1. ' IMAM ALI G. KAZI, J.---The petitioners Messrs Zahid Hussain Shah, a firm that claims that they have been taking contracts to collect octroi on behalf of certain local councils. On 10-4-1991, the petitioners offered the highest bid of Rs,1,803,000.00 to the Union Council Landhi (respondent No,2) for collecting octroi on its behalf on the goods brought in within the jurisdiction of that council for the year 1991-92. Their' such offer was required to be confirmed by the Divisional Auction Committee appointed by the Government under their Notification No,SO-2/TC-VII(5)/87 dated 15th May, 1988 as the amount offered for collecting the octroi taxes did not exceed Rs,5 million. The meeting of the Divisional Auction Committee, Karachi was 'held on 13-4-1991 wherein their offer was duly confirmed. The approval of their bid by the Divisional Auction Committee was followed by execution of a valid agreement with the said union and they made required payments to the Union Council and made arrangements for commencing their business. Long thereafter the petitioners learnt that some influential party was trying to cause reversion of the entire transaction by approaching the Provincial Government *through the back door. The petitioners received a letter dated 9-5-1991 addressed to them by a Section Officer of the Department of Local Government requiring them to appear on 15-5-1991:before the Additional Secretary to the Government of Sindh Local Government and. Rural Development Department. The representative of the petitioners pursuant to the letter received by them appeared before the Additional Secretary, who in turn directed him to appear before the Additional Chief Secretary, The Chairman of Union Council, respondent No,2, was in like way required' to be present on that date. The Additional Chief Secretary to the Government of Sindh, Local Government Wand Rural Development Department, told the Chairman that he should arrange to re-auction the lease for collection of octroi as the auction price offered by the petitioners was too low. After this meeting, letter was issued on the same date to the Chairman of. Union Council, Landhi which is reproduced herein below "No,SOIV/5(3)/91-UC(Landhi).
2. 'GOVERNMENT OF SINDH, LOCAL GOVERNMENT , PUBLIC HEALTH ENGINEERING AND RURAL DEVELOPMENT DEPARTMENT: Karachi, dated the 15th: May, 1991.
3. ' The Chairman, Union Council, Landhi, District Karachi.
4. ' Sub: AWARD OF OCTROI CONTRACT OF UNION COUNCIL, LANDHI, FOR THE YEAR 1991-92.
5. ' Auction proceedings regarding award of octroi contract of Union Councl, Landhi for the year 1991- 92 are hereby quashed. The contract should be re-auctioned with official bid of Rs,2,500,000.00 (Rupees twenty-five lacs).
2. You are further directed to make publicity of auction in Daily "Dawn", "Jang" and "Ibrat".
6. Sd. ' (ABDUL MAJEED SAMMA) SECTION OFFICER-IV for Additional Chief Secretary Local Government"
7. ' The petitioners claim that after the receipt of the letter referred to above they made a representation to the Additional Chief Secretary, Government of Sindh, Local Government and Rural Development Departments and the concerned Minister requesting them to recall the order. They however, succeeded in obtaining interim orders from the Minister but ultimately their representation bore no fruit.
8. ' The Union Council. Landhi, respondent No,2, also made a representation to the Government to set aside their order directing it to re-auction the contract which too was dismissed.
9. ' The petitioners being aggrieved by the order dated 15th May, 1991 passed by the Additional Chief Secretary, Government of Sindh, Local Government and Rural Development Department reproduced hereinabove, have filed present Petition under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973.
10. ' The respondent No,1 had filed their parawise comments in the petition. It has been disclosed therein that Messrs Golden Traders complained that Union Council Landhi in collusion with certain parties accepted a low offer for granting octroi contract to the petitioners for the year 1991-92 and they offered to take the contract for an amount of Rs,2,500,000.00. According to them the auction was arranged on the basis of advertisements published in certain newspapers having meagre circulation intentionally avoiding publication in leading newspapers. On the basis of such complaint, the department arranged a meeting with the Chairman, Vice-Chairman and the petitioners to sort out the dispute. The petitioners and others were, therefore, heard and all of them agreed that the right to collect octroi for the said Union Council be reauctioned and it was due to such facts that orders impugned herein were passed.
11. ' The respondent No,2, Union Council, Landhi, filed counter-affidavit supporting the case of the petitioners.
12. ' Mr. Ghulam Hussain H. Abbasi, Advocate appearing for the petitioners, contended that the lease to collect octroi on behalf of a local council is governed by Rule 225 of the Sindh (West Pakistan)
13. Municipal Committees Octroi Rules, 1964, and the petitioners succeeded as the highest bidders to secure the contract in question. After their highest bid was processed by the Divisional Auction Committee, a valid agreement was executed in their favour by respondent No,2. Long thereafter the Provincial Government took up the case and ordered its re-auction.
14. ' He further contended, that the action taken by the Provincial Government in the circumstances of the present case is patently arbitrary, mala fide and is taken due to the interest of an interested party in the business line and deserved to be struck down. He referred to the case of Arsalla Khan v.
15. Bashir Ahmed Blour and 3 others reported in PLD 1976 SC 581.
16. ' Mr. K.M. Nadeem, Assistant Advocate-General, Sindh, contended that the petitioners were admittedly heard on 15-5-1991 and had themselves agreed to re-auction and the decision of the Government is within their competence and no exception can be taken to it. Particulars of mala fides are neither mentioned in the petition nor can be alleged against the respondent No,1 as through the impugned order the right to collect octroi was to be put to re-auction and any one including the petitioners could succeed by offering the highest bid. In support of his contention he referred to the cases reported in PLD 1988 Karachi 38 and 1972 SCM R 80.
17. ' Mr. Khalid Daudpota, Advocate appearing for respondent No,2, the Union Council Landhi, supported the case of the petitioners.
18. ' On examination of the record of the petition we notice that one Syed Zahid Hussain Shah son of Safdar Hussain Shah had participated in the auction and his offer was confirmed by the Divisional Auction Committee. All correspondence initially was addressed to him on his address, 65/3, AI- Falah Road, Bihar Colony, Karachi. Thereafter it appears that agreement for collection of octroi on behalf of Union Council, Landhi was executed in favour of Messrs Zahid Hussain Shah having its office at Room No, 408, Burhani Chambers, Abdullah Haroon Road, Saddar, Karachi. It appears that the present petition has been filed by Messrs Zahid Hussain Shah through its partner Mr. Zahid Hussain Shah son of Safdar Hussain Shah who had offered the bid in his name. Though this anomaly has not been explained by any of the parties to the petition but we find it to be inconsequential.
19. ' Before we deal with the case of the petitioners, we would like to point out that in a case where the Government in exercise of their supervisory powers over, the local councils under section 53 of the Sindh Local Government Ordinancel 1979, has taken any action under its subsection (2) or (3), the concerned Council have been conferred a right to file a representation against it under its sub- clause (4). Any order made on such representation shall be treated as final. In the present case the Union Council as mentioned here in above did make a representation against the orders passed by respondent No,1 and it was rejected. Such order, therefore, under section 53(4) of the Sindh Local Government Ordinance, 1979 became final and also as thereafter the respondent No,2 did not approach this Court under Article 199 of the Constitution. They have now preferred to support the petitioners in this petition which can smack of their collusion with the petitioners.
20. ' From the reading of the order impugned in this petition, it becomes clear that the said order was passed by the respondent No,1 under section 53(3) of the Sindh Local Government Ordinance, 1979 which is reproduced below: "(3) lf, in the opinion of Government, anything done or intended to be done by or on behalf of a council is not in conformity with the law, Government, may by order:--
(a) quash the proceedings;
(b) suspend the execution of any resolution passed or order made by the council;
(c) prohibit the doing of anything proposed to be done; and
(d) require the council to take such action as may be specified."
21. The Provincial Government under above provision of law have indeed been conferred very wide powers to take action in terms of the four sub-clauses of section 53(3) without any restriction or prohibition. But actions contemplated by the four sub-clauses of section 53(3) of the said Ordinance can only be taken by the Government if anything is done or intended to be done by a council which in the opinion of the Government is not in conformity with law. In the present case the respondent No,1 have not passed any speaking order to point out that anything was done in auctioning the right to collect octroi on behalf of the Union which in their opinion can be termed as having been done against any provision of law to enable them to exercise jurisdiction so vested in them. Even in their parawise comments the respondent No,1 have merely pointed out that the bid offered by the petitioners was low. The order passed by respondent No,1 and impugned in this petition cannot be sustained on the ground mentioned .By him. As regards the second contention the petitioners have not been Ole to substantiate their allegations of mala fides.
22. ' In view of what is stated above the order passed by respondent No,1 and impugned in this petition is declared to have been passed without any lawful authority and to be of no legal effect. The petition is accordingly allowed with no order as to the costs.