Through this writ petition, the petitioner has challenged the resolution dated 02.07.2008 whereby the Tehsil Council; Mian Channu did not award the contract to the petitioner about collection of tax rights.
2. The admitted facts of the case are that for the auction of collection rights of tax on immovable property, the respondent Tehsil Municipal Administration, Mian Channu, flashed an advertisement and the petitioner along with so many others participated in the auction proceedings. It is also admitted fact that out of ten contestants/bidders the petitioner offered the highest bid to the tune of 1,54,00,000/- and then after approval of the above bid of the petitioner by the Auction Committee, the Tehsil Nazim also accorded approval, but the dispute erupted when the Tehsil Council in its meeting held on 02.07.2008 resolved that there as there was a chance of enhance bid, therefore, the earlier bid in favour of the petitioner was cancelled and fresh auction was ordered.a
3. Pursuant to the order of this Court, the report and parawise comments have been filed by the respondent Council.
4. It is contended by learned counsel for the petitioner that out of ten total persons who participated in the bid, the petitioner turned out to the highest bidder, his bid was approved by the Auction Committee as well as Tehsil Nazim and that although in terms of Rules 11(2) and 11(3) of the Auctioning of Collection Rights Rules, 2003 the Council could refuse to accept the auction, but such power could not be used arbitrarily and such power could be exercised only when the auction is unreasonable and also when there is scope of further enhancement of bid offer. According to the learned counsel both the above ingredients are missing in the case in hand.
5. In response to the above arguments of learned counsel for the petitioner, the learned counsel appearing for the respondents contends that House of Tehsil Council Mian Channu had exercised its legal powers vested upon them under Rule 11(3) of the Punjab Local Government (Auctioning of Collection Rights) Rules, 2003.
6. Before proceeding further the relevant provision i,e, 11(2) and 1 1 ( 3) of the Punjab Local Government (Auctioning of Collection Rights) Rules, 2003 are quoted: "11. Acceptance of bid.
(1) The bid received in open auction, if less that the reserve price, shall be rejected by the Nazim concerned or the person authorized by him in all cases and the contract shall be re-auctioned in the prescribed manner.
(2) The highest bid, equal to reserve price or above, received in open auction shall be accepted by the respective Nazim and placed before the Council concerned within ten days of receipt of bid for confirmation: provided that bid so received was reasonable and there was no scope of its further enhancement in view of the concerned Local Government administration.
(3) The Council concerned shall have full powers to accept or reject the bid duly recommended by the Local Government administration for the reasons to be recorded in writing."
Now, keeping in view the above quoted provision, when the proceedings of the House are analyzed, it indicates that one member told the House that some Contractor (not specifically named) had informed him that he was ready to give the bid highest then the one offered by the present petitioner. It was on the basis of this sole statement that the House went ahead to resolve for rejecting the bid in favour of the petitioner and for re-auction of the collection rights for forming an opinion that there is chance of collection of more tax on transfer immovable property. Rule 8 of the above Rules, 2003 provides that contract of collection rights for the income of a Local Government shall be awarded to a highest bidder through an open bid by adopting the procedure of auction, as laid down in Chapter-II. The above quoted Rule-11 provides that where the bid received is less than the reserve price, the same shall be rejected by the Nazim. Sub-rule (2) of Rule 11 provides that highest bid equal to reserve price or above received in open , auction, shall be accepted by the respective Nazim and placed before the Council concerned within 10 days of receipt of the bid for confirmation provided that bid so received was reasonable and there was no scope of its further enhancement in view of the concerned Local Government Administration. The petitioner, no doubt, was the highest bidder and under Rules 8 read with Rule-11, his bid had to be approved by the Auction Committee and then accepted by the Nazim, which in fact was done. While doing so, neither before the Auction Committee nor before the Tehsil Nazim any objection was raised or apprehension expressed about the amount of bid offered by the petitioner. It is not the case of the respondent Council that proper publicity was not given or that there was any other-illegality or irregularity in the process of earlier auction. In view of the above admitted position, the House cannot be allowed to frustrate a lawful process in an arbitrary manner, merely on the pretext that some one had showed willingness to give highest bid, because if such a practice is allowed to be followed, there will be hardly an end to bid process, and whenever, subsequently some one (he may not even be the participant of the bid or even the-looser of the said bid) thinks to frustrate the earlier bid, he can easily influence any member of the House, especially when no element of collusion or fraud was asserted before the House.
7. Furthermore, the Tehsil Municipal Officer, Mian Channu, present in Court, when questioned about how much increase in the tax was detected during this process, he after consulting the record prepared a rough table and pointed out that in fact from 1st of July to 11th of August, 2008 there was a shortfall of Rs, 3,17;444/-, which means that actually the respondent T.M.A has suffered loss.
In view of this tabulation, the sole ground which weighed with the House to reject the earlier bid i,e, expectation of increase, is also no more available to the Council.
8. For what has been discussed above, if the auctions held openly are allowed to be nullified, then there would be no end to this exercise and people will keep on coming with offers of higher amounts in order to oust their adversaries. This practice is not permissible under the rules; equity or justice. It thus held that highest bid of the petitioner was rejected on extraneous considerations and the resolution of the House dated 02.07.2008 has been passed without lawful authority. The Tehsil Municipal Administration shall award contract to the petitioner forthwith, subject to terms and conditions of action, already agreed by the parties and subject to the provisions of Punjab Local Government (Auctioning of Collection Rights) Rules, 2003.