' This Revision Application is directed against the order of the I Vth Additional District Judge, Karachi dated 14-6-1980.
2. The facts giving rise to this Revision Application are as follows :- ' Respondent 1 on 11-4-1980 advertised for auction the right to hold Fox Show in the Zoological Garden, Karachi for the year 1980-81. The notice for auction appeared in the Daily Newspapers of Karachi and the petitioner has produced in this Revision a cutting from Daily less rat dated 11-4- 1980. Pursuant to this notice the actual auction took place on 26-4-1980. It is an admitted position that the petitioner who is the successful bidder participated in the auction on the aforesaid date and his highest bid of Rs, 20,000 was accepted by the officer who conducted the auction subject to approval of respondent No. 1. The petitioner had deposited a sum of Rs, 1,000 before participating in the auction and with the fall of the hammer paid a further sum of Rs, 4,000 ; thus making payment of 1/4th amount of the auction price. It is the case of the petitioner that the acceptance of his highest bid with the fall of the hammer by the officer who was conducting the auction amounts to a concluded contract. However, in the terms and conditions of the auction which were published in this connection it was mentioned that the bid was subject to the approval of respondent No. 1. It appears that after the auction had taken place, respondent 2, who was already having the right to hold "Fox Show" up to 30th June, 1980 and who had applied for renewal of his licence to respondent No. 1, on 9-4-1980, offered to pay higher amount for the continuance of his rights to hold the "Fox Show". This offer of respondent 2 was accepted by respondent 1, and as a result of this acceptance.
On 14-5-1980, a letter was issued to respondent 2 by respondent 1 informing him that the lease/licence in his favour has been renewed for a further period of three years, namely, for the period of 1980-81, 1981-82 and 1982-83. The petitioner, it is alleged, after having come to know of this instituted a suit for declaration and injunction in the Court of Vth Senior Civil Judge, Karachi on 15-5-1980. Along with the suit an application for grant of temporary injunction was also made on which the trial Court granted the temporary injunction to the petitioner. The injunction granted in favour of petitioner was later confirmed by the learned Civil Judge on 28-5-1980. Both respondents 1 and 2 challenged the order of Civil Judge dated 28-5-1980 in Miscellaneous Appeal. It is alleged in ground No. 1 of the Memo. Of Revision by the petitioner that the notice of the Appeal was served on him for 12-6-1980, and when he appeared in the Court on the aforesaid date his counsel requested for time to file counter-affidavit but it was denied and his counsel was made to argue the appeal on the very same day and the appeal was allowed on 14-6-1980. It is accordingly contended that proper opportunity was not given to the petitioner to contest the appeal by the First Appellate Court.
3. I have heard Mr. M. A. Latif, the learned counsel for the petitioner, Mr. Muslim Naqvi, the Legal Adviser of K. M. C. For respondents 1 and 3 and Mr. Munawar Abbas, the learned counsel for respondent 2. The fact of auction having taken place on 26-4-1980, and the consequent payment made by the petitioner to the respondent 1 of a sum of Rs, 5,000 in connection thereto is not disputed. Mr. Muslim Naqvi, the Lagal Adviser of the K. M. C. Has very candidly placed all the documents relating to the case, including the alleged terms and conditions of the auction before me. Mr. Muslim Naqvi has contended before me that under the Sind Local Councils (Contract)
Rules, 1980 which were published in the Gazette of Sind dated 16th April, 1980, the Mayor of Karachi has an authority to enter into all agreements and contracts in respect of immovable property up to the valuation of Rs, 2 lakhs and in all other cases up to Rs, 10 lakhs. It is accordingly contended that it was open to the Mayor when the bid was submitted to him for approval either to accord approval to it or to reject the same. It is contended that the Mayor was the competent authority under the rules to take this action. Upon enquiry, however, the learned counsel very candidly stated before me that such delegation of the power under proviso to subsection (4) of section 45 of the Ordinance has in fact been made in favour of the Major on 3rd June, 1980 and also placed a copy of the Gazette Notification where under powers have been delegated. It is admitted before me that the rights such as in the present case are to be dealt with In accordance with section 45 of the Sind Local Government Ordinance, 1979. It is also fairly stated by Muslim Naqvi, before me, that the present case will be governed by subsection (4) of section 45 of the above Ordinance which is in the following terms :- "45.-(4) All contracts for transfer by grant, sale, mortgage, lease or otherwise of immovable property or any interest and right thereto or disposal or sale of movable property shall, subject to the rules be entered into after inviting offers in an open auction : ' Provided that if the highest bid is not accepted by the Council, approval in writing of Government shall be obtained, and Government shall, in its order give reasons for not accepting the highest bid : ' Provided further that a Council may with the approval of Government enter into a contract Without inviting offers in auction."
' Mr. Muslim Naqvi contended that although under first proviso to subsection (4) of section 45 of Ordinance XII of 1979, the power is to be exercised subject to the approval of "Government" in writing, the power of "Government" in fact is also exercised by the Mayor of Karachi. Mr. Munawar Abbas, the learned counsel for respondent 2, has very strongly urged before me that the very conduct of the auction by respondent No. 1 in favour of petitioner was illegal and void as respondent 2 was already having a right in respect of this very place where the Fox Show is to be held up to 30th June 1980. He further pointed out that in terms of the letter under which the rights were granted in favour of respondent 2 the lease could be renewed by mutual consent for further period. He accordingly contended that the respondent 2 having exercised the option for renewal of the lease in his favour on 9th April, 1980, the auction by the Karachi Municipal Corporation on 26th April, 1980 was void ab initio and, as such, it could not confer any right upon the petitioner so as to entitle him to maintain a suit either against the K. M. C. Or against respondent 2. It is also contended both by Mr. Muslim Naqvi and Mr. Munawar Abbas that an auction-purchaser does not acquire or get any right by virtue of mere participation in the auction or having given a bid. It is contended that until such time the auction is approved no right as such vests in favour of the auction-purchaser so as to entitle him to maintain a suit in respect of the said auction. The proposition canvassed by the learned counsel with regard to the rights of an auction-purchaser may be correct regarding auction sales generally, but here the auction had taken place in terms of a statutory provision, namely, section 45 of the Sind Local Government Ordinance, 1979, which lays down that a specific procedure is to be adopted in cases where the highest bid offered in an open public auction is not accepted. It is to be noticed that all contracts for transfer of grant, sale, mortgage, lease or otherwise in respect of immovable property are to be disposed of only after inviting offers in public auction. It is further provided in the first proviso to subsection (4) that in case the highest bid offered by a person in an open public auction is not approved, then approval in writing of the Government to such effect is to be obtained and that the Government has to give reasons for not accepting the highest bid offered. It is nobody's case that the Government has declined to accept the highest offer made by the petitioner in this case. All that was argued before me both by Mr. Muslim Naqvi, the learned counsel for respondents 1 and 3, and Mr. Munawar Abbas for respondent 2 that the bid was not accepted by the Mayor of Karachi who, according to the learned counsel, was competent under the law to decline to accept the same and to dispose of the rights in favour of respondent No, 2 by private treaty in accordance with second proviso to subsection (4) of section 45 of Ordinance XII of 1979. The 1st proviso to subsection (4) of section 45 clearly states that in cases of non-acceptance of the highest bid, the approval is to be obtained in writing from the "Government" which, in the present case means the "Provincial Government", and that the order must contain the reason for non-acceptance of the highest offer made by a person in an open auction. The position which emerges out of the above discussion is that there is no legal and valid order on record to show that the bid of the petitioner was not accepted as contemplated and provided in the first proviso to subsection (4) of section 45. I enquired from the learned counsel for respondent No, 2, I it was competent for respondent No. 1 to dispose of the rights in favour of respondent No, 2 by way of private treaty after having invited offer in open public auction, without first rejecting the highest bid offered by the petitioner. The learned counsel in reply contended that until such time the bid is accepted, no right is vested in the auction-purchaser and, as such, it was open to respondent No. 1 to negotiate with respondent 2, and to transfer the rights which were auctioned in favour of the petitioner by way of private treaty. The contention does not appear to be correct. In view in so far as the bid given by the petitioner was not rejected, it was not competent for respondent No. 1 to negotiate and transfer the same to respondent No,
2. I may further point that in this case the transfer of right in favour of. Respondent 2 by negotiation has admittedly been done on 14-5-1980 through a letter addressed by the Director, Parks and Recreation, K. M. C. To the respondent 2. The second proviso to subsection (4) of section 45 authorizes 'a Council to make transfer by contract with the approval of Government without inviting offers in auction. In the present case offers for disposal of that rights were invited in open auction and no approval from the Government is produced sanctioning the transfer of right by respondent No. 1 in favour of respondent No, 2, by contract. Mr. Munawar Abbas, the learned counsel for respondent 2 contended that in the case of respondent No, 2 it was not necessary to have obtained the approval of Government as according to him in terms of letter dated August 1977, where under the lease was initially granted to respondent 2, with the approval of the Government for a period of three years, the sanction shall hold good for all subsequent renewals. I may point out that the letter relied upon by the learned counsel for respondent 2 in Term No, 5 specifically states that the right of the licensee in respect of the place is not a permanent right except for the period of lease which has been granted in his favour. It is not disputed that the lease/licence granted to respondent 2 under letter dated 1st August, 1977 was valid only up to 30th June, 1978, and that it could only be renewed by mutual consent of the parties. It is also not disputed that instead of acting on the renewal clause contained in the above C letter, the respondent No. 1 decided to invite offers in open auction for sale of these rights. I fail to see how in these circumstances it could be argued that the disposal of the rights in favour of respondent No, 2 was in accordance with the law. The First Appellate Court vacated the injunction granted by the trial case relying upon the provision of subsection (4) of section 45 of the Ordinance XII of 1979 and on the fact that an auction-purchaser acquires no right in respect of the auction until the bid is approved. The view taken by the 1st Appellate Court is wholly misconceived. The question for consideration was whether on the material on record a prima facie case was made out by the petitioner so as to entitle him to the grant of the injunction. The provision of law relied upon by the First Appellate Court, specifically says that in case of non-acceptance of the highest bid, the approval of the Government is to be obtained and reasons therefor have to be given. It is an admitted position in the case that the notification under which it is intended that powers were delegated to the Mayor of respondent No. 1 under subsection (4) of section 45 of Ordinance XII of 1979, was issued on 3-6-1980 and as such on the date when the offer of the petitioner was declined/rejected by the Mayor on 15-5-1980, he had no such power. The learned First Appellate Court completely overlooked this aspect of the case and made no discussion as to how the letter dated 15th May, 1980 issued by respondent 1 intimating the petitioner that his bid has been cancelled was a legal or valid cancellation of the bid offered by the petitioner in the open public auction on 26-4-1980. It is not disputed before me that at the time the auction had taken place, the application by respondent 2 for renewal of his right to continue holding "Fox Show" was pending before respondent No. 1 but notwithstanding this request of respondent No,
2. Respondent No. 1, decided to auction these rights and invited offers in open auction. This action of respondent No, I was wholly inconsistent with the right asserted by respondent 2. It Is also admitted before me that respondent 2 did not raise any objection to the holding of auction by respondent No. 1 of these rights. For the purposes of finding out whether the petitioner had made out a prima facie case, in these circumstances, it is sufficient to say that the bid offered by the petitioner in auction was not legally cancelled and as such the disposal of these rights in favour of respondent No, 2 during subsistence of the auction was prima fade not legal. I am accordingly of the view that the petitioner has succeeded in making out a prima facie case for the grant of injunction.
' Coming to the question of balance of convenience and irreparable injury Mr. Munawar Abbas, the learned counsel for respondent No, 2, argued that since the respondent 2 has been in occupation of the place for the last about 13 years and the lease has now been extended for a further period of 3 years, it will only be equitable that the injunction be refused on the ground of balance of convenience, as the inconvenience, which is likely to result in the case of grant of injunction is more to the respondent 2 that the inconvenience which is likely to result to the petitioner. I have already pointed out that the transfer by negotiation in favour of respondent 2 by respondent No. 1 cannot be justified legally on the basis of the material on record and as such there can be no question of any inconvenience being caused to respondent No, 2 by the grant of injunction in favour of the petitioner. The question of balance of convenience in the circumstances is in favour of the petitioner. The result is, this Revision is accepted, the order of the Vth Additional District Judge, Karachi dated 14-64980 is set aside and the order of the trial Court granting injunction is restored.
There will, however, be no order as to costs.