1. ' MUKHTAR AHMED JUNEJO, J.---Petitioner Muhammad Aslam has invoked the Constitutional jurisdiction of this Court against an order passed by the Mayor K.M.C. and conveyed to the petitioner under a letter dated 30-9-1991 from the respondent No,2.
2. ' According to the petition filed by the petitioner and the counter-affidavit filed on behalf of the respondents by Ashiq Rauf Chohan, Assistant Accounts Officer, Health Department K.M.C., offers were invited by the respondent No,1 for awarding contract for right to collect fee on slaughtering of animals in K.M.C. Slaughter House at Landhi for the year 1991-92 (1-10-1991 to 30-6-1992). The petitioner and two others namely Anwar Khan and Haji Ghulam Muhammad gave the respective offers. The offer given by the petitioner was the highest being Rs, 2,12,000 p.m. The petitioner's offer was processed and provisional acceptance was conveyed to the petitioner. In pursuance of such acceptance the petitioner desposited on 24-9-1991 Rs,2,12,000 as advance instalment for October,1991 and Rs,2,12,000 as advance instalment for June 1992. He deposited on 23-9-1991 Rs, 57,240 as advance income-tax. These payments were made through pay orders under a challan.
3. Under a letter dated 24-9-1991 respondent No,2 informed the petitioner that consequent upon receipt of payments made by him on 24-9-1991 he was provisionally allowed to carry out the contract of collection of slaughtering fee in KMC Slaughter House at Landhi from 1-10-1991 till 30-6- 1992 subject to payment of Rs,2,12,000 p.m. and subject to final approval by the K.M.C. Council. It was after all this that the petitioner was informed by the respondent No,2 under the impugned letter dated 30-9-1992 that the contract in question cannot be handed over to him till further orders, as per verbal order of the Mayor K.M.C. Hence this petition.
4. ' Case of the petitioner was that being a successful bidder in competition and having paid contractual amount in pursuance of such letter from the respondents he was entitled under the law to collect the fee on slaughtering of animals till 30-6-1992 and that the respondent No, 1 was bound by the terms and conditions of the contract and he was not competent to cancel or terminate the contract unless the petitioner committed any act of insolveny or infringed any condition of the contract. Impugned order passed by the Mayor and communicated to the petitioner under letter dated 30-9-1991 was challenged to be illegal, mala fide, unlawful and violative of the terms and conditions of the contract. It was also averred in the petition that nature of the contract, on agreed terms and conditions which were fully accepted, cannot be changed by mere verbal orders of the Mayor and that this smacked of mala fides.
5. ' The petition was opposed by the respondents on whose behalf Ashiq Rauf, Assistant Accounts Officer K.M.C. filed his counter-affidavit. Case of the respondents as per the said counter-affidavit was, that offer of the petitioner was to be approved by the K.M.C. Council which had not given final approval to the offer. Issue of the letter dated 29-9-1991 by the respondent No, 2 allowing the petitioner to collect the fee in question from 1-10-1991 was not denied, but it was contended that the said letter was issued by mistake and through inadvertence. It was added that such mistake was realised and the matter was placed before the Mayor who directed the respondent No, 2 to inform the petitioner that the contract in question cannot be handed over to him till further orders as the matter was to be placed before the K.M.C. Council for final aproval and that the Contractor was not to be inducted into possession on 1-10-1991. It was added in the counter-affidavit that on receipt of approval by the KMC Council the petitioner can start the collection of fee in question for the remaining period and the excess amount paid by him would be refunded to him but if the KMC Council rejected the offer then the entire amount deposited by the petitioner would be refunded to him. The petition was challenged to be premature on the ground that the competent authority had not accorded final approval and no agreement was executed between the parties to bind them.
6. ' Mr. Ch. Muhammad Iqbal learned counsel for the petitioner argued that invitation of offers for award of the contract in question by the respondent No,1, tender of offer by the petitioner, provisional acceptance of such offer by the respondent No, 1 and deposit of bid money and other ancillary amounts by the petitioner constituted a legal contract enforceable by law and as such the same could not have been ignored. Learned counsel for the petitioner referred to the provisions contained in section 45 of the Sindh Local Government Ordinance, 1979 (hereafter to be mentioned as the Ordinance) and argued that it was statutory duty of the Mayor to report the matter to the KMC Council about the highest hid having been given by the petitioner. It was also argued that the Mayor had no power or authority to sabotage petitioner's highest bid or to decline handing over of a contract to the highest bidder. It was next argued that if the KMC Council had not accepted petitioner's highest bid, it had to obtain approval in writing of the Government of Sindh for nonacceptance of the highest bid. Reference was made to subsection (8) of section 51 of the Ordinance about communication of Council's decisions to the Government of Sindh. Reference was also made to Sindh Councils (Contract) Rules, 1980. In support learned counsel for the petitioner cited the cases of:
(i) M/s. Abdullah & Co. y. The Province of Sindh and others 1992 MLD 293;
(ii) Commissioner of Income Tax, Central Zone "C" v. M/s. Muhammad Amin-Muhammad Bashir Limited 1990 PTD 151;
(iii) Ubaidullah and another v. Municipal Committee, Chiniot and another 1992 MLD 135.
7. ' Mr. M. Yaseen Kiyani learned counsel for the respondents argued that the mere fact that the petitioner was adjudged to be the highest bidder, did not mean that he was necessarily to be given the contract about collection of slaughter fee. It was next argued that the highest bid given by the petitioner had no legal sanctity unless it was approved by the KMC Council. KMC Council was said to have been delegated the powers exercisable by the Government of Sindh under section 45(4) of the Ordinance. Present petition was challenged to be premature on the grounds, that the final approval to petitioner's bid was yet to be accorded by the KMC Council which was the competent authority to approve the contract, and that no agreement between the parties had as yet been executed. In support learned counsel for the respondents cited the cases of:
(i) Munshi Muhammad and another v. Faizanul Haq and another 1971 SCMR 533;
(ii) Rahmat Ali and others v. The Revenue Board, West Pakistan, Lahore and another 1973 SCMR 342;
(iii) Moinuddin v. Negotiating Committee for Disinvestment of AKMIDC Units Muzaffarabad and others PLD 1987 SC (AJ&K) 99;
(iv) Fawwad & Fareen Enterprise Limited v. Director of Industries Government of Sindh, Karachi and others PLD 1983 Kar. 340;
(v) Karachi Municipal Corporationed v. Moosa M. Adam and others PLD 1972 Kar. 571;
(vi) Dr. Fazal Din v. Municipal Committee, Lyallpur PLD 1956 Lah. 916;
(vii) Dr. Azeem Shad v. Municipal Committee, Multan PLD 1968 Lah.
8. 1419.
9. ' Admittedly the petitioner participated in the auction for awarding contract for a right to collect fee on slaughtering of animals in KMC Slaughter House at Landhi for the year 1991-92 (from 1-10-1991 till 30-6-1992). Admittedly the bid given by the petitioner at Rs, 2,12,000 per month, was at the higher side as compared to the offers submitted by Anwar Khan and Haji Muhammad Soomro. Admittedly highest bid of the petitioner was processed and provisional acceptance was conveyed to him under a letter dated 10-9-1991 (copy Annexure B) in the following words: "It is to inform you that the Mayor KMC is pleased to accept your offer of Rs, 2,12,000 per month provisionally in the above-cited subject, subject to final approval of the KMC Council."
10. ' Had said letter contained only said words, the petitioner could have been held to be not clothed with any right in subject-matter of the contract, in light of the observations made in the case of Munshi Muhammad and another (1971 SCMR 533). Said letter dated 10-9-1991 also contained the following words: "As such you are hereby directed to arrange for the payment of the following, at the earliest:---
(1) Advance instalment for the month of October, 1991. Rs, 2,12,000.00
(1) One month instalment in advance (To be adjustable against {{TABLE}} S.No, Challan Date Amount 1402 24-9-91 Rs,2,12,000 1.401 24-9-91 Rs,2,12,000 Nil 23-9-91 Rs,57,240 the instalment for the month of June, 1992) Rs, 2,12,000.00
(3) Advance Income Tax @ 3% Rs, 57,240.00 Total: Rs, 4,81,240.00 {{TABLE}} ' In consequence of the direction given to the petitioner under the letter dated 10-9-1991 he deposited with the KMC through its bankers Rs,2,12,000 on 24-9-1991 as instalment for October 1991, another amount of Rs,2,12,000 on 24-9-1991 as payment of one month advance instalment of June 1992 and Rs,57,240 on 23-9-1991 as advance income-tax. After such deposits the petitioner was given right to collect fee on slaughtering of animals in the KMC Slaughter House at Landhi under a letter (copy Annexure "H") dated 24-9-1991 in the following words: "Consequent upon receipt of following payments: ' Remarks 'Advance payment for October 1991.
11. ' One month advance payment adjustable against instalment for the month of June, 1992.
12. ' 3% Income-tax paid by {{Table}}cash at National Bank of Pakistan Kutchery Road Branch, Karachi.
13. ' You are hereby provisionally allowed to carry out the contract, "Right to collect fee on slaughtering of animals in the K.M.C. Slaughter House at Landhi, for the year, 1991-92 (9 months i.e. from 1-10-1991 to 30-6-1992) at Rs,2,12,000 per month subject to final approval of K.M.C. Council."
14. ' Cumulative effect of all this material is that the petitioner acquired a legal and a vested right for his bid being considered for approval by the K.M.C. Council and not to be guillotined under verbal orders of the Mayor. The only duty of the Mayor was to report the matter to the K.M.C. Council in terms of clause (b) of subsection (2) of section 45 of the Ordinance. This was to be done after execution of the contract. In other words the petitioner had legal right to insist for execution of the agreement before his bid was approved by the K.M.C. Council. Admittedly the bid was neither approved nor disapproved by the K.M.C. Council. It was not mentioned in the counter-affidavit filed on behalf of the respondents if the bid given by the petitioner was at all reported to the K.M.C.
15. Council in terms of clause (b) of subsection (2) of section 45 of the Ordinance. Even if the highest bid given by the petitioner was not accepted by the K.M.C. Council, the matter was to be reported to the Government of Sindh within ten days, as per section 51(8) of the Ordinance and approval of the Sindh Government was to be obtained, as per the proviso below subsection (4) of section 45 of the Ordinance. Delegation of the powers, exercisable by the Government of Sindh under section 45(4) of the Ordinance, if made to the K.M.C. Council, did not exempt the latter from giving reasons for not accepting the highest bid, required to be given under the proviso below subsection (4) of section 45 of the Ordinance. It is open to question if powers exercisable by the Government of Sindh under the proviso below subsection (4) of section 45 of the Ordinance, can be exercised by the K.M.C. Council as delegatee in a case, where it has itself not accepted the highest bid. In terms of said proviso the K.M.C. Council and the Government of Sindh are two different functionaries with different powers. An anomalous situation would be created if K.M.C. Council, which is not competent to reject highest bid without approval of the Government of Sindh, is required to give approval to its own act of refusing to accept the highest bid. Clause (b) of subsection (2) of section 45 of the Ordinance created statutory obligation for the Mayor to report to the K.M.C. Council the fact about the highest bid given by the petitioner after execution of the contract. As against this the Mayor had no power to issue an order that the contract in question cannot be handed over to the petitioner.
16. ' The authorities cited on behalf of the respondents do not cover a case of this nature, where Constitutional provisions have been invoked to challenge action of the Mayor to be illegal, unlawful etc. In the case of Munshi Muhammad and another, 1971 SCMR 533 it was held that bidders at auction of plots were not clothed with any right in auctioned properties, when terms and conditions of the auction recited that highest bids offered at auction were subject to approval of Additional Settlement Commissioner concerned, who may or may not accept bids without assigning any reasons and such highest bids offered at the auction were not approved and the entire plot of land was transferred to an allottee. In the case of Rahmat Ali and others 1973 SCMR 342 there was auction of State land and one of the conditions of auction was, that it was within the discretion of the Revenue authorities to confirm or not to confirm the auction, and the Revenue authorities did not confirm the auction of the land to the highest bidder. In the circumstances it was held that the persons giving highest bid did not acquire any valid title to the property, so as to give them right to invoke writ jurisdiction. In the case of Moinuddin PLD 1987 SC (AJ&K) 99 the Government of the State of Azad Jammu and Kashmir appointed a Negotiating Committee to finalise the sale of certain industrial units. Said Committee put those industrial units to auction and invited bids for their sale.
17. Such sale or transfer was subject to approval of the said Government. In the circumstances it was held that if a bid for the, sale of property is subject to prior approval of the Government, the highest bid, per se, would not create any contractual right for sale of the property to such a bidder unless such a bid is approved by the Government. In the case of Fawwad & Fareen Enterprise Limited PLD 1983 Kar. 340 the Director of Industries etc. Government of Sindh invited quotations for supply of certain drugs but reserved right of accepting the full or part quantity offered and did not pledge to accept the lowest or any tender. In the context of the facts it was held by a D.B. of this Court that by giving the lowest bid which was not accepted, the bidders acquired no legal or vested right to the grant of the contract, in view of reservation of right by the authorities not to accept the lowest or any other tender. In the case of Karachi Municipal Corporation PLD 1972 Kar. 571, it was held that the trend of authority is clear, consistent and uniform that the formalities prescribed in Municipal Legislation with regard to the execution of contracts by Municipalities are mandatory and there can be no estoppel against them. In the same case it was further held in order to protect the public interest, to check corruption and to ensure the purity of the democratic process, the Legislature has always imposed drastic controls on the powers of the employees of Municipalities. In the case of Dr. Fazal Din, PLD 1956 Lah. 916 the view taken was that a lease of property reserving a yearly rent or for more than one year can be effected only by means of a registered instrument and bearing seal of the Municipal Committee. In the case of Dr. Azeem Shad PLD 1968 Lah. 1419 the Chairman of a Municipal Committee invited tenders for leasing out certain premises and then accepted the highest offer and ordered delivery of possession to the bidder of the highest offer. Before communication of such order to the bidder, the Chairman revoked the acceptance. In the circumstances it was held that there was no legal basis for the proposition that communication of acceptance is to be deemed in a case where acceptance is not communicated due to the negligence of promise or his employees or agents. In none of the cases cited on behalf of the respondents the bidder was asked to make certain payment in pursuance of acceptance of his bid. In the cited cases the bidders had not yet become vested with any legal or vested right. It is to be conceded that the statutory and executive authorities have locus poenitentiae to recall an order, only if no effective step has been taken in implementation thereof.
18. ' Learned counsel for the respondents could not cite any provision of law by which the Mayor can pass order of the nature passed by him in the instant case.
19. ' In the circumstances this petition requires to be accepted and the impugned order is declared to be illegal and of no legal effect. The Mayor K.M.C. is required to perform his statutory duty as cast upon him by the provisions contained in section 45 of the Ordinance. There would be no order as to costs.