The Supreme Court has dismissed an appeal of Space Telecom (Pvt) Ltd to return earnest money $5,000,000 deposited with Pakistan Telecommunication Authority (PTA) for cellular mobile licence. "We find no reason to interfere with the decision of the high court and decline leave to appeal," said the judgement authored by Justice Qazi Faez Isa.
A three-judge bench headed by Justice Gulzar Ahmed and comprising Justice Qazi Faez Isa and Justice Mazhar Alam Khan Miankhel on October 18, 2018 had reserved the judgement.
The PTA in February 2004 had invited bids for the award of two technology neutral National Mobile Cellular Licences through a bidding/auction process.
Three companies - Space Telecom (Pvt) Ltd (petitioner) and two foreign companies (Drex Technologies SA and SiloServ Offshore SA) formed a consortium and submitted their bid on 14th April, 2004 for the award of a licence (lot "A" of the stipulated "Spectrum Bandwidth" and "Uplink-Downlink").
The consortium''''s bid of $291,000,000 was accepted by PTA (respondent) which by a letter dated 15th April, 2004 informed the consortium of the acceptance of the bid.
The consortium was required to pay 25 percent of the bid price, less the earnest money of $10,000,000, which they had already deposited with PTA. Out of the total earnest money $10,000,000, the Space Telecom had contributed $5,000,000.
According to the contract, 25 percent amount was required to be paid within 10 days of the acceptance of the bid, that is, by 26th April, 2004. The consortium, however, did not make payment, therefore, PTA on 27th April, 2004 wrote to the consortium informing it that PTA had forfeited the earnest money.
The petitioner informed the PTA that it had every intention to comply with the terms of PTA''''s letter of 15th April, 2004 and to pay $62,750,000 but was prevented from doing so by an order of a civil court, that it had deposited the said amount with PTA, it would have committed contempt of court.
The petitioner wrote letters to the PTA on 23rd August, 2004. The PTA on 7th September, 2004 declined the petitioner''''s request. Space Telecom again wrote a letter, which the PTA on January 19, 2005 reiterated its rejection. The petitioner then challenged it before Rawalpindi Bench of the Lahore High Court.
The LHC directed PTA "to decide the claim of refund of the earnest money of the petitioner through a speaking order after giving an adequate opportunity of being heard to the petitioner."
The PTA on 23rd February, 2006 again declined the request of the petitioner and maintained that the petitioner had "failed to perform its obligation, hence cannot be entitled to the earnest money forfeited."
Space Telecom then assailed the order in Islamabad High Court through a writ petition. The IHC decided the matter through a consolidated judgement dated 25th May, 2017 and maintained the PTA''''s impugned order. Later, the petitioner challenged the IHC order before the apex court.