribed. It is argued that in case the contracts are given through open auction then it will not possible for the Contractor to maintain the quality. The same would deteriorate. The device has been adopted in order to maintain the standard. It was argued that in case the contracts are given by open auction the Railways would be benefited. It was argued that the other Writ Petitions pertain to "A" Class station like Lahore and the purpose for inviting sealed bids and imposition of condition of pre‑qualification was to maintain the quality and standard of food supply to the passengers.

6. Mr. Arif Saeed, Advocate appeared for PRACS argued that respondent No.4 was not Secretary of PRACS. It is added that his client was held qualified by the Review Committee and rightly because it was already having catering contract. It is explained that this company was owned by Railways and floated in order to get international contracts. It is added that benefit would not go in the pocket of any individual rather would go into funds of Railways, therefore, the allegations of mala fide are not correct.

7. Mr. M.A. Zafar Advocate, learned counsel for petitioner in Writ Petition No.17233 of 1998 while summing up the arguments submitted that mala fide of the respondents in adopting the policy under challenge was clear from the fact that the matter was referred to Law and Justice Division, which opined as under:‑‑ "The undersigned is directed to refer to the Ministry of Railways O.M. No.C‑1.94/COT‑3, dated 18‑6‑1998, on the above subject and to inform that it is for the administrative Division/ department to follow the observation of the Honourable Supreme Court. If they are not clear then clarification may be sought from the Court, through the Government Counsel." It is added that this opinion was binding on the respondents as per Rules of Business' but the same was conveniently by passed like the judgment of the Honourable Supreme Court in case of Shaukat Ali (Supra). It is added that State functionaries like Railways are expected to act fairly and justly, in a manner which should not give to any one any cause of complaint on account of discriminatory treatment or otherwise.

8. I have given my anxious consideration to the arguments and gone through the record as well as the precedents. The undertaking given in Shaukat Ali's case reads as under:‑ "It has been decided now that all these licenses shall be auctioned in a transparent manner with the prerequisite of experience in the business. The Railway administration is going to issue notices to all existing licensees under the clauses of the agreement with a fortnight. " The learned Judges after recording the above proceeded to observe as under:‑‑ "(4) Since the Railways intend to grant licenses in the above term in order to ensure that no one is discriminated or favoured for the reason other than the well‑being of the people and the country at large, no purpose will be served by granting leave. We may observe that since Pakistan is founded on the basis of religion of Islam, efforts should be made to bring about an egalitarian society based on Islamic Concept of fairplay and social justice. The State functionaries like Railways are expected to act fairly and justly, in a manner which should not give to any one any cause of complaint on account of discriminatory treatment or otherwise. While discharging official functions, efforts should be made to ensure or that no one is denied to earn his livelihood because of the unfair or discriminatory act on the part of any State functionary. It is hoped that the petitioners who had been earning livelihood for considerable long period on the basis of licenses granted by the Railways, will be treated fairly."

9. It is cleat from the above that the Railway administration, in the grant of catering and vending contracts, are supposed to act fairly and justly. The action should not be discriminatory giving arty cause of complaint to some one. The learned counsel for the Railway candidly admitted that through the present system the offers would be on the lower side then he tried to justify by saying that this would, however, maintain the quality. This is clearly a false pretext in view of the fact that the' Railway administration retains the authority to terminate the contract in case of violation of terms and conditions of licence/contract. It is, thus, clear that present system is not only violative of the direction of the Honourable Supreme Court and undertaking given but also against the financial interest of the Railways. This clearly proves the allegation that this is all mala fide and the purpose is to install persons of own choice. It is made clear that the reserve price for the bidding should be on highest figure already available.

10. The upshot of this discussion is that the writ petition is accepted with costs. The result is that impugned decision/action of the respondents inviting sealed bids for awarding the catering and vending contracts over Pakistan Railways on the basis of bid forms and terms and conditions issued therewith are declared illegal, mala fide, arbitrary and without legal effect and they are directed to give all such contracts through open auction. H.B.T./S‑347/L Petition accepted.