Messrs O.K. AGENCIES vs CHIEF CONROLLER and others

' MALIK MUHAMMAD QAYYUM, J.---This is an appeal against the judgment and order of the learned Single Judge of this Court whereby he dismissed the Constitutional petition filed by the appellant in limine, on the ground that as the rights which the appellant seeks to enforce arise out of a contract, the Constitutional petition was not maintainable and the petitioner should seek alternative remedy available under the law i,e, by filing of a civil suit.

2. The facts necessary for the disposal of this appeal are that the respondents invited tenders on 13-4-1998, for supply of Alkaline Nickel Cadmium Batteries. Ten foreign bidders participated in the tenders including the appellant, who was the lowest bidder. After satisfaction of technical suitability by the Purchase Committee, a letter acceptance was issued on 9-7-1998, which was duly conveyed to the appellant. In implementation of the contract, certain actions were taken by the Pakistan Railways like, directing the appellant to extend bank guarantee up to 30th September, 1998 etc. However, suddenly on 10th of August, 1998, a letter was issued to the appellant withdrawing the acceptance of the bid made by the appellant. This letter was challenged by the appellant by filing a constitutional petition, which has already submitted was dismissed in limine.

3. The learned counsel for the appellant has contended that there is no universal rule that in all cases of breach of contract a Constitutional petition cannot be maintained. He submitted that performance of the contractual obligation of the State or an instrumental of the State was involved, a Constitutional petition can be maintained provided there was no dispute on facts.

4. On the other hand, learned counsel for the respondents has reiterated that the contractual obligations cannot be enforced by filing a Constitutional petition. In this behalf he has relied upon Agricultural Development Bank Pakistan and others v. Hamida Begum and Mir Rasool Bux Khan Sundrani & Co. v. People's Municipality, Sukkur and 2 others PLD 1975 Karachi 878.

5. There is a considerable merit in the contention raised by the learned counsel for the appellant. A Full Bench of this Court was seized of a similar dispute in the case of M/s. Wakotent Power and Light Ltd., Goldberg-III, Lahore v. Government of Pakistan, Ministry of Water and Power through its Secretary PLJ 1998 Lahore 665. After extensive review of the case-law on the subject, the Full Bench came to the conclusion that the trend of authorities had undergone a change and the remedy of writ is permitted to be resorted to in case, involving contract between private person and State/statutory functionaries as it is considered to be more efficacious and speedy remedy as compared to civil suit or arbitration proceedings. The other case relied upon by the learned counsel for the appellant also supports him, which is the case of Muhammad Ali Butt v. Inspector- General of Police, Punjab and others PLD 1997 SC 823, in which it was ruled that though the High Court does not normally entertain a petition under Article 199 of the Constitution to enforce civil liability arising out of breach of contract to pay the amount of money due to the claimant and leaves same to the aggrieved party to agitate the question in a civil suit filed for that purpose but the High Court in a Constitutional petition under Article 199 of the Constitution, however, can order payment of money by State or its functionaries to enforce a statutory obligation.

6. Coming now to the facts of the case, there is no force in the contention of the learned counsel for the respondents that there was no concluded contract between the parties. It is a common ground between them that the offer made by the appellant through the tender was accepted by the Pakistan Railways vide letter, dated 9-7-1998. It is also evident on the fact of the record that in implementation of the contract, the appellant was asked to take certain steps by the Pakistan Railways like extending the bank guarantee. A perusal of the impugned order, dated 10-8-1998 shows that no reason whatsoever has been given for withdrawal of acceptance. Even otherwise, once an offer has been accepted, a concluded contract has come into being and it is not open in the person who has accepted the offer to retract from the same as provided by the Contract Act, 1872. The other defect from which the impugned order suffers is that the appellant was not granted any opportunity of showing cause or of hearing before passing the impugned order.

7. The learned counsel for the respondents has tried to justify the withdrawal of the contract on the ground that the same was procured by misrepresentation by the appellant inasmuch as it represented that it was a sister concern of a State-owned China Company which later on informed the respondents that the appellant Company had nothing to do with it.

8. The difficulty in the way of the acceptance of this argument is that the impugned order does not give any such reason nor does it proceed on the basis that the acceptance of the contract had been procured through misrepresentation or fraud. In these circumstances, the respondents cannot be permitted to urge for the first time that the contract had not been validly awarded. Be that as it may, if the contract was being set aside on account of some faults of the appellants, in all fairness, the appellant should have been confronted with the same and asked to explain its position by issuing a notice to him.

' In view of what has been said above, we allow this appeal, set aside the impugned order of the learned Single Judge and declare the order, dated 10-8-1998 passed by the Pakistan Railways is without any lawful authority and of no legal effect. There shall be no order as to costs. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.