1992 PLP 135 (MLD)

Nemo for Respondent No.l. Ali Ahmad Awan for Respondent No.2. Date of hearing: 14th October, 1991. The dispute relates to lease of rights for the collection of octroi duty for the year 1991‑92 from the areas forming part of Municipal Committee, Chiniot. In response to public advertisement appearing in daily Nawa‑i‑Waqt, Lahore, dated 26‑6‑1991, the petitioners participated in the auction held on 27‑6‑1991 and their bid at Rs.55,00,000 was the highest. They claimed to have deposited Rs.2,00,000 with the respondent. The Sub‑Committee constituted for the purpose of holding auction recommended the acceptance of their bid on 26‑6‑1991 whereafter a further sum of Rs.4,78,000 was deposited by them. The petitioners were allowed to supervise the collection of octroi duty on 30‑6‑1991 but this order was subsequently cancelled on 3‑7‑1991.

2. It appears that on 29‑6‑1991 the respondent No.2 filed an application before the Chairman, Municipal Committee stating that he was willing to have the contract at Rs.56,00,

000. Faced with this situation, the petitioners offered to enhance their bid to Rs.56,50,

000. The matter was placed before the General House of the Municipal Committee on 22‑7‑1991 which resolved that the offers received be kept pending; the rights to be reauctioned and if no one participated in the auction, the highest 'offer be accepted. This resolution has been impugned by the petitioners.

3. It is argued on behalf of the petitioners that the general house of the Municipal Committee was under an obligation to consider the offer made by the petitioners at the auction held on 27‑6‑1991 and either to accept or reject it but without having done it could not either direct the reauction or order that contract be awarded on the basis of the previous offers. Learned counsel for the respondent is, however, of the view that the offer of the petitioners stood rejected by implication by the resolution dated 7‑7‑1991.

4. According to rule 3, of the Punjab Local Council (Lease) Rules, 1990, a Local Council can lease out by public auction the collection rights of any tax and fee for a period not exceeding one year. The procedure for acution has been laid down in Rule

4. By sub‑rule (4), Local Council has been authorised to accept or reject a bid in a meeting of the house. Sub‑rule (5) provides that where the Local Council rejects a bid, the lease shall again be put to auction.

5. In the present case it is clear from the resolution, dated 7th July, 1991, the Local Council had neither accepted the bid of the petitioner nor rejected it although it was under a legal obligation to do so. In this view of the matter the impugned resolution is clearly not sustainable. There is nothing in the resolution which could be construed as rejection of the bid made by the petitioner. This resolution is open to another serious legal objection which is that unless two attempts of auction had been made, as provided by sub‑rule (3) of Rule 4 no other method for the grant of contract could be adopted. In view of what has been stated above this petition succeeds to the extent that resolution dated 7‑7‑1991 is declared to be without lawful authority and of no legal effect, as a result of which the respondent shall now place the bid of the petitioners for acceptance or rejection before the General House. If the bid is rejected the respondent No.l shall proceed to reauction the rights in question in accordance with law. The meeting shall be convened within 7 days. No order as to costs. AA./U‑3/L Order accordingly.