' This judgment shall decide Writ Petition No,19765 of 2000 and Writ Petition No,4794 of 2001 as common questions are involved and both these matters were ordered to be heard together. (The petitioner in Writ Petition No,19765 of 2000 will hereinafter be referred to as the "first petitioner" while the petitioner in Writ Petition No,4794 of 2001 shall be referred to as the "second petitioner").
2. The first petitioner herein is an Advocate while the second petitioner was the Chief Officer of Zila Council, Vehari (hereinafter to be referred to as respondent No,6).
3. In an auction held for the lease of the rights of collection of "goods exist tax" Malik Tariq Masood and Muhammad Siddique Khan made the highest bid for Rs,4,51,00,000. This bid was approved by respondent No,6 on 17-8-1995. As per terms of the auction the said lessees were called upon to make a deposit of Rs,1,13,24,000 within seven days. Instead of making the deposit the lessees on 24- 8-1995 filed an application requesting respondent No,6 to extend time for the deposit. Vide order dated 27-8-1995 respondent No,6 granted an extension of four days for making of the said deposit.
After getting the said extension the said lessees approached this Court by filing Writ Petition No,11150 of 1995 which was so filed on 28-8-1995. On 5-9-1995 the matter was taken up by this Court when in the presence of the counsel for the petitioner, the learned Advocate-General, a learned A.A.-G. As also learned counsel for respondent No,6, the learned Advocate-General informed the Court that the highest bid made by the said writ petitioners has been approved by the competent authority. It was also noted that the lessees had already made a deposit of Rs,40,00,000. The lessees were directed to approach respondent No,6 for obtaining the challan for the deposit of further amounts in accordance with terms and conditions of the auction. At the same time respondent No,6 was directed to give at least 7 days' time to deposit the said amount after the date of issuance of Bank challan to the lessees for which purpose the lessees were to approach respondent No,6 on 7-9-1995. The order then concluded that the lease period and rights and liabilities therein shall start accruing on the date the lessees are given charge at the spot for the collection of tax.
4. It is a common ground that this order was implemented and possession was delivered to the lessees on 15-9-1995. At this stage first petitioner was contacted by the respondent No,6 to take steps for review or modification of the said order, dated 5-9-1995.The reason was that the order had the effect of extending the period of lease beyond 30-1-1996 which was not permissible under the Rules. On 18-9-1995 C.M. 3292 of 1995 was filed in this Court seeking clarification or modification of the order dated 5-9-1995. This application was filed by the first petitioner acting as a counsel for respondent No,6.
5. At this stage I may note here that the said second petitioner joined as Chief Officer of respondent No,6 on 17-9-1995 i,e, at a point of time when the said order had been passed and implemented.
6. C.M. No,3292 of 1995 came up before the Court on 15-10-1995 in presence of the first petitioner for respondent No,6, Mr. Ali Ahmad Awan, Advocate for the said lessees, Mian Abdus Sattar Najam then Advocate-General, Punjab with Ch. Muhammad Bashir, A.A.-G. And the said second petitioner. His Lordship proceeded to record an order with the agreement of the learned counsel for both the parties for the modification of the order dated 5-9-1995 as follows:-- "(a) from 1-8-1995 to 15-8-1995 on which date the auction took place, whatever amount has been collected by the Zila Council shall be made over to the writ petitioner and the writ petitioners shall be liable to pay lease money for the said period according to the highest bid offered by him and accepted;
(b) from 16-8-1995 to 14-9-1995 on which date the possession was delivered to the petitioners to collect the export tax whatever collections have already been made by the Zila Council the same shall be retained by it and the petitioners shall not be liable to pay instalment on account of lease money;
(c) the lease period shall expire on 30-6-1996."
' Consequently, the application as well as the writ petition were disposed of in the said terms.
7. Against this order respondent No,6 filed C.P.L.A. No,581-I of 1996. Leave to appeal was sought against the said order dated 15-10-1995 by respondent No,6 with the assertion that the counsel for respondent No,6 i,e, the said first petitioner had not given his consent for passing the said order. It was further asserted that the said order cannot be implemented being violative of the Rules.
Honourable Supreme, Court vide judgment dated 5-5-1996 refused to grant leave by observing that the order was in fact passed with the consent of the said first petitioner and that it incorporates the terms agreed to by both the parties and that the order is binding on respondent No,6. It was further observed as follows:-- "On perusal of the impugned order, we are satisfied that the agreed terms incorporated therein are quite just and fair to both the parties and they can well be acted upon."
' On 4-5-1999 notice (Annexure "E") was served upon both the said petitioners. It was stated that the Resident Assistant Director Audit, District Council, Vehari has issued Requisition No,9/RAD, dated 26-3-1999, whereby the responsibility for the loss caused to respondent No,6 in the matter of the consent decree in Writ Petition No,11150 of 1995 has been placed on the said petitioners. The lessees were warned that they should get objection dropped otherwise surcharge proceedings will be commenced by the Government. The said first petitioner filed a reply to this notice (Annexure. "F"' to his writ petition), explaining the circumstances in which the said order was passed on 15-10-1995 and requesting respondent No,6 to bring the said facts in the notice of the Audit Authorities. It appears that the reply did not impress the Audit Authorities and the case was sent to the Provincial Government. The pre-surcharge certificate (Annexure "F/1") was accordingly issued under rule 27 of the Punjab Local Councils '(Audit) Rules, 1981, whereby it was found that respondent No,6 had suffered a loss of Rs,27,81,176 and that it is to be borne by both the petitioners equally i,e, each one has to pay a sum of Rs,13,90,588 and they were to be surcharged accordingly. Thereafter the Provincial Government issued notices on 25-2-2000 to the said petitioners alleging that the respondent No,6 has suffered a loss due to their negligence/misconduct and they should show cause as to why they should not be surcharged for the said amount. This notice was replied by both the petitioners separately denying the said allegations. Vide order, dated 23-9-2000 the replies were not found satisfactory and the Chairman, Punjab Local Government, Inspection Team, Lahore was appointed as an Enquiry Officer.
8. Learned counsel for the said first petitioner argues that the issuance of the said notices, the commencement of proceedings, the certificate, the order and further proceedings are void inasmuch as the first petitioner is not a person within the meaning of the Punjab Local Government (Audit) Rules, 1981 against whom such proceedings can be taken or order passed. Further contends that the petitioner acted in the best interest of his client to the best of his ability in the given circumstances of this case. Learned counsel points out that what happened was that the Honourable Judge who had passed the order dated 5-9-1995 in Writ Petition No,11150 of 1995 had in the meanwhile decided a similar case i,e, Writ Petition No,11802 of 1995 in somewhat similar circumstances in the same terms albeit without the consent of the parties. This case was decided on 19-9-1995 while C.M. No,3292 of 1995 came up on 20-9-1995 and thereafter on 11-10-1995. On both these dates the Honourable Judge made a reference to the said case decided by him and had expressed the opinion that this case is also to be decided on the same terms keeping in view of rule of consistency. The first petitioner, accordingly on 15-10-1995 agreed to the decision of the case in the said manner. According to the learned counsel primarily the anxiety of respondent No,6 was that the lease period should not extend beyond 30-6-1996 which was the effect of the earlier order dated 5-9-1995. Learned counsel then refers to the said decision of the Honourable Supreme Court of Pakistan in the C.P.L.A. Filed to seek leave to appeal against the said order dated 15-10- 1995 and particularly refers to the observations of the Supreme Court holding the agreement to be just, fair and workable.
9. Learned counsel then complains that the matters had already gone out of hand when the said first petitioner was contacted by respondent No,6 for seeking relief qua order dated 5-9-1995. The precise contention is that the persons who were in fact responsible for the fiasco i,e, these who had enlarged the time in the first instance for the deposit to enable the lessees to approach this Court in the meanwhile had not been in any manner called upon to explain or to make good the loss.
10. Learned counsel for the said second petitioner after adopting most of the arguments of the learned counsel for the first petitioner argues that his client came to join respondent No,6 on 17-9- 1995 when the said extension in time had already been granted the lessees had approached this Court, order dated 5-9-1995 had been passed and had already been implemented. Learned counsel contends that in the matter of the first petitioner it is stated case of -respondent No,6 that no one from its side instructed him to agree to the terms of the said order. Now, according to the learned counsel, the only role the said second petitioner has in this entire matter is that on 15-10- 1995 he was present in Court with the records. There is not a word in the order that it was he who consented to the said arrangement or that he was consulted by the said first petitioner while agreeing to the said arrangement.
11. Learned Advocate-General contends that it is a matter of record that the first petitioner was not issued any instructions in the matter of proceedings that took place before this Court on 15-10-1995 and that as a result of the said arrangement made with the consent of the first petitioner, respondent No,6 suffered a loss of Rs,27,81,176 which constitutes the difference between the amount actually collected by the Zila Council during the said period and the amount which the lessees were required to pay under the terms of the lease. Learned Advocate-General has, however, not much to say in the matter of the said second petitioner.
12. Learned counsel for respondent No,6 adopts the arguments addressed by the learned Advocate-General.
' 12-A. I have gone through the files of these two cases as also of Writ Petition No,11150 of 1995 and Writ Petition No,11802 of 1995, with the assistance of the learned counsel for the parties and the learned Advocate-General. The grounds, leading to the issuance of the pre-surcharge certificate, are stated by the Divisional Director, Local Fund Audit, Multan in Annexure "F/2" (Writ Petition No,19765 of 2000). According to this document the Administrator i,e, respondent No,6 approved the bid on 17-8-1995 and directed the lessees to deposit the 1/10th of the bid amount, otherwise the security amounting to Rs,40,00,000 was to be forfeited. Now the lessees insisted that the bid has to be approved by the Minister concerned and meanwhile requested for grant of time to deposit on 24-8-1995. This request was processed by the Taxation Officer, the Chief Officer and the Resident Assistant Director (Audit) who recommended the extension and the Administrator granted extension up to 29-8-1995. Before the said date the writ petition had been filed and a restraint order was issued, till such time that the lease is approved by the Minister for the Local Government, Punjab. Now this document further reads that the Minister had accorded the approval on 4-9-1995 thereafter on 5-9-1995 respondent No,6 asked the lessee to deposit the difference and take over the charge. It was in this background that the order, dated 5-9-1995 was passed by this Court in Writ Petition No, 11150 of 1995. The document further reads that the first petitioner was engaged as counsel who filed C.M. No,3292 of 1995 for review of the said order. Thereafter the details of the order passed on 15-10-1995 with the agreement of the counsel for the parties are stated. Then there is reference to the filing of the said C.P.L.A. In the Honourable Supreme Court of Pakistan. There is also reference to a letter dated 3-12-1995 addressed by respondent No,6 to the said first petitioner calling upon him to disclose as to whether any of the officers had given consent to him for the said arrangement made in the Court. This letter was not replied to by the first petitioner.
13. Thereafter there is reference to the judgment of the Honourable Supreme Court. I may note here that the said order of the Honourable Supreme Court has been extensively reproduced except of course the portion where the said arrangement was held to be just and fair. Thereafter it was abruptly concluded that both the petitioners appeared in this Court and gave their consent and agreed to terms which did not favour respondent No,6 causing a financial loss of Rs,27,81,176. It was then observed that the said petitioners have not exercised due care in agreeing to the terms in this Court which were favourable to the lessees. Then there is a reference to the case pertaining to Zila Council, Bahawalpur (Writ Petition No,11802 of 1995) and it was stated that both the cases had different factual background. Towards the end is the observation that the said officer does not see any weight in the presumption that the cause for commencement of litigation was the extension accorded by the Administrator from 24-8-1995 to 28-8-1995 as the lessee could have approached this Court irrespective of the said extension. It is, this report of the said Divisional Director, Local Fund Audit, Multan which is primarily being relied upon by the learned Advocate-General in support of the said contentions.
14. There is absolutely no dispute that the lessee had deposited a sum of Rs,40,00,000 which in its turn was a security for the purpose of conditions of the terms including payments made in accordance therewith. It is a matter of record that the lessee failed to pay the said initial amount and was given an extension. Before the expiry of the extended period the lessee approached this Court and the order dated 5-9-1995 was passed. Primarily the anxiety of respondent No,6 was that the lease period stood extended beyond 30-6-1996 because of the said order and the said first petitioner was engaged to get the order clarified or modified accordingly. It was in the said background that C.M. No,3292 of 1995 was filed.
15. Now going by the said reasoning of the said Divisional Director, Local Fund Audit, Multan in document Annexure "F/2" one distinctly gets the impression that somehow or the other respondent No,6 believed the contention of the lessees that he could not have approved the bid and that the bid was to be approved by the Minister. It is a matter of record that the bid was in fact approved by the Minister on 4-9-1995 and thereafter on 5-9-1995 the lessee was called upon by respondent No,6 to make the deposit. It is but obvious that in the course of Writ Petition No,11150 of 1995 the learned Advocate-General informed the Court of the said approval when he stated that the competent authority has approved the bid. This being so, this Court disposed of the writ petition with the said observations regarding 8 days time w,e,f, 7-9-1995 to the lessees to make the deposit and thereafter delivery of possession which was delivered on 14-9-1995. Thus, the only thing remaining was the matter of period of the lease as according to the said order, dated 5-9-1995 the lease was to commence from the date when the possession was to be delivered to the lessees.
16. In the said factual background borne out from the record, it cannot at all be said that the said first petitioner acted in any manner without due care and caution in the matter of agreeing to the said arrangement. The said contention of the learned counsel that the arrangement was made with reference to the earlier decision of his Lordship in Writ Petition No,11802 of 1995 decided on 19- 9-1995 is borne out from the records of the said writ petition. I find that in the said case also the plea of the lessees was the same i,e, the approval was made by the Minister on 7-9-1995. In the present case the Minister gave the approval on 4-9-1995. It was primarily the said delay caused in the matter of said approval by the Minister that forms the basis of both the said writ petitions. I, therefore, do not find any difference in the factual background of both the cases and the contention of the said first petitioner that he was absolutely sure that this case was to be decided accordingly by his Lordship keeping in view the Rule of consistency cannot be said to be improbable.
17. Whether or not the first petitioner sought instructions or as to whether or not he was so instructed would not be of much relevance in view of the settled law that a counsel has complete authority under the terms of his power of attorney to act in the interest of his B client and even to enter into a compromise or agreement for the decision of a given case.
18. Be that as it may, the order passed on 15-10-1995 withstood the scrutiny of the Honourable Supreme Court on the touchstone of the fairness of the conditions laid down therein, and stated to be agreed to by the said first petitioner, and it was held that the agreement is just and fair to both the parties and that the terms can be acted upon. In my humble opinion under the Constitution of this country no Court muchless an Audit Officer has the lawful authority to overrule the said observation of the Honourable Supreme Court of Pakistan unless, of course, a case of fraud, misrepresentation or lack of jurisdiction is made out in properly constituted proceedings. It is but a matter of record that no application under section 12(2), C.P.C. Till dale has been filed either in this Court or before the Honourable Supreme Court to question the said order on the said grounds.
19. So far as the said second petitioner is concerned, suffice it to say that there is not a word in the said report of the Audit Officer or in any of the comments/written statement as to how he is responsible when he joined the office of respondent No,6 long after the said order has been implemented and thereafter he was in Court on 15-10-1995 only to produce the record. There is not a word on the record that he had anything to do with the said arrangement.
20. This leaves the said first contention of the learned counsel for the petitioners. The contention is based upon reading of rule 27 of the said Audit Rules, 1981 by the learned counsel. The said rule 27(1) provides for issuance of a pre-surcharge certificate in respect of--
(i) any member of the Local Council,
(ii) any official or servant of the Local Council, any person charged with the administration of the affairs of the Local Council, or acting on behalf of the Local Council, in case he is found responsible for any loss, wastage, misappropriation or misapplication of any money or property belonging to the Local Council. According to the learned counsel the term "acting on behalf of the Local Council" is to be read ejusdem generis with the said earlier terms and it would only be a person falling in the said first three categories who, if acting on behalf of the Local Council can be proceeded against under the said Rule. Learned Advocate-General, on the other hand, is of the opinion that a lawyer acting on behalf of the Local Council would fall within the mischief of the said Rule. I find myself in agreement with the learned Advocate-General inasmuch as going by the terminology of the said Rule possibly no person who is connected with the Local Council in any manner stands left out and the person referred to in the said fourth category may include a counsel acting for the Local Council.
21. For all that has been discussed above, both the writ petitions are allowed and the proceedings initiated under the Punjab Local Councils (Audit) Rules, 1981 against the said first and the st cond petitioners are declared to be without lawful authority. No order is to costs.