P L D 1996 Lahore 22 (PLP)

This judgment shall dispose of W.P. No.11880 of 1995 and W.P. No.1Z16 of 1995 as the facts and law in both these writ petitions are the same. Facts for the disposal of these petitions are that an advertisement appeared in the daily "The Pakistan" on 8‑7‑1995 for leasing out the collection rights of goods exit tax of Zila Council, Okara, through auction for the year 1995‑

96. The case of the writ petitioner in W.P. No.11880 of 1995 is that he submitted his call deposit for an amount of Rs.25 lacs drawn at United Bank Limited and participated in the auction held on 17‑7‑1995 alongwith nine other bidders. Since the highest bid offered at the time of auction was Rs.2,27,00,000 which was less than the previous years as such the auction committee decided to re‑auction it again through public notice. Subsequently he came to know that respondent No.2 Administrator Zila Council, Okara, recommended the bid of contesting respondents Nos. 3 to 5 for an amount of Rs.2,47,00,000 and sent the papers for confirmation of their bid. It was the case of the petitioner that the moment he came to know about this development, he immediately approached the Minister for Local Government and Rural Development and pointed out the illegalities committed in the holding of auction and making of reference. He himself offered Rs.2,60,00,

000. The Minister through his order, dated 23‑7‑1995 rejected the proposal submitted by Administrator for the acceptance of the bid and directed trim to re‑auction the right again immediately. It so happened that instead of adhering to this direction of re‑auction, by another order, dated 31‑8‑1995 the Minister approved the bid of respondents Nos. 3 to 5 for Rs.2,47,00,000 for a period of 11 months. Consequent to this the possession was handed over to respondents on 3‑9‑1995. Further on their representation it was decided by the Government that the lease period would be 12 months commencing from 1‑7‑1995 to 30‑6‑1996. However, subsequently it was conveyed to respondents Nos. 3 to 5 that 12 months period would commence from 3‑9‑1995, the date of handing over of the possession. The case was argued at some length by the learned counsel appearing for the respective parties and they also produced precedents in support of their ‑respective stances. It is pertinent to mention here that Writ Petition No. 1 0 ‑hearing on 20‑9‑1995 and being prima facie satisfied of 1995 firstly came up for with the allegations levelled by the petitioner, I directed respondents Nos.1 and 2 Secretary, Local Government and the administrator Okara respectively to appear personally in Court alongwith record on 26‑9‑1995. W.P. No.12516 of 1995 involving identical points came up for hearing on 24‑9‑1995 and was ordered to be heard alongwith Writ Petition No.11880 of 1995. Both these writ petitions came up for hearing on the adjourned date i.e. 26‑9‑1995. The petitioner in Writ Petition No.11880 of 1995 filed an application in Court under section 151, C.P.C. through another learned counsel Mr. Ihsanullah Khan Lillah making prayer for the withdrawal of his writ petition as the same according to him was filed under some .misunderstanding". Since I was not satisfied with the bona fide of the stance of the petitioner, I checked his signature on the bid sheet (Annex.B) of his petition at serial No.6. Firstly he denied his signature but after some time he stated that it was he who had affixed his signature on the bid sheet at serial No.6. Due to contradictory stances taken by him in the Court he was asked to produce his National Identity Card and was also directed to sip in Urdu on a paper. I noticed that his signature on the Identity Card is in English while signature got in Court on a paper in Urdu did not at all tally with his signature on the bid sheet. Learned counsel for the respondents Nos3 to 5 Mr. Ali Ahmad Awan also supported the stance vehemently qua the withdrawal of the Constitutional petition. It is not denied that the writ petitioner has got right to withdraw his petition but the same cannot be exercised freely after the notices have been issued to the other side who have incurred a lot of expenses in order to cause their representation in the lis particularly so when the illegalities pointed out by the petitioner prima facie satisfied the Court resulted in the issuance of the notice. In this case the Minister for Local Government and Rural Development earlier ordered for re‑auction on 23‑7‑1995 because of the alleged pooling of the contractors. This assertion of the Minister qua pooling among the contractors gets some support from the conduct of the parties demonstrated before this Court' in the matter of withdrawal of the Constitutional petition. The petitioner advanced a vague reason of .misunderstanding" in seeking the permission to withdraw. If this tendency is allowed to continue, this would certainly give under lever to the unscrupulous litigants to come to this Court with the bundle of allegations and after succeeding in getting issuance of notices to the other side, would settle their score by withdrawing their Constitutional petition in the amidst. There is another aspect of the matter in this case which cannot be lightly overlooked as the same allegation respecting the conduct of auction and pooling of the contractors is also the subject‑matter of the connected writ petition. In this background after having noticed the illegalities committed in the acceptance of the bid I am not persuaded to accede to the prayer of withdrawal after issuance of notice to the other side. Reliance in this respect is placed upon Messrs Hindustan Sanitary and Drainage Works v. Shabbir Burhani and 6 others PLD 1992 Karachi 21.

9. The other ground that a vested right accrued to respondents Nos. 3 to 5 after the acceptance of their bid and consequent transfer of possession to them is devoid of any force. According to the statement of the Admin; trator Zila Council, Okara till date no formal contract has been executed between the parties. To determine whether the execution of formal contract is necessary it is desirable to detail out the following provisions of the Punjab Local Government Ordinance, 1979 and the rules made thereunder. Section 39 thereof provides as under:

39. Contract.‑‑(I) All contracts made by or on behalf of a local council shall be (a) in writing and expressed to be made in the name of the local council; (b) executed in such manner as may be prescribed; and (c) reported to the local council by the Chairman at the meeting next following the execution of the contract as under: (2) No contract executed otherwise than in conformity with the provision of the section shall be binding on the Local Council. It is noticed that subsection (2) ibid is couched in negative terms to the effect that any contract executed otherwise would not be binding upon the, local council. Sub‑rule (5) of rule 7 of the Punjab Local Council Lease Rules, 1990 (5) A lease shall not become operative unless the lessee enters into an agreement with the Local Council. In the same terms sub‑rules (7) and (10) of rule 16 of the Punjab Zila Council Goods Exit Tax are couched which are as under: (7) In case the Z41a Council does not confirm the bid, it may decide that the lease of the export tax shall again be put to auction under the rules. (10) The successful bidder shall execute a formal deed in favour of the Zila Council the cost of which shall be borne by him, containing the terms and conditions of the lease before exercising rights thereunder. The reading of the aforesaid provisions demonstrate that the execution of formal agreement is necessary before any party embark upon the collection of taxes. The terms and conditions of the agreement is to be executed in a formal deed. It was admitted before me by the Administrator, Okara as already mentioned that till date no formal agreement has been executed between the parties. The law/rules quoted above have provided in an unequivocal to that all the contracts should be in writing. In this case by delivering possession to respondents Nos. 3 to 5 on 3‑9‑1995, the respondent Local Council has violated the aforesaid provisions in clear terms. It amounts to putting the cart before the horse. It has consistently been held by the superior Courts that if a method has been prescribed to do a thing in a certain manner it must be done in. that manner alone or not at all. The violation of law/statutory rules would not create any right in favour of the respondents. The argument that the Administrator is the last authority in leasing out the collection right and the Minister for Local Government is totally alien in the matter as he has got nothing to do is also of no assistance to the respondents. Section 26‑A of the Local Government Ordinance provides as under:‑‑ "26‑A. Curtailment of term of office.‑(1) Notwithstanding anything to the contrary contained in section 26, where, before the expiry of the term of office of the local councils, fresh elections to local councils have been announced or held under the Ordinance, Government may by Notification in the official Gazette curtail the term of office of the Local Councils. (2) On the curtailment of the term of office of the local councils under subsection (1) all powers and functions of the local councils shall be exercised and performed by such person or authority as Government may appoint in this behalf as Administrator and the lands and properties belonging to the local council shall vest in Government still such time to newly elected local councils are inducted into office. Chapter 15 of the Local Government Ordinance deals with the supervisory power of the Government over the local council. Sections 153 and 156 thereof provide as under:‑‑‑ "

153. Supervision of Local Councils.‑‑‑Government shall exercise general supervision and control over the local councils in order to ensure that their activities conform to the provisions of the Ordinance.

156. Safeguards.‑‑‑If, in the opinion of Government anything done or intended to be done by or on behalf of a Local Council or Committee is not in conformity with law or is in any way against public interest, Government for reasons‑to be recorded may‑‑‑ (a) quash the proceedings; (b) suspend the execution of any resolution passed or order made by the Local Council or Committee: and (c) prohibit the doing of anything proposed to be done. The aforesaid provisions demonstrate that the control is to be exercised by the Government to ensure that the activities of the local council conform to the provisions of the Ordinance. Since the local council stood superseded as such Administrators were appointed to look after the affairs. It is to be noticed that the Zila Council themselves were collecting the tax and duty. The Government having supervisory power decided through Memo. dated 24‑4‑1995 to give allowance to the Zila Councils to lease out the collection of goods exit tax for the financial year 1995‑

96. Certain conditions were laid down to ensure fool proof and transparent nature of the transaction. It is provided in that Memo. that the auction proceedings would be forwarded to the Government for confirmation of the lease by Minister for the Local Government. In this case it is not denied that auction was held pursuant to the aforesaid Memo. The Administrator Zila Council, Okara after holding the same submitted the papers for onward confirmation. The Minister for Local Government after noticing that there was allegation/complaint of pooling among the contractors did not confirm the bid and ordered that the lease be auctioned with the base line of Rs.2,60,00,000 offered by the writ petitioner in W.P. 11880 of 1995. The auction having held after the allowance given by the Memo. dated 24‑4‑1995 to the Zila Council it cannot be said that the Minister has got no say in the matter. The administrator sent the papers in pursuance to the dictates of the Memo. dated 24‑4‑1995 for confirmation of the bid to the Minister as the same was held‑ thereunder, In this background it cannot be said that the Minister has got no say in this matter. Even otherwise Government or for that matter the Minister would not be a silent spectator to the dolling out of the State property. He having passed the order of fresh auction could not have withdrawn the same as the valuable right has accrued to the prospective bidders as well as Zila Council, Okara. Alleged pooling of the contractors in the words of the Minister has deprived the Zila Council from substantial amount. The argument that the Minister under the General Clauses Act has got power to recall his order would also be of no assistance. He having taken stock of all the events decided for holding of fresh auction. After this decision a right has been accrued in favour of the prospective bidders as well as Zila Council, Okara. As stated by the learned counsel appearing in W.P. 12516‑95 the petitioner therein is ready to pay Rs.one crore more than the amount on which it was allegedly given to the respondents. The financial matter of the Zila Council cannot be put at stake. The functionaries entrusted with the performance of duty are expected to act in an honest and transparent manner so as to protect the interest of the State. After accrual of right to prospective bidders as well as Zila Council the direction for reacting cannot be frustrated. Another argument has been advanced that the matter pertains to the disputed questions of facts as such the Constitutional jurisdiction would not be attracted is also of no avail. It is not disputed that the Minister after taking stock of auction proceedings of Zila Council came to a definite conclusion that the same has been effected through pooling of contractors which has caused tremendous loss to the Zila Council. After considering this aspect he came to a definite conclusion to re‑auction the same. In this background simply because the petitioner has been given possession by Zila Council through work order before execution of the formal contract and has embarked upon collection of tax by expending some money would not detract this Court from exercising its Constitutional jurisdiction. The learned. Advocate‑General who has entered appearance on Court's call has vehemently supported the stance of the writ petitioner in Writ Petition No.12516 of 1995 on the strength of section 26, subsection (2) of the Local Government Ordinance on the ground that the property of the local council vests in the Government and it is the responsibility of the functionaries to utilise the same in the best manner so as to watch its interest. Resultantly for what has been stated above the writ petitions are accepted and the order dated 31‑8‑1995 confirming the bid of the respondents is declared to have been passed without lawful authority and of no legal effect. It is further directed that the fresh auction be held with the base line of Rs.3,47,00,000 as offered by the writ petitioner in W.P. 12516 of 1995. It is made clear to the writ petitioner in W.P. No.12516 of 1995 that in case he does not stick to his offer of Rs.3,47,00,000, Rs.25 lacs deposited by him would be forfeited. There shall be no order as to costs. M.BA./R‑2620/L Order accordingly.