' TASSADUQ HUSSAIN JILLANI, J.---Through this petition petitioner seeks leave to appeal against the judgment dated 23-2-2009 passed by a learned Judge of the Lahore High Court vide which he allowed respondent's civil revision by reversing the judgment and decree of the learned Appellate Court dated 27-3-2008 in terms of which the suit of the respondent/plaintiff was dismissed by setting aside the decree of the trial Court dated 17-7-2006.
2. Facts giving rise to the instant petition briefly stated are that the suit property i,e, a plot measuring 6 marlas which is owned by the Provincial Government was put to auction by the Housing and Physical Planning Department on 8-1-1998 in which respondent/plaintiff offered a bid of Rs, 21,500 per marla which as per the record was the highest bid. The District Housing Committee, however, decided that any bid below Rs,22,000 shall not be accepted. Thereafter the respondent/highest bidder approached the Khidmat Committee at the district level and the said committee recommended that the respondent/plaintiff be allowed to enhance the bid amount to Rs,24,000 per marla and the same be accepted. However, the District Housing Committee did not agree with the same and decided that it be put to re-auction. The said order reads as follows:-- "Mr. Munawar Hussain participated in the open auction of the plots held on 6-1-1998. He offered the highest bid of Rs,21,500 against the reserved price of Rs,21,000 per marla fixed by the District Housing Committee, Sargodha. Later on, when his highest bid was placed before the District Housing Committee, for consideration and approval, the Committee after due consideration approved all the bids which were either Rs,22,000 or above Rs,22,000 per marla and accordingly the bid of applicant was rejected by the District Housing Committee, being the low bid.
' After the cancellation of the bid, the applicant approached the Chairman, District Khidmat Committee Sargodha and requested for the approval of his bid. After hearing the case, the Chairman, Khidmat Committee passed directions, that if the applicant is ready to enhance the bid @ Rs,24,000 per marla against this plot, his bid may be accepted.
After due consideration, the committee decided not to agree with the recommendations of the District Khidmat Committee Sargodha on the ground that this is against the terms and conditions and spirit of the auction policy: As such, the District Housing Committee finding it against the policy decided that the plot may be re-auctioned in the next auction." (Emphasis is supplied)
3. Respondent/plaintiff challenged the decision of the District Housing Committee by way of a civil suit which was decreed on 17-7-2006 but the same was reversed in appeal and the trial Court's judgment stands set aside by the learned High Court vide the impugned judgment.
4. Haying heard learned Additional Advocate-General and learned counsel for the respondent at some length and after giving due consideration to the submissions made, we find that admittedly the terms and conditions of auction inter alia stipulated that the competent authority i,e, presiding officer may during the course of proceedings reject any bid without assigning any reason (condition No, 5) and further that the acceptance of the highest bid shall be subject to the approval of the competent authority (condition No, 8) as specified in auction notice. It is not denied that in the auction notice the said authority was the District Housing Committee. It would be pertinent at this stage to refer to the terms and conditions of auction, which are as follows;-- "(1) The auction will be considered by the presiding officer indicated in the auction notice in accordance with the programme and at the place specified in the auction notice published by the authority concerned.
(2) No person shall be allowed to participate in the auction unless he makes an application to the presiding officer in the prescribed form and has deposited with the Presiding Officer a Bank Draft/Deposit-at-call from a scheduled Bank of such value and in favour of such officer as is specified in the auction notice. Prescribed forms shall be available from the Presiding Officer at the place of auction free of cost.
(3) No person shall be allowed to bid unless he is himself the applicant or is an agent duly authorized by the applicant in writing.
(4) The auction proceedings shall be open to all applicants or their duly authorized agents and shall be conducted in their presence.
(5) The Presiding Officer may, during the course of auction proceedings, reject any bid without assigning any reason.
(6) At the close of the bid the Presiding Officer shall announce the name of the highest bidder and the price offered by him.
(7) The successful bidder shall within three days of the auction make payment of one third of the price offered by him in respect of the plot, inclusive of the earnest money already deposited by him in the form of Bank Draft/Deposit-at-call of a scheduled Bank in favour of such officer as is specified in the auction notice. In case he fails to make this payment within the prescribed time the bid shall stands cancelled and the earnest money earlier deposited by him shall be liable to be forfeited.
(8) The acceptance of the highest bid shall be subject to the approval of competent authority as specified in the auction Notice. The competent authority shall declare its approval or rejection, as the case may be through a notice affixed on the notice board in the office of the Deputy Director, Housing and Physical Planning Department concerned within a period of sixty days from the date of auction. It shall be the responsibility of the bidder to ascertain whether the acceptance has been declared or not. In case the approval or rejection of the bid is not declared within the aforesaid period of time, the bidder shall have the right to withdraw-his bid and to obtain the refund of the security and the earnest money deposited by him.
(9) The balance of the price shall be deposited by the successful bidder within a period of fifteen days from the date of expiry of the period of 60 days specified in condition No, 8 in the form of Bank Draft/Deposit-at-call of a scheduled Bank, in favour of the officer with whom the payment under condition No, 8 was made. In case he fails to make this payment within the prescribed period the bid shall stand cancelled and the security deposited under condition No, 7 shall be liable to be forfeited.
(10)The bidder whose bid has been approved, (hereinafter referred to as the intending purchaser which term shall include, the legal heirs on whom his rights have devolved in case of his death) shall within six weeks of the full payment, execute an agreement for sale and have it registered at his own expense. The intending purchaser shall take possession of the plot within thirty days thereafter. In case the intending purchaser shall take possession, the possession shall be deemed to have been given on the expiry of the aforesaid period of thirty days for the purposes of reckoning the building period admissible to him.
(11)A bona fide error in the identity or description of the plot sold shall not by itself result in annulment of the sale nor shall any compensation be payable in respect of such error.
(12)If the plot sold is found to measure more or less than the area advertised, the total price of the plot shall proportionably be increased or decreased, as the case may be at the rate of the accepted bid.
(13) The plot shall not be sub-divided nor shall it be put to a use other than the one for which it was auctioned.
(14) The intending purchaser shall within a period of three years from the date when he takes or is deemed to have taken possession of the plot earect(sic) upon it, a building in accordance with the building regulations prescribed by the local authority concerned and obtain a completion certificate under the said regulation.
(15) The intending purchaser shall not transfer or otherwise alienate any of his rights in the plot before obtaining a compensation certificate from the authority concerned.
(16) The intending purchaser shall not mortgage the plot except for the purpose of obtaining a loan for the construction of a building thereon with the prior approval of the concerned Director, Housing and Physical Planning Department Government of Punjab.
(17) In case the intending purchaser commits breach of any of the conditions mentioned in the foregoing clauses or of the terms and conditions of the sale Agreement, the Agreement shall be liable to be rescinded, the plot resumed and one third of the price of the plot forfeited.
(18) The proprietary rights in the plot shall be transferred to the intending purchaser after he has obtained completion certificate from the authority concerned and has satisfied all other terms and conditions of the sale Agreement. The intending purchaser shall bear all the expenses in respect of registration of the sale deed."
5. The learned Additional District Judge while reversing the judgment in terms of its finding on issues Nos,1 and 2 had considered the effect of the afore-referred terms and conditions of auction and had candidly held that the "perusal of the file of the learned trial Court reveals that Exh.D. 1 is terms and conditions of auction. Mark-A is the notice of auction published in the Newspaper.
Exh.D.2 and Exh.D. 3 are impugned orders of appellants/defendants cancelling the bid in favour of the plaintiff. Perusal of the findings of the learned trial Court reveals that the learned trial Court has failed to appreciate the meaning of a bid. Generally in the common it is an offer of the sale price and the highest offer is placed before the other party for its acceptance and if it is accepted and the price is deposited it emerges into a contract. Mark-A reveals that this notice of the auction was published in the Newspaper and condition No, 5 in this notice reveals that all the successful bids will be placed before the District Housing Committee, Sargodha for its approval and the accepted and approved bids and rejected bids would be published on the Notice Board.
Exh.D.1 is terms and condition of auction and condition No, 8 is clear enough that the acceptance of the highest bid shall be subject to the approval of competent authority as specified in the auction notice. The highest bid given by the plaintiff was placed before the authority according to condition No,8 and it has not been accepted by the authority is the second party of this contract, therefore, no contract came into any existence." In reversing the judgment of the Appellate Court the learned High Court, we may observe with respect, did not examine the effect of the afore- referred condition Nos, 5 and 8 of the terms and conditions of auction. It also escaped the notice of the learned court that the exercise of discretion by relevant authorities was not amenable to interference in writ jurisdiction unless the same was arbitrary, fanciful or violative of any of the fundamental rights. This well established principle of Constitutional law has time and again been reiterated by this Court. In Munshi Muhammad and another v. Faizanul Haq etc. (1971 SCM R 533) in similar circumstances this Court while upholding the judgment of the High Court held as follows:-- "The view formed by the High Court is unexceptionable. Since the auctions in favour of the petitioners were not finally approved, they did not acquire any right in the properties, and had, therefore, no locus standi to ask for their transfer. According to the terms and conditions of the auction itself, the highest bids offered in the auctions were subject to the approval of the Additional Settlement Commissioner concerned, who may or may not accept the bids, without assigning any reasons for his action.
' The manner of the exercise of this discretion by the relevant authorities, as conferred by law, is not amenable to writ jurisdiction of the High Court, unless it be found to be arbitrary or fanciful."
6. This view was followed in Pervez Qureshi v. Settlement Commissioner Multan (1974 SCM R 337) wherein the court observed as under:-- "A mere bid at an auction if the bid is subject to confirmation, does note create any contractual right until the bid is confirmed. It is in the discretion of the auctioneer to confirm or not to confirm it. In the present case, the bid could not be confirmed, because the respondents 2 and 3 claimed that the auction was illegal as the property concerned had already been transferred. The Departmental Authorities found as a fact that it had so been transferred to the said respondents and cancelled the auction. The petitioner who was a successful bidder at the auction cannot claim to be a person aggrieved by this order of cancellation of the auction vide Civil Review Petition No, 22 of 1966 (Abdul Hamid Khan v. The Settlement Commissioner, Lahore), decided on the 17th June 1966 by this Court and Muhammad Sharif v. Sharifuddin (1972 SCMR 63) which is a decision in an appeal."
7. For what has been discussed above, we are of the view that the impugned-judgment not only reflects non-consideration of material evidence on record but also the law laid down by this Court to which reference has been made above and, therefore, is not sustainable. Consequently, this petition is converted into appeal and allowed and the impugned judgment is set aside. The amount deposited by the respondent/highest bidder shall, however, be returned to him within a period of one week of the receipt of this order.