THE PROVINCE OF WEST PAKISTAN (NOW PUNJAB PROVINCE) THROUGH SECRETARY TO THE GOVERNMENT OF WEST PAKISTAN (NOW PUNJAB PROVINCE) IRRIGATION AND POWER DEPARTMENT, LAHORE AND Others vs MANGLA DAM CONTRACTOR THROUGH GENERAL MANAGER
This matter concerns a dispute over the rate of canal water supplied by the Irrigation and Power Department to a contractor for public works construction. The core legal question was whether a contract for water supply, signed by the Divisional Canal Officer after receiving sanction conveyed by the Irrigation Secretary, was binding upon the Provincial Government, despite later claims that proper sanction was lacking. The Supreme Court upheld the Lahore High Court's decision, which found that the agreement was validly executed. The Court held that the parties had acted on the assumption of valid sanction, the agreement had been performed by both sides for nearly two years, and the government could not reopen the matter after such a duration. Furthermore, the Court noted that the government's assertion of a lack of sanction was unsupported by any affidavit from the Irrigation Secretary. The key principle laid down is that where a government contract is acted upon by both parties for a significant period, the government is estopped from challenging the validity of the contract based on alleged procedural irregularities in the sanctioning process, especially when the claim is unsubstantiated by evidence.
- Can the Provincial Government reopen a contract after it has been acted upon by both parties for a significant period?
- Is a contract for canal water supply valid if signed by the Divisional Canal Officer following sanction conveyed by the Irrigation Secretary?
- Does an unsubstantiated assertion in a written statement suffice to challenge the validity of a government contract?
- Rule 11, Canal and Drainage Rules
- Rule 10(2), West Pakistan Government Rules of Business 1962
- Rule 15, West Pakistan Government Rules of Business 1962
1. SALAHUDDIN AHMED, J.-The dispute : between the parties relates to the rate of canal water supplied to the respondent for con--struction of certain public works. A Division Bench of the Lahore High Court while accepting the writ petition of the respondent has observed as follows :- "There can be no doubt as to the existence of a written agreement between the parties in which the Provincial Govern--ment had agreed to supply canal water to the petitioner for construction purposes at the rate of Rs. 3 per 10,000 c. Ft. In terms of rule 11 of the Canal and Drainage Rules the contract was to be signed by the Divisional Canal Officer with the previous sanction of the Provincial Government, as the period of the contract exceeded one year. After some initial correspondence, the sanction of the Provincial Government was conveyed to the Executive Engineer on the 21st of August 1963 by means of Letter No. 11/9-S-O (Rev.)/62 from the Secretary to the Government of West Pakistan, in the Irrigation and Power Department to the Chief Engineer, Sargodha Zone, Lyallpur. On the receipt of this letter the Executive Engineer concerned wrote to the petitioner to sign the agreement,, which was duly completed on the 23rd of August 1963. According to sub-rule (2) of rule 10 of the West Pakistan Government Rules of Business of 1962 the Irrigation Secretary was competent to sign the order conveying the sanction of the Provincial Government.
2. The Executive Engineer as well as the petitioner-firm therefore rightly acted on the assumption that the sanction of the Provincial Government had been duly accorded to the agreed rate. This agreement was acted upon by the parties inasmuch as water was supplied by the Irrigation Department at the agreed rate, and the price was duly paid by the petitioner-firm. In these circumstances it is not open to the Provincial Government to reopen the matter after nearly two years."
3. Furthermore, there was no affidavit on behalf of the Irriga--petition Secretary that he had failed to obtain the necessary sanction as required under rule 15 of the Rules of Business.
4. Our attention was drawn to the written statement filed on behalf of the petitioners in the writ proceedings showing that there was no such sanction. The statement is not supported by any affidavit.
5. There is no substance in this petition and it is accordingly dismissed.