' The learned counsel has filed this I.C.A. On behalf of the appellants to call in question order of the learned Single Bench of this Court, dated 20-3-2009. The said order was passed in Writ Petition No,1908 of 2009.
2. The respondent applied for contract to collect tax on transfer of immovable property, which was advertised in a local newspaper for the period commencing from 1-1-2009 to 30-6-2009. In the auction, the offer of the respondent of Rs,3,85,00,000 was accepted being the highest.
3. The respondent was also informed that the amount of C.D.R. Of Rs,39,31,375 and a sum of Rs,13,80,000 the 2% security for the last year of 2007-08 which was lying with the appellants would also be included and 1/10th of the bid money and 2% security for the year 2009 would be adjusted against the new bid. However, the respondent was not issued the work order. Whereupon the respondent filed Writ Petition No,1908 of 2009 which was allowed vide impugned order, dated 20-3- 2009.
4. The learned Single Bench observed: "It is not denied by the respondents that the petitioner was the highest bidder in the auction held by it. It is also not denied that the counsel made three earlier attempts to auction the contract for one year but failed to attract any bidder. The Town Municipal Administration decided to advertise the contract in the newspaper on 7-1-2009 and held the auction on 14-1-2009 in which the bid of the petitioner being the highest was accepted. However, it was subsequently declined. It is worth-noting at this juncture that for the first six months, the staff of the respondents made collection of the tax which according to the petitioner came to Rs,3,15,00,000. This has not been denied by the respondents. For the previous year the contract was awarded to the petitioner at Rs,6,90,00,000 whereas for six months the reserved price is fixed in excess of Rs,7 crores, based on the new evaluation table which is not the mode provided under the law for fixing reserve price". The learned Single Bench further held as under:--- "The petitioner no doubt was the highest bidder and under Rule 8 read with Rule 11 his bid had to be accepted by the Nazim as well as Tehsil council and his bid could be rejected only if it was below the reserve price which in the instant case was fixed arbitrarily and without adopting the procedure provided under the law."
5. We have considered the order of the learned Single Bench, the record of the case and relevant rules very carefully. Chapter 3 of the Punjab Local Government (Auctioning of Collection Rights)
Rules, 2003 deals with the subject. According to Rule 8, the contract of collection rights of an 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 2. Chapter 2 consists of Rules 5, 6 and 7 which provide the procedure i,e, a public notice for conduct of an auction in at least two National Newspapers, copy of notice to be placed on notice board of office of the Local Government, concerned, etc., time and date of the auction in the said notice. Rule 6 requires preparation of statements of eligible participants. Rule 7 requires that auction shall start after commencement and delivering the copy of terms and conditions of the contract.
' Coming back to Chapter 3; Rule 9 requires that a reserve price shall be fixed. The reserve price for an income shall be the average of last preceding three years income of the respective Local Government. According to Rule 10, at least three attempts shall be made to award the contract of collection rights of income through open bid by the Administration of Local Government concerned before the commencement of the financial year, if the first and second attempts of auction have failed to fetch bid equal to the reserve price or more. According to Rule 11, if the bid received in open auction is less than the reserve price, it shall be rejected by the Nazim concerned and the contract shall be re-auctioned in the prescribed manner. However, the highest bid, equal to reserve price or above shall be accepted by the respective Nazim and placed before the Council concerned, within 10 days of receipt of bid for confirmation: Provided that bid so received was reasonable and there was no scope of its further enhancement. Rule 11 also gives full power to the Council to accept or reject the bid duly recommended by the Auctioning Committee for the reasons to be recorded in writing. According to the same rule, the offer or bid once accepted by the Council concerned shall not be repudiated after entering into agreement. According to Rule 13, as soon as the confirmation from the Council about the acceptance of bid is received, the Local Government administration shall communicate the acceptance of bid to the contractor immediately by a letter through a special messenger. Under Rule 13, in case the contractor does not turn up to deposit dues recoverable from him in the light of terms and conditions of auction, it shall be presumed that the contractor is no more interested in the contract and the contract shall automatically stand cancelled and the deposits made by the contractor shall stand forfeited.
6. In the instant case, the emphasis of the learned counsel for the respondent is that he was declared the highest bidder after three attempts, therefore, procedure given in Rules 11 and 13 is not applicable in the instant case. According to him, in the facts and circumstances of the instant case, Rule 10 is applicable independent of other rules i,e, 11 and 13. According to the learned counsel, the appellants were bound to issue him work order as he successfully participated in the auction.
Therefore, the order of the learned Single Bench is correct and the instant appeal is not tenable; contended by the learned counsel of the respondent.
7. According to the learned counsel for the appellant, the report and parawise comments submitted by the appellants were not considered by the learned Single Bench and impugned order was passed without considering the legal position submitted in the report and parawise comments. Thus, the impugned order is based on non-reading and misreading of the material documentary evidence as well as provisions of the law. According to him, reserve price of the auction was Rs,7,86,27,500 which was less than the reserve price, hence the impugned judgment is liable to be set aside. The learned counsel for the appellants further submitted that all rules provided under Chapter 3 are to be read together otherwise the procedure of auction cannot be completed.
8. Rule 10 requires that at least three attempts should be made to award the contract of collection rights if the first and second attempts of auction have failed to fetch bid equal to the reserve price or more than as mentioned in Rule 9. It does not say that at the conclusion of third attempt the Local Government administration is bound accept the bid and to issue the work permit. Moreover, a bid accepted after first attempt or third attempt is not complete unless the procedure given under Rules 11 and 13 is not completed. We attempted several times to extricate from the learned counsel for the respondent the source of his belief on basis of which he urged that provisions of Rules 11 and 13 are not applicable in the instant case but he could not offer one.
'Chapter 3 provides legal basis for different stages of procedure of awarding contracts. The whole procedure given in Chapter 3 is essential to complete a process for granting of any valid contract.
Once the procedure under Rule 10 is completed, offer of the highest bid equal to reserve price or above, the matter is referred to the respective Nazim to place it before the Council concerned within 10 days of receipt of bid for confirmation. According to sub-rule (2) of Rule 11, even there is a restriction on the Council to confirm the bid, it can only confirm the bid if it is reasonable and there was no scope of its further enhancement. Sub-rule (3) of Rule 11 further clarifies the situation while mentioning that council 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. Thus, we have no doubt in our mind that ultimate power to accept or reject a bid rests with the council and not with any Committee or Local Administration of a Local Government, i,e, appellants Nos.1 and 2 in the instant case. The language of Rule 13 further strengthens our view, which reads as under:--- "As soon as the confirmation from the Council about the acceptance of bid or offer is received, the Local Government administration shall communicate the acceptance of bid or offer to the contractor immediately by a letter through special messenger."
' In a similar case, the Honourable Supreme Court of Pakistan clearly held while discussing the Punjab Local Council (Tax Rules), 1990 which are in pari materia with the Punjab Local Government (Auctioning of Collection Rights) Rules, 2003 that auction proceedings are subject to the approval/confirmation of the Council. It may be pointed out that in precedent case, the Local Government was dissolved and powers of Local Council were being exercised by the Government/Minister. The Honourable Supreme Court declared lawful, the decision of the Government/Minister for re-auction. After discussing at length the case law from the Honourable Supreme Court it was clearly held that merely by participating in the auction and giving the highest bid the appellant does not acquire any vested right. For benefit of all, the relevant portion is reproduced as under:- "We are, therefore, of the view that by merely participating in the auction and giving the highest bid the appellants did not acquire any vested right to get their bid accepted as the highest bid in the auction was subject to the approval of Zila Council which at the relevant time was not functioning and the highest bid sent to the Government for approval was rejected by the Minister, Local Government for cogent reasons directing re-auction of the lease right". (laved Iqbal Abbasi v.
Province of the Punjab and others 1996 SCMR 1433)
9. In, view of our above detailed discussion and reading of the relevant rules, we allow this appeal.
Resultantly, the order of the learned Single Bench dated 20-3-2009 delivered in Writ Petition No,1908 of 2009 is set aside and declared of no lawful effect.