' GHULAM RABBANI, J.---This appeal with leave of the Court is directed against the short order dated 31-3-2009 followed by reasons dated 3-4-2009, whereby a Division Bench of High Court of Sindh allowed Constitution Peition No, D-415 of 2006 filed by respondents Nos. 1 and 2 herein.
2. Briefly stated, the relevant facts of the case are that in an auction proceedings held on 1-2-2006 for leasing out disputed land out of Agro Forest lot Nos. 88, 96 and 104, respondents Nos. 1 and 2 were declared highest bidders and the proceedings were placed before the Chief Conservator of Forest, being competent authority, for approval as per requirement; but, vide letter dated 19-6- 2006, he ordered that the land be auctioned afresh after making wide publicity, since there were complaints in respect of earlier auction ensuing litigation. The respondents Nos. 1 and 2, however, were capable to deposit, in the meantime, one year's lease money on challan issued by- respondent No,6. Fresh auction took place on 1-7-2006 in which the appellant came out to be the highest bidder and lease was granted to him for 5 years. A lease deed was executed in his favour on 2-9-2006 and the possession of the land, as stated, was handed over to him. On 8-11-2006, respondents Nos. 1 and 2 challenged re-auction of the land in favour of appellant by way of Constitution Petition No, D-415 of 2006 claiming that they have been in cultivation possession, therefore, their possession be also not disturbed. A Division Bench of High Court of Sindh heard the matter and allowed the petition of the respondents Nos.1 and 2 with the directions to respondents Nos. 3 to 6 herein, to complete the requisite formalities in favour of respondent Nos.1 and 2 and execute the agreement within one month vide judgment, impugned herein.
3. Perusal of the impugned judgment reflects that learned Division Bench of High Court allowed the Constitution Petition filed by respondents Nos.1 and 2 with observation that:-- "There is no material placed before this Court by the Department, which could substantiate the fact that the highest bid of the petitioners was not confirmed either by the respondent No,2 or any other authority. Moreover, it is the common practice and knowledge that the Forest Department can never issue a challan without first seeking approval from the Chief Conservator, therefore, the Respondent No,2 while permitting re-auction on 19-6-2006 has not referred to the earlier auction and or its non-confirmation. In law, a contract stands concluded if three ingredients are fulfilled.
One is the offer, the other is the acceptance and third one is the consideration. In the case in hand, the official respondents have invited the bid which is an offer and in response to the offer, petitioners gave bid, which bid was declared to be the highest bid and such bid was accepted and the bid amount was paid through challan issued by the Department. All the aforesaid acts construe that the contract between the petitioners and the respondents Nos. 2 to 4 stands concluded. The non- execution of an agreement between the petitioners and respondents Nos.2 to 4 is a formality which would not invalidate the concluded contract. The contract cannot be avoided by the Department by holding re-auction pursuant to the order of the Respondent No,2, impugned in these proceedings".
4. Contention of learned counsel for appellant is that the auction proceedings in which the respondents Nos. 1 and 2 were declared highest bidders were subject to approval of competent authority; however, no approval was accorded. Rather, the competent authority ordered for re- auction, therefore, no concluded contract in favour of the respondents Nos. 1 and 2, could be construed as creating any right in their favour. In support, he referred to the Sindh Agro Forestry Lease Policy, 2004 (hereinafter referred to as the policy). Next contention of learned counsel is that in fresh auction, the respondents Nos. 1 and 2 had not participated in the auction proceedings as a consequence whereof the appellant was leased out the disputed land being the highest bidder.
Even otherwise, learned counsel stated that the appellant being Mohagedar had a preferential right to the grant of lease as per Policy ibid.
5. On the other hand learned counsel for respondents Nos. 1 and 2 has challenged the fresh auction and in that put up a defence that since the respondents Nos.1 and 2 having been declared highest bidders, had deposited in cash lease money for 1 year on the challan issued by the concerned Officer of the Forest Department, presumption, therefore, would be that the auction proceedings were approved by the competent authority. Even otherwise, learned counsel expressed that the formal approval, in the circumstances, could alone be an indoor arrangement not affecting the right of respondents as highest bidders. The other ground taken by him is that a vested right stood created in favour of respondents Nos.1 and 2, therefore, it was all the more necessary that before the orders for re-auction were passed, the respondents Nos. 1 and 2 ought to have been heard. In support he placed reliance on a case reported as 2009 SCM R 1055.
6. We have gone through the Sindh Agro Forestry Policy, 2004 which, was promulgated by the Government of Sindh in pursuance of the decision of the Cabinet and in exercise of its powers under section 5(32) of the Forest Act, 1927 vide notification dated 15-2-2005 (available at pages Nos. 68-72 of the paper book). Para 8(4) thereof reflects that the highest acceptable bid shall be subject to approval of the competent authority as per financial rules. In this case the admitted position is that there is nothing on record to show that approval was ever given to the earlier auction by the competent authority; rather, it is not a case of respondents Nos. 1 and 2 that competent authority had, in black and white, approved their bid at any stage; therefore, notwithstanding the deposit of lease money by respondents Nos. 1 and 2 for one year, in our view, no concluded contract could be construed in their favour. With respects, it may be stated that the observation of learned Division Bench of High Court, noted herein above, is therefore, misconceived. The contention of learned counsel that since in earlier auction the respondents Nos.1 to 2 came to be highest bidders and they had deposited lease money, it created in them a vested right to be heard before ordering re-auction of the disputed land, is also not tenable since there was no approval of their bids and no such an agreement of lease as per policy vide para 10 thereof was executed in their favour. We have gone through the judgment cited by learned counsel for respondents and find that the same is in different circumstances, therefore, not applicable to the case of the respondents Nos.
7. Now coming to the case of appellant, the facts, as they stand out conspicuously, are that the appellant came out a successful bidder; his bid was approved by the competent authority; a lease deed creating rights inter se was executed in his favour on 2-9-2006 (available at pages 80 to 86 of the paper book); he being Mogador undeniably is entitled to be preferred for grant of lease as per para 8(5) of the policy ibid; lease was granted to him at the rate higher to that on which it was earlier auctioned in favour of respondents Nos. 1 and 2 and that the period of lease in favour of appellant which commenced from Kharif 2006-2007 ending Rabi 2010-2011, has patently, been enjoyed by him with only small portion thereof now remaining. In the circumstances, we are of the considered view that the appellant has made out a good case in his favour.
8. Considering the foregoing, we allow this appeal and set aside the impugned judgment with no order as to costs.