The learned counsel has filed this writ petition on behalf of the petitioner whereby he has challenged impugned resolution dated 18.6.2009 passed by Tehsil Council, Mailsi. Through the said resolution, the highest bid offered by ,the petitioner in auction for levying tax on transfer of immovable property was rejected declaring the bid amount as a reserve price, directed to re- auction the contract.
2. According to the learned counsel for the petitioner, under Condition No, 7 of Conditions for auctions of tax on transfer of property TMA, Mailsi, Year 2009-2010, the bid of petitioner required, only acceptance of the Nazim; Under Rule 8, the respondents were required to award contract to the petitioner being the highest bidder; Under Rule 11 neither Nazim nor the Council could refuse acceptance and confirmation. According to him, Annex-B of the writ petition which is application of Respondent No, 5, Muhammad Abid shows that he did not participate in the open auction and subsequently gave the application offering rupees four lacs more than the highest bid of the petitioner on a lame excuse. He also referred to Annex-A proceedings of Session of Tehsil Council, Mailsi, dated 18.6.2009. Refering to Item No, 35 which demonstrate that Tehsil Municipal Officer informed the house that Respondent No, 5 made offer of Rs,1,52,00,000/-, four lacs more than the offer of the petitioner. In the same resolution, it is further pointed out that Respondent No, 5 had deposited 8 lacs as call deposit No, 2031905/UBL.. According to the learned counsel for the petitioner, said resolution is illegal and without jurisdiction. The learned counsel for the petitioner referred to decisions delivered in Writ Petition No, 9460/04, C.P.No, 2170-L/2004 and 2009 SLC 180.
3. The learned counsel for the respondents referred to Rule 11(2) to contend that it was a prerogative of the House to accept or reject the bid. The learned counsel appearing on behalf of the learned counsel for Respondents No, 3 and 4 presented amendment in Rule 11 whereby sub- rule (5) has been amended and sub-rule (6) has been added to Rule 11 (Auctioning of Collection Rights), Rules, 2003.
4. I have considered the above contentions, the record referred to and relied by the learned counsel and the Rules, 2003. The judgments referred to by the learned counsel for the petitioner, in my view, are on different facts than the instant writ petition. For example, according to the facts of Saeed Ahmad Vs. TMA, 2009 CLC 180, one member of the Council informed the House that some contractor (not specifically named) had informed him that he was ready to give bid higher than the one offered by the petitioner. According to the learned Judge, it was on the basis of this sole statement that the House decided to reject the bid in favour of the petitioner and have re-auction of the collection rights for forming an opinion that there was chance of collection of more tax on transfer of immovable property. In the instant case, it is the Tehsil Municipal Officer who informed the Full House that Respondent No, 5 had not only made offer, he also deposited Rs,800,000/- as call deposit. So in the instant case, the offer was more definite, express and the House was informed formally by an officer of the Administration. It was not from one member who had been informed by some contractor without any name, etc. It is further pointed out in para-7 of the precedent judgment that-- 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."
Obviously, the facts stated in the preceding Para show that the situation is different in the, instant writ petition. The T.M.A. is not likely to suffer any loss in case the offer of Respondent No, 5 or anybody else is accepted and contract is re-auctioned. The decision in the Writ Petition No, 9460/04 was challenged in the Hon'ble Supreme Court in Civil Petition No, 2170-L of 2004, therefore, discussion on Writ Petition No, 9460/04 is not necessary. The facts of the said case are that an open auction was held on 9.4.2004. The bid was approved by the Council; and Council recommended the same for acceptance. The Tehsil Municipal Administration also encashed deposit-at-call submitted by the successful bidder prior to the auction. On 12.5.2004, one Muhammad Yousaf submitted an application before the Tehsil Nazim on 12.5.2004 (Auction was held on 9.4.2004) that means nearly after more than a month that he was not registered at the time of auction and thus could not participate in the auction proceedings and now he had obtained registration, he was willing to offer a sum of Rs,5,12,00,000/- against amount of successful bidder Rs,4,87,00,000/-. The Hon'ble Supreme Court observed that said Muhammad Yousaf was not even qualified to participate in the auction proceedings as he was not a registered contactor at the time of auction, therefore, he had no locus standi. Moreover, the Hon'ble Supreme Court observed that the Council rejected the bid of the successful bidder on intervention of Muhammad Yousaf, malafidly who was not even qualified to participate in the auction proceedings. Obviously that is not the case in the instant writ petition.
5. Coming back to the recent judgment relied upon heavily by the learned counsel for the petitioner, Saeed Ahmad Vs. TMA, Mian Channu, 2009 CLC 180. The learned Single Bench held that the petitioner no doubt was the highest bidder and under Rule 8 read with Rule 11, his bid had to be approved by the Auctioning Committee and then accepted by the Nazim, which in fact was done.
The learned Single Bench further held, "in view of the above admitted position, the House cannot be allowed to frustrate a lawful process in arbitrary manner merely on the pretext that some one had showed willingness to give highest bid."
6. As stated in the preceding para, in the instant case, it was not some one or some contractor who had approached the one member of the House with a better offer. The House was informed of offer by relevant authority which was duly considered by the House, therefore, in my opinion the council did not act in an arbitrary manner, etc.
7. In a recent judgment of this Court delivered by a Division Bench, I.C.A. No, 201/2009, dated 27.5.2009, it has been held that 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. It may be pointed out that, in my view, acceptance of Nazim and confirmation by the Council is followed by a proviso which provides two conditions i,e, reasonableness of the bid and no scope of its further enhancement. It is further pointed out that colon between words '"confirmation" and "provided" show that conditions are mentioned in the same sentence. Grammatically a sentence is completed or. broken from other sentence with a "full stop" and not by a colon. Therefore, the power of Nazim or Council is subject to these two conditions. The same judgment has also held that Rule 11 gives full power to the Council to accept or reject the bid duly recommended by the Auction Committee for the reasons to be recorded in writing. Enhancement of bid exist in the instant case as offered by Respondent No, 5.
8. According to the same judgment, Rule 11 requires that once the offer or bid is accepted by the Council, it shall not be repudiated after entering into agreement. No such power is expressly or impliedly conferred upon the Nazim. According to Rule 13, which is not referred to by the learned counsel for the petitioner or respondents, as soon as the confirmation from the council about the acceptance of bid is received, the Local Government Administration shall communicate the acceptance of the bid to the contractor. It is hinted at that the Local Government has not been bound in the similar way by acceptance of the Nazim, the way it has been bound by confirmation of the council. In the light of the above discussion, it is further held that a bid accepted after first attempt or third attempt is not complete unless the procedure given under Rules 11 and 13 is completed. Briefly, the procedure given in the above discussed rules can be summarized. 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.
The language of Rule 13 further strengthens the above 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."
The learned counsel for the petitioner was, probably not aware that through Notification No, SOV(LG)5-23/2003, dated 3.6.2008, amendment has been made in sub-rule (5). And new sub-rule
(6) has been added. Now according to sub-rule (5), if the Council accepts, an offer or bid of a contract and enters into an agreement with the contractor, it shall not repudiate the agreement. In sub-rule (6) it has been provided that if the Government is satisfied that the auction has not been conducted in accordance with the rules or in a transparent manner, it may repudiate the agreement and the responsible officer may be proceeded against under the law. The reading of these two sub-rules shows that Council cannot repudiate the agreement once Council accepts an offer or bid of contract and enters into an agreement with the contractor. It does riot mention any role in the above context of a Nazim. Moreover, under sub-rule (6) Government has been empowered to repudiate the agreement even after acceptance of offer or bid by the Council and entering into an agreement with the contractor. Again no mention is made of Nazim in context of the authority, competent to accord final acceptance/ approval or repudiation of the agreement.
9. In a similar case, the Hon'ble Supreme Court of Pakistan held while discussing the Punjab Local Government Ordinance (Tax) Rules, 1990, which are in pari materia, with the Punjab Local Government (Auction of Collection Right), Rules, 2003, that auction proceedings are subject to the approval/confirmation of the Council. It may be pointed out that in the said case, the Local Government was dissolved and powers of Local Council were being exercised by the Government/Minister. The Court declared that merely by participating in the auction and giving the highest bid a person does not acquire any vested right. 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 send to she Government for approval was rejected by the Minister for Local Government for cogent reasons directing re-auction of the lease right. (Javed Iqbal Abbasi Vs. Government of Punjab, 1998 SCMR 1433).
10. In my humble view, the above referred judgment of the Hon'ble Supreme Court clinch the proposition that merely by participation in an auction and giving the highest bid, one does not acquire any vested right.
11. As a result of above discussion, reasons/grounds, this writ petition is dismissed.