M/s Cleanol Services Versus Province of the Punjab through Secretary Specialized Healthcare & Medical Education Department, etc.

Stereo HCJDA 38 JUDGMENT SHEET IN THE LAHORE HIGH COURT LAHORE (JUDICIAL DEPARTMENT) Writ Petition No.30552 of 2026 M/s Cleanol Services Versus Province of the Punjab through Secretary Specialized Healthcare & Medical Education Department, etc. Petitioner by:- Mr. Muhammad Azam Zafar, Advocate. Respondents by: Mr. Salman Asif Warraich, Assistant Advocate General, Punjab. Mian Mubarik Arshad, Advocate for respondent No.5 (PPRA). M/s Matee-ur-Rehman and Sheharyar, Advocates for respondent No.6. Date of hearing: - 17.06.2026 JUDGMENT RAHEEL KAMRAN, J.: Through the instant petition filed under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973 (the “Constitution”), the petitioner calls in question the vires of order dated 05.05.2026 passed by the Managing Director, Punjab Procurement Regulatory Authority, Lahore (hereinafter referred to as the “MD PPRA”). By virtue of the impugned order, the representation filed by respondent No.6 M/s HS & Co. Pvt. Limited was accepted, the bid of the petitioner M/s Cleanol Services was declared financially non- responsive for non-inclusion of mandatory PESSI1 and EOBI2 contributions in respect of reliever staff at the time of submission of bid and the procuring agency was directed to proceed further with the lowest Provincial Employees Social Security Institution / Scheme Employees’ Old-Age Benefits Institution -2- W.P. No.30552 of 2026 evaluated bidder after fulfillment of all other legal and codal requirements. The matter was also referred to the Administrative Department for probing the conduct of the procuring agency. 2. The factual background as gathered from the contents of the petition and the record, is that Jinnah Hospital, Lahore (hereinafter to be referred as “the Procuring Agency”) through its Medical Superintendent advertised an e-PADS3 tender notice dated 04.11.2025 for “Contract for Janitorial Services at Jinnah Hospital, Lahore for the Financial Year 2025-2026” under the Punjab Procurement Rules, 2014 (the “Rules, 2014”), adopting single stage two envelope bidding procedure. The estimated cost of procurement was Rs.255,905,880/- per annum. The petitioner and six other firms participated, out of which four were declared technically responsive. The financial bids were opened on 31.12.2025 and the Purchase Committee in its meeting held on 01.01.2026, recommended the petitioner as the lowest bidder with monthly quoted rate of Rs.19,531,612/- and annual cost of Rs.234,379,344/-. Respondent No.6 was placed as second lowest bidder with monthly quoted rate of Rs.20,003,800/-. Respondent No.6, as also another bidder M/s Mustafa & Sons, filed grievances before the Grievance Redressal Committee (the “GRC”) of the procuring agency, primarily alleging that the petitioner had not included mandatory EOBI and PESSI contributions and applicable taxes in respect of reliever staff and that its bid was commercially unjustified and liable to be declared non-responsive. The GRC rejected the grievances through minutes/decision dated 12.01.2026 and upheld the decision of the Purchase Committee. The GRC observed that there was no gross or major discrepancy in the bid of the petitioner; that income tax, EOBI and PESSI deductions were at the cost of the petitioner; that there was no increase or decrease in the quoted price of the petitioner; and that the petitioner had submitted affidavit on e-stamp paper undertaking to bear the cost of income tax, EOBI and PESSI from its invoice. Thereafter, the E-Pak Acquisition and Disposal System -3- W.P. No.30552 of 2026 procuring agency vide letter dated 13.01.2026, sought guidance/opinion from PPRA with regard to the objections raised by the participating firms. In the said letter, the procuring agency specifically brought to the notice of PPRA that EOBI and PESSI deductions in respect of 27 relievers had not been calculated/included in the financial bid of the petitioner, however, it was also stated that the first lowest and second lowest bidders had submitted affidavits agreeing to deduction of income tax at the rate of 6% and EOBI and PESSI from relievers’ cost at the same amount as quoted in their financial bids and that there was no decrease or increase in the main financial bid proposal of the firms. In the meanwhile, the procuring agency issued advance acceptance of contract in favour of the petitioner on 20.01.2026. The petitioner submitted performance guarantee on 24.01.2026 and formal contract agreement was executed on 23.02.2026, whereafter it mobilized resources and commenced work. Respondent No.6 filed representation before PPRA. The MD PPRA vide order dated 26.03.2026, set aside the decision of the GRC and remanded the matter to the procuring agency with direction to re-verify the calculations after due application of PESSI and EOBI to reliever cost and to decide the lowest evaluated bidder accordingly. In compliance, the procuring agency re-examined the financial bids and again found that the financial ranking remained unchanged and that the petitioner continued to be the lowest bidder. Respondent No.6 again approached PPRA by filing representation against the post-remand decision. Vide impugned order dated 05.05.2026, the MD PPRA accepted the representation and declared the petitioner’s bid financially non-responsive. Hence, the instant petition. 3. Learned counsel for the petitioner submits that the GRC, after examining the objections of respondent No.6, rightly held that non- mentioning of EOBI and PESSI in respect of reliever staff was not a gross or major discrepancy because the petitioner had undertaken through affidavit that the relevant statutory deductions including income tax, EOBI and PESSI would be borne from its invoice without any -4- W.P. No.30552 of 2026 increase in the quoted bid price. Learned counsel submits that the said undertaking constituted, at best, a clarification within the meaning of Rule 33 of the Rules, 2014 and did not alter or modify the substance of the bid. It is argued that the MD PPRA, while passing the impugned order, ignored this material aspect and wrongly treated the subsequent calculation prepared by the procuring agency as reconstruction or alteration of the petitioner’s bid. According to learned counsel, even after the amount of Rs.138,710/- was added by the procuring agency during post-remand re-verification, the petitioner’s monthly rate came to Rs.19,670,322/-, which was still considerably lower than the rate of respondent No.6 i.e. Rs.20,003,800/-. It is submitted that if the procuring agency committed an error by adding the amount during re-verification, such error could not be used to penalize the petitioner, particularly when the petitioner had already undertaken that the statutory deductions would be borne by it without enhancement of the bid price. 4. Conversely, learned counsel for respondent No.6 supports the impugned order and submits that Section 2.3.9 of the Instructions to Bidders required every bidder to adhere to minimum wage rates, all applicable taxes and statutory contributions including PESSI and EOBI while preparing the financial bid. He argues that the petitioner failed to include such mandatory statutory contributions in respect of reliever staff and as such its bid was materially non-compliant. It is further argued that Rule 33 of the Rules, 2014 does not permit alteration or modification of a bid after the closing time for submission of bids and that the petitioner’s subsequent affidavit could not be used to cure a material defect. Learned counsel submits that the procuring agency, by adding Rs.138,710/- during re-verification, in fact reconstructed the bid of the petitioner, which is impermissible under the procurement regime. 5. Learned Assistant Advocate General, Punjab as well as learned counsel appearing on behalf of PPRA support the impugned order for the reasons recorded therein and submit that the MD PPRA -5- W.P. No.30552 of 2026 acted within the bounds of its statutory supervisory jurisdiction under the Rules, 2014. 6. Arguments heard. Record perused. 7. The controversy revolves around the legality of the impugned order dated 05.05.2026 whereby the petitioner’s bid has been declared financially non-responsive on the ground that mandatory PESSI and EOBI contributions in respect of reliever staff were not included at the time of bid submission. There is no cavil with the proposition that bids in public procurement must be evaluated strictly in accordance with the declared evaluation criteria and the terms of the bidding documents. It is equally settled that after the closing time for submission of bids, no bidder can be permitted to alter or modify the substance of its bid. The prohibition contained in Rule 33(1) of the Rules, 2014 is founded upon the principles of transparency, equal treatment of bidders and sanctity of competitive bidding. However, the same rule through sub-rules (2) and (3) permits the procuring agency to seek and accept clarifications after opening of bids, provided such clarifications do not change the substance of the bid and are made in writing. For reference, Rule 33 ibid is reproduced below: “33. Clarification of bids.—(1) No bidder shall be allowed to alter or modify his bid after the closing time for the submission of the bids. (2) The procuring agency may, if necessary after the opening of the bids, seek and accept such clarifications of the bid as do not change the substance of the bid. (3) Any request for clarification in the bid, made by the procuring agency and its response, shall invariably be in writing.” It is vivid from the bare reading of the above Rule that every post-bid communication is not prohibited. What is prohibited is alteration or modification of the bid and what is permissible is clarification which explains, confirms or removes ambiguity without changing the substance or financial burden of the bid. The core issue arising for determination is whether the petitioner’s affidavit, whereby it undertook to bear PESSI, EOBI and applicable taxes in respect of reliever staff from within its -6- W.P. No.30552 of 2026 quoted price, constituted a permissible clarification under Rule 33(2) or an impermissible alteration under Rule 33(1). Put otherwise, whether the non-separate reflection of statutory contributions in respect of reliever staff was a curable omission or a material defect warranting disqualification. 8. As per record, in the financial bid form of the petitioner, the petitioner had mentioned under the head of management charges one Manager, three Reliever Supervisors and twenty-seven Reliever Janitors along with their wages as well as costs relating to uniform, shoes etc. However, in respect of such reliever staff, PESSI, EOBI, income tax and PST were not separately reflected in the same manner as they were reflected in respect of other categories of staff. This omission became the basis of grievance by respondent No.6. The GRC did not treat the same as a gross or material discrepancy. The relevant finding of the GRC was as under: “The question of Income Tax and EOBI and PESSI deductions are at the cost of the 1st lowest firm. There is no increase or decrease in the quoted price of M/S Cleanol Services as quoted in the Financial Bid i.e. Rs.19,531,612/- per month. The extra Income Tax (3% to 6%) and EOBI & PESSI of Reliever Janitors will be deducted from the invoice of the firm and there is no change in minimum wage rates to all the Janitorial Staff as per government applicable rates. The 1st Lowest firm M/S Cleanol Services has also submitted affidavit on E-Stamp Paper that they will bear the cost of Income Tax, EOBI & PESSI from the Invoice of the firm.” The procuring agency while seeking guidance from PPRA through letter dated 13.01.2026, also highlighted the same position. It was expressly stated that EOBI and PESSI deductions for 27 relievers had not been calculated/included in the financial bid of the petitioner but at the same time it was stated that the first lowest and second lowest bidders had submitted affidavits agreeing to deduction of income tax at the rate of 6% and EOBI and PESSI from relievers’ cost at the same amount as quoted in their financial bids and that there was no decrease or increase in the main financial bid proposal of the firms. This Court is of the opinion that the contents of the letter dated 13.01.2026 read with the -7- W.P. No.30552 of 2026 decision of the GRC dated 12.01.2026 demonstrate that the petitioner’s affidavit was in the nature of a clarification within the meaning of Rule 33 of the Rules, 2014. The petitioner did not claim any additional amount from the procuring agency; did not seek correction of the quoted monthly price and undertook to bear the statutory deductions from the amount already quoted. The financial liability of the procuring agency remained confined to Rs.19,531,612/- per month as originally quoted. Such clarification neither conferred any unfair advantage upon the petitioner nor imposed any additional burden upon the public exchequer. It is also of relevance that respondent No. 6, according to the procuring agency’s letter dated 13.01.2026, had itself submitted a similar affidavit agreeing to deduction of income tax, EOBI and PESSI from relievers’ cost at the same amount as quoted in its financial bid. Thus, the clarification mechanism was not applied selectively to the petitioner alone. 9. The impugned order proceeds on the premise that during post- remand re-verification, the procuring agency added an amount of Rs.138,710/- to the petitioner’s bid thereby increasing the monthly bid from Rs.19,531,612/- to Rs.19,670,322/- and that such addition amounted to reconstruction of the bid. There can be no exception to the principle that a procuring agency cannot add to, modify or reconstruct a financial bid after opening thereof. If the procuring agency during post- remand proceedings, calculated the petitioner’s revised monthly rate by adding Rs.138,710/- per month as a separate component over and above the quoted bid price, such calculation was certainly not consistent with the position earlier taken by the procuring agency itself in its letter dated 13.01.2026. However, the error committed by the procuring agency in post-remand tabulation could not, by itself, justify declaration of the petitioner’s bid as financially non-responsive. The real question was not whether the procuring agency could increase the petitioner’s bid price — it clearly could not — but whether the petitioner had clarified, without altering the substance of its bid, that EOBI, PESSI and applicable taxes -8- W.P. No.30552 of 2026 in respect of reliever staff would be deducted from and borne within the originally quoted price. The record answers this question in the affirmative. The MD PPRA misdirected itself by treating the post- remand erroneous addition of Rs.138,710/- as conclusive proof of non- responsiveness, without giving due weight to the GRC decision, the procuring agency’s letter and the petitioner’s affidavit. It is also noteworthy that even the erroneous post-remand calculation of Rs.19,670,322/- was still lower than the quoted rate of respondent No.6, i.e., Rs.20,003,800/-, which reinforces the conclusion that no prejudice was caused to respondent No.6 in terms of competitive ranking. 10. Section 2.3.9 of the Instructions to Bidders required bidders to adhere to minimum wage rates, applicable taxes and statutory contributions while preparing financial bids. The said clause cannot be read in isolation from Rule 33 of the Rules, 2014 and the factual record. The petitioner had mentioned the reliever staff in its financial bid along with wages and related charges. The dispute was confined to non- separate reflection of PESSI, EOBI and allied deductions in respect of such relievers. Every lapse, omission or imperfect entry in a financial bid form does not necessarily entail the consequence of disqualification or financial non-responsiveness. The nature, effect and materiality of the omission must be examined in the context of the bidding document and the bid as a whole. A bid may be rejected where the omission goes to the root of the matter, affects the quoted price, changes the scope of work, creates uncertainty regarding performance of statutory obligations, gives an unfair advantage to a bidder or prevents fair comparison of bids. However, where the relevant category of staff is disclosed, the number and designation of such staff are mentioned, their wages are reflected and the bidder merely omits to separately calculate or mention statutory contributions/taxes in respect of that category, such omission cannot be treated as a fatal defect if the bidder confirms in writing that all statutory liabilities shall be discharged from within the quoted amount without claiming any enhancement. Guidance in this respect is found in the ratio -9- W.P. No.30552 of 2026 from the judgments in the cases of “Dr. Akhtar Hassan Khan and others v. Federation of Pakistan and others” (2012 SCMR 455) and “Messrs Nishat Mills Limited v. Superintendent of Central Excise Circle II and 3 others” (PLD 1989 SC 222). Both the said judgments were followed by this Court while quoting relevant excerpts therefrom in the case of “A.M. Construction Company (Pvt.) Limited through Chief Executive Officer and another v. National Highway Authority through Chairman and 2 others” (2017 CLC 178). The extract from the said judgment is reproduced for ease of reference: “38. Further, a public authority should not be bound to give effect to every term mentioned in the tender document. It has the power to waive a technical irregularity of little or no significance. I am of the view that even if the bid security is of lesser amount the same can be overlooked/ignored by the respondent. In appropriate cases, as in the present case petitioner being lowest bidder and the difference between petitioner and second lowest bid is of rupees 35-Million, public functionaries have the power/authority to deviate from and not to insist upon strict compliance of a condition.” 11. The above principle has also to be read in harmony with Rule 4 of the Rules, 2014, which lays down the foundational principles governing public procurements, as under: “4. Principles of procurements.—A procuring agency, while making any procurement, shall ensure that the procurement is made in a fair and transparent manner, the object of procurement brings value for money to the procuring agency and the procurement process is efficient and economical.” Public procurement is not an empty ritual of form. Its purpose is to secure goods, works or services for the public authority in a fair, transparent, efficient and economical manner while ensuring best value for money. Therefore, while the requirements of the bidding documents cannot be diluted and equal treatment of bidders must be preserved, the procurement regime does not require rejection of the lowest responsive bid on account of a curable omission which does not affect the quoted price, the scope of services, the eligibility of the bidder, the quality of performance or the competitive position of other bidders. Guidance in this respect is also found in the judgment of this Court in Writ Petition -10- W.P. No.30552 of 2026 No.14049 of 2015 titled “Kaumedex v. Managing Director, Punjab Public Procurement Regulatory Authority etc.”. Relevant extract from the said judgment is as under: “7. It is imperative to state that the procurement regime must balance the principles of fairness and transparency with procedural practicality. Rule 33(2) of the PPRA Rules permits flexibility to cure such procedural deficiencies, provided the core integrity and competitive standing of the bid remain unaffected. Here, the supplemental documents neither granted undue advantage to respondent No. 6 nor undermined the fairness of the bidding process.” 12. The MD PPRA was justified to the extent it observed that the procuring agency could not add Rs.138,710/- to the petitioner’s quoted price during re-verification. Such addition, if treated as enhancement of the bid, would indeed be contrary to Rule 33 of the Rules, 2014. However, the legal consequence of such finding was not to declare the petitioner’s bid financially non-responsive. The proper course was to hold that the petitioner would remain bound by its original quoted price of Rs.19,531,612/- per month and that all statutory deductions/contributions including PESSI, EOBI and applicable taxes in respect of reliever staff would be borne by the petitioner from within the said quoted amount in terms of its affidavit and the clarification already forming part of the record. The impugned order does not record any finding that the petitioner furnished false, fabricated or materially incorrect information, nor that the petitioner refused to bear statutory contributions or sought payment over and above its quoted bid. The entire case against the petitioner rests on the non-separate mention of PESSI and EOBI in respect of reliever staff and the subsequent erroneous addition made by the procuring agency during re-verification. Such circumstances, in the presence of the petitioner’s written undertaking, did not warrant the drastic consequence of declaring the bid financially non-responsive. 13. It is well settled that this Court while exercising constitutional jurisdiction under Article 199 of the Constitution in procurement matters, does not sit as a forum of appeal to re-evaluate bids or substitute -11- W.P. No.30552 of 2026 its own opinion for that of the competent authority. Interference is warranted only where the impugned action suffers from jurisdictional defect, patent illegality, arbitrariness, misreading or non-reading of material record, or results in manifest injustice. Tested on this touchstone, the impugned order dated 05.05.2026 cannot be sustained. 14. For the foregoing reasons, this petition is allowed. The impugned order dated 05.05.2026 passed by the MD PPRA is set aside to the extent whereby the petitioner’s bid has been declared financially non-responsive and the procuring agency has been directed to proceed with the next lowest evaluated bidder. The petitioner shall continue to perform the contract, subject to fulfillment of all legal, codal and contractual requirements and shall remain bound by its originally quoted monthly price of Rs.19,531,612/-. It is clarified that all applicable statutory deductions/contributions including PESSI, EOBI, income tax and other lawful deductions in respect of reliever staff shall be borne by the petitioner from within the said quoted amount in accordance with law and its undertaking/affidavit forming part of the procurement record. No order as to costs. (RAHEEL KAMRAN) JUDGE Approved for reporting. JUDGE Azhar*