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December 27, 2018

SHC sets aside ombudsman’s decision, governor’s orders on contractual dispute


December 27, 2018

The Sindh High Court has set aside a decision made by the provincial ombudsman and order by the Sindh governor on a contract-related dispute they adjudicated.

In a petition submitted to the court, the Karachi Board of Secondary Education (KBSE) had assailed the Sindh ombudsman’s decision and governor’s order in a contractual dispute between KBSE and a private contractor.

Abrar Hasan, the petitioner’s counsel, argued that the ombudsman had no jurisdiction to entertain a civil dispute of a contractual nature and hence his decision and the decision in review thereupon, rendered by the governor, were void in the eyes of law.

He submitted that BSEK had entered into a contract with a private contractor for the provision of furniture on rent which was to be utilised at examination centres for the Secondary School Certificate examinations of 2012.

He said the contractor claimed a bill amounting to Rs18,846,285, in respect of the rental amount, out of which the petitioner paid Rs13,959,954. However, the contractor claimed that rent for a total of nine days remained unpaid, and the due amount was outstanding.

Hasan said the provincial ombudsman declared the BSEK’s act of not informing the contractor when to lift the furniture an act of maladministration on the part of the agency and directed the BSEK chief to clear the outstanding balance rent for four days to the supplier. The Sindh governor later upheld the ombudsman’s decision.

In response, the counsel for the private contractor, Alizeh Bashir, said that the ombudsman had clearly identified that it was a case of maladministration and had held the petitioner culpable in such regard. She submitted that petitioner had not challenged the jurisdiction of the ombudsman and on the contrary the representation filed before the governor was preferred by the petitioner itself and therefore the petitioner could not raise a belated challenge to jurisdiction simply because the ombudsman’s decision and the governor’s order had been rendered against them.

She further said that the dispute between the respective parties had been duly adjudicated and had attained finality and therefore the present petition was misconceived and therefore liable to be dismissed forthwith.

Sindh Additional Advocate General Meeran Mohammad Shah adopted the arguments advanced by the respondent’s counsel and supported the governor’s order and ombudsman’s decision, respectively.

After hearing the arguments, the SHC’s division bench headed by Justice Mohammad Ali Mazhar observed that the matter calls into question the determination of a purely contractual issue that is quantum payable by the BSEK to the respondent pursuant to a rental contract.

The court observed that it is an admitted fact that an amount of Rs. 13,959,954 was paid in regard to the contract and the amount of Rs4,886,631 was not paid since the petitioner did not consider the same to be due under the contract.

The court further said that the issue is the very interpretation of a contract and not that of any maladministration ancillary to a contract. The bench said the quantum payable by the petitioner to the contractor was a matter requiring interpretation of the contract after leading of evidence, adding that petitioner has already made substantial payments under the contract so it would be inappropriate to ascribe any dishonesty (or maladministration) thereto simply on account of the petitioner’s computation having been incongruent to that of the contractor.

The court observed that while the parties remained at liberty to agitate the veracity of their claims inter se the irreconcilability of their calculations could not be deemed to qualify within the parameters of maladministration.

The court observed that it is trite law that the question of jurisdiction is the primary issue to be considered by any forum prior to undertaking any further proceedings, notwithstanding the fact whether such an issue was raised by any of the parties.

It is imperative for the court to consider whether the ombudsman’s decision suffered from any defect in jurisdiction and if the same is determined to be the case then such a defect cannot be ignored, the bench added.

The bench further said that any decision made by a court or a forum performing judicial functions (or even quasi-judicial functions) having no jurisdiction was a nullity in the eyes of the law. It is apparent that for the ombudsman to have assumed jurisdiction in this matter the complaint had to have qualified upon the anvil of the term maladministration and it is the considered view of the court that the dispute inter se does not succeed in such regard, it added.

According to the bench, the assumption of jurisdiction by the ombudsman was erroneous and cannot be sustained besides the error of jurisdiction was maintained by the governor’s order. The court then set aside both, stating that they were determined to have been rendered in erroneous assumption of jurisdiction.

Allowing the petition, the SHC made clear that the observations of the court shall cause no prejudice and shall not influence the adjudication of any proceedings between the parties for the determination of any rights and obligations with respect to the contractual dispute considered herein before the forum of competent jurisdiction.

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