1. DR. GHOUS MUHAMMAD, J.---This Constitutional petition under Article 199 of the Constitution of Islamic Republic of Pakistan arises out of following facts.
2. The petitioner who is said to be an approved octroi contractor offered the highest bid in the auction held by the Union Council Sial being respondent No. l in this petition. Therefore he was awarded contract for recovery of octroi tax for the year 1996-97, within that Union w.e.f. 1-1-1996 to 30-6-1997 in the sum of Rs.1,45,165. He also deposited a sum equal to 11 per cent. Of the contract money. On 29-6-1996 the contract was confirmed by the Director Local Government Hyderabad. It appears that before grant of this contract there was a proposal for bifurcation of the limits of respondent No.1 and, therefore in the order dated 29-6-1996 a provision was made in the following terms to cover a situation arising out of finalization of such a proposal.
3. "In case of proposal for bifurcation of the Council materialize, this contract for the current financial year still remain intact for current financial only and as a result of claim of other Council to which some area/portion of this Council is annexed both the Council may decide their proportionate claims jointly and unanimously and in case of any difference/dispute the matter or approportionatement shall be referred to Government. This addition is to be made in case of matter of up-gradation of limits of Municipal Committee Dadu. This condition may be incorporated in the Model Agreement."
4. An agreement was also executed between the petitioner and the Union Council Sial and the condition envisaged by aforesaid order was included therein. On 12-8-1996 the Government of Sindh issued a notification whereby some areas of the Union Council-Sial were included in the limits of Municipal Committee Dadu which is respondent No.2 in this petition. Consequently upon this notification the Administrator of respondent No.2 vide his letter dated 19-8--1996 stopped Union Council Sial from recovering Octroi tax from inhabitants residing within notified extended area of Municipal Committee Dadu. The Administrator Union Council Sial contested the stand of the Municipal Committee Dadu and also requested for withdrawal of its order but it seems that the needful was not done and the petitioner was not allowed to recover the tax from the area which subsequently became part of the limits of the Municipal Committee Dadu.
5. The petitioner has, therefore filed this petition to challenge action of Municipal Committee Dadu.
6. We have heard Mr. Jhamat Jethanand learned counsel for the petitioner and Mr. Rasool Bux Unar learned counsel for the respondent No. 2 and also perused the record.
7. It has been contended on behalf of the petitioner that the respondent No.2 had no authority to interfere with his rights to recover octroi duty. It is the case of the petitioner that subsequent variation in the limits of respondent No. l which resulted in the reduction of the area of respondent No.1 would not entitle respondent No.2 to take unilateral decision adversely affecting his rights. He relied upon the letter dated 29-6-1996 issued by the Director Local Government Hyderabad Division, Hyderabad relevant portion whereof has been reproduced above, to submit that his contract remained intact and the claim arising out of the bifurcation of the Council would be decided by both the respondents jointly and unanimously and in case there is any dispute the same should be referred to the Government. This letter was addressed to the Assistant Director, Local Government Dadu and its copy was also forwarded to the Secretary to the Government of Sindh Local Government Public Health Engineering and Rural Development Department Karachi.
8. The Government of Sindh as' well as respondent No.2 being well-aware of what transpired in relation to the grant of recovery rights to the petitioner never raised any objection but were seemingly parties to that arrangement.
9. Learned counsel for respondent No.2 however attempted to argue that the Director Local Government who was author of the letter dated 29-6-1996 had no power to allow any Council /Committee to recover or levy tax from or in the area outside its limits or to put any condition of sharing the octroi tax. He also placed reliance on the judgment Sindh Fine Textile Mills Ltd. Karachi v.
10. People's Municipality, Shikarpur and 2 others PLD 1978 Karachi 449. This argument is misconceived.
11. The Director did not allow respondent No. l to recover the tax outside its limits. Admittedly at the time when the contract was awarded to the petitioner the areas in question were within the limits of respondent No.1. Since there was a scheme for bifurcation of respondent No. l a provision was made to deal with the situation arising out of its finalization as unless it was so done there would have been serious complication and the petitioner or any other contractor might not have been willing to come forward for recovery of Octroi tax. The Director, therefore, acted in a manner suited to that exigency and, as noted earlier respondent No.2 was also agreeable to that formula. The learned counsel for respondent No.2 was unable to show how the Director was not competent to do so. Moreover, it also does not stand to reason, as urged by the learned counsel for respondent No.2, that the Director had no place in the Local Government Ordinance when admittedly a person was already appointed to that post and was working as such in the Directorate of Local Government Hyderabad Dadu.
12. The learned counsel for respondent No.2 supported the notification dated 19-8-1996 extending its limits and also challenged the maintainability of this petition on the ground that the Government of Sindh was not made a party. It would of course have been proper if the Government of Sindh was a party but mere omission to do so would not be fatal to this petition. The petitioner has neither impugned the said notification nor has sought any other relief against the Government of Sindh.
13. The petitioner has prayed that his right to recover octroi tax be protected against interference by the Administrator Municipal Committee Dadu who has, therefore, been already impleaded as respondent No.2 in the petition and the issue thus raised can be decided without the Government of Sindh being a party. It has been further submitted on behalf of respondent No.2 that the relief sought for by the petitioner cannot be granted and he can at the most approach respondent No. l for determining or reduction of contract money and tray apply for recession of contract and damages from the Union. Council. He also referred to the judgment Alvi Sons Ltd. v. (1) The Government of East Pakistan. (2) The Local Controller, Directorate of Supply Government of East Pakistan and (3) The Habib Bank Ltd. PLD 1968 Karachi 222. This contention is also without substance and the petitioner is entitled to claim recovery of octroi tax in terms of the contract awarded to him if it can be shown that respondent No.2 has no power to interfere with his rights.
14. The decision reported in PLD 1968 Karachi 222 would be of no help to him. In that case plaintiff sought declaration under section 42 of Specific Relief Act to the effect that he did not commit any breach of contract between him and other side and therefore the defendant was not entitled to encashment of Bank Guarantee. The suit was dismissed on the ground that such declaration could not be granted and the remedy available to the plaintiff could have been either a suit for recession of contract or for its specific performance or damages. The position in the instant case is altogether different. The petitioner has neither come under section 42 of the Specific Relief Act nor is he seeking any such declaration.
15. The learned counsel for respondent No.2 relied upon the case Sindh Fine Textile Mills Ltd., Karachi v.
16. People's Municipality, Shikarpur and 2 others, PLD 1978 Karachi 449 to submit that the Government had no power to allow a Council or a Committee to recover tax from area outside its limits. In that case notifications extending the limits of Shikarpur Municipality were challenged and it was held by a Division Bench of this Court that those notifications were a colourable exercise by the Government of its powers. Another case cited at the bar by the learned counsel for respondent No.2 is Union Motor Bus Service v. The Director Local Board of Thatta and others, PLD 1958 (W.P;)
17. Karachi 205. In that case it was held that the Thatta District Local Board had no authority or jurisdiction whatsoever in the areas which then formed part of Karachi. There is no cavil with the proposition that a council is not competent to recover duty or tax from the area outside its jurisdiction. In the present case, however, the position is different. The petitioner was awarded contract to recover the duty when the area in question was admittedly within the limits of respondent No. 1. It was further provided in the order dated 29-6-1996 by the Director that in the event of redistribution of the limits of respondents Nos. l and 2 the right of the petitioner to recover the duty would not be disturbed and the claim of the respondents, if any, arising out of such change would be settled amongst themselves and if there was any dispute in that connection the same would be referred to the Government. Reverting to the case of the petitioner it is manifest that the petitioner---s right to recover octroi duty accrued to him prior to the notification dated 12- 8-1996 and that such a right was to remain intact despite subsequent change of limits of the respondents. Pursuant to this arrangement the petitioner deposited money and took further steps to fulfil his contractual obligations. The following observations of the Hon'ble Supreme Court in the judgment reported as Pakistan v. Muhammad Himayatullah PLD 1969 SC 407 will clarify the position:--- "The authority that has the power to make an order has also the power to undo it. But this is subject to the exception that where the order has taken legal effect, and in pursuance, therefore, certain rights have been created in favour of any individual, such an order cannot be withdrawn or rescinded to the detriment of those rights."
18. The assurance in the letter dated 29-6-1996 of the Director Local Government Hyderabad constitutes very important aspect of this case as the same influenced the conduct of the petitioner arid was also acted upon by him. Thus the doctrine of promissory estoppel will come into play and it will be useful to refer in this connection to the following extract from Halsbury's Laws of England: III-Edition-Volume 15, P.175 (para. 344).
19. "Promissory estoppel. When one party has, by his words or conduct, made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then, once the other party has taken him at his word and acted on it, the one who gave the promise or assurance cannot be afterwards be allowed to revert to their previous legal relations as if no such promise or assurance had been made by him, but he must accept their legal relations subject to the qualification which he himself has so introduced."
20. The doctrine of promissory estoppel which is based on a representation with regard to an assurance as compared to the common laws doctrine of estoppel which is founded on a representation as to existing fact has also assumed an important role in the realm of administrative law and it is available both against the Government and their agents as delegatees.
21. It will also be relevant to refer to the judgment of the Hon'ble Supreme Court reported as Al-Samrez Enterprise v. The Federation of Pakistan 1986 SCMR 1917. In that case the Federal Government of Pakistan had issued a notification exempting certain items from customs duty. Relying upon that notification the appellants Al-Samrez Enterprise/ purchased articles so exempted and letter of credit was also opened. When the goods arrived at Karachi Port the Customs Authorities refused to clear the same except on the basis of enhanced ditty mentioned in the subsequent notification.
22. The appellants protested and claimed that they had acquired vested right in terms of the previous notification. The Supreme Court while allowing the appeal observed as under:-- "We are, therefore, clearly of the opinion that if a binding contract was concluded between the appellants and the foreign exporter or steps were taken by the appellants creating a vested right to the then existing notification granting exemption, the same could not be taken away and destroyed in modification of the earlier one, on the ground that under section 21 of the General Clauses Act, the Government could exercise the power of Modification. (1925 F)."
23. It was further held as follows:-- "It will be inequitable and unjust to deprive a person who acts upon such assurance of the right to exemption and expose him to unforeseen loss in the business transaction by suddenly withdrawing the exemption after he has made legal commitments. It is in this perspective that a right is created in his favour and a subsequent withdrawal of exemption cannot be given retrospective operation by an executive act to destroy this right."
24. (See also Army Welfare Sugar Mills Ltd v. Federation of Pakistan 1992 SCMR 1652).
25. It will also be seen in this case that no loss would be caused to the Municipal Committee Dadu if the petitioner is allowed to recover the octroi duty as agreed because in terms of the letter dated 29-6-1996 Municipal Committee Dadu would get from the Union Council Sial its share in the proceeds of octroi proportionate to the area now included in its territory.
26. The upshot of the above discussion is that this petition is allowed but their will be no orders as to cost.