' This petition under Article 199 of the Constitution of the Islamic Republic of Pakistan (1973) has been filed by Mumtaz Hussain petitioner who claims to be the highest bidder in an auction held on 30th April, 1991 for leasing out the rights to collect tax on transfer of immovable property situate within the areas falling within the jurisdiction of Zila Council, Jhang. According to the petitioner this bid was accepted by the Chairman, Zila Council Jhang (respondent No,2) in pursuance whereof he deposited the requisite amount but respondent No,2 instead of honouring the agreement with the petitioner has awarded the contract to respondent No,4 without any lawful justification.
2. In the written statement filed by respondents Nos.1 and 2, the facts of the petitioner's participation in the auction and his being the highest bidder have not been denied or disputed, but it has been vehemently asserted that the auction in favour of the petitioner was not confirmed but was rejected by the Chairman whereafter the subsequent auction was held on 8th of May, 1991, in which respondent No,4 was the highest bidder at Rs,1,30,00,000. This auction was approved by the Chairman, Zila Council, in pursuance whereof an agreement was executed between Zila Council and respondent No,4, who is, as such, entitled to run the contract. It was asserted that the documents filed with this petition showing that the auction in favour of the petitioner had been confirmed, are false and fabricated.
3. It is to be noted that on 9-6-1991 Mr. Munir Ahmad Bhatti, Advocate, counsel for respondents 1 to 3, made a statement that his clients had no objection if the lease rights were ordered to be re- auctioned. The learned Advocate-General has also taken up the same position. This arrangement was, however, not accepted by respondent No,4, whose learned counsel stated that valuable rights in favour of respondent No,4 had been created on account of acceptance of the bid, payment of the instalments and execution of the contract, and he could not be deprived of these rights.
4. The learned counsel for the petitioner apart from reiterating the contents of the petition has argued that in law the power to accept or reject the bid vests in the Local Council and not the Chairman and as the bid of the petitioner was never put before the Zila Council, its rejection by the Chairman is meaningless and has no legal effect and consequently, the rights could not have been reauctioned.
' The learned counsel next argued that the auction alleged to have been held on 8th May, 1991 is, in any case, illegal as it was without any prior notice, as required by the Punjab Local Councils (Lease)
Rules, 1990, particularly Rule 4 whereof which provides that in case of reauction a notice of not less than fifteen days shall be given. The learned counsel emphasised that in the public notice issued on 26th April, 1991, although it was provided that if the auction could not be held on 30th April, 1991, it shall be held on 6th of May, and 8th of May, 1991, but as admittedly an auction was held on the 30th April, 1991, subsequent auctions could not take place. It was also urged that the second auction was not only violative of the Rules, but a sham transaction and was collusive and fraudulent.
' So far as the contract executed between respondents Nos.1 and 4 was concerned, the learned counsel pointed out that it was violative of section 39 of the Punjab Local Government Ordinance, 1979 and the Punjab Local Council (Contract) Rules, 1980, according to which the Chairman can execute the contract the value of which does not exceed rupees three lacs.
5. In reply the learned counsel representing respondent No,4 objected to the maintainability of the petition on the ground that the petitioner has not come to the Court with clean hands as his claim is based upon forged and fabricated documents; that there are disputed questions of fact involved in the controversy which cannot be adjudicated upon in the Constitutional jurisdiction of this Court; that the petitioner has an equally efficacious remedy available in the form of reference of the dispute to the arbitration of the Commissioner in accordance with the terms and conditions of auction; that the rights flowing out of a contract cannot be made subject-matter of a Constitutional petition and lastly that the petitioner has no locus standi to file the petition being only a prospective bidder.
6. On merits it was argued that the bid in favour of the petitioner was never approved but was rejected by the Chairman who was competent to do so and has been delegated with the power by resolution No,2 dated 7th June, 1990. As regards the second auction it was argued that it has been held after due notice in accordance with law.
7. In reply, the learned counsel for the petitioner has taken up the position that the Chairman in collusion with his officers has changed the entire record and the documents filed by the petitioner were genuine while the record produced by the respondents has been forged and fabricated. The learned counsel has emphasised that the petitioner has deposited the entire money due under the auction which shows that the transaction was bona fide and the bid of the petitioner had been confirmed.
8. As is obvious from the facts noted above, there is a serious factual controversy between the parties as to whether or not the bid of the petitioner was approved/confirmed by the Chairman.
Both the parties filed documents supporting their versions. However, it is not possible to resolve these disputed questions in the exercise of Constitutional jurisdiction of this Court. The case shall, therefore, proceed on the assumption that the bid in favour of the petitioner had not been approved by the Chairman and only the facts which are not in dispute shall be taken notice of.
9. The admitted position is that in pursuance of the public notice published on 26th April, 1991 the auction of the rights to collect the tax was held on 30th of April, 1991, in which the petitioner gave the highest bid of Rs,1,26,05,000. It is conceded in the written statement filed by respondents Nos.1 and 2 that the auction committee comprising three members had recommended that this auction be confirmed. It is disputed that no separate notice for the auction held on 8th of May, 1991 was issued. In that auction, according to the respondents, the bid of respondent No,4 was the highest, which was subsequently approved by the Chairman, in pursuance whereof, an agreement was entered into between respondents Nos. 1 and 4 under the signatures of the Chairman.
10. Having taken the notice of the admitted facts, as given above, now the preliminary objections raised by the respondents as to the maintainability of this petition may be adverted to. The first objection is as regards the locus standi of the petitioner to file this petition. This objection has little merit in it. Admittedly, the petitioner was the highest bidder in the auction held on 30th of April, 1991 and was, therefore, certainly entitled to have his bid put up for confirmation before the competent authority. The petitioner has also objected to the second auction which allegedly took place on 8th of May1991, and one of the grievances is that it was without any notice. That being so, the dictum of the Supreme Court in Arsalla Khan v. Bashir Ahmad Blour PLD 1976 SC 581 holding that a person bidding at an auction for collection of octroi duty complaining of having received no notice of auction is an aggrieved person within the meaning of Article 199 of the Constitution and, therefore, has locus standi to file Constitutional petition, becomes fully attracted to the present case.
11. The second objection of the learned counsel for the respondent that contractual rights cannot be enforced by a Constitutional petition is also without any merit. The petitioner in the present case is not seeking enforcement of a contract simpliciter, but has challenged the impugned actions of the respondent No,1 as being without lawful authority being violative of the Punjab Local Government Ordinance, 1979 and the statutory rules framed thereunder. similar contention was raised in Arsalla Khan's case supra, but was repelled in the following words:- "Mr. Zafar was conscious that the appellant's case against this part of the impugned order was on a much weaker footing than the challenge to the direction for the rejection of the first respondent's bid. Learned counsel, therefore, submitted that as the first respondent's claim arose out Of a breach of contract, the High Court had erred in holding that his writ petition was maintainable. In support of this submission learned counsel relied on this Court's judgments in Meraj Din v. Noor Muhammad and others, in Munshi Muhammad and another v. Faizanul Haq and another and in Babu Parvez Qureshi v. Settlement Commissioner, Multan and Bahawalpur Divisions, Multan and others. But the High Court had allowed the writ on the ground that the first respondent had relied on the breach of a statutory provision namely sub-rule (1) of Rule 225 and had also challenged the Government's order inter alia on the ground that it was ultra vires of section 61, 62 and 63 of the said Ordinance. The question whether sub-rule (1) of Rule 225 is in force is not free from doubt, but in any case, the direction to lease the octroi rights to the appellant was a breach of a statutory provision, and as the first respondent's claim that his bid at auction for octroi rights has not been challenged, he was an aggrieved person within the meaning of Article 199 of the Constitution."
12. This brings me to the question as to whether the petitioner, in the circumstances of the case, can be said to have another adequate remedy available to him in the form of reference to the Commissioner for arbitration. It is correct that clause 21 of the terms and conditions of the auction provides that in the event of any dispute between the parties the matter shall be referred to the Commissioner but the applicability of this clause to the dispute in this petition is highly doubtful. On a true reading of the relevant clause, it appears that the disputes which can be taken before the Commissioner are mainly with regard to the receipts of the tax and allied matters relating thereto.
The questions, however, which falls for determination in the present case are entirely different and to these disputes the arbitration clause cannot be extended.
13. Be that as it may, it is to be seen that the Chairman of the Zila Council against whom serious allegations of fraud and forgery have been levelled, happens to be the sitting Minister of the Punjab Government. The remedy for arbitration before the Commissioner cannot, therefore, be considered to be equally efficacious or adequate in the circumstances of the present case. Additionally, as the Zila Council has itself failed to invoke the arbitration clause, this Constitutional petition cannot be thrown out on this ground (refer Anujuman-e-Ahmadiya v. D. C., Sargodha (PLD 1966 SC 639) and the Majlisi-Intizamia, Jamia Masjid, Ghulam Muhammadaba Colony, Lyallpur v. Secretary to Government of West Pakistan Communication and Works Department, Lahore (PLD 1975 S.0 355).
14. As regards the merits it may be noticed that according to sub-rule (4) of Rule 4 of the Punjab Local Council (Lease) Rules; 1990, framed in exercise of the powers conferred under sections 144 and 167 of the Punjab Local Government Ordinance, 1979 by the Governor of the Punjab, the power to accept or reject the bid vests in the Local Council and not its Chairman. That being so it was incumbent upon the Chairman to have placed the bid of the petitioner for its confirmation or rejection before the Local Council but he instead, according to the case of the respondents, proceeded to reject the same. As regards the contention of the learned counsel for the respondents that the powers in this respect had been delegated to the Chairman vide Resolution No,2 dated 7th June, 1990 there is no merit in it. On a true interpretation the resolution, it shall be seen that its applicability was confined to the contract for the year 1990-91 and there was no general delegation. This view gains strength from the fact that the matter under discussion at the relevant time was only with respect to the budget for the year 1990-91. It is, however, not necessary to dilate any further on this aspect of the matter as the petitioner has made a statement in this Court that he does not press for the confirmation of his bid but has prayed for reaction.
15. An equally important reason as to why the auction in favour of respondent No,4 cannot be sustained is that it was held without due notice. It stands admitted on the record that no separate notice Was given with respect to reauction on 8th June, 1990. Reliance has, however, been placed upon the notice dated 26th April, 1991 in which it was stated that if no auction is held on 30th April, 1991 the reauction shall take place on 6th and 8th May, 1991. This notice hardly satisfies the requirement of law. According to Rule 4(1) of the Punjab Local Council (Lease) Rules, 1990, public notice in not less than one daily newspaper and at least 7 days before the date fixed for auction has to be given by the Local Council. By virtue of sub-rule (5) this provision applies to reauctions also. Sub-rule (2) requires that the notice should contain the date of the meeting of the Local Council to be held for considering the acceptance of the bid made in an auction, but in the notice on which reliance has been placed by learned counsel for respondent No,4 no such date finds mention at all. The notice is obviously violative of Rule 4 of the Punjab Local Council (Lease) Rules, 1990. Even otherwise the auction held on 8th May, 1991 is contrary to the contents of the notice dated 26th April, 1991 itself. In the said notice it was stated that if no auction could be held on 30th April, 1991 reauction shall take place on 8th May, 1991. In the present case it is common ground between the parties that auction was held on 30th April, 1991 though according to the respondents it was not approved, but the fact remains that the auction had taken place on 30th April, 1991, and the Committee recommended that the petitioner's bid be accepted. That being so, it cannot be said that as no auction had taken place on 30th of April, 1991 the respondents were entitled to hold auction on 8th May, 1991 without any further notice. The learned counsel for the petitioner has placed on record the instructions issued by the Government of Punjab to all Chairmen of Zila Councils, dated 13th May, 1991, in which practice to hold auction for the second time in such like manner has been deprecated. As the second auction was clearly without any notice, it cannot be sustained.
16. As regards the contract executed in favour of respondent No,4, it is true that under Rule 4 of the Punjab Local Councils (Contract) Rules, the Chairman is authorized to execute all contracts on behalf of the Zila Council, but according to the proviso to the rule itself read with Schedule I, if the value of the contract exceeds rupees three lacs, the contract can only be made by the Chairman with the prior approval of the Local Council. In the present case, there is no approval by the Zila Council forthcoming on the record with the result that the contract being violative of the rules has no legal validity in view of subsection (2) of section 39 of the Punjab Local Government Ordinance, 1979.
17. So far as the relief is concerned it is to be seen that the counsel for the petitioner, respondent No,2 and the counsel for respondents 1 to 3 have stated before this Court that the rights may be ordered to be reauctioned. The learned Advocate-General also made a statement to similar effect.This course of action, was not acceptable to the learned counsel for respondent No,4. But it has been held that the auction in his favour was violative of the rules and was illegal and thus not sustainable. So, in view of the circumstances of the case, the proper order which deserves to be passed is that the Zila Council shall proceed to reauction the lease rights in question after due notice, in accordance with law. I .
18. It may be stated that the petitioner has undertaken to make good the loss, if any, suffered by the Zila Council, for the reauction and had also undertaken to deposit rupees twenty lacs with the Zila Council within a period of three days from today.
19. For the foregoing reasons, W.P.5335 of 1991, filed by Zahoor Elahi challenging both the auctions as being illegal with the prayer that reauction of the rights be ordered, stands accepted.
' Both these petitions stand disposed of in the above terms.