1996 PLP 282 (CLC)

Ch. Muhammad Azam for Respondents Nos.1 and

2. Mohsin Raza Joya for Respondent No

3. Dates of hearing: tad and 3rd April, 1995. This judgment shall also deal with and dispose of Writ Petition No.2101/94/BWP titled Muhammad Amin and 7 others v. Municipal Committee Hasilpur and 2 others because in both these petitions same order is impugned.

2. The Municipal Committee Hasilpur, District Bahawalpur/respondent No. 1 announced an open auction for plots of shops owned by it within the municipal area on monthly rent basis. The petitioners participated in the auction and were highest bidders for 9 shops and deposited the earnest money under the endorsement of Administrator Municipal Committee Hasilpur/respondent No.

2. Respondent No. 2 thereafter forwarded the case to Deputy Commissioner Bahawalpur/respondent No. 3 as delegatee of Government in exercise of powers under section 156 (b), Punjab Local Government Ordinance, 1979 for formal approval, although it is alleged that it was not required by law. The respondent No. 3 endorsed the auction. However, on the report of Assistant Director, Local Government and Rural Development, Bahawalpur, the Deputy Commissioner Bahawalpur/respondent No. 3 vide his Letter No. LGA/2521 dated 7‑9‑1994 directed respondent No.2/the Administrator, Municipal Committee, Hasilpur to cancel the auction and orders a fresh auction after completion of all formalities and consequently respondent No. 2 cancelled the auction on 12‑9‑1994. Hence this Constitutional petition.

3. I have heard the learned counsel for the parties and have also seen the parawise comments submitted by respondents Nos. 2 and 3.

4. In their comments respondents Nos. 2 and 3 have stated different reason, than the one contained in the impugned order of respondent No. 3 for having cancelled the auction. It is stated therein that the property auctioned by the Municipal Committee Hasilpur/respondent No. 1 is not the property of the Municipal Committee but it is the property of the Irrigation Department and is part of an abandoned irrigation channel and the land of channel has not yet been transferred in the name of Municipal Committee.

5. Learned counsel for the petitioners has submitted that the explanation offered by respondents for having caused the cancellation of the auction is evasive and is intended just to create subterfuge in defence of the impugned order which is patently illegal. It has argued before this Court that the entire piece of land and open spaces not privately owned lying within the municipal limits were once for all transferred to respective Municipal Committee vide Memo. No. COI /24‑.202/2436‑39 dated 27‑2‑1976, the copy of which has been produced by the petitioners. This directive was issued by Commissioner Bahawalpur Division to all the Deputy Commissioners in Bahawalpur Division in view of a "Farman" issued by Late Ameer of Bahawalpur on 22‑10‑1935. It is next submitted by the learned counsel for the petitioners that once having successfully participated in the auction and the earnest money having been deposited by the petitioners, the valuable vested rights in, regard to the property auctioned had been created in favour of the petitioners and the Deputy Commissioner Bahawalpur passed the impugned order without giving the petitioners an opportunity of being heard and, therefore, the impugned order, dated 7‑9‑1994, being violative for the Principle of "audi alteram partem" is illegal, and void ab initio. It is also submitted that the consequential order passed by the Administrator Municipal Committee Hasilpur/respondent No. 2 dated 12‑9‑1994, whereunder the auction has been cancelled under the directions of respondent No. 3/Deputy Commissioner Bahawalpur is not an independent order but merely mechanical order without application of mind and as such it cannot be sustained in law. Learned counsel for the petitioners has placed reliance upon Ittehad & Co. v. the Commissioner, Faisalabad and 3 others (PLD 1994 Lahore 29) wherein the Commissioner had suspended resolution of Municipal Corporation as delegatee of Government in exercise of powers under section 156(b), Punjab Local Government Ordinance, 1979 without hearing the affected person, it was held that "although it is correct that in this section there is no specific requirement to hear the affected person before passing an order but it is trite law that minimum requirement of natural justice of affording an opportunity of being heard is to be read into every statute in absence of any exclusion." Reliance is also placed on Dr. Nusrat Ullah Chaudhry and 2 others v. Government of the Punjab through Secretary, Cooperative Department, Lahore and 2 others (PLD 1994 Lahore 353) wherein no show‑cause notice was issued to the petitioners prior to taking action against them whereby plot allotted to them was cancelled. It was held that action against petitioners having been taken at their back without affording them opportunity of being heard was violative of the principles of natural justice and, thus, void ab initio and it was observed that "it has been rightly held by the superior Courts that the rule of natural justice embodied in the maxim "audi alteram partem" was not confined to proceedings before Courts but would extend to all proceedings by whomsoever held which might affect the person or property or other rights of the parties concerned in a dispute". In Mrs. Anisa Rehman v. P.IA.C. and another (1994 SCMR 2232), it was held by the Hon'ble Supreme Court that Maxim "audi alteram partem" would be applicable to judicial as well as to non judicial proceedings and it would be read into every statute as its part if right of hearing has not been expressly provided therein and the violation of the Maxim was equated with the violation of a provision of law warranting pressing into service constitutional jurisdiction under Article 199 of the Constitution.

6. Learned counsel for the petitioner has then referred to Bashir Ahmad Bilour v. Municipal Committee, through its Administrator and 3 others (PLD 1976 Pesh. 1). In that case the Administrator, Municipal` Committee held public auction for leasing out right to collect octroi and after accepting the highest bid, submitted the same to Controlling Authority for confirmation. Controlling Authority, on direction of Provincial Minister, without applying his own mind to case, rejected highest bid of the petitioner on his back and leased out right to another person by private negotiations. It was held1hat the action of the Controlling Authority was not only repugnant to provisions of law, but also was manifestly unjust and designed to undermine public confidence and it was observed that the impugned action of respondents is without jurisdiction for being opposed to the well‑known principles of "audi alteram partem".

7. Learned counsel for the respondents, on the other hand, submits that the petitioners were merely the highest bidder at the auction and the contract had not been completed as yet in terms of section 39 of the Punjab Local Government Ordinance 1979 which requires that the contracts shall be executed in such manner as may be prescribed and, according to Rule 5 (2) of the Punjab Local Councils (Contract) Rules, 1981, all agreements or on behalf of a local council have to be signed by the Chairman and attested by two witnesses and shall bear the seal of the local council and in a instant case agreement has not been arrived at between the petitioners and the Municipal Committee in the prescribed manner and, therefore, no valid contract exists between the parties which can be executed. Reliance in this regard is placed upon Muhammad Abdullah v. Municipal Committee, Gujranw0a (PLD 1967 Lahore 1011) wherein it was held that the contract not bearing the common seal was invalid and it is thus urged that petitioners have no locus standi to institute the present petition.

8. I am afraid that this argument of the learned counsel for the respondents has no force because the petitioners had successfully participated in the auction and were highest bidders and their auction had also beer approved and in these circumstances they could not be condemned unheard. In Arsalla Khan v. Bashir Ahmad Blour and 3 others (PLD 1976 SC 581) a person biding 4Lt auctions for collection of octroi duty and not being able to participate in an auction for having received no notice of auction was declared to be an aggrieved person within meaning of Article 199 of the Constitution. Reliance can also be placed to similar effect on Muhammad Hussain Butt v. Zila Council and others (1994 CLC 502) where the claim of the petitioners was that they had deposited amount as earnest money with Authority for getting disputed cattle market on lease through auction, but cattle market was auctioned in their absence and was purchased by other persons. The auction was declared to be illegal and was set aside and it was held that the petitioners who had deposited earnest money were the necessary party in bid and if they were not present when cattle market was auctioned, it was the duty of Authority to have summoned the petitioners before auction of cattle market was conducted because they had earned their right to participate in bid by depositing earnest money. The next submission of the learned counsel for the respondents is that the contractual rights and obligations cannot be enforced through Constitutional petition. .

9. I am afraid that this submission of the learned counsel for the respondents has also no force. It is settled law that where the petitioner is seeking his statutory rights arising under statute and rules thereunder, a money or contractual claim based on such rights can be pursued in the Constitutional jurisdiction. In M.H. Abidi v. State Life Insurance Corporation (1990 MLD 563) (Karachi), a Division Bench judgment of Karachi High Court, it was held that it is true that ordinarily the contractual rights and obligations have to be enforced through Courts of ordinary jurisdiction, "however, where rights are based on statute law or rules framed thereunder or when an obligation or duty vests in public functionary as a statutory body, performing functions in relation to the affairs of the federation or a province or a local authority, the Constitutional, jurisdiction can be attracted. In such and allied situations even contractual rights and obligations may be enforced in constitutional jurisdiction. This, however, is subject to the important rider of corresponding absence of an adequate remedy". Further reliance on‑this point can be placed upon Estate Officer v. Tahir Hussain (PLD 1962 SC 75), Anjuman‑e -Ahmadiya v. Deputy Commissioner, Sargodha (PLD 1966 SC 639), Rashid A. Khan v. W.P.' Railway Board (PLD 1973 Lah. 733) and Masjid‑i‑Intizamia Jamia Masjid, v. Secretary Government of West Pakistan (PLD 1975 SC 335). Thus, merely, because a contract is involved in a Constitutional petition is not by itself sufficient to oust the Constitutional jurisdiction under Article 199 of the Constitution. Reference may also be made to Pakistan Medical Association Karachi v. Government of Sindh and 5 others (1979 CLC 382), a judgment delivered by the Division Bench of Karachi High Court. In that case the Karachi Development Authority issued a scheme for allotment of plots and the petitioner therein, applied for the plot under the scheme and obtained a plot but the Karachi Development Authority without giving a personal hearing to the petitioner cancelled the plot. It was held that it was a case, not one of simple agreement but one of performance of statutory obligations and functions and susceptible to exercise of writ jurisdiction.

10. The petitioners were highest bidders at the auction conducted by Municipal Committee, Hasilpur, they deposited the earnest money in time, and 'the auction was also approved by respondent No. 2 Administrator Municipal Committee, Hasilpur, and therefore, the valuable vested rights accrued in their favour in regard to the property for which they made their bids. In these circumstances and in view of the above discussion, they had the right to be heard before any adverse order could be passed against them. The Deputy Commissioner Bahawalpur, therefore, acted illegally in issuing the direction to the Administrator Municipal Committee, Hasilpur, without first affording the petitioners an opportunity of being heard. This writ petition is, therefore, accepted and the order, dated 7‑9‑1994, of the Deputy Commissioner Bahawalpur being violative of principle of natural justice of Audi Alteram Partem is set aside and the consequential order, dated 12‑9‑1994, or Administrator Municipal Committee is also set aside. It will, however, be open to the Deputy Commissioner Bahawalpur as delegatee of Government under section 156(b) of Punjab Local Government Ordinance, 1979 to decide the matter afresh after affording the petitioners, a full opportunity of being heard and after holding a detailed inquiry in regard to the title of the property in dispute. The parties are left to bear their own costs. AA./M‑2572/L Petition accepted.