' By my short order dated the 26th May, 1991 I had dismissed the plaintiffs application (CMA 1009/91) under Order 39, Rules 1 and 2, C.P.C. For injunction to restrain the defendant from transferring, alienating, auctioning the commercial Plot No,COM-7/7, measuring 638. 88 square yards, situated in Block-2, Scheme No,5, Clifton," Karachi, or creating any charge or incumberance thereupon till final disposal of the suit. The following are the reasons for the dismissal of the application. #TBS "Save as provided by sub-rule (2), all commercial plots in all schemes of the Authority under execution, including the Clifton #TBE
2. The admitted facts of the case are that the defendant, through an advertisement in the daily "Jang" dated October 14, 1990, announced that the plots of land, including the plot in question in the suit, would be disposed of by auction to be held on the 16th October, 1990. In pursuance of that announcement, auction was held and the plaintiff participated therein and made the highest bid of Rs,2,525 per square yard. The plaintiff then paid the defendant 25% of the cost of the land, amounting to Rs,4,03,293. Thereafter an agreement was made between the parties, a photo copy whereof is Annexure `X/D' to the plaint. Subsequently, the plaintiff was informed by the defendant that his bid had not been approved by the Governing Body of the defendant and he was advised to seek refund of the money paid by him. On these facts the case of the plaintiff is that "there was a commitment of offer and acceptance on the part of the parties and the defendant was not entitled to repudiate the contract". It is further the case of the plaintiff that "some of the terms and conditions of sale... Are void" and that any clause of the agreement which is opposed to public policy or which offends against any provision of law is void. However, in the plaint, no provision of the agreement has been specified as opposed to public policy or offending against any provision of law. The plaintiff has prayed for (a) a declaration that he is entitled to the transfer of the plot, (b) for specific performance of "the agreement of sale dated 16-104990" and, in the alternative (c) damages amounting to Rs,16,00,000.
3. Mr. Sami Ahmed, the learned counsel for the plaintiff, referred to Clause 24 of the agreement which provides as follows: "The above terms and conditions shall constitute a firm offer and acceptance on the part of KDA and the allottee for the occupancy rights in the plot allotted to him by the KDA and shall create a binding agreement between KDA and the allottee. The allottee shall pay to the KDA any tax, charges, levy to the Federal Government, Provincial Government, including Income Tax (3% Advance Tax on the total cost of the plot under Section 50 (A) of the Income Tax Ordinance 1979), Excise & Taxation, KMC and all other local/Govt. Agencies from time to time" (emphasis added). ' and contended that, in view thereof, there was an agreement for sale of the plot between the parties. He further argued that clause 4 of the agreement which provides that "the KDA reserve the rights to reject any bid or any offer made in the course or after the auction without assigning any reason" is illegal, void and unenforcible in view of the provisions of Sections 23, 28, 73 and 74 of the Contract Act.
4. Mr. S.H. Kazilbash, the learned counsel for the defendant referred to the advertisement in "Jang"
Annexure `X/A' to the plaint, wherein it is specifically provided that KDA will be entitled to reject any bid either during or after the auction without assigning any reason. He further argued that nothing in, the agreement confers any right, title or interest to or in the plot on the plaintiff and that the defendant had under clause 4 of the agreement, the right to reject any bid or any offer made in the course of or after the auction without assigning any reason. He contended that the bid of the plaintiff was, in terms of the agreement, subject to approval by the Governing Body of the defendant and that until such approval the plaintiff acquired no right whatever: Mr. Kazilbash also contested the argument that clause 4 of the agreement is void or unenforcible.
5. The question which arises is whether the agreement dated the 16th October, 1990, is an agreement for sale of the plot. Upon analysis of the relevant statute, rules and regulations and of the provisions of the agreement, the answer clearly is that it is not. Relevant rules and regulations are reproduced below for facility of reference. Rule 10 of the KDA (Disposal of Land) Rules, 1971, provides, by sub-rule (1)--Schemes, will be disposed of by unrestricted public auction after wide publicity in the newspapers. The acceptance of abid at the auction will be subject to the approval of the Governing Body of the Authority."
' The Disposal of Land and Estates Regulations made by the Governing Body of the defendant, in pursuance of the powers conferred upon it by Article 15 of the Karachi Development Authority Order, 1957, provide, in relevant parts, as follows:- "5. Disposal of Land--After the notice has been given of a new Development Scheme through advertisement in the newspapers published in the Karachi Division regarding the lease or sale of open plots or built up property in accordance with Article III (2) of the KDA Order it shall be disposed of according to the procedure contained in these Regulations. Disposal shall be--- by open auction on the prescribed terms and conditions in case of commercial plots."
"13. Disposal of Commercial Plots.---(1) Commercial Plots shall be auctioned and lease granted to the highest bidder subject to the confirmation of bid by the Allotment Committee and also provisions of proviso (b) of clause 4 of these Regulations. Provided that Allotment Committee shall have the right to reject any bid without assigning any reason;
(2) The Governing Body of KDA shall fix the reserve price of each category of Plot, below which no bid shall be accepted;
(3) The successful bidder at the auction shall pay 25% of the total value of the plot at the fall of the hammer;
(4) Auction shall further be subject to the terms and conditions at Appendix `E' of these Regulations."
6. Rule 10, cited above, which provides for disposal of Commercial Plots by unrestricted public auction contemplates that a bid would be accepted at the auction but such acceptance would not be final unless approved by the Governing A Body of KDA. It follows that until the bid, which is an offer, is accepted or approved by the Governing Body of KDA, it cannot be said that any contract for sale of the plot has been concluded. The procedure for disposal of land has been prescribed by the Disposal of land and Estates Regulations, referred to above.
' Clause 5 of the Regulations provides for disposal of land by public auction; clause 13 provides that lease of a commercial plot shall be granted to the highest bidder subject to confirmation of the bid by the Allotment Committee of KDA; that the Allotment Committee shall have the right to reject any bid without assigning any reason; and that the auction shall be subject to the terms and conditions contained in Appendix 'E' to the Regulations. Appendix 'E' is in substantially the same terms as the agreement (Annexure `X/D' to the plaint) and provides, inter alia, that KDA reserves the right to reject any laid or offer during or after the auction without assigning any reason. The effect of these Regulations clearly is that a bid, though accepted at an auction, is subject to confirmation by the Allotment Committee of KDA and that the bidder does not acquire a right to a lease unless and until such confirmation is given. The above provisions are statutory rules and regulations having the force of law and neither their validity nor their efficacy was questioned by the learned counsel for the plaintiff.
7. Before proceeding to the consideration of the agreement, it is relevant to observe that in the notice of auction published in the daily `JANG' dated the 14th October, 1990 (Annexure X/A' to the plaint) it was clearly stipulated that KDA has the right to reject any bid or offer, during or after the auction, without assigning any reason; and that it was in pursuance of this notice that the plaintiff participated in the auction and made his bid. The notice was not an offer to accept the highest bid at the auction but merely an invitation to the public to bid at the auction. As observed in Chitty on Contracts, Volume I page 23 (24th edition)- "At an auction sale, the auctioneer's request for bids is not an offer which can be accepted by the highest bidder. Instead it is a bid that constitutes an offer, and this the auctioneer may accept or reject."
The advertisement in `JANG' was merely an invitation to treat as distinct from an offer to be bound to sell the plot to the highest bidder. It was merely an offer to receive offers or "offer to Chaffer", as observed by Boven, L.J. In Carlill's case (1892) 2 Q.B.
484. Cheshire and Fifoot in Law of Contract state the rule thus-- "The bid itself constitutes the offer which the auctioneer is free to accept or reject."
8. The bid of the plaintiff, though accepted at the auction was, as provided by Rule 10 and the Regulations, cited above, subject to approval by the Governing Body of KDA. The acceptance was, therefore, in no way final and did not amount to acceptance of the offer, constituted by the bid, to ripen into a concluded contract. That the bid was not approved is admitted. There was, therefore, no contract between the parties for sale of the plot.
9. In the context of the plaintiff's case that there was an agreement between the parties for sale of the plot, it may be observed that Mr. Sami Ahmed's argument was confined to bare reference to clause 24 of the agreement, which has been reproduced in para 3 above. Analysis of the agreement would, however, show that clause 24does not have the effect presumed by him. The scheme of the agreement is to cover all aspects of the transaction beginning from the terms and conditions of auction until execution of lease and thereafter. The provisions for auction are contained in clauses 2, 3, 4 and 5. By clause 2, every bidder is presumed to have inspected the plot for which he bids; clause 3 specifies that the bid is to be for purchase of occupancy rights on the basis of 99 years lease; by clause 4, the right to reject any bid during or after the auction is reserved to KDA; and the successful bidder is required, by clause 5 to pay first instalment equal to 25% of the bid money at the fall of the hammer. The auction proceedings are thus completed upon payment of 25% of the bid money. Then occur the provisions regarding allotment of the land to the bidder. Clause 6 of the agreement contemplates that, if the bid is approved by Auction Committee, he would have to pay, on demand, second instalment of the bid money and would, thereupon be given allotment order. After the allotment order is issued, the balance of the bid money would have to be paid and possession order would thereafter be issued. These provisions are followed by the clause providing for the rights and liabilities of the parties consequent upon possession being given. By clause 8, the bidder is obliged to pay annual rent every year from the date of the possession; clause 9 contemplates that, upon receiving possession, the bidder and his servants, contractor etc. Would be entitled to enter upon the land; and clauses 13 to 17 prescribe the obligations of the bidder in connection with the erection of a building on the land. Clause 18 provides that until execution of the lease the successful bidder shall have no right, title or interest in the plot except that of a licensee to enter upon the plot for the purpose of erecting the proposed building; and finally, clause 19 provides that the successful bidder would be entitled, upon payment of full occupancy value and other charges, to 99 years lease in accordance with the terms and conditions of a lease deed a copy of which could be obtained by the successful bidder. It may be observed that although the expression "successful bidder" has been employed throughout the agreement, it is appropriate only upto the stage when, upon approval of bid by the Governing Body and payment of the second instalment, a letter of allotment is issued. Thereafter the "successful bidder" really becomes an allottee and, upon execution of a lease, a lessee. The expression "successful bidder", therefore, must, according to the context of the relevant clauses of the agreement, be taken to mean either "allottee" of "lessee". Now, construing clause 24 of the agreement in the light of the scheme of the agreement, it is clear that it has no reference to a person whose bid has not been approved. Further, it expressly mentions offer and acceptance on the part of K.D.A. And "the allottee" for occupancy rights of a plot "allotted" to him. The provisions of this clause, therefore, come into effect only after the bid is approved and letter of allotment is issued. Admittedly in this case no such thing has happened.
10.
10. It was contended by Mr. Sarni Ahmed that clause 4 of the agreement by which K.DA. Reserved to itself the right to reject any bid or offer during or after the auction is void under Section 23 of the Contract Act as opposed to public policy. According to him it is a public policy that a person should not be prevented from seeking a remedy from a Court of law and clause 4 has the effect of preventing him from seeking such a remedy. A bare perusal of clause 4 would show that it has no such effect. Mr. Sami Ahmed relied on a passage at page 177 of the Law of Contract (3rd edition) by Shaukat Mahmood which is as follows:- "Public policy is equivalent to "the policy of Law". It is applicable to the spirit as well as the letter of the law. Whatever tends to injustice or oppression, restraint of liberty, commerce and natural or legal right, whatever tends to the obstruction of justice or to the violation of a statute and whatever is against good morals and when made the object of a contract is against public policy and therefore void and not susceptible of enforcement."
' The above passage purports to be based on the case reported in AIR 1964 A.P.
465. It is not necessary to decide whether or not the observation in the above passage to the effect that whatever tends to the violation of a statute is against public policy is too wide. It is sufficient to note that section 23 of the Contract Act provides that every agreement of which the object or consideration is unalwful is void and that the consideration or object of an agreement is lawful unless, inter C alia, it is of such nature that, if permitted, it would defeat the provisions of any law or the Court regards it as opposed to public policy. Mr. Sami Ahmed's argument, though almost exclusively devoted to an attempt to show that clause 4 of the agreement was opposed to public policy, really amounted to a contention that the clause was void as it was intended to defeat the provisions of Section 28 of the Contract Act, which in relevant part, is as follow:- "Every agreement, by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void to that extent."
' No attempt was, however, made by him to show how section 28 was attracted to the facts of this case; and in any case, as stated above, there is nothing in clause 4 which has the effect of restricting the plaintiff absolutely or otherwise, from enforcing such rights as he may have.
11. Mr. Sami Ahmed cited the cases of M/s. M.G. Brothers Lorry Service v. M/s. Prasad Textiles (1984 P.S.C. 301). Dr. S. Jalil Asghar v. Messrs Atlas Industries and Trading Corporation (1984 SCMR 1); and District Board, Lyallpur v. Abdul Razzaq (PLD 1960 Lahore 166).
12. In 1984 PSC 301 it was held that a clause in the Way Bill the object of which was to defeat the provisions of section 10 of the Carriers Act was void. Mr. Sami Ahmed relied particularly on paragraph 14 of the judgment (at page 305) which reads--"Section 10 of the Carriers Act, as we have noted before, provides that unless notice in writing of the loss or injury has been given to him before the institution of the suit and within six months of the time when the loss or injury first came to the knowledge of the plaintiff no suit shall be instituted. Condition 15 of the Way Bill in the instant case makes it imperative to give notice either within 30 days from the date of the booking or from the date of the arrival of the goods at the destination by the party concerned, to sustain suit. The date of arrival of the goods at the destination by the party may not be known to the party concerned for long time. No claim can be made without the loss of the goods and therefore 30 days from the date of booking would become irrelevant unless loss or damage happens. Therefore it appears to us that Condition 15 of the Way Bill was designed to avoid the liability as contemplated under section 10 of the Carriers Act, 1965 and that too in a situation where the parties had not be express contract limited their liability as contemplated under section 6 of the Carriers Act. It appears to us, therefore, that the learned Judge of the Andhra Pradesh High Court was right in the view he took. The trial Court and the first appellate Court had held that Condition 15 of the Way Bill was not violative of section 28 of the Indian Contract Act. That view of the lower Courts has not been challenged before the High Court in the second appeal. Before us also that view was not seriously challenged. It also appears to us that neither there is restriction absolutely from enforcing rights by the usual legal proceedings nor limitation of time within which such rights might be enforced in the instant case but Condition 15 was only intended to defeat or bypass the provisions of section 10 of the Carriers Act. Section 23 of the Indian Contract Act provides that the consideration or object of agreement was lawful, unless, inter alia, it was of such a nature, that, if permitted, would defeat the provisions of any law. In the instant case, it appears to us that if Condition 15 be permitted that it will defeat the provisions of section 10 of the Carriers Act, even in a case notice in writing of the loss or injury has been given to him before the institution of the suit and within six months of the time when the loss or injury first came to the knowledge of the plaintiff.
Even in a case where the plaintiff was unaware of the arrival of the goods at the destination or was unaware of a loss or damage, the plaintiff would not have any right to institute a suit if no claim was made and could not have been made within 30 days as stipulated in Condition 15 of the Way Bill. In that view of the matter, we are of the opinion that Condition 15 must be held to be void in view of Section 23 of the Indian Contract Act because its object was to defeat the provisions of section 10 of the Carriers Act. This conclusion, in our opinion, follows from the construction of the section and Condition 15 of the Way Bill."
13. The facts of the case reported in 1984 SCMR 1 are entirely different from these in the present case. The questions which arose in that case were, firstly, whether it was established by the facts on the record that the contract was for an illegal object, namely; inducing a public officer to act with partiality or for corrupt motives or to bias him in the discharge of his official duty"; and, secondly, whether, in the circumstances of the case, the Court was justified in raising the question of illegality of contract as a ground for its unenforcibility, suo motu without there being such a plea in the pleadings of the respondents. On facts, it was held that no illegal object was established and that the contract not being ex facie illegal, the Court would have been justified to take suo motu cognizance of the illegality of the contract had all material facts come to light in the course of the evidence to show that the contract had an illegal purpose. That, however, was held not to be the position in the case.
14. In PLD 1960 Lahore 166, it was held that a clause in the agreement enabling the appellant to confiscate the price of work done by contractor, without suffering any loss, was violative of Section 73 of the Contract Act and therefore void under section 23 of the Act.
15. None of the above cases are of any avail to the plaintiff. It cannot be gainsaid that an agreement the effect of which is to defeat the provisions of any law is void but clause 4 of the agreement, far from violating the provisions of section 28 of the Contract Act or any other law, is, in fact, intended to give effect to the provisions of Rule 10 and the Regulations cited above. It is, therefore, not void.
16. It was finally submitted by Mr. Sami Ahmed that if injunction is not granted as prayed the suit of the plaintiff, to the extent of the relief of specific performance claimed therein, would become infructuous. That however, is not a fact for consideration in deciding whether or not the plaintiff had disclosed a E prima facie case.
17. In the circumstances, I am clearly of the opinion that the plaintiff has failed to disclose prima facie case. A temporary injunction as prayed for by him, therefore, cannot be granted, and the application merits dismissal.
Application rejected.