' TARIQ SHAMIM, J.--- Tax was levied by the Tehsil Municipal Administration, Chiniot, District Jhang on transfer of immovable property. The contract to collect tax is awarded in terms of the Punjab Local Government (Auctioning of Collection Rights) Rules, 2003. Auction for awarding contract for collection of the aforementioned tax was held on 14-6-2008 under the supervision of the Auction Committee and the petitioners' bid of Rs,2,52,15,000 being the highest was accepted and through letter, dated 27-6-2008 the respondents conveyed approval to the petitioner. The petitioner was directed to deposit certain amounts apart from the deposit-at-call submitted by the petitioner and encashed by the respondents. On receipt of the letter, the petitioner sought permission of the respondents to deposit the requisite amount but the respondents did not accord the permission and verbally informed him that the Tehsil Council had not confirmed the auction. However, he subsequently, came to know through his own source that one Haji Zabita Khan, who had not participated in the auction, had given an offer of Rs,2,80,00,000 for the same contract and the Tehsil Nazim was inclined to award the contract to him by holding fresh auction. Being aggrieved thereof, the instant petition has been filed by the petitioner.
2. Notice was issued to the respondents and report and parawise comments were furnished by them. The parties have been heard at length and the relevant documents have also been perused.
3. According to the learned counsel for the petitioner, the bid of the petitioner, being the highest, was approved by the Sub-Committee and recommended for acceptance by the Auction Committee. The deposit-at-call submitted by the petitioner was encashed by the Administration, however, later on Haji Zabita Khan, a front man of the Tehsil Nazim, made an offer of a higher amount and the Tehsil Administration taking into consideration the said offer, declined to award the contract to the petitioner which could not have been done under the law being not permissible.
It was argued by the learned counsel that the said Haji Zabita Khan had failed to participate in the auction and consequently he could neither seek nullification of the open auction nor the Tehsil Municipal Administration was empowered to do so. It was also argued by the learned counsel that the petitioner's bid was the highest and above the reserve price fixed by the respondents and that the auction proceedings had been conducted in a most transparent manner by the Auction Committee and therefore, the Tehsil Municipal Administration was legally bound to award the contract to the petitioner.
4. On the other hand, the learned counsel representing the respondents contended that the petitioner could not challenge the decision of the Tehsil Council as it had the right to reject the bid made by the petitioner and that it was in the interest of the public to obtain the highest bid for the contract. It was also argued by the learned counsel that approval was not accorded by the Tehsil Council and consequently the bid was not finally accepted and the Tehsil Council was fully empowered to under Rule 11 of the Punjab Local Government (Auctioning of Collection Rights)
Rules, 2003 to order fresh auction.
5. The Local Council is authorized under the law to collect tax through award of contract for a period not exceeding one financial year and the contracts for collection of taxes etc. Are to be granted through open auction as provided in Rule 8 of the above referred Rules. The sub-Rule (2) of Rule 11 provides that the highest bid equal to or in excess of the reserved price shall be accepted by the Nazim and placed before the Council within 10 days for acceptance. Admittedly the petitioner was the highest bidder whose bid had been accepted by the Nazim which is evident from the letter dated 27-6-2008. The bid was made by the petitioner in the open auction and had been accepted by the Auction Committee which recommended its approval/acceptance. It has been noticed that a substantial number of bidders had come forward to participate' in the auction and the Tehsil Municipal Administration being fully satisfied with the proceedings did not call upon the three highest bidders for negotiation to increase the amount. However, the Nazim of the Tehsil Municipal Administration entertained the offer of Haji Zabita Khan and on basis thereof the Tehsil Council declined to accept the bid of the petitioner and directed fresh auction. The said Haji Zabita Khan is allegedly the front man of the Nazim. Although the allegation has remained unsubstantiated, yet the circumstances reflect that all is not well as has been portrayed by the respondents. The procedure adopted by the Council for holding fresh auction on basis of offer made by Haji Zabita Khan is not only noval but also not supported by the law as this is not a valid consideration on which a bid submitted by the contractor can be rejected. There is nothing on the record to even remotely suggest that the auction proceedings were not transparent or that there were some other flaws in the proceedings. Further, the Tehsil Municipal Administration falls within the definition of "Government" and being so it is required to deal with persons who transact business with it in a just and a fair manner so as not to lose trust of the public. In the instant case the decision of the Tehsil Council and its Nazim to hold fresh auction is not above board. If public auctions are allowed to be nullified on the basis of a subsequent offer, then there would be no end to this exercise as people would continue to come up with better offers even for personal reasons. The Honourable Supreme Court of Pakistan in an unreported case titled Tehsil Municipal Administration and others v.
Chaudhry and Co. And another (Civil Petition No,2170-L of 2004) has observed as under:--- "(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 powers within the given rules 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 fides crept in and was rightly set at naught by the High Court."
6. In view of what has been discussed above, this writ petition is allowed and the decision of the Tehsil Municipal Administration, Chiniot, whereby the highest bid offered by the petitioner was not accepted on extraneous considerations, is declared to be without lawful authority and of no consequence. The Tehsil Municipal Administration shall forthwith award the contract to the petitioner for the year in question subject to terms and conditions already settled between the parties.
' There shall be no order as to costs.