SHABBIR AHMED vs KIRAN KHURSHEED and 8 others

' SYED MANSOOR ALI SHAH, This judgment will decide this writ petition along with the following writ petitions, as they raise common questions of law and facts:- --

(i) Writ Petition No, 20259 of 2011 titled Messrs Pakistan State Oil .Company Ltd. v. Province of Punjab and others

(ii) Writ Petition No, 18356 of 2011 titled Muhammad Waheed v. Government of the Punjab and others

(iii) Writ Petition No, 16843 of 2011 titled Shabbir Ahmed v. Tehsil Municipal Administration and others

2. The facts narrated by Messrs Pakistan State Oil Ltd. ("PSO")1 are that on 20-5-1961 one Messrs Standard Vacuum Company Ltd, Karachi was granted lease of vacant plot ("PLOT") close to the General Bus Stand, District Sheikhupura by the Municipal Corporation, Sheikhupura at an annual rent of Rs,2,250/-. The said company took over the vacant possession of the PLOT and set up a petrol pump on the said premises under the name and style of "Moonlight Filling Station". {{FOOT NOTE}} Petitioner in Writ Petition No,20259 of 2011.

' Later on the said company merged into PSO in the year 1981 and thereafter PSO has continued as a lessee of the aforesaid Municipal Corporation and later on of the respondent TMA, Sheikhupura (successor in interest of the Municipal Corporation). He further contended that one Shabbir Ahmad2 was appointed as authorized dealer of PSO on 1-8-2007. The major investment in setting up of the petrol pump has been of PSO, however, the new dealer has also constructed some office rooms attached to the existing petrol pump. He submitted that extension of the lease of the PLOT in favour of Shabbir Ahmad in the year 2007 is actually an extension granted in favour of PSO, as Shabbir Ahmed is the authorized dealer/agent of PSO. In any case PSO or its dealer Shabbir Ahmad remained tenants of respondent TMA, Sheikhupura till the impugned advertisement for public auction was published on 6-7-2011. The Lease Agreement ("Agreement") entered with Shabbir Ahmad in the year 2007 was for a period of five years, which is yet to expire in June, 2012.

3. Counsel for the petitioner Shabbir Ahmed supported the contention of the counsel for PSO and additionally submitted that the petitioner has been a dealer of PSO for the last several years and has referred to Certificate dated 8-7-2011 which shows that the petitioner is an authorized dealer of PSO to run and manage the aforesaid petrol pump.

4. Counsel for the petitioners (i,e,, PSO and Shabbir Ahmed)* further submitted that the auction of lease hold rights of the PLOT by the respondent TMA, vide public advertisement dated 6-7-2011 is without lawful authority, inasmuch as, it violates Rules 9(2)(e) and 16(c) of the Punjab Local Government (Property) Rules, 2003. They also contended that the auction of leasehold rights is without notice to the petitioners who have carried out huge investment and set up petrol pump on the PLOT in the year 1961.

5. On the question that the petitioners ought to have been issued a notice, learned counsel placed reliance on "Olga Tellis and others v. Bombay Municipal Corporation and others" (AIR 1986 SC 180) and Malik Abdul Adz v. West Pakistan Publishing Company (Private) Ltd." (PLD 1965 (W.P.) Lahore 82). Learned counsel for PSO further contends that the auction-purchaser namely Waheed Ahmad is not a dealer of PSO and does not have a license under Rule 115 of the Petroleum Rules, 1937 to carry out the business of running a petrol pump. It is reiterated that Shabbir Ahmad is still the dealer of PSO.

6. Explaining the background to the Agreement, learned counsel {{FOOT NOTE}} Petitioner in Writ Petition No,16843 of 2011 and the instant petition. ' for the petitioners submitted that a Committee was constituted by the respondent TMA on 16-7- 2007 to consider the enhancement of rent of the PLOT in question, as well as, other plots of TMA and has referred to meeting dated 10-9-2007 whereby the rent of various plots was enhanced. It is pointed out that the name of Pakistan State Oil appears at Sr. No,94 of the list of tenants attached to the said minutes, establishing that PSO was a tenant in possession of the PLOT. The rent of the PLOT was enhanced from Rs,800/- to Rs,950/- by the said Committee. He submits that as a consequence of the said enhancement the aforesaid Agreement was entered between Shabbir Ahmed and respondent TMA. Further, learned counsel referred to parawise comments filed by the respondent Administrator TMA Sheikhupura, whereby it has been admitted that the petitioner has been a lessee of the respondent TMA. It is also pointed out that the comments of respondent TMA clearly state that, in order to enhance the rent, the process of auction of lease hold rights was recoursed to by respondent TMA under Punjab Local Government (Property) Rules, 2003 ("Rules") without issuance of notice to the petitioners for enhancement of rent.

7. It is further contended by the petitioners that the auction for lease hold rights is in violation of Item 64 of the 6th Schedule of the Local Government Ordinance, 2001. It is also submitted that after filing the first Writ Petition No,16843 of 2011, Shabbir Ahmed was granted interim relief on 20-7-2011 to the effect that the parties shall maintain status quo, however, on 29-7-2011 the petitioner was dispossessed from the said premises by Respondent/TMA with the help of Police force. The said dispossession was challenged through the second writ petition i,e,, Writ Petition No,18645 of 2011.In the second petition it is contended that after the status-quo order was issued by this Court, the subsequent act of dispossession has no lawful authority and ought to be reversed. It is lastly contended that no notice or proceedings have been initiated to date against PSO or Shabbir Ahmed alleging that Lease Agreement dated 16-7-2007 is bad in law.

8. Mr. Mehmood A Sheikh', Advocate, learned counsel for respondent TMA verbally admits that one Standard Vacuum Company Ltd. Was the lessee of the erstwhile Municipal Corporation Sheikhupura since 1961 and that PSO stepped into the shoes of the said Company in {{FOOT NOTE}} 3 Ref: Report of Additional Director GeneFal (Admn-H) Punjab Local Government Board, Annexure R/7-27 in reply of Writ Petition No,16843 of 2011.

4 Second counsel for the respondent TMA. The earlier counsel Niaz Ahmed Khan represented respondent TMA and also filed parawise comments, however he was subsequently replaced by Mr. Mehmood A. Sheikh, Advocate ' the year 1981 However, in his reply filed in Writ Petition No,20295 of 2011 (Para No,2 on facts submits that the merger of the Messrs Standard Vacuum Company Ltd. Into Pakistan State Oil is not known to TMA, in spite of the same, admittedly, the respondent TMA has been accepting rent from PSO as series of letters placed on the record states that PSO is. The tenant of respondent TMA. However, it is submitted that no formal lease agreement was entered into with PSO, however, PSO has been intermittently depositing rent over the years. The learned counsel further submitted that similarly after 2007 one Shabbir. Ahmad continued paying rent hence; on the whole, the status of PSO, as well as, Shabbir Ahmad is that of tenants, of TMA. He, however, vehemently adds that the said tenancy has been executed in violation of Punjab Local Government (Property) Rules, 2003 and is therefore void.

9: It is further submitted by the counsel for TMA that compliance of Item 64 of the 6th Schedule to the Punjab Local Government Ordinance, 2001 took place as the petitioner was given reasonable notice in the shape of the public advertisement for auction of the lease hold rights. In order to elucidate the point further, learned counsel placed reliance on the definition of the word "Notice" as defined in the Black's Law Dictionary. He also placed reliance on Rule 18 (24) of the- Rules in support of his contention.

10. Submitting further he said that the relationship of tenancy enjoyed by the petitioner since 1961 and in particular after 1981 has been in violation of the Rules, in as much as, no public auction of the said lease hold rights was conducted and therefore the tenancy in question is void ab inito. He laid special stress on the fact that the said tenancy is causing loss to the exchequer as a paltry sum of Rs,950/- per month is being paid as rent by the petitioners, while the current rent of the PLOT is around Rs,1,40,000/- per month. He referred to the proceedings of the. District Price Assessment Committee (DPAC) conducted in the year 2010 where the rent recommended by the said Committee for the PLOT was Rs,1,40,000/-. He submitted that intervention in the matter by this court will amount to retention of ill-gotten gains by the petitioners who have approached this court with unclean hands and with vehemence _placed reliance on "Muhammad Sharif through Legal Heirs and 4 others v. Sultan Hamayun and others" (2003 SCMR 1221), "Muhammad Baran and others v.

Member (Settlement and Rehabilitation), Board of Revenue, Punjab and others" (PLD 1991 SC 691)

"Syed Wajih-ul-Hassan Zaidi v. Government of Punjab and others" (1997 SCMR 1901), "Muhammad Maqsood Sabir Ansari v. District Returning Officer, Kasur and others" (PLD 2009 SC 28), "Lt. Col. (R)

Muhammad Aslam v. Defence Housing Authority (DHA) through Administrator and 2 others" (PLD 2008 Lahore 261) and "Muhammad Arif v. District Coordination Officer Khushab and another" (2009 MLD 1160). As far as the rent assessm ent of the plot in question conducted in the year 2007 through a Committee fixing the annual rent as Rs,950/- enhancing it from Rs800/- per month, as referred to by the counsel for the petitioners, learned counsel for TMA submitted that the said proceedings were bogus and fake as the said Committee could not have been constituted under the Ordinance. He however, failed to refer to any order or document issued by the respondent TMA declaring the said meeting to be bogus or illegal

11. Learned counsel for auction-purchaser namely Muhammad Wahced5 submitted that the petitioner (Shabbir Ahmed) is estopped from challenging the auction proceedings because he himself participated in the same and placed reliance on "Indus Valley Construction Company Ltd. v. Comentation Intrafbr Ltd." (1982 SCMR 1127) and "Yahya Gulzar v. Province of Punjab through Secretary Health, Government of Punjab. Lahore and 3 others" (2001 CLC 9) in support of the same.

He also referred to section 124 of the Punjab Local Government Ordinance, 2001 as well as, Rules 9(2) and 16 of the Punjab Local Government (Property) Rules, 2003. He further contended that public property can only he leased out -through public auction and placed reliance on "Alta Ullah Khan Malik v. Federation of Government of Pakistan through President of Pakistan and 3 others"

(2010 PLD Lahore 605). He submitted that the said auction will bring a monthly rent of Rs,1.13,000/- to the public exchequer as opposed to Rs,1280/- paid by the petitioner. That the .Ease obtained by the petitioner is collusive and an internal report to this extent has been prepared by the respondent TMA.

12. Arguments heard. Record perused.

WHETHER PETITIONERS (i,e,, PSO/SHABBIR AHMAD)

ARE TENANTS?

13. The facts, as culled out from the pleadings of the parties and the additional documents placed on the record by the learned counsel for respondent TMA6 are that on 20-5-1961 the PLOT was leased out to Messrs Standard Vacuum Company Ltd. By the erstwhile Municipal Corporation, Sheikhupura. The said Company later on merged into PSO and thereafter PSO became the lessee.

An incomplete copy of Agreement of Lease entered between the Municipal Corporation Sheikhupura and

5. It is clarified that in this judgment M. Waheed even though a petitioner in Writ Petition No, of 2011 will he referred to as "Auction-Purchaser". Reference to petitioners in this judgment does not include the said "Auction Purchaser".I8356

6. In the shape of paper book (Volume-I) dated 18-10-2011.

' PSO has been placed on the record by the learned counsel for TMA'. A complete copy was called for through the learned Assistant Advocate General, Punjab, which has been placed on the record as "Mark-A". The said Agreement is undated and does not specify the period of lease, however, its execution is admitted by the learned counsel for TMA and also certified by the Tehsil Officer (Regulations), TMA, Sheikhupura. A petrol pump has since been raised on the PLOT and further modernized in the year 2005 after incurring sizeable investment. Pleadings also show that partial investment has also been made by Shabbir Ahmad as authorized dealer of PSO.

14. The parawise comments filed on behalf of respondent TMA8 in Writ Petition No,16843 of 2011 and Writ Petition No,18645 of 2011 admit that Shabbir Ahmed is a lessee of the PLOT in question by virtue of Agreement dated 16-7-2007. In fact the said parawise comments show that TMA placed reliance on condition 5 of the Agreement for' initiating the impugned auction, thereby once again admitting the execution of the Lease Agreement. Condition 5 of the Agreement simply provides that the tenant shall be bound by the instructions issued by the TMA and government from time to time.

Learned counsel for respondent TMA also submitted that relationship of tenancy exists between PSO/Shabbir Ahmad and the TMA and over the years (even after the year 2007) rent has been received by respondent TMA. However, intermittently. He, however, submitted that extension of lease in the year 2007 was not through public auction. No proceedings or action has been taken against the petitioners on the basis of the said 'Agreement by TMA. On the contrary the written correspondence of TMA and its parawise reply filed before this court confirms that Shabbir Ahmed is a tenant of TMA.

15. Additionally, Minutes 'of Meeting of District Rent Assessment Committee, Sheikhupura held on 8- 11-2010 placed on the record by respondent TMA acknowledge that Shabbir Ahmad is running the petrol pump under respondent TMA. Letter dated 18-4-2011 issued by the Tehsil Municipal Officer, Tehsil Municipal Administration, Sheikhupura also acknowledges that the PLOT has been leased out in favour of the erstwhile company on .20-5-1961 and a fresh Agreement of Lease has been executed between respondent TMA and PSO in the year 2007. Similarly, in letter dated 4-7-2011 issued by the Administrator, Tehsil Municipal Administration, Sheikhupura it is once again reiterated that respondent TMA has leased out the PLOT on 20-5-1961 and fresh Lease {{FOOT NOTE}} 7 Paper Book (Volume-I) dated 18-10-2011 (P.54).

8 Filed by the earlier counsel of TMA and not withdrawn or amended by the subsequent counsel representing TMA.

' Agreement was signed between respondent TMA and PSO in the year 2007. This letter, however, qualifies that the Lease Agreement was signed in the year 2007 without following the procedure of open auction but does not mention if any action was taken in pursuance of the same or any inquiry was conducted in the matter or notice has been issued to the petitioners for cancellation of the Agreement. Reference is also made to the Committee constituted by the Local Government in pursuance to letter dated 7-7-1982, comprising Tehsil Municipal Officer, Tehsil Officer (Regulation) and three Naib Nazims. The Committee enhanced the rent of the leased properties of TMA. The said document of enhancement of rent duly lists. PSO at serial No, 94 and shows that the rent has been enhanced from Rs,800/- to Rs,950/- p.m. In the year 2007. It is submitted by the learned counsel for respondent TMA that the said minutes are bogus and collusive, but has failed to refer to any action taken against the complicit officers of TMA or for the cancellation of the said minutes or for that matter any document issued by TMA recording the said minutes to be bogus. Report of the Additional Director General (Adorn-II) of the Punjab Local Government Board dated 30-8-2011 placed on the record by the auction-purchaser9 confirms that such a Committee was constituted and rent enhanced to Rs,950/- but qualified that it was without the sanction of the Tehsil Nazim and the matter was not placed before the Tehsil Council and holds Tehsil Officer (Regulation) responsible. Nothing has been placed on the record to show that TMA took action in the matter after the Report of the Additional Director General (Admn-II) of the Punjab Local Government Board.

16. The above facts show, that there is an ongoing relationship of tenancy between PSO and as a consequence with its agent/authorized dealer namely (Shabbir Ahmad) and respondent TMA. This relationship is in existence since the erstwhile Municipal Corporation entered into Lease Agreement with the predecessor in interest of PSO. It .Is also admitted that PSO raised petrol pump on the vacant PLOT and has since been operating the same as a tenant and has been paying rent, even though irregularly. It is also admitted by respondent TMA that .Since 2007 the authorized dealer/agent of PSO (Shabbir Ahmed) has been operating the petrol pump. Even if the Agreement is taken out of the equation, as is the contention of the respondents, the original Lease Agreement still stands between TMA and PSO. Therefore, it can be safely concluded that the petitioners namely PSO (and as a consequence its authorized dealer Shabbir Ahmad) are the tenants of respondent TMA. {{FOOT NOTE}} In Writ Petition No,16843 of 2011 as Annexure-R/7-27 with his reply.

EVENTS LEADING TO THE IMPUGNED PUBLIC ADVERTISEMENT FOR AUCTION OF LEASEHOLD RIGHTS DATED 6-7-2011.

17. Events leading to the impugned public advertisement dated 6-7-2011 through which leasehold rights of the PLOT were put to auction by Respondent TMA during the currency of the tenancy with PSO can be ascertained from,the parawise comments-of respondent TMA. In Writ Petition. No,16843 of 2011 and Writ Petition No,18645 of 2011, as well as, documents placed on the record through separate paper book (Volume-I) dated 18-10.2011 by the learned counsel for respondent TMA and are as follows:--

(i) Notification' dated 7-10-2010 issued by the Government of the Punjab, Colonies Department, Board of Revenue. Punjab, Lahore for grant of fresh leases and extension of leases of. State land for installations of petrol pumps, CNG stations, etc. In the Province of Punjab through public auction.

Under the said Notification, District Price Assessm ent Committee (DPAC)," Sheikhupura, headed by District Officer (Revenue), Sheikhupura held a meeting on 8-11-2010. Besides noting in their minutes that Shabbir Ahmad was running Moon Light Petrol Pump under the respondent TMA and paying rent Rs,1160/- p.m., the Committee Unanimously assessed the rent of the PLOT as Rs,1,40,000/- p.m.

The said rent was maintained in the reassessment exercise done by DRAC Reference Minutes of DRAC dated 31-12-2010. It is pointed out that this exercise was conducted by the Revenue.

Authorities under the Colonization of Government Lands (Punjab) Act, 1912 and not by Respondent TMA under PLGO, 2001.

(ii) Notification12 dated 23-11-2010. Respondent Tehsil Municipal Officer, Tehsil Municipal Administration, Sheikhupura vide letter dated 18-4-2011 in pursuance of Notification dated 23-11- 2010 issued by the Local Government and Community Development Department, 'Government of Punjab requested District Officer (Revenue) that market rent of the PLOT be assessed from the District. Rent Assessm ent Committee (DRAC). The said Notification was issued under section 197 Of PLGO {{FOOT NOTE}} 10 Notification No,3510-2010/2794-CL.II, dated 7th October, 2010 issued under section 10(2) of the Colonization of Government Lands (Punjab) Act, 1912. wrongly decribed as DPAC- should. Be DRAC.

' 12 Notification No,SO.ESTATE 2-30/2009 dated 23-11-2010.

2001". It is underlined that in the above referred letter dated 18-4-2011 issued by Respondent TMA, Sheikhupura, it is admitted that PSO is the tenant and also acknowledges the lease agreement executed in the year 2007. It is also observed that the above Notification was issued under section 197 of the PLGO, 2001, which is simply for the removal of difficulties and has a limited scope. Section 197 does not empower the Department to lay down procedure and guidelines for regulating lease of immovable property of the Local Government which falls within the rule making function under section 191 of the PLGO, 2001.

(iii) The Additional District Collector, Sheikhupura in response to the above letter dated 18-4-2011 of TMA, communicated vide his letter dated 14-5-2011 the Minutes of the District Rent Assessm ent Committee, Sheikhupura dated 8-11-2011 and 31-12-2010 to the Tehsil Municipal Officer, Sheikhupura, prepared under an earlier Notification mentioned above issued under the Colonization of Government Lands (Punjab) Act, 1912.

(iv) On 20-5-2011, Tehsil Municipal Officer wrote to the Additional District Collector Sheikhupura explaining that the size of the plot is l4-marlas while the rent has been assessed showing the plot to be of 1-kanal therefore the matter may be placed before the District Rent Assessment Committee for reassessm ent of rent.

(v) The Additional District Collector, Sheikhupura wrote back on 24-6-2011 stating that the area of the plot is 16-marlas, 1-Sarsahi and therefore, himself re-assessed the rent to Rs,1,12,770/- p.m.

There is no reference in the letter showing that the matter was referred to DRAC.

18. The above simply shows that the rent of the PLOT was being assessed assuming the petitioners to be lawful tenants. Additionally, the rent enhancement exercise narrated above has been under the Colonization of Govt. Lands (Punjab) Act, 1912 and subsequently, under notification issued under section 197 of the Punjab Local Government Ordinance which simply deals with removal of difficulties 'and could not have provided the mechanism for carrying out enhancement of rent.

While' the said rent assessm ent was going on in spite of its hazy and {{FOOT NOTE}} .13 Section 197 of PLGO, 2001 deals with Removal of Difficulties. It is pointed out that by 13-4-2011, Rule 18 had been introduced in Rules, 2003 which recognized DRAC for the first time. ' suspect legal foundation, Rule 18 was introduced on 13-4-2011 in Rules, 2003 providing for lease of immovable property for the purposes of petrol pumps, etc through public auction. Respondent TMA on the basis of the said amendment directly proceeded with the auction of the PLOT in total disregard of the fact that petitioners were tenants in possession of the PLOT since 1961 and that Rule 18 did not apply to an existing continuing tenancy. Rule 18 of Rules, 2003 does not authorize the local government to intervene in an unexpired tenancy and put it up for auction without notice to the petitioners. Parawise comments of respondent TMA in Writ Petition No,16843 of 2011 show that the only consideration that weighed with respondent TMA were that the Rules, 2003 per se necessitated a re-auction of leasehold rights, which is incorrect. The parawise comments are reproduced for ready reference: ' Para 2 "On Facts":- "Admitted to the extent that the petitioner was lessee of Plot No,26 situated in Purana Adda Larrian Sheikhupura. According to Condition No,5 of agreement executed between the parties, both the petitioner and respondents were bound to comply with the instructions of the Government of the Punjab LG&CD Department issued from time to time. Government of the Punjab, LG&CD Department issued Punjab Local Government (Property) Rules 2003 (amended 2011) and according to section 18 of the rules ibid, the land meant for petrol pump had to be re-auctioned." (emphasis supplied)

' Thereafter, without notice to the petitioners, Respondent TMA issued a public advertisement for auction of lease hold rights on 6-7-2011 and proceeded with the auction wherein Muhammad Waheed, the auction-purchaser, has been declared successful by the respondent-Administrator, Sheikhupura.

19. Learned Counsel for TMA verbally justified recourse to direct auction on 'the ground that the government exchequer was suffering a huge loss due to the low rent being paid by the petitioners and therefore required an immediate action.

LEGAL QUESTIONS THAT REQUIRES DETERMINATION

20. The following legal questions arise in this case:---

(a) Whether petitioners who were admittedly tenants of TMA (and the erstwhile Municipal Corporation) since 1961 could be ousted from the PLOT without notice as provided under item 64 of the 6th Schedule of PLGO, 2001, even after the insertion of Rule 18 in Rules, 2003 on 13-4-2011 ?

(b) Without prejudice to the above, whether the impugned auction per se is in accordance with Rule 18 of Rules, 2003?

BRIEF BACKGROUND OF THE PROCEDURE PROVIDED UNDER THE LOCAL GOVERNMENT LAW FOR LEASE OF IMMOVABLE PROPERTY

21. Lease of immovable property under section I22.Of the erstwhile Punjab Local Government Ordinance, 1979 had to be on such terms and conditions as provided in the bye-laws. Under Rule 11 of the erstwhile Punjab Local Councils (Property) Rules, 1981 (bye law) any immovable property 'can be leased out by the Chairman subject to the provisions of Punjab Local Councils (Contract) Rules, 1981 on his own authority, if the period of the lease did not exceed one year, and with the sanction of the Local Council if the period of lease exceeds one year. Rule 4 of the Punjab Local Councils (Contract) Rules, 1981 provided that the Chairman on behalf of Local Council was empowered to enter into a contract.

22. Proviso to section 124(2) of the Punjab Local Government Ordinance, 2001 provides that lease ought to be through the process of competitive bidding and subsequently on 13-4-2011, Rule 18 was introduced in Punjab Local Government (Property) Rules, 2003 laying down an elaborate procedure for the auction of lease hold rights in an immovable property for setting up a petrol pump, etc.

23. Before PLGO, 2001 and its subsequent amendments in the Rules thereunder in 2011 the concept of lease through public auction was introduced for the purposes of Local Government through Letter dated 7-7-1982 issued by the Local Government and Rural Development Department, which was made in pursuance to Instruction No,25 dated 1-9-1997 issued by the Martial Law Administrator and is referred to in Letter dated 7-7:1982 as "MLI. No,25." Instruction 25 stated:-- LAND LEASE INSTRUCTIONS

1. The Municipal Corporations, Committees and District Councils grant leases of their property including nazul land and State land vested in them from time to time. These properties may fall in the following categories:---

(a) Agricultural land/sullage water, etc., for cultivation.

(b) Building sites including Tehoazar.

(c) Constructed Buildings, both commercial and non-commercial.

(2) Martial Law Administrator, Punjab, Zone A has issued the following instructions in respect of the above leases. These instructions will take immediate effect notwithstanding any other rule or instructions on the subject:-

(a) Details of auction will be advertised in Press well in advance.

(b) All leases shall be made by open auction.

(c) No lease in any case shall be for a period of more than one year.

(d) All auctions of lease shall be, subject to the confirmation of Commissioners in the case of District Councils and Municipal Corporations and Deputy Commissioners in case of others. (emphasis supplied)

' This concept appears to have been later on incorporated in the proviso to section 124(2) of PLGO, 2001.

24. The above shows that over the years the procedure from lease of immovable property of the local government has been successively made transparent and subject to public auction through competitive bidding. However, this has little applicability to the present case. The lease/tenancy in question is 'subsisting since 1961. The Agreement of Lease placed on the record as "Mark A" does not provide for a period of lease but the conduct of the parties and their representation before the Court shows that the said lease is subsisting. Agreement in the year 2007 executed by Shabbir Ahmed with the TMA, in spite of being admitted by the respondents in their reply, in their various correspondence referred to above and through conduct, as rent since 2007 has been admittedly received, though intermittently, still if, for the sake of argument, the said Agreement is taken out of the relationship between the parties on the grounds of its voidability, the relationship of tenancy between TMA and PSO subsists as the initial Agreement of Lease continues and has never been terminated.

25. PSO being a lessee since 1961 could only be treated under the special procedure provided under Item No,64 of the 6th Schedule to the PLGO read with section 195 of PLGO. Relevant portions are reproduced hereunder for reference:--- 195 General Powers of Local Governments etc.--- (1) Notwithstanding any specific provisions of this Ordinance, every Local Government, Village Council and Neighbourhood Council shall perform their functions conferred by or under this Ordinance and in performance of their respective functions shall exercise such powers and follow such procedures as are enumerated in the Sixth Schedule. (emphasis supplied)

Sixth Schedule

64. Lease and licences for land and buildings:

(1) A Local Government may grant a licence or lease in respect of any land, open space, building or property vested in it or managed, maintained or controlled by it on such terms and conditions as may be provided in the bye laws.

(2) Notwithstanding anything contained in any other law or a subsisting lease or licence, the concerned Local Government may, after giving a reasonable notice to the person concerned, vary the terms and conditions of any lease or licence of land or buildings or any other property owned, managed, maintained or controlled by it, in such manner and to such extent, as it may deem fit, and may also cancel the lease or licence if the varied terms and conditions are not acceptable to the lessee or the licensee. (emphasis supplied)

26. In essence, the correspondence between TMA and the DRAC referred to earlier in the judgment and the repeated insistence of the learned counsel for TMA that petitioners were not paying rent according to the market rate made out a case for enhancement of rent against the petitioners.

Hence, PSO/Shabbir Ahmed were entitled to a "reasonable notice" for enhancement of rent (variation in the terms of the lease) and in case of their non-acceptability, for cancellation of their lease. It appears that TMA, woke up (it is not clear whether TMA woke up on its own motion or was driven by some other vested interests) from a -long A slumber with a shuddering realization to immediately protect and safeguard the interest of TMA and the public exchequer but in their overzealousness, insensitively trampled upon due process and rule of law guaranteed to the petitioners under the Constitution. As a result, TMA has unashamedly offended the fundamental and constitutional rights of the petitioners, bypassing the process provided under section 195 and the Schedule to PLGO and violating the protections guaranteed to the petitioners under Articles 4, 10A, 18 and 23 of the Constitution. Article 4 carries two protections in one breath: (i) to enjoy the protection of law and (ii) to be treated in accordance with law is an inalienable right of, every citizen. It further states: "In particular no action detrimental to... Property of any person shall be taken except in accordance with law." The first part of article 4 constitutionally entitles the petitioners to enjoy the protection of law. In this case section 195 read with Item 64 of the 6th Schedule to PLGO provides that protection. Under the said protection unless a "reasonable notice" is issued to the petitioners their terms and conditions of lease cannot be altered. This requirement of law by virtue of Article 4 is an inalienable right of the petitioners. Under the second part, i,e,, to be treated in accordance with law, the very law which protects the petitioners provides for a procedure to be adopted in -case respondent wish to proceed against the petitioners. In this case the only way to proceed against the petitioners was 1, of issuance of a "reasonable notice" to vary the terms and conditions of the lease. None of these constitutional protections were considered .By respondent TMA. The impugned auction also offends the newly incorporated fundamental right under Article 10-A of the Constitution, which mandates that civil rights and obligations of the petitioners can only be determined through fair trial and due process. Article 10-A, morphs Article 4 into a more robust fundamental right, covering both substantive and procedural due process.

While substantive due process provides a check on legislation and ensures the protection of freedoms guaranteed to a person under the Constitution, procedural due process; which concerns me here, provides that "each person shall be accorded certain "process" if they are deprived of life, liberty or property....The question then focuses on the, nature of the "process" that is "due."... The government always has the obligation of providing, a neutral decision maker one who is not inherently biased against the individual or who has- personal interest in the outcome.' Due process is now available to every person as a fundamental right and underscores procedural fairness and propriety in determining his civil or criminal rights. The procedure adopted in determining the rights of the parties must at every step pass the test of fairness and procedural propriety and at all times must honour the law and the settled legal principles.15 Article 10-A is not limited to a judicial trial in its strict sense but requires fairness from any foruth which determines the rights of a person. In this case the haughty indifference of TMA to ignore the petitioners and their existing tenancy and to smugly proceed directly with auction of the lease hold right does not pass the test of fairness or due process under Article 10-A: In addition, Articles 18, 23 and 24 of the Constitution are also offended as right to do business and right to enjoy property have also been impaired. Hence, rushing directly to auction the leasehold rights without giving notice to the existing tenants (petitioners) in terms of the Schedule (which enjoys a higher legislative status than the Rules), is unabashedly unconstitutional and a blatant violation of PLGO. Reliance with advantage is placed on "Muhammad Nadeem Arif and others v. Inspector General of Police, Punjab, Lahore and others"

(2011 SCMR 408), "Tariq Aziz-ud-Din and others: In re (2011 PLC (C.S.) 1130), "Fauji Foundation and another v Shamimur Rehman" (PLD 1983 SC 457), "Food Department, Gujranwala through its Deputy Director and others v. Ghulam Farid Awan" (2010 SCMR 1899), "Utility Stores Corporation of Pakistan Limited v. Punjab Labour Appellate Tribunal and others" (PLD 1987 SC 447) "Dr. Mobashir Hassan and others v. Federation, of Pakistan and others" (PLD 2010 SC 265), Nadeem Ahmed, Advocate and others v. Federation of Pakistan and others (PLD 2010 SC 1165), Wajid Ali v. Rent Registrar/Special Judge Rent, Lahore and another (PLD 2010 Lahore 463), Zainab Garments (Pvt.) Ltd. Through Chief Executive and others v. Federation of Pakistan and another (PLD 2010 KAR 374) and Farooq Saleh Chohan and 2 others v. Government of Pakistan, Ministry of Interior through Secretary/Section Officer, Islamabad and 4 others (PLD 2010 KAR 394).

27. On the other hand the procedure followed in holding the auction, if it is considered in isolation, violates Rule 18 of Rules, 2003 in the following manner:---

(i) The recommendations of the DRAC regarding market rent of the area had to be obtained under the Rules i,e,, an assessm ent to be done after 13-4-2011 (date of promulgation of the Rule). First, the revised. Assessm ent of rent in the sum of Rs,1,12,770/- p.m. Dated 24-6-2011 has been actually revised by the Additional District Collector, Sheikhupura and not the DRAC. Second, the earlier assessm ents of rent were dated 8-11-2010 and 31-12-2010 which were both before the introduction of Rule 18 and under a different law16.

(ii) Committee constituted under Rule 18(5) headed by District Coordination Officer had to conduct auctioning of the lease. The said Committee under Rule 18(7) had to assess the market rent of the immovable property on the basis of the recommendations of DRAC. The Committee under Rule 18(8) had to seek permission of the Divisional Commissioner to treat the assessed rent as base rent for obtaining bids in the auction. In case of re-auction due to expiry of the lease period, the ex- lessee had the first right of refusal subject to payment of outstanding dues under Rule _18(22).

None of the above Rules were complied with

28. For the above reasons the initiation of the auction proceedings and the resulting auction, independent of the other grounds, is in violation of Rules, 2003 and therefore declared to be illegal and hence set aside. Respondents if they wish to proceed against the tenancy of the petitioners will have to first issue notice to the petitioners under Item {{FOOT NOTE}} 16 Colonization of Government Lands (punjab) Act, 1912.

' No,64 of the 6th Schedule to PLGO, 2001 and proceed further in accordance with law.

29. Arguments of auction-purchaser that the petitioner participated in the auction are also half baked. According to the record the petitioner Shabbir Ahmed deposited the auction money but did not participate in the biding process. Even otherwise, participation of Shabbir Ahmad in the auction cannot save or sanctify the auction proceedings, which were not conducted according to the Rules as discussed above and could not be permitted to side step the provisions of section 195 read with item 64 of the 6th Schedule of the PLGO.

30. Auction Notice dated 6-7-2011 and auction dated 13-7-2011 are, therefore, set aside subject to compensatory costs of Rs,200,000/- for flouting due process and for insensitively trampling upon the fundamental rights of the petitioners, especially by a local government that being a trustee of the people must be overly cautious in dealing with the fundamental rights of the people. The costs shall be paid by the Respondent TMA to PSO/Shabbir Ahmed. Reliance is placed on Kawas B. Aga and another v. City District Government, Karachi (CDGK) through Nazim-e-Ala and others (PLD 2010 Karachi 182), The Postmaster-General, Northern Punjab and (AJ&K), Rawalpindi v. Muhammad Bashir and 2 others, (1998 SCMR 2386), Province of Sindh through Secretary, Home Department and others v. Roshan Din and others, (PLD 2008 SC 132), Inayatullah v. 5h. Muhammad Yousatand 19 others, (1997 SCMR 1020), Mst. Afsana v. District Police Officer, (Operation), Khairpur and 5 others.

(2007 YLR 1618), M.D. Tahir, Advocate v. Federal Government and others, (PLD 1999 Lahore 409) and unreported judgment passed in State v. Hudabiya Paper Mills Ltd. Etc."(C.P.Nos.1885-1891 of 2011) dated 18-1-2012.

31. Respondent TMA is directed to restore the possession of the Petrol Pump to PSO/Shabbir Ahmed forthwith.

32. It is pointed out by learned counsel for the respondent/TMA that the continuance of the tenancy of the petitioners over the years at nominal rent is collusive and a large number of officers of TMA are responsible for this lapse. It is submitted by the Administrator that an inquiry has also been initiated against the said officers. Letter dated 14-10-2011 which is marked as "Mark B" has been placed on the record which reveals that the inquiry has been in fact initiated during the pendency of these proceedings as the letter itself states that on the verbal directions of this Court, a reference has been moved to the competent authority to carry out a detailed inquiry. It is disturbing to note that reference has been made to some verbal directions of this court. It is made clear that this Court does not issue verbal directions and only speaks through written orders or judgments. Secondly, no verbal directions were ever given in this case. The Administrator was directed to provide details of the departmental actions taken against the officers who according to the learned'counsel for respondent TMA were involved in issuing the lease agreement in favour of Shabbir Ahmed. Order dated 19-10-2011 passed in Writ Petition No, 18645 of 2011" in this regard is clear and leaves little doubt. Therefore, Notice for contempt is issued to the Administrator namely: Kiran Khurshid, for twisting the facts before this court and for issuing letter dated 14-10-2011 by making reference to verbal directions of this court when no such directions were given. Office is directed to separate the contempt proceedings by opening a new tile and retain copy of letter dated 14-10-2011 in the new file. Contempt Petition (duly numbered) shall be put up for hearing on 29-5-2012 before this court after notice is issued to Kiran Khurshid, Administrator, TMA Sheikhupura, who shall appear in person before this court on the said date.

33. Resultantly, the instant petition, Writ Petition No,20259 of 2011 and Writ Petition No,16843 of 2011 are accepted in the above terms " whereas Writ Petition No,18356 of 2011 is dismissed.

34. Research Assistance rendered by Mian Muhammad Kashif, Advocate and the Lahore High Court Research Centre (LHCRC) is acknowledged with thanks.