' SARDAR MUHAMMAD RAZA KHAN, J.--- Tehsil Municipal Administration seeks leave to appeal against the judgment dated 24-6-2004 passed by Lahore High Court.
2. Taxes on transfer of immovable property within the limits of Tehsil Municipality, Sialkot are collected through a contractor who is awarded contract against an open auction. Such open auction was admittedly held on 9-4-2004 where the highest bid of Rs,4,87,00,000 was that of Chaudhry & Co., respondent No,
1. The auction subcommittee, duly constituted by Tehsil Council approved the bid and recommended the same for acceptance. Tehsil Municipal Administration also encashed deposit-at-call submitted by the petitioner prior to auction.
3. One Muhammad Yousaf (respondent No,2) submitted an application before the Tehsil Nazim on 12-5-2004 that as he was not registered at the time of auction and thus, could not have had participated in the auction proceedings and now that he obtained registration, he was willing to obtain the contract for sum of Rs,5, 12,00, 000. The Tehsil Council did not award the contract to the 'highest bidder and ordered for new auction. The highest bidder challenged the said order through the writ petition in hand which was accepted and hence this petition.
4. It may be emphasized that the award of contract to the highest bidder was refused on the application of Muhammad Yousaf who admittedly was neither a bidder nor a registered contractor. It has come on record that there were 11 bidders in all out of whom three were unregistered and hence ousted from the proceedings. The number of bidders reduced to 8 were all those who were duly registered including the highest bidder. This fact is narrated only to emphasize that a stranger to the bid who also was unregistered, had no locus standi to make interference and should not have even been heard, muchless ordering fresh auction at his instance. The learned High Court was, therefore, rightly of the view that he was a front-man of Tehsil Nazim. The re-auction from the inception seems to be manoeuvred one and hence mala fide. Rule 10 of Punjab Local Government (Auction of Collection Rights) Rules, 2003 stood amended through the Notification No,SOV(Ig)5-23/2003, dated 20-10-2003 and the following was inserted:-- "If the first and second attempt of auction have failed to fetch bid equal to the reserve price or more."
' These words were added towards the grounds under which the auction could be cancelled and the highest bid rejected. The amendment would clearly suggest that the auction could be cancelled only if failed to fetch a bid equal to or above the reserve price.
5. In the instant case, the reserve price was Rs,3,70,40,786 whereas the highest bid of respondent No,1 was Rs,4,87,00,000 almost Rs,1,17,00,000 higher than the reserve price which, in the circumstances is quite a substantial amount. The rejection of such bid and cancellation of the auction therefore, seems to be certainly mala fide as well as motivated.
6. Learned counsel for the petitioner claimed that the Council had the prerogative to cancel the auction which prerogative have rightly been exercised and hence should not have been interfered with by the High Court. We do not find ourselves in agreement with the argument because the Council has to exercise its power within the given rule, and regulations juxtaposed with the circumstances of the case. As discussed earlier that there was no reason at all under the rules to cancel the auction, the Council did so because of the intervention of Muhammad Yousaf. This is where the mala fide crept in and was rightly set at naught by the High Court. There is no force in the petition which is hereby dismissed and leave to appeal refused.