By this constitutional petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 the petitioner has challenged the action of respondent No.1 regarding forfeiture of his earnest money and holding of further auction proceedings of Lot; No.E-2/June/2004. The prayers made in the petition reads as under:--
(1) It be declared that the petitioner is the rightful purchaser and owner of Lot No.E-2/June/2005, lying in the compound of the respondent No.2 as Dump.
(2) Declare that the 2nd Auction and Re-Auction h behind the back of the petitioner and without advertising the same in any local newspaper, is illegal and void and also against the principles of natural justice, as well as being contrary to the commitment forwarded in letter dated 13-6-2006.
(3) The respondents Nos.1 and 2, their representatives, attornies, any person/persons working under or through them be restrained from removing, disturbing and from delivering, in part or in whole, the Iron goods and packaging material of Lot No.E-2/June/2004, lying at the TPX Yard at West Wharf, Karachi, to any other person/persons other than the petitioner as the same has been awarded to the petitioner on 24-4-2006.
(4) Any other, further or better relief that this Honourable Court may deem fit.
(5) Cost of the petition may please be awarded.
2. In a nutshell, case of the petitioner is that in the auction proceedings in respect of Lot No.E- 2/June/2004 conducted by the respondent No.1 on 24-4-2006, he had participated and given the highest bid of Rs.18,000 per metric ton for purchase of the said whole lot weighing 350 metric tons.
Subsequently, some dispute had arisen between the petitioner and the respondent No.1 as regards the identity and number of items included in the said Lot No.E-2/June/2004, due to which some communication was also made between them, but ultimately the earnest money paid by the petitioner was forfeited by respondent No.1 in all illegal manner and the Lot No.E-2/June/2004 was re-auctioned in favour of auction purchaser Abdul Latif in the sum of Rs.15,150 per metric ton.
3. On notice of this petition, the respondent No.1 submitted their parawise comments, explaining the relevant facts and circumstances, which compelled them for extreme action of forfeiture of earnest money of the petitioner in the sum of Rs.500,000 deposited in relation to his offer of Rs.18,000 per metric ton for lot No.E-2/June/2004, and also holding of second and third auction for that lot, wherein ultimately it has been re-auctioned on 2-9-2006 in favour of auction purchaser Abdul Latif at the rate of Rs.15,150 per metric ton.
4. During the pendency of this petition, the auction-purchaser Abdul Latif has voluntarily placed his appearance before the Court by submitting his application dated 19-10-2006 and he is now represented by Mr. Abid Feroz Advocate.
5. Mr. Amin Lakhani learned counsel for the petitioner, after narration of the relevant facts stated in the petition, has contended that the petitioner, while giving the highest bid of Rs.18,000 per metric ton for the whole lot No.E-2/June/2004, weighing 350 metric tons, had every intention to take its delivery as per usual practice followed by the customs department, and it was in such circumstances that he had also deposited token money of Rs.500,000 with the, respondent No.1 vide Pay Order No.SP/G 053523, but subsequently a confusion was created by the officers of respondents as regards the exact items, which were included and were to be delivered to him from Lot No.E-2/June/2004. In such circumstances, efforts were made by the petitioner to lift the whole lot lying at K.P.T. In a dump manner as identified by the customs authorities and KPT at the time of holding auction, but for this purpose he was not accommodated by the respondents. He further made reference to the letter dated 13-6-2006 to show that even the respondent No.1 had given last date to the petitioner for lifting of Lot No.E-2/June/2004 up to 17-6-2006, but in utter disregard to their own commitment second auction of Lot No.E2/June/2004 was held on 16-6-2006, wherein no appropriate/ desired offer was received by the customs authorities. Subsequent to it, in the third auction process Lot No.E2/June/2004 was auctioned in favour of auction purchaser Abdul Latif at a meagre price of Rs.15,150 per metric ton, which was even much below the reserved price declared by the customs authority for the purpose of auction of Lot I\ o.E2/June/2004.
6. Mr. Raja Muhammad lqbal learned counsel for the respondent No.1 vehemently contended that it was due to the unfair conduct of the petitioner that after acceptance of his highest bid of Rs.18,000 per metric ton for Lot No.E2/June/2004 and despite delay of almost two months its delivery could not be given to him, as the petitioner himself was not serious and willing to abide by his commitment, for flimsy reasons. He further submitted that forfeiture of Rs.500 000, deposited by the petitioner, is in absolute conformity with the prescribed rules and regulations, therefore, at this belated stage the petitioner is not entitled for any relief through this constitutional petition.
7. Mr. Sarfraz Sulehri learned counsel for respondent No.2 has not advanced any arguments as regards the merits of this petition as, according to him, respondent No.2 is only concerned with the lifting of that auctioned lot and payment of its charges to the KPT.
8. The learned counsel for auction purchaser Abdul Latif has contended that the auction purchaser is not willing to accept the delivery of the remaining lot of No.E-2/June/2004 at the rate of 18,000 per metric ton, therefore, he has no objection if remaining quantity of Lot No.E-2/June/2004 is given to the petitioner on such rate. He further submitted that in such case his client may however be compensated for the labour charges already incurred by him over sorting out the components of Lot No.E-2/June/2004. According to the learned counsel, for this purpose the auction purchaser Abdul Latif has spent a sum of Rs.75,000.
9. During the proceedings of this constitutional petition, in terms of the order dated 3-11-2006, the Nazir of this Court has visited the site, examined the available Lot No.E-2/June/2004 and submitted his report confirming the availability of 317 metric tons of scrap items from Lot No.E-2/June/2004, while 33 mertic ton have already been delivered and lifted by the auction purchaser Abdul Latif at the rate of Rs.15,150 per metric ton. Simultaneously, the learned counsel for the petitioner, in response to a query made by this Court on 3-11-2006 has also submitted a statement in writing dated 4-11-2006 which reads as under:- "I, Muhammad Umer, son of Abdul Samad, the petitioner herein, ,vide order dated 3-11-2006. Passed by this Honourable Court, do hereby on solemn affirmation, state and submit as under:-
(1) That I was awarded an auction for a lot bearing No.E2/June/2004, weighing 350 Metric Tons (350000 Kgs.), at the price of Rs.18,000 per Metric Ton. The said lot is currently lying in the TPX Yard of the respondent No. 1.
(2) That I respectfully submit that I am willing and ready to remove the said lot in 5 instalments as under:--
(a) 75 Metric Tons
(b) 75 Metric tons 15 days thereafter
(c) 75 Metric tons 15 days thereafter
(d) 44 Metric tons 15 days thereafter
(e) 44 Metric tons 15 days thereafter (total 313 Metric Tons)
(3) That the said lot, which originally weighed 350 Metric Tons, has been reduced since the respondent No.1, for mala fide reasons, has illegally passed on 37 Metric Tons of the said lot.
(4) That in view of the above circumstances, the petitioner undertakes to remove the same' on the preceding conditions and if the petitioner fails to uphold his statement, the amount of Rs.500,000 (rupees Five Lacs only), which has been deposited with the respondent No.1, shall stand forfeited in favour of the said respondent."
10. On careful perusal of whole case record and considering the submissions of the learned counsel for the parties, now one of the crucial points for consideration before us is that whether in the given facts and circumstances of the case the officials of respondent No.1 were justified in auctioning the Lot No.E2/June/2004 in favour of auction purchaser Abdul Latif at the rate of Rs.15,150 per metric ton, which offer was admittedly much below the reserved price quoted by them i.e. Rs.75,17,355.
Though to justify such action approval sheet for auction held on 2-9-2006 has been placed on record by respondent No.1 to show the approval of such bid of Rs.15,150 per metric ton (total amounting to Rs.5,30,2500) by the members of the auction committee, but the fact remains that such practice can reluctantly be approved in exceptional circumstances and for valid reasons, which seems to be lacking in the instant case, particularly due to the open offer of the petitioner, still available on record. It will also be worthwhile to mention here that looking to the reserved price of the lot in the sum of Rs.75,17,335 i.e. Rs.21,478 per metric ton, fixed by the auction committee/competent authority, many intending bidders, who might be willing to buy the lot even for Rs.19,000, Rs.20,000 per metric ton may not have come forward to participate in the auction proceedings, under the impression that the lot will never be sold below its reserved price. The other disturbing feature of this case is that acceptance of bid in the sum of Rs.15,150 per metric ton by the members of the auction committee as against the offer of Rs.18,000 per metric ton given by the petitioner, has prima facie, resulted in loss of public revenue in the sum of approximately Rs.997500, therefore, in our view subsequent acceptance of bid of only Rs.15,150 per metric ton by the auction committee, on mere completion of paper work cannot be accepted as transparent and honest process of auction.
11. Considering the above noted aspects of the case, we are of the view that it is a fit case where intervention of this Court is required to save unnecessary loss to the public exchequer. Accordingly, we allow and dispose of this petition in the terms that the delivery of remaining quantity of auctioned Lot No.E2/June/2004 viz. 31.7 metric tons shall be given to the petitioner in the manner detailed in para.2 of his statement dated 4-11-2006, with the modification that last quantity to be lifted by him will be of 48 metric tons (making the total deliverable quantity to 317 metric tons) and further condition that as per requirement and conditions of respondent No.1, 25% of the total bid money will be deposited by the petitioner with the respondent No.1 within one week from the date of this order. This amount will however include the sum of Rs.500,000 already paid by the petitioner in the form of pay-order No.SP/G053523, as the action of forfeiture of such amount by the respondent No.1 is hereby set aside. In case any default is committed by the petitioner in the lifting of remaining available quantity of Lot No.E-2/June/2004 as per his own statement and this order, the respondent No.1 will be at liberty to take any further action against him in accordance with law.
12. The auction purchaser Abdul Latif, who has already lifted a quantity of 33 metric tons from the Lot No.E-2/ June/2004 at the rate of Rs.15,150 per metric ton on 8th/9th October, 2006 (as per report of the Nazir), will appropriate such quantity, and in addition to it he will also be paid by respondent No.1 a sum of Rs.50,000 towards labour charges, purportedly incurred by him in sorting out the remaining lot. Any excess amount recovered from the auction purchaser Abdul Latif by respondent No.1 will also be immediately refunded to him after deduction of price of 33 metric tons delivered to him at the rate of Rs.15,150 per metric ton.
13. The petition stands disposed of in the above terms along with other listed applications.