Summary: Background:This case involves a civil revision petition filed by the petitioner, Qazi Ejar, against the judgment/order dated 06.11.2023 by the Additional District Judge-Abbottabad, which dismissed his application for an extension of time to pay the balance sale consideration amount in civil appeal No. 1316 of 2023. The original suit sought specific performance of an agreement dated 29.05.2013, requiring the respondent, Hizbullah, to accept Rs. 25,000 as the balance sale consideration and to attest mutation in favor of the petitioner. The trial court ruled in favor of the petitioner, subject to the payment of the remaining balance. However, the appellate court modified the decree to include a total payment of Rs. 3,50,000 within 30 days, failure of which would result in the dismissal of the suit.-----Issues:Whether the condition attached to the decree, requiring the deposit of the balance sale consideration amount within 30 days, was mandatory.Whether the court could extend or modify the time for payment after it had passed a decree and became functus officio.-----Holding/Reasoning:The High Court dismissed the civil revision petition, holding that:The condition attached to the decree was indeed mandatory. Non-compliance with this condition would naturally lead to the consequences specified in the decree, which, in this case, was the dismissal of the petitioner's suit.Once a court has issued a decree, it becomes functus officio, meaning it no longer has jurisdiction over the matter and cannot alter or extend the terms of the decree. The failure of the petitioner to deposit the specified amount within the given timeframe meant that the court no longer had the authority to grant an extension.----Citations/Precedent:The court referenced several precedents to support its decision, including:Muhammad Wahid's case (2016 SCMR 179), which emphasized that conditions attached to decrees are mandatory and their violation could be detrimental to the party in default.---Quote: 1. Where a condition is attached to a decree then, such condition is to be treated as mandatory and its non-compliance would entail the consequences mentioned in the said decree.2. When once a period is set in a conditional decree, then such period could not be extended, when such period has once expired, as by then such Court would become functus officio, however, if the request is made for the extension of the set period and when by then the said period has not yet expired then, the same could be extended by the Court who has passed the said decree.3. At the time of entertaining a suit for specific performance of an agreement or during the pendency of such suit, the Court may ask the plaintiff to deposit the outstanding sale consideration amount, and even his failure at such stage, may entail dismissal of his suit.4. Under section 148 of CPC the Court may extend time fixed for doing any act when the lis/petition is pending before it, but once such proceedings ended up then, it becomes functus officio and it could not enlarge such period.

Summary: Issue: The main issue in this case is whether the petitioner is entitled to the release of its bid security after its bid was rejected and the bid security forfeited by the respondent.----Facts: The petitioner, in a joint venture, participated in a tender issued by the National Transmission & Dispatch Co. Ltd. (NTDC) for the design, manufacture, supply, installation, testing, and commissioning of a plant for a grid station. After the technical evaluation, the financial bids of two technically qualified bidders, including the petitioner, were opened. The petitioner submitted the lowest bid. During the process, the NTDC raised queries regarding the bid, which the petitioner duly responded to, accepting corrections as desired by NTDC. However, the NTDC later rejected the petitioner's bid and forfeited its bid security, citing the petitioner's refusal to accept arithmetical corrections. The petitioner challenged this decision through a constitutional petition.----Holding: The court held that the petitioner's refusal to accept arithmetical corrections, as stated by NTDC, was erroneous. The petitioner had, in fact, accepted and responded to the corrections sought by NTDC. Additionally, the court found that the bidding documents did not provide for forfeiture of bid security in the circumstances described by NTDC. Therefore, the decision to reject the bid and forfeit the bid security was unlawful. The court overruled the objections raised by the respondents regarding the maintainability of the petition and directed the respondents to release the petitioner's bid security.----Legal Principle Applied: The court applied the principle of Contra Proferentem, which states that ambiguities in contracts or documents are construed against the drafter. Since the bidding documents did not explicitly allow for the forfeiture of bid security in the circumstances described by NTDC, the court interpreted the documents unfavorably against the respondent.----Decision: The court ruled in favor of the petitioner, declaring the rejection of its bid and the forfeiture of its bid security unlawful. The respondents were directed to release the petitioner's bid security.---Quote: ''The act of confiscation of bid security while rejecting the bid and scraping procurement process was unlawful since the Petitioner did not refuse to accept arithmetic errors as desired by the procuring agency and the latter had itself opted for fresh procurement process.''

Summary: (a) Specific Relief Act, 1877 ----S. 22---Specific performance of contract---Equitable relief---Readiness and willingness of plaintiff---Discretionary nature of relief---Effect---Court must assess the conduct of plaintiff to determine entitlement---In suit for specific performance, plaintiff must unconditionally seek permission of the Court to deposit balance consideration on the first hearing and exhibit financial capability---Failure to deposit amount despite repeated Court directions disentitles party from equitable relief---In the present case, the respondent failed to deposit balance sale consideration of Rs.3,500,000/- on multiple occasions despite repeated directions of the Trial Court and raised frivolous excuses including NAB proceedings against the locality, which were later clarified as not applicable to the suit property---Such conduct reflected lack of readiness and willingness to perform contractual obligations---Appellate Court erred in decreeing suit based on admission of agreement and offer of petitioner without appreciating conditional nature of said offer and failure of respondent to comply with Court orders---Trial Court rightly dismissed the suit in terms of dicta laid down in M/s Kuwait National Real Estate Co. (Pvt.) Ltd. v. M/s Educational Excellence Ltd. (2020 SCMR 171). (b) Evidence Act (I of 1872) ----Conduct of plaintiff---Relevance in equitable relief---Plaintiff’s financial capacity and conduct before, during, and after institution of suit are crucial---Respondent failed to justify one-year delay in instituting suit after lapse of cut-off date, failed to seek timely deposit of amount before Trial Court or even after Appellate Court’s direction---Depositing amount only when it suited him at appellate stage, that too through an ex parte application, negated bona fide conduct required for equitable remedy---Contumacious behavior disentitles such plaintiff from decree for specific performance. (c) Civil Procedure Code, 1908 ----O.I, R.10, Ss.148, 149 & 151---Repeated applications by plaintiff for adjournments, impleadment of unnecessary parties, and delay tactics before Trial Court---Such conduct undermines judicial process and reinforces inference of unwillingness---Court observed that such maneuvering cannot be allowed to frustrate lawful contractual enforcement nor can it justify grant of equitable remedy. (d) Contract Act, 1872 ----Agreement to sell---Admission of execution---Conditional offer---Effect---Mere admission of agreement or conditional offer by vendor does not bind the Court to grant relief in absence of performance by purchaser---Conditional offer made by petitioner to decree suit was contingent upon timely deposit of balance amount, which was never honored by respondent---Such offer lapsed and could not be used by Appellate Court to grant decree---Reliance by Appellate Court on Muhammad Asif Awan v. Dawood Khan (2021 SCMR 1270) and Muhammad Jehanzaib Khan v. Muhammad Rafique Khan (2021 PLC (CS) 1435) was misplaced as facts were distinguishable. (e) Administration of Justice ----Principles of equity---Performance of contract must be timely and in good faith---Respondent delayed suit, evaded compliance, and failed to substantiate financial readiness---Grant of decree in such circumstances would amount to rewarding litigant acting in bad faith---Courts must deny equitable relief to parties exhibiting contumacious and unjust conduct. (f) Disposition Revision petition was allowed. Judgment and decree dated 03.03.2022 of Appellate Court were set aside. Order of Trial Court dated 20.10.2021 dismissing respondent’s suit was restored. Petitioner was directed to refund earnest money of Rs.1,500,000/- within two months. Application C.M. No. 2833 of 2022 was rendered infructuous.

Summary: Background:Sheikh Khalid Javaid, the petitioner, contested the appellate court's judgment and decree dated March 3, 2022, which reversed the trial court's decision dated October 20, 2021, and decreed in favor of Shamas ud Din Chishti, the respondent, for the specific performance of a contract based on an agreement to sell dated January 29, 2019. Additionally, a related application (C.M. No.2833/2022) filed by Daniyal Zarar Khan, who purchased the disputed property from the petitioner after the trial court's dismissal of the respondent's suit but before the expiration of the appeal period, was also decided in this judgment.----Issues:Willingness and Readiness for Specific Performance: The determination of the respondent's willingness and readiness to fulfill the contractual obligations under the agreement to sell.Admission of Agreement Execution: The relevance of the petitioner's admission of the agreement's execution before the trial court and its impact on the appellate court's decision.Validity of Conditional Offer: The continuation of a conditional offer made by a party at the trial stage into the appellate proceedings.---Holding/Reasoning:The Lahore High Court found that the appellate court erred in its judgment by relying solely on the petitioner's admission of the agreement's execution and an unaccepted conditional offer to decree in favor of the respondent. The court emphasized that specific performance is an equitable relief, and the plaintiff must continuously exhibit willingness and readiness to perform their part of the contract. The court highlighted the respondent's failure to deposit the balance consideration despite multiple opportunities and directions from the trial court, demonstrating a lack of genuine intention to fulfill the contractual obligations. Therefore, the appellate court's decree for specific performance was set aside, and the trial court's dismissal of the respondent's suit was upheld.-----Citations/Precedents:Muhammad Asif Awan v. Dawood Khan and others (2021 SCMR 1270)Muhammad Jehanzaib Khan v. Muhammad Rafique Khan and two others (2021 PLC (CS) 1435)Mrs. Mussarat Shaukat Ali v. Mrs. Safia Khatoon and others (1994 SCMR 2189)Muhammad Abdur Rehman Qureshi v. Sagheer Ahmad (2017 SCMR 1696)Mrs. Zakia Hussain and another v. Syed Farooq Hussain (PLD 2020 S.C. 401)Hamood Mehmood v. Mst. Shababa Ishaque and others (2017 SCMR 2022)M/s Kuwait National Real Estate Company (Pvt) Ltd. and others v. M/s Educational Excellence Limited and others (2020 SCMR 171)----------Given the respondent's contumacious conduct and the eventual sale of the disputed property to a third party for a higher price, the court directed the petitioner to return the earnest money to the respondent within two months. The connected application by the third-party purchaser was deemed infructuous due to the acceptance of the revision petition and the setting aside of the appellate judgment in favor of the respondent.-----Quote: ''Key factors to be kept in sight while determining the willingness and readiness of a plaintiff in a suit for specific performance of the contract? Held: The jurisdiction of the Courts to issue a decree of specific performance is discretionary in nature as it is an equitable relief. Thus, the Court is not bound to grant such relief merely because it is lawful to do so let alone that the same is exercised in favour of a plaintiff who has exhibited contumacious conduct by not complying with repeated directions of the Court to pay balance amount of sale consideration. Equity mandates that in a suit for specific performance, it is the duty of the Court to find out, which party has not performed and is trying to wriggle out of his contractual obligations. It is to be kept in sight that the law of limitation prescribes a specific time for institution of suit for specific performance and the same is considered within time even if filed on the last day of the limitation period prescribed under the law. However, the vendee, as part of natural human conduct, is expected to immediately file a suit for specific performance of contract on refusal of the vendor to adhere to his contractual obligations which would exhibit that the vendee is willing and ready to perform his part of the contract in terms of deposit of the balance consideration. The performance of the contract is not to be seen from the date when it is suitable to the plaintiff.''

Summary: Background:The Higher Education Commission (HEC) of Pakistan filed a lawsuit against Dr. Nousheen Iram and her guarantor (defendant no.2) for recovery of scholarship funds. HEC claimed that Dr. Nousheen breached her scholarship agreement by not serving in Pakistan for five years after completing her Ph.D. in March 2013 as stipulated in the contract signed in 2007. The guarantor for Dr. Nousheen, who was her father, had passed away in 2011 before the lawsuit was filed. The trial court ruled that proceedings against the deceased guarantor should abate, leading HEC to challenge this decision in the Islamabad High Court.-----Issues:Whether the liability of the guarantor, as per the terms of the surety bond, extends beyond his death and binds his legal heirs.Whether the surety bond could be interpreted as a continuing guarantee binding the guarantor's heirs.-----Holding/Reasoning/Outcome:The Islamabad High Court dismissed the HEC?s petition. The Court clarified the distinction between "guarantee" and "bond" under the law, noting that the language used in the instruments did not support the continuation of liability beyond the guarantor's death. The court held that the "surety bond" and the "guarantee" were separate instruments and that the bond, in legal terms, did not extend obligations to the guarantor?s heirs posthumously unless explicitly stated. The court cited the case Meezan Bank Limited vs. Messrs Focus Apparels and others to support the reasoning that heirs could not be held liable without their explicit agreement to the covenant made by their predecessor. Furthermore, the court held that the HEC's interpretation of the surety bond as a continuing guarantee was incorrect, as the transaction was not a series of transactions but a single scholarship, and payments made in installments did not change this characterization.----Citations/Precedents:National Bank of Pakistan v. Muhammad Raies Ahmad (2020 CLD 784) - Discussed in terms of enforcement of a charge against property and not directly applicable to the question of heir?s liability under a guarantee.Mst. Ameer Begum v. Abid Hussain (PLD 2011 Lahore 284) - Cited regarding the admission of a charge on the surety's property.Section 131 of the Contract Act - Discussed in terms of revocation of a continuing guarantee.Meezan Bank Limited vs. Messrs Focus Apparels (Private) Limited and others (2013 CLD 2138) - Cited for principles regarding the binding of legal heirs under a guarantee.Muslim Commercial Bank v. East and Exports Private Limited and others (2007 CLD 1205) - Cited for principles on the strict construction of guarantee instruments.

Summary: Background: The petitioners sought a writ from the Islamabad High Court directing the National Highway Authority (NHA) to award them the contract for constructing the Bhong Interchange on the Sukkur-Multan Motorway (M-5). The petitioners were disqualified in the bid evaluation process for submitting an incorrect withholding tax rate in their bid. They contested the disqualification, arguing that the error was a bona fide mistake and should have been rectified. The NHA, however, awarded the contract to the respondent, IKAN Engineering Services (Private) Limited. ----Issues: 1- Whether the petitioners' disqualification for submitting a bid with an incorrect withholding tax rate was justified. 2- Whether the petitioners should be allowed to rectify the error in their bid during the clarification process. 3- Whether the reduction of respondent No.5's bid after the bids were opened violated public procurement rules. ----Holding/Reasoning/Outcome: The court held that the petitioners' bid was correctly disqualified because the misstatement of a 2% withholding tax (instead of the applicable 7%) was a material error. Allowing the petitioners to correct the bid would change the substance of the bid, which is prohibited under Rule 31(1) of the Public Procurement Rules, 2004 (PPR-2004). The court agreed with the NHA that the petitioners’ attempt to rectify the error after the bid evaluation process violated public procurement rules, which prohibit modifications to bids after submission. The court emphasized that the procurement process must remain transparent and free from manipulation. While the court acknowledged that the NHA improperly allowed respondent No.5 to reduce its bid after the bids were opened, it did not nullify the tender because respondent No.5's final bid was still higher than the petitioners’. However, the court cautioned the NHA against allowing such practices in the future. ----Citations/Precedents: Gamalto Middle East FZ-LLC vs. Federation of Pakistan, 2020 CLD 151 National Institutional Facilitation Technologies (Pvt.) Ltd. vs. The Federal Board of Revenue, PLD 2020 Islamabad 378 West Bengal State Electricity vs. Patel Engineering Co. Ltd., AIR 2001 SC 682 Nasir Ali vs. Muhammad Asghar, 2022 SCMR 1054

Summary: Background:The appellants filed a suit for declaration along with recovery of mesne profit against the respondents regarding a property located in Mauza Maryuin Kalan, Tehsil and District Gujranwala. The dispute arose due to the reluctance of defendant No.13 (son-in-law of the appellants' sister) to pay rent and return possession of the property. The appellants, residing in Lahore, entered into agreements with defendants No.1 and No.2, believing they would assist in resolving the dispute with defendant No.13.----Judgment:The Lahore High Court, upon review, found that the issues framed by the trial court did not accurately reflect the parties' pleadings and the real controversy. The court emphasized the importance of framing correct issues to facilitate a fair trial. As a result, the judgment of the trial court was set aside, and the case was remanded to re-frame issues and decide afresh within six months.----Conclusion:The appeal was allowed, and the case was remanded to the trial court for re-framing issues and a fresh decision in accordance with the law. Both parties were directed to appear before the trial court on a specified date.

Summary: The core issue revolved around the demand for additional performance security from the contractors who had submitted bids for various construction works following public advertisements by the Communication & Works Department, Irrigation Department, and Punjab Local Government. The demand was based on a clause in the Bid Document that required the lowest bidder to deposit additional performance security if there was a significant difference between the total tendered amount and the approved estimated amount.-----Issues:The central issue before the Supreme Court of Pakistan was whether the procuring agency could require the bidder to pay additional performance security over and above the bid security and performance guarantee provided under the Punjab Procurement Rules, 2014. Specifically, the Court examined whether the bidding documents could include terms and conditions that were over and above or inconsistent with these Rules.----Holding/Reasoning/Outcome:The Supreme Court, after a thorough examination of the Punjab Procurement Regulatory Authority Act 2009, the Punjab Procurement Rules, 2014, and other relevant documents, held that the additional performance security demanded from the lowest bidders was unlawful and violative of the Rules. The Court reasoned that the regulatory framework under the Act and the Rules provided a stable and predictable environment for procurement, and deviation from this framework could create uncertainty and confusion. The Court emphasized the principles of transparency, level playing-field, and non-discrimination in public procurement, and found that the imposition of additional performance security was inconsistent with these principles. Therefore, the demand for additional performance security and the clauses related to it in the bidding document were set aside.---Citations/Precedents:Punjab Procurement Regulatory Authority Act 2009: Establishes the regulatory framework for public procurement in Punjab, emphasizing governance, transparency, and quality.Punjab Procurement Rules, 2014: Provides specific regulations for public procurement, including provisions on bid security and performance guarantee.OECD Principles for Integrity in Public Procurement: The Court referenced these principles, which advocate for transparency, good management, prevention of misconduct, and accountability in public procurement.Quotes from Justice Sandra Day O?Connor and Chief Justice Warren E. Burger: Emphasized the importance of alternative dispute resolution and mediation in the legal process.Roger Fisher and William Ury, "Getting to Yes": Highlighted the benefits of mediation over litigation.Hazel Genn, "Judging Civil Justice": Discussed the judicial encouragement of settlements to reduce caseloads and promote efficiency.Lord Woolf's "Access to Justice: Final Report": Predicted that traditional trials would become the exception in dispute resolution.

Summary: Facts:The petitioners are registered distribution contractors with SNGPL, involved in ditching, backfilling, reinstatement, etc.In 2018 and again in 2020-2021, petitioners paid a refundable security amount for contractor pre-qualification, as required by SNGPL.Following a challenge to this security requirement by another contractor in the Islamabad region, SNGPL decided to refund these security amounts and introduced new conditions for contractor pre-qualification via a memorandum dated 13th September 2023.The petitioners, aggrieved by the non-refund of their security deposits and the introduction of new conditions, filed a writ petition after their applications for the refund were denied by SNGPL.-----Issues:Whether the memorandum issued by SNGPL, introducing new pre-qualification conditions and affecting the refund of security deposits, can be applied retrospectively.Whether the terms of the memorandum are enforceable during the currency of existing contracts between the petitioners and SNGPL.----Judgment:The court observed that executive orders such as the contested memorandum cannot operate retrospectively unless explicitly stated.The court found that introducing conditions detrimental to the petitioners' interests during the term of an already executed contract is unlawful.The court referenced precedents stating that while contractual disputes are typically outside the purview of constitutional jurisdiction, exceptions exist when public interest is involved or when governmental actions are in question.The court partly allowed the petition, setting aside the order dated 15th December 2023 as illegal and unlawful. SNGPL was restrained from enforcing the 13th September 2023 memorandum's conditions on the current contracts between the petitioners and SNGPL.----Principle:This judgment underscores that executive or administrative orders cannot be applied retrospectively to alter the terms of existing contracts, especially when such alterations are to the detriment of one party. Moreover, it reaffirms the principle that while contractual matters between private parties and public functionaries generally fall outside constitutional jurisdiction, exceptions exist, particularly when issues of public interest or governmental actions are involved.---- ''The first and foremost question which arises herein is that as to whether a memorandum can be given effect retrospectively. There is no cavil that this Court in exercise of constitutional jurisdiction can neither settle the terms and conditions of the contract interse parties nor direct the executive to insert or exclude certain condition in the contract, which undoubtedly is within the domain of the executive. There is also no denial to the proposition that in the matter of enforcement of contractual obligations, this Court in ordinary course abstains to exercise constitutional jurisdiction for enforcement of the terms and conditions of the contract or to remedy the breach of contract but at the same time the constitutional jurisdiction cannot be abridged if some perversity or patent illegality is floating on the surface of the record. It is an oft repeated principle of law that though constitutional jurisdiction ordinarily should not be exercised in case of breach of contract but if such breach does not entail any inquiry or examination of minute or controversial questions of fact, if committed by Government, semi-Government or Local Authorities it can adequately be addressed in exercise of jurisdiction contemplated under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973. Guidance to this effect can be sought from Messrs AIRPORT SUPPORT SERVICES versus THE AIRPORT MANAGER, QUAID-E-AZAM INTERNATIONAL AIRPORT, KARACHI and others (1998 SCMR 2268).''

Summary: (a) Contract Act, 1872: --- S. 73 & S. 74—Breach of employment bond and claim for damages—Employer's burden to prove actual loss. The Islamabad High Court partly allowed the appeal, modifying the trial court’s judgment regarding the recovery of damages for breach of an employment bond. The employer failed to provide sufficient evidence of actual loss incurred due to the employee’s resignation before the contractual period. The Court held that under Section 74 of the Contract Act, the employer is entitled to reasonable compensation, not exceeding the stipulated amount in the bond, and emphasized the requirement to prove actual loss for recovery. (b) Employment Law: --- Termination of employment and claim for training costs. The Court acknowledged the employer's entitlement to recover training expenses incurred on the employee and awarded compensation for one month’s salary as per public policy principles. The remaining claim for damages based on a liquidated penalty clause in the bond was deemed excessive and unsupported by evidence. (c) Doctrine of Unconscionability: --- Inequality in bargaining power between employer and employee; penal nature of bond clauses. The Court applied the doctrine of unconscionability, highlighting the inequality in bargaining power between the employer and employee. It observed that bond clauses imposing penalties for resignation without clear and reasonable justification violated reasonable expectations and international labor standards. (d) Damages in Employment Contracts: --- Types of damages and principles for awarding compensation. The Court differentiated between nominal, compensatory, and liquidated damages, emphasizing that the employer must establish actual loss through cogent evidence. It clarified that mere reliance on a penalty clause does not justify recovery without proof of damages. The award must align with the principle of reasonableness. (e) Disposition: Appeal partly allowed; employer awarded training costs and one month’s salary. The Court modified the trial court’s judgment, limiting the employer’s recovery to Rs.32,000 as training costs and Rs.43,000 as one month’s salary. The rest of the claim for Rs.534,663 was dismissed for lack of evidence.