2005 PLP 398 (YLR)

Class. Limit of Contract Amount (i) Category A Contractor No limit. (ii) Category B Contractor Up to Rs.2.00 million. (iii) Category C Contractor Up to Rs.1.00 million. (iv) Category D Contractor. Up to Rs.0.5 million. (4) Contractors shall be enlisted by the respective District Government in accordance with instructions issued by the Local Government and Rural Development Department from time to time." It is submitted that pursuant to this Rule, the Government of the Punjab, Local Government and Rural Development Department vide Circular/Instruction No.SOVI (LG) 2‑253/97; dated 30‑10‑2003 prescribed the instructions for the purposes of section 15‑A ibid. Reference has been made to clause (h) of the aforesaid Circular to submit that a contractor registered in any District of the Punjab was entitled to participate in the auction proceedings under these Rules throughout the Province of Punjab. Clause (h) as hereinbefore referred is reproduced as under:‑‑ (h) "No contractor shall be allowed to participate in the auction of collection rights of any Local Government unless he is registered in accordance with the Rules ibid, and these instructions. However the contractor registered in any District of Punjab is entitled to participate in auction proceedings under these Rules throughout the Province of Punjab."

10. The cumulative effect of the submission made by the learned counsel for the petitioner is that the petitioner is enlisted by a District Government of the Punjab and notwithstanding that the petitioner was not registered with the District Government, Kasur did not disentitle him to take part in the auction proceedings held by the TMA, Kasur as mentioned above. He further submitted that the impugned finding of respondent No.1 that a contractor has to be enlisted by the District Government concerned (in this case District Government Kasur) before he could participate in an auction pertaining to the said TMA is based upon misconstruction of law. It is next contended by the learned counsel for the petitioner that respondent No.1 had erred in not adverting to clause (h) of the Circular/Instruction mentioned above and that the impugned order has been passed in complete oblivion of the same.

11. Adverting to the locus standi of respondent No.5 to challenge the auction proceedings, it is stated that on the date of auction viz. 24‑5‑2004, respondent No.5 himself was admittedly not registered with the District Government, Kasur as a contractor. It was only on 24‑6‑2004 i.e. after 21 days of the signing of the contract by the TMA, Kasur in favour of the petitioner that respondent No.5 was enlisted as a contractor with the District Government, Kasur. It is submitted that in this view of the matter, respondent No.5 had no locus standi to challenge the auction.

12. The learned counsel for the petitioner has placed reliance upon an unreported judgment of this Court passed in W.P. No.94760 of 2004 wherein it was held that the registration or enlistment of contractors under Rule 15‑A ibid was a pre condition and that respondent No.5 who was not qualified to take part in the auction of 24‑5‑2004 could not be allowed to over reach the auction proceedings and upset the highest bidder of an approved auction by now making an offer of a higher amount than the one ascertained as the highest bid through the auction.

13. Malik Muhammad Azam Rasool, Advocate for respondents Nos.2 to 4 ‑has submitted that in fact only those contractors were eligible to take part in the impugned proceedings who were enlisted by the respective District Government in accordance with the instructions issued by the Local Government and Rural Development Department from time to time. The learned counsel for the respondents has stressed upon the provisions of Rule 15‑A(4) ibid to urge that the term respective District Government employed therein would refer to the particular District Government, for which the auction proceedings are held. He has elaborated his stand by saying that as the petitioner was admittedly not enlisted by the District Government, Kasur, he had no locus standi to participate in the auction proceedings and that any superstructure built upon such an illegal foundation shall also be unlawful. Referring to clause (h) of the Circular/Instructions, dated 30‑10-2003, it is submitted that the latter contents thereof i.e. "however, the contractor registered in any District of the Punjab is entitled to participate in the auction proceedings under these Rules throughout the Province of Punjab" is totally out of the context and is beyond the purview of Rule 15‑A of the Punjab Local Government (Auctioning of Collection Rights) Rules, 2003. He has further submitted that vide subsequent Circular/Instruction, dated 24‑8‑2004, it has been clarified that no contractor shall be allowed to participate in the auction of the collection rights of any Local Government unless he is registered in the District in which auction is to be held.

14. Mr. M.A. Zafar, Advocate on behalf of respondent No.5 has supported the stand taken by the learned counsel for respondents Nos.2 to

4. He has further submitted that the District Accounts Officer, Kasur through his letter, dated 5‑6‑2004 informed the T.O. (F), Kasur that since the registration of the contractors for the purpose was in progress, the auction of collection rights be postponed to enable the maximum number of locally registered contractors to participate in the auction. It is contended that from this, it was apparent that no lawful auction could or did take place on 24‑5‑2004. It is further submitted that even if the petitioner acquired any right through the impugned auction, he had lost the same as he did not remit the total requisite amount of Rs.50,58,465 and instead remitted. Rs.48,75,000 and due to this short payment, the petitioner was rendered in eligible to take over the possession of the collection rights. Learned counsel for respondent No.5 further referred to clause 7 of the agreement executed between the TMA and the petitioner to contend that it contained an arbitration clause, on account of which, the writ petition itself was not competent.

15. Arguments have been heard and record perused.

16. Rule 15‑A of the Punjab Local Government (Auctioning of Collection Rights) Rules, 2003 makes it incumbent upon every contractor who participates in the auction proceedings of collection rights of different taxes and fees to be enlisted according to the categories mentioned therein by the respective District Government in accordance with the instructions issued by the Local Government and Rural Development Department from time to time. The enlistment of the contractor according to this Rule is not with reference to the District Government, wherein the auction proceedings are held but relates to the respective District Government to which a particular contractor applies for such registration. This is clearly elucidated through clause (h) of the Circular/ Instruction, dated 30‑10‑2004 wherein it is specified in no uncertain terms that a contractor registered in any District of Punjab is entitled to participate in the auction proceedings under these Rules throughout the Province of Punjab.

17. The effect of Clause (h) cannot be whittled down by the subsequent issuance of a Circular/Instruction by the Government of Punjab Local Government and Rural Development Department on 24‑8‑2004 as far as it affects the merits of the instant case. Although, according to this latter Circular/instructions, it is stated that no contractor shall be allowed to participate in the auction of collection rights of any Local Government unless he is registered in the District in which the auction is to be held, it cannot operate retrospectively to effect the rights acquired by an auction purchaser approved prior to the enforcement of the subsequent Circular. The submission made by the learned counsel for the respondents that no contemplated right had come to vest in the petitioner before the enforcement of the Circular, dated 24‑8‑2004 as the petitioner had rendered himself in eligible to take over possession by his own act of default in depositing the requisite amount and also on account of the fact that possession of the collection rights has admittedly not been granted to the petitioner so far is devoid of force. It has been pointed out by the learned counsel for the petitioner that out of the total requisite amount of Rs.50,58,465, the petitioner had deposited a sum of Rs.48,75,000 and had also remitted the balance amount since. It is also noticed that the possession of the collection rights could not be transferred to the petitioner on account of an injunctive order that was passed against the handing over of such possession. The reason for this is that as here in before mentioned not only the highest bid of the petitioner was accepted, the same was approved by the Auction Committee and the House and acceptance letter, dated 1‑6‑2004 had bean issued to him. The TMA had also entered into a formal lease agreement/contract with the petitioner on 30‑4‑2004.

18. The requisite amount was thus, remitted by the petitioner. He was unable to obtain the possession of collection rights on account of an injunctive order of this Court. The contention that the petitioner had rendered himself in eligible for obtaining possession is repelled.

19. At the time of the auction on 24‑5‑2004, the Circular/Instructions of 30‑10‑2003 held the field. It clearly spelt out that a contractor registered in any District of Punjab is entitled to participate in the auction proceedings under the Rules throughout the Province of Punjab. The auction proceedings held on 24‑5‑2004 were thus, in accordance with the Instruction issued under Rule 15‑A ibid and did not suffer from any illegality.

20. The Circular/Instructions, dated 24‑8‑2004 would also not affect against the petitioner upon the principle of locus poenitentiae. As hereinbefore observed, the transaction in favour of the petitioner was a past and closed transaction and the accrued right in favour of the petitioner could not be taken away as the auction had been acted upon in all its material details.

21. Viewed in this backdrop, the impugned order passed by respondent No.1 has not been made in accordance with the relevant law, rules and instructions holding the field at the time of auction. Resultantly, this writ petition is allowed and the impugned order passed by respondent No. 1 ( Secretary, LG & RD Department) is declared to have been so done without lawful authority and is declared as null and void. The TMA, Kasur shall pass the possession of collection rights to the petitioner forthwith as already agreed to by the parties for the financial year concerned. M.H./T‑59/L Petition allowed