' MUSHIR ALAM, J.---Through this constitutional petition, petitioners have impugned the letter dated 27-1-2007 cancelling the auction issued by respondents Nos.1, 2, 3 4 and 6 being illegal, unlawful, unjustified and of no legal effect.
1. Brief facts of the case germane to the decision of instant petition appear to be that the petitioner was successful bidder in an open auction held on 20-7-2006. Consequently the petitioners paid the entire consideration in the manner stated in the acceptance letter dated 17-9-2006.
2. It is stated that the Inter City Bus Terminal was inaugurated on 18-11-2006 and, physical possession of the cafeteria for passengers on ground floor at Yousuf Goth Inter City Bus Terminal, Baldia Town, Karachi in the main Terminal Building as shown at Sr.No,11 of the advertisement was handed over to the petitioners. It is the case of petitioners that they started their business and out of the blue impugned notice dated 27-1-2007 for cancellation and withdrawal of auction proceedings were issued.
3. It was contended by Mr. S. Masroor Ahmed Alvi, learned counsel for the petitioners that a binding contract had come into being after acceptance of offer as mentioned in the auction publication followed by acceptance and approval by the worthy City Nazim CDGK on 7-9-2006. He has stressed relying on section 2(f) of the Contract Act that once offer is accepted and consideration has passed, binding and enforceable contract came into being. It was urged that contract cannot be cancelled without there being any breach or any just cause or reason.
4. Mr. Manzoor Ahmed, learned counsel appearing for CDGK, disputes the contention of petitioner's counsel. According to him, no concluded contract was arrived at. Firstly, for the reasons that CDGK reserved to itself all rights to cancel/reject any bid without assigning any reasons. It was therefore, urged that pursuant to the reservation of such right, CDGK was well in its authority to cancel the auction through impugned notice dated 27-1-2007. It was secondly urged that neither formal agreement was signed nor executed nor the possession was handed over and the petitioners are occupying the premises in question unauthorizedly and in excess of area auctioned. It is stated that after inauguration of the said Bus Terminal, heavy influx of passengers was noticed which was beyond the expectation of CDGK and since there was no provision for Pardah observing womenfolk of the northern part of Pakistan, it was necessitated to provide provision for such category of passengers.
5. We have heard the arguments advanced by learned counsel for the parties, perused the material available on record.
6.
6.Admittedly: the auction was held on 27-7-2006. We have examined the terms and conditions on which the auction was held appearing at page 15 of the Court file. The premises subject matter of instant petition is mentioned at serial No,11 as passenger's cafeteria measuring 344 square yards (3095 square feet) reserved price Rs,4000 per square yards for 10 years lease, monthly rental Rs,5 per square feet, security deposit 500,000 some of the relevant conditions of the auction were (i) that the premises shall be auctioned on 10 years lease and monthly rental value shall be fixed on square foot basis, (ii) successful bidder shall pay the annual rent in advance and rent shall be payable from the date of possession, all terms and conditions of tenancy shall be as per relevant law, (iii) Rental shall be payable in advance from the date of possession, (iv) 25% was payable on the fall of hammer, (v) highest bidder whose bid is accepted by the auction committee as constituted by the City Nazim, CDGK on acceptance of the bid shall deposit the second instalment of 25% of the occupancy value and (vi) within four months, whether demanded or not shall deposit the balance 50% of the entire occupancy value (vii) CDGK reserve right to reject an offer or bidwithout asinine any reasons.
7. It is an admitted position that the entire occupancy value of auction, has been paid through Challans dated 4-9-2006, 19-9-2006 and 29-12-2006, Annexures C, D and E respectively pages 19 to 23 of the Court file. Mr. Manzoor strenuously relied upon the last condition of the auction notice as reproduced and under lined above.
8. Admittedly the petitioners were successful bidders and in accordance with terms of publication, successful bidder whose bid is accepted by competent authority, was required to pay the balance 50% consideration. Through acceptance letter dated 7-9-2006, petitioner was informed, that the 'The Honourable City Nazim CDGK has been pleased to approve/ accept your bid @ Rs,9500 per square yard for the above auctioned on 9-8-2006 for commercial purpose. The land will be chargeable @ Rs,5 per square feet per annum (subject to revision) (page 17 of the file). After the detail of amount payable within 30 days, it was also cautioned "In case of nonpayment of the amount within stipulated period the sale of the plot shall be cancelled and 25% deposit will be forfeited." The amount demanded was admittedly paid within due date.
9. To a specific question as to the cutoff date till which the CDGK retained the right to revoke the offer, Mr. Manzoor, learned counsel for CDGK, while relying on the last clause referred to above, contended that CDGK could cancel or revoke the bid without assigning any reason at any time. We are afraid such brazen discretion cannot be left to be exercised by the public functionary like CDGK.
We have no cavil to the proposition that authority may reserve to itself right to accept or reject bid/offer without assigning any reason, provided such authority is exercised with circumspection, due care and utmost responsibility. Such reservation of authority to reject the bid does not clothe the public functionary with brazen and arbitrary power to reject the offer merely because it possesses such power and or .That it reserved to itself such power. Such right or reservation to cancel or revoke the bid could only be retained till the offer is not accepted by the competent authority as reserved under the invitation to offer. Once that stage is crossed and the competent authority approves the bid/offer a binding contract comes into being. Signing of the formal agreement etc. Is but procedural requirements. It may be observed that CDGK performed its functions and discharge its duties and exercise the power and authority under the SLGO, 2002.
Unlike private individuals, CDGK being public functionary has to exercise its authority with all care and diligence. Once offer is invited on stated terms and conditions adherence to representation and commitment is obligated upon such functionary. Onerous responsibility is cast upon public functionary to establish and regain its credibility and public trust and confidence in discharge of its public duties and functions which is fast eroding. There is serious dearth of credibility in the public functionaries. All possible efforts should be made by the public functionary to live up to commitments and representation made by it and adheres to the commitment and live up to the expectation of the common citizen in the realm of contractual obligation committed by it in discharge of its statutory duties.
10. We were not persuaded to with Mr. Manzoor learned counsel for the CDGK that such right could be exercised any time by the CDGK. As observed above the discretion and right reserved to reject bid or offer are to be exercised fairly, equitably and before the acceptance by the competent authority, once bid is accepted by the competent authority, no more discretion to cancel the auction is retained by the authority. We are therefore; of the considered view that the impugned notice dated 27-1-2007 cancelling the auction is unwarranted and cannot be sustained. The petition is accordingly allowed. However, if the petitioner is found to be in possession any area in excess as claimed by Mr. Manzoor, then CDGK will be within its right to recover the same and claim and recover charges for use of such excess area and take such action as may be permissible under law.