Railways told to consider club’s revenue share offer

LAHORE
The Supreme Court on Wednesday asked Pakistan Railways to consider the offer of the Royal Palm Golf and Country Club to have 50 per cent share in its profit instead of 10 per cent which it was taking earlier according to the agreement.
Justice Saqib Nisar issued the order while hearing a petition filed by former state minister for railways Ishaq Khan Khakwani, challenging the award of contract of Royal Palm Golf and Country Club to Maxcorp Husnain (Pakistan) Limited.
The petitioner argued that the case was a scam involving a huge fraud with the government. He said the club administration, out of the contract, was allowing marquees for weddings and making money without giving any share to Railways, the owner of the land where the facility was established.
Representing the Royal Palm, Barrister Syed Ali Zafar submitted that the contract was executed between Pakistan Railways and Royal Palm Golf and Country Club after a transparent competitive bidding.
He submitted that it wasn’t a scam where someone had defrauded the government, but instead Maxcorp Husnain (Pakistan) Limited fulfilled all the obligations and built and established a premier golf club in the city of Lahore - which had now become a landmark and icon containing 18-hole par 72 golf course of international standards - along with three tennis courts, squash courts and swimming pools each, club house facilities and other amenities.
The counsel argued that the golf club was maintained as per highest standards and his clients had managed to establish tremendous goodwill through tireless efforts by virtue of which the club now boasted more than 3,000 members. Barrister Zafar further relied on the fact that throughout the period of the contract, the golf club’s accounts had been audited by one of the leading chartered accountancy firms of the country - M/s AF Ferguson and Co.
The accounts showed that the Railways had earned more than Rs 530 million in terms of revenue sharing, commitment charges and land usage charges and the amount was more than any other project of Pakistan Railways, he added. Zafar argued that it wasn’t a case of enforcement of any fundamental rights of public importance as the contract was commercial contract in nature and had been executed between independent parties.
“In case of a dispute regarding its validity, the only course available to Pakistan Railways is to refer the matter to arbitration, which is an internationally recognised mode of dispute resolution.”
According to Zafar, the Supreme Court cannot decide any factual controversies as under Article 10A of the Constitution all civil rights have to be determined only through a fair trial while the proceedings under Article 184(3) before the SC do not amount to a fair trial being inquisitorial in nature.
He stated his clients had nothing to hide and offered that if the court has any doubt on the accounts then it should appoint an independent auditor, from amongst any top chartered accountancy firms, to verify the accounts which would reveal that the golf club was being properly managed and nothing was being hidden.
Upon the court’s query as to whether marquees for wedding were allowed to be set up in the contract, Zafar submitted that the contract never prohibited the same. He said in such contracts, the Supreme Court should uphold their validity and only interfere where there was fraud proved on the record, which was not the case here.
Pakistan Railways and the Government of Pakistan supported the petitioner in alleging that the contract was not awarded as per the procedures of fairness and hence should be declared void.
In response to the allegations, Barrister Zafar said the concept of “judicial review” in administrative action was very clear unless the contract was so unreasonable that no prudent man would enter into it, the court would not sit in judgement over the contract.
According to Zafar, the terms and conditions of the Implementation Agreement showed clearly that the agreement was commercially in favour of Pakistan Railways which had the right to share 10 per cent in the revenues.
He, however, offered that his clients were willing, if Pakistan Railways so desired, then they could share profit equally instead of sharing 10 per cent.
At this, the court adjourned the matter with the direction to the petitioner, Pakistan Railways and the government to consider the offer and respond before January 20.