ABDULLAH & CO. Versus PROVINCE OF SINDH

NASIR ASLAM ZAHID, ACTG. C.J. ‑‑‑Petitioner in this Constitutional Petition is Abdullah & Co., a partnership firm and represented by Mr. G.H. Abbasi, Advocate. Respondent No.1 is the Province of Sindh and represented by Syed Sarfaraz Ahmed, A.A.‑G. Respondent No.2 is Union Council Darya Khan (hereinafter referred to as "the Union Council") represented by Mr. Jhamat Jethanand, Advocate and respondent No.3 is M/s. Dewan Sugar Mills Limited (hereinafter ‑ referred to as "the Company") represented by Dr. Raees M. Mushtaq, Advocate.

2. For the year 1991‑92, the Union Council advertised through public notice in the newspapers dated 13‑4‑1991 for auction of the right to collect octroi. In the notice, it was stated that open public auction shall take place on 22‑4‑1991 and, if it was not held on that date, the auction will be held on 25‑4‑1991 and 28‑4‑1991. According to the petitioner, the public auction was not held on 22‑4‑1991 having been postponed without any reason and on 25‑4‑1991 also the auction did not take place as the Chairman of the Union Council remained absent. According to the petitioner, written intimation was given to all the interested bidders who were present on 25‑4‑1991 that the auction would take place on 28‑4‑1991. From the documents filed alongwith the petition, it follows that, to oversee the auction proceedings, the Assistant Director, Local Government, Thatta and other staff of his department were present on the site on 25‑4‑1991 and they took serious exception to the postponement of the auction on account of the absence of the Chairman of the Union Council and this was brought on record by his letter, dated 25‑4‑1991 and he also sent a, report to that effect to the Government by his letter, dated 27‑4‑1991. In his report, dated 27‑4‑1991 sent to the Additional Secretary, Government of Sindh, Local Government Department, Karachi, it was inter alia stated as follows: ‑

"In this' present case the Secretary, Union Council as well as the Chairman want to award the contracts to the persons of their choice and are, therefore, avoiding open competition. The contract may fete more than expectation, whereas the upset price is Rs.9 lacs only.

This report is submitted in the interest of Union Council and any hidden manipulated auction papers will not be accepted. The progress of 3rd date i.e. 28th April, 1991 will he submitted and I am sending the same team to watch myself to ensure that no hanky‑panky takes place."

3.According to the petitioner, on 28‑4‑1991 the petitioner and other interested bidders attended the office of the Union Council at the appointed hour and waited there for quite some time but the auction did not take place but later in the day the petitioner and other bidders were informed that the auction had already taken place. It has been alleged that neither the name of the party who had been given the contract nor the amount of his bid was disclosed. On the same day, the petitioner informed the Assistant Director, Local Government as follows: ‑

"In respect of Mr. A.D.L.G. Thatta.

SUB: COMPLAINT OF DEWAN SUGAR MILLS OCTROI CONTRACT FOR 1991‑92 OF UNION COUNCIL DARYA KHAN SOHO MIRPUR BHATHORO DISTRICT THATTA.

Dear Sir,

I, on behalf of M/s. Abdullah & Co., to participate in public auction of Octroi contract of Dewan Sugar Mills of Union Council, Darya Khan Soho, reached the office of Union Council alongwith necessary papers and call deposit vide Pay Order No.SV/1 091126 Allied Bank of Pakistan, dated 21‑4‑1991 at about 10‑45 a.m. After I reached the office of Union Council, the Chairman reached the office. After some time we were told that when ADIG will come only then the auction proceedings will start. At about 12 o'clock the A.D.L.G. arrived. After his arrival the Secretary of the Union Council informed us that the auction has been held. Sir, we ask you to let us know that when the auction was scheduled at 11.00 a.m. and when all the interested were present there when and in whose presence auction was held.

We, therefore, request you to please enquire into this misdeed and this fake auction should be set aside at once.

Dated:‑28‑4‑1991 ?????????????????????????????????????????????????????????????????? For Abdullah and Co., c.c. to: Dy. Commissioner, District Thatta."

4. The case of the petitioned is that no public auction took place on 28‑4‑1991 and the petitioner had complained in writing to the Assistant Director, Local Government, Thatta, who was present on the site on 28‑4‑1991 and was a witness to the fact that bids were not invited from interested bidders who were present in the office of the Union Council on 28‑4‑1991 and that no auction was publicly held. By their letter, dated 5‑5‑1991, the petitioner complained to the Government, inter alia, stating that through an invisible deal between the Chairman of the Union Council and that Company, which happens to be situated within the territorial limits of the Union Council, on paper it was shown that some auction proceedings had taken place and the bid of Rs.11 lacs supposed to have been made by the Company being highest was sent to the Government for approval. According to the petitioner, in an open auction, the highest bid would have been at least Rs.15 lacs and he offered to take the contract for Rs.15 lacs. It was also suggested that the auction be held under the supervision of District Auction Committee, Thatta. On receipt of the petitioner's representation, the Government by their letter dated 11‑5‑1991 directed the Chairman of the Union Council to re‑auction the contract with the reserved price of Rs.15 lacs, which had been offered by the petitioner, and the Assistant Director, Local Government, was directed to ensure compliance. The Union Council again got the notice published in newspapers on 27‑5‑1991 for reauction on 28‑5‑1991, 30‑5‑1991 and' 1‑6‑1991. According to the petitioner, the auction could not be held on 28‑5‑1991 due to the visit of Chief Minister and on 30‑5‑1991 also the auction was postponed on the ground of insufficient publicity and no auction also took place on 1‑6‑1991. The petitioner placed all the facts on record by their letters addressed to the Government. The Assistant Director, Local Government, complained to the Government by his letter, dated 5‑6‑1991 against the Chairman, Union Council, asking for suitable action to be taken against him. The Union Council with a view to give further publicity to the proposed auction again advertised for reauction of the contract on 20‑6‑1991, 27‑6‑1991 and 29‑6‑1991. The petitioner, in response to this third public notice for auction, attended the office of the Union Council on 20‑6‑1991 but he was then informed that, under the directions of the Government, auction had been postponed and as such no auction took place. On further enquiries the petitioner came to know that the previous letter, dated 11‑5‑1991 of the Government directing reauction had been withdrawn and the contract was awarded to respondent No.3 for Rs.11 lacs on the basis of the so‑called auction held on 28‑4‑1991.

5. The petitioners have challenged the award of the contract to respondent No.3 on the ground that no auction had taken place on any date and the award of the contract in favour of respondent No.3 was mala fide and also illegal. We have heard Mr. G.H. Abbasi, learned counsel for the petitioner, Mr. Syed Sarfaraz Ahmed, AA.‑G. for ;he Sindh Government, Mr. Jhamat Jethanand, learned counsel for the Union Council and Dr. Races M. Mushtaq, learned counsel for the Company.

6. Mr. G.H. Abbasi submitted that the award of the contract without holding a public auction was against the mandatory provisions of Section 45(4) of the Sindh Local Government Ordinance, 1979 and Rule 225 of the Octroi Rules, 1964. It was submitted that from the documents placed on record, including the report of the Assistant Director, it is apparent that the Chairman of the Union Council did not want the auction to take place in public and as such the entire exercise on paper showing some auction to have taken place on 28‑4‑1991 was manoeuvred to give the contract to the Company. The award of the contract has been challenged on the ground of mala fides. It was then argued that the Government having once directed the Union Council to reauction the contract of octroi after declining the recommendation of the Union Council for accepting the offer of Rs.11 lacs of the Company, could not accept the same offer later on. According to Mr. G.H. Abbasi, the Government had upheld the objection of the petitioner against the acceptance of the offer of Rs.11 lacs of the Company and, therefore, it was incumbent on the Government as well as the Union Council to hold a public auction with the reserved price of Rs.15 lacs as offered by the petitioners. According to the learned counsel, no reasons have been given for withdrawing the earlier Orders not accepting the recommendation for award of the contract to the Company.

7. Mr. Ramat Jethanand, learned counsel for the Union Council, submitted that on 28‑4‑1991 an auction had taken place and copies of the relevant record of the Union Council has been placed on the file of this petition as Annexures to the counter‑affidavit filed by the Chairman of the Union Council showing that several bidders had taken part in the auction and the highest bid of Rs.11 lacs was made by the Company which was communicated to the Government for acceptance but when the Union Council received the letter dated 11‑5‑1991 of the Government declining the recommendation of the Union Council, it took steps for auctioning of the contract but later on the letter, dated 11‑5‑1991 was withdrawn by the Government and the auction in favour of the Company for Rs.11 lacs was confirmed. According to the learned counsel for the Union Council, the highest bid of the Company made in the auction held on 28‑4‑1991 had been accepted and the contract in favour of the Company had been awarded in accordance with the law and applicable rules.

8. Dr. Races M. Mushtaq, learned counsel for the Company raised the following contentions: ‑

(a) Questions of fact are involved and the controversy about the auction having taken place on 28‑4‑1991 or not being in dispute, the matter cannot be resolved in a Constitutional petition,

(b) Alternate remedies of filing an appeal under section 108 of Sindh Local Government Ordinance, 1979, read with Sindh Councils Appeals Rules, 1982,, and of a Civil Suit (reference Section 113 of Ordinance) being available, this petition is liable to be dismissed.

(c) A contract has been executed by the Union Council in favour of the Company granting lease for the current year from 1‑7‑1991 to 30‑6‑1992 and as nearly 4‑1/2 months have passed and only about 7 months remain for the lease period to expire, it is not a case where any relief be granted to the petitioner;

(d) The petitioner is not an aggrieved person and as such cannot maintain this Constitutional petition under Article 199 of the Constitution and in this regard reliance was placed on a Division Bench Judgment of this Court in the case of Enterior Enterprises v. Government of Sindh (1989 CLC 773).

9. We may first take up the preliminary objections raised by Dr. Races Mushtaq, learned counsel for the Company. It has been contended that the petitioner is not an "aggrieved person" and as such cannot maintain this petition under Article 199 of the Constitution. In the facts and circumstances of this case we find no merit in this objection. The first auction was scheduled to take place on 22‑4‑1991 and it was mentioned in the public notice that, if the auction was not held on that date, it would be held on 25‑4‑1991 and 28‑4‑1991. The case of the petitioner is that the public auction was not held on 22‑4‑1991 having been postponed and also not on 25‑4‑1991 as the Chairman of the Union Council had remained absent on that day and that on 25‑4‑1991 written intimation was given to all the interested bidders including the petitioner, who were present on 25‑4‑1991, that the auction would take place on 28‑4‑1991 and these averments are supported by the official documents on record. The official documents of the Government also show that the Assistant Director Local Government Thatta and other staff of his department were present on 25‑4‑1991 to oversee the auction proceedings and very serious exception was taken by the Assistant Director to the postponement of the auction on account of the absence of the Chairman. The petitioner and other bidders had been present on 22‑4‑1991, 25‑4‑1991 and 28‑4‑1991 to take part in the auction. On 28‑4‑1991, the petitioner informed the local representatives of the Government in writing about the auction not having taken place and that the petitioner and others not allowed to take part in any auction if at all it took place. Later on, on 5‑5‑1991 the petitioner made a representation to the Government about the "mock auction" of 28‑4‑1991 and, by letter dated 11‑5‑1991, on the basis of the complaint made by the petitioner, the Union Council was directed to reauction the contract for collection of octroi. The Union Council was also informed by the Government that in the reauction it should be mentioned that the petitioner had made an offer on‑Rs.15 lacs for contract which meant that Rs.15 lacs should be the reserve price. Thereafter, the next auction' dates were fixed for 28‑5‑1991,. 30‑5‑1991 and 1‑6‑1991 but on these dates auction did not take place and the Assistant Director Local Government by his letter, dated ‑5‑6‑1991 complained to the Government against the Chairman. Then again for the third time dates for reauction were fixed through public notice. It was mentioned in the public notice that auction would take place on 20‑6‑1991,27‑6‑1991 and 29‑6‑1991 but the auction did not take place on the direction of the Government and the offer of Rs.11 lacs alleged to have been given by the Company in the auction held on 28‑4‑1991 was accepted. Since the publication of the first notice for auction in April, 1991, the petitioner had been making t efforts to take part in the auction which is reflected in his representations to the Government. It was on his complaint that reauction was ordered by the Government and thereafter on two occasions public notices appeared in the A newspapers for reauction but the auction did not take place. On these facts, the petitioner has been able to establish that he had sufficient interest in the award of contract in question to fall within the meaning of "aggrieved person" in Article 199 of the Constitution.

Dr. Raees Mushtaq in support of the aforesaid preliminary objection had relied upon a Division Bench Judge of this Court in the case of Enterior Enterprises v. Government of Sindh (1989 CLC 773). The cited decision is clearly distinguishable on facts as the petitioner in that case had not even averred that he intended to take apart in the proposed public auction. In the aforesaid judgment authored by Saeeduzzaman Sidtliqui, J. (as he then was) it was observed as follows: ‑

"The learned counsel for the respondents jointly contended that the petitioner has failed to disclose in his petition the manner in which his personal right, if any, has been violated by respondents Nos.1 and 3 when they granted lease for collection of export tax to respondent No.3 by negotiation. The respondents have failed to perform an act as required by law is not sufficient to maintain a petition under Article 199 of the Constitution unless the petitioner is further able to show that he had a personal interest in the performance of such duty in accordance with law which has been violated or prejudiced on account of such non‑performance. We have carefully gone through the memo of petition filed by the petitioner and find that the only allegation made by the petitioner against the respondents is that their action in extending the lease in favour of respondent No.3 for the period from 1‑7‑1988 to X‑6‑1989 was in contravention of Rule 47 of District Council (Export Tax) Rule, 1976. There are no allegations in the petition that the petitioner had intended to participate in the proposed auction which was to be held on 9th June, 1988 or that the petitioner had made preparations to take part in the proposed auction but was deprived of his right to paritcipate in the proposed auction as the respondent No.2 failed to hold the auction on the proposed date. Mere fact that the petitioner had a right to participate in the public auction alongwith every other citizens of the country is not enough to maintain a petition able to show that he asserted that right or that the assertion of that right by him was defeated, `denied' or adversely affected on account of some illegal action on the part of respondent (See Fazal Din v. Lahore Improvement Trust, Lahore PLD 1969 SC 223). As there is no assertion in the petition that the petitioner had intended or had made preparations to take part in the proposed auction but was derived of this right on account of illegal extension of lease by respondent No.1 in favour of respondent No.3 he has no locus standi to file this petition to challenge the grant of lease in favour of respondent No.3 by respondent No.l. The petitioner is accordingly not an `aggrieved person' within the meaning of Article 199 of the Constitution.

As observed, in the present case, the petitioner, in addition to the averments made in the memo of petition, has shown through his representations in writing and also through official documents that he had made preparations to take part in all the auctions and had gone to the office of the Union Council on all occasions to take part in the auction and in fact, on his representation, reauction was ordered.

11. Another preliminary objection raised by Dr. Raees Mushtaq on behalf of the Company was that alternate remedies of filing an appeal under section 108 of the Sindh Local Government Ordinance and a civil suit which was not barred in view of section 113 of the Government Ordinance were available and as such this petition is liable to be dismissed. In the facts and circumstances of this case, we have not been pursuaded to dismiss this petition on the ground that the aforesaid alternate remedies were available. The rule that the High Court cannot entertain a writ petition or a Constitutional petition when other appropriate remedies are available is not a rule of law barring the Constitutional jurisdiction of the High Court but it is a rule by which the Court regulates its jurisdiction. In the facts of this case, where the allegations had been made that the actions of the Union Council and the Government were arbitrary, unjust, unfair and mala fide and the said averments are prima facie supported by official documents and the time available with the petitioner to seek remedy being very short in which it could not reasonably be expected that the petitioner would get adequate relief in alternate proceedings, in our view, no other adequate remedy was available to the petitioner, and as such this petition is not liable to be dismissed on the ground that an alternate remedy by way of appeal under section 108 of the Local Government Ordinance 1979, was,' available or that a suit could have been filed.

12. The third preliminary objection raised on behalf of the Company was that in this petition questions of facts are involved and the controversy about the auction having taken place on 28‑4‑1991 or not being in dispute, the matter cannot be resolved in a Constitutional petition. In our view, this petition can be decided on the basis of documentary evidence brought on record of this case without going into any disputed questions of facts and as such this preliminary objection is also overruled.

13. The last preliminary objection raised in this case is that a contract has been executed in favour of the Company granting lease to it for the current year from 1‑7‑1991 to 30‑6‑1992 and, as over 4 months have now passed it is not a 6t case where any relief can be granted to the petitioner. Dr. Raees Mushtaq relied upon the decision of this Court in the case of Parvez Samad v. Secretary to Government of Sindh (1985 MLD 1087), where, while dismissing on several grounds a petition filed by the petitioners challenging the auction on the ground that the notice published in a newspaper about the auction did not come to their knowledge, a Division Bench of this Court observed as follows: ‑

"Lastly, since 'right of third party has come into existence and since right of auction is for a period of one year only and now about three months have already passed we would not like to interfere in the exercise of the Constitutional jurisdiction. The petitioner may, however, seek remedy if available under any law."

In our view, in the cited judgment, no principle of general application has been laid down that if the right auctioned is for a period of one year and that some period has expired, the High Court should not exercise Constitutional jurisdiction.. The decision to exercise the discretionary Constitutional jurisdiction depends on the facts of each case. On a particular set of facts, the High Court may decline to exercise such Constitutional jurisdiction and on another set of facts it may exercise its Constitutional jurisdiction. Details of the background about the three attempts to hold auctions and the complaints against the Chairman made officially by the Assistant Director of Local Government Department deputed to oversee the auction proceedings have already been given in sufficient detail in the earlier part of this judgment. As noted, the dates of the third auction according to the notice in the press were 20th, 27th and 29th of June, 1991 and when the petitioner and other bidders went to the office of the Union Council on 20‑6‑1991, they were informed that the auction would not take place and later on, after making enquiries, the petitioner came to know that on the basis of some auction held on 28‑4‑1991 the contract had been awarded to the Company for Rs.11 lacs in spite of the orders of the Government directing reauction for which date notices had been issued in the press by the Union Council and other steps had been taken and immediately thereafter this Constitutional petition was filed on 2‑7‑1991. The petitioner cannot be accused of laches in the matter. The petitioner has been diligently pursuing this matter through applications and representations in writing to the concerned functionaries and on coming to know of the award of contract to the Company they filed this petition without any delay. In this petition, the case of the petitioner is that the contract has been awarded in a surreptitious manner on the basis of a "mock auction" alleged to have been held on 28‑4‑1991 and as no auction had taken place, the award of the contract to the Company is illegal being in violation of the applicable law and rules. It is then contended that the Government had acted in an arbitrary, unjust and unfair manner inasmuch as it first accepted the plea of the petitioner and ordered for reauction with a reserved price of Rs.15 lacs as offered by the petitioner and then allowed the auction proceedings to be commenced and make progress till the final dates and then scrap the reauction exercise and accept an offer of Rs.11 lacs alleged to have been made about two months earlier on 28‑4‑1991 without giving any reason whatsoever for this arbitrary action. In the circumstances, where such serious allegations have been made which find support from the official documents, we are not inclined to dismiss this petition on the ground that though it had been filed on 2‑7‑1991, without any delay on the part of the petitioner, as now more than 4 months have passed during the hearings, the petitioner is not entitled to any relief in this Constitutional petition.

15. Coming now to the merits of the case it is not necessary to repeat the facts again which have been given in sufficient details in the earlier part of this judgment with reference to documentary evidence and correspondence on record. For the first auction, the three dates were 22‑4‑1991, 25‑4‑1991 and 28‑4‑1991. Admittedly auction did not take place on 22‑4‑1991 and 25‑4‑1991. The dispute on facts is restricted to the auction of 28‑4‑1991. According to the petitioner, he and several other bidders had gone to take part .in the auction but no auction took place and later on they were informed that some auction had taken place. According to the Union Council, their record shows that an auction had taken place on 28‑4‑1991 in which four bidders took part excluding the petitioner and the highest offer of Rs.11 lacs was made on behalf of the Company which was recommended for acceptance to the Government. In view of the facts stated in the official documents on record including the allegations against the Chairman of the Union Council, there is a serious doubt whether any public auction at all took place on 28‑4‑1991. It appears that if at all any auction proceedings took place, such exercise was carried out secretly to deprive the petitioner and other bidders to take part in the auction. In any case, even if any auction had taken place on 28‑4‑1991 and even if a bid of Rs.11 lacs was made by the Company in that auction which was the highest, such bid was not accepted by the Government which directed reauction of the contract on 11‑5‑1991 and in the direction to the Union Council it was clearly mentioned that in the notice for reauction it should be mentioned that the petitioner had given an offer of Rs.15 lacs. This direction was in the nature of treating Rs.15'lacs as the reserve price. In fact, this direction was complied with and in the two notices for public auction appearing in the press on behalf of the Union Council it .was mentioned that the petitioner had offered Rs.15 lacs for the contract. Auctions scheduled for 28‑5‑1991, 30‑5‑1991 and 1‑6‑1991 admittedly did not take place. The third set of dates for auction were then given in the public notice published in the press on 20‑6‑1991, 27‑6‑1991 and 29‑6‑1991. Again the petitioner and other bidders went to the office of Ike Union Council to take part in the auction on 20‑6‑1991 but were informed that the Government had postponed the auction. Later the petitioner came to know on inquiries that the reauction had been scrapped and the offer of Rs.11 lacs made on 28‑4‑1991 by the Company had been confirmed. No reasons have been given for scrapping the reauction and for accepting the offer of Rs.11 lacs which had earlier been declined about two months earlier. As noticed, the Government had directed that in the notices for public auction it should be specified that the petitioner had made an offer of ks.15 lacs. This clearly indicated that the direction to the Union Council was that Rs.11 lacs as bid/offer of the Company was very low and that the reserve price should be Rs.15 lacs as offered by the petitioner. Neither in the comments of the Government nor in the counter‑affidavit on behalf of the Union Council, any reason has been given why the offer of Rs. 11 lacs made on 28‑4‑1991 which had not been accepted earlier by the Government and where reauction had been ordered with the reserve price of Rs.15 lacs and two public notices appeared in the press about reauction with a reserve price of Rs.15 lacs, why rcauction on 20‑6‑1991 was cancelled and the offer made as far back as 28‑4‑1991 of Rs.11 lacs, lower by Rs.4 lacs than the reserve price of Rs.15 lacs, was accepted.

16. In our view, orders of the Government withdrawing the letter, dated 11‑5‑191, by which letter it had declined to accept the offer/bid of Rs.11 lacs of the Company, and scrapping the reauction, and the award of the octroi contract for the year 1991‑92 by the Union Council as confirmed by the Government in favour of the Company (Dewan Sugar Mills Limited) are arbitrary, unfair and unjust and also mala fide. We may not be taken to hold that the Government did not have the power to withdraw the letter, dated 11‑5‑1991 but, in our view, this power or discretion which affected individual rights was required to be exercised in a fair, reasonable and just manner. An executive discretion which affects private rights cannot be exercised at the whim of the executive authority. It must have a basis and such basis must be reasonable, fair and just in the circumstances of the case.

17. We may refer to a judgment of a Division Bench of this Court in the case of Manthar Ali M. Jatoi v. Government of Sindh 1988 PLC (C.S.) 344 in which case the Government had refused to appoint the petitioner as a Civil Judge and a direction was sought that recommendation of the Public Service Commission regarding the petitioner for his appointment as a Civil Judge be implemented. After making reference to the provisions of the Sindh Civil Servants Act, 1973 and the applicable rules, it was observed in the aforesaid judgment, authored by Chief Justice Naimuddin (as ho then was) as follows: ‑

"Although the appointment has to be made by the competent authority but under the provisions of the aforesaid rule appointment has to be made on the recommendation of the Public Service Commission. The competent authority in order to refuse to accept the recommendation of Public Service Commission should have acted under some rule or at least for some cogent reason. In the present case both seem to be absent. Moreover, under Article 4 of the Constitution, petitioner is entitled to be treated in accordance with law. We may reproduce hereinbelow Article 4 of the Constitution for the sake of ready reference:

"4.(1) To enjoy the protection of law and to be treated in accordance with law is the inalienable right of every citizen, wherever he may be, and of every other person for the time being within Pakistan.

(2) In particular‑‑‑

(a) no action detrimental to the life, liberty, body, reputation or property of any person shall be taken except in accordance with law;

(b) no person shall be prevented from or be hindered in doing that which is not prohibited by law; and

(c) no person shall be compelled to do that which the law does not require him to do."

The petitioner, therefore, could not have been dealt with arbitrarily,

The competent authority may have discretion in the matter, still the discretion has to be exercised on well‑settled principles, that is, it should be exercised in good faith having regard to all relevant considerations and foe public purposes and in accordance with law and it should be exercised justly, fairly and reasonably. It should not be exercised arbitrarily or capriciously."

In the aforesaid judgment reference was made to a passage from "Judicial Review of Administrative Action" by S.A. de Smith, page 252, Third Edition. In support of the principles enunciated as aforesaid, reliance was placed on Manthar Ali Jatoi's case, on the following judgments: ‑

(i) Syed Jaffar Hussain v. Additional Rehabilitation Commissioner (1985 SCMR 1076);

(ii) Federation of Pakistan v. Charsada Sugar Mills Limited (1978 SCMR 428);

(iii) Makramullah v. Province of East Pakistan (PLD 1969 Dacca 417) and

(iv) Montgomery Flour and General Mills Limited v. Director, Food Purchases, West Pakistan (PLD 1957 Lah. 914).

It was then held in Manthar Ali M.Jatoi's case by this Court that discretion in that case had not been exercised on settled principles stated earlier in the said judgment.

We may also refer in this regard to two judgments by the Indian Supreme Court. In Ramana Dayaram Shett v. International Airport Authority of India (AIR 1979 SC 1628) it was held by the Indian Supreme Court as follows: ‑

"Where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largesse, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norm which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largesse....must be confined and structured by rational, relevant and non?-discriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory." .

In the case of Harminder Singh Arora v. Union of India (1986) 3 Supreme Court Cases 247, it was held that the Government may enter into a contract with any person but in so doing the State or As instrumentalities cannot act arbitrarily. '

18. As observed earlier, on the basis of the record, we have reached the conclusion that the action of the Government in scrapping the reauction where the reserve price was notified as Rs.15,00,000 (as offered by the petitioner) and confirmation of the bid of Rs.11,00,000 given by the Company about two months earlier and the award of the contract to the Company by the Union Council for the said amount are all arbitrary actions. No reasons at all have been given for the aforesaid actions. In the circumstances the actions are also mala fide.

19. As a result, this Constitutional Petition is allowed and the award of the octroi contract and its confirmation by the Government in favour of respondent No.3, Dewan Sugar Mills Ltd. in the sum of Rs.11,00,000 for the year 1991‑92, are declared to he without lawful authority and of no legal effect. The Union Council may now hold fresh public auction for the award of octroi contract for the remaining period of the current financial year. The Union Council had acted under the instructions of the Government in awarding the contract to respondent No.3. The Union Council is free to take appropriate civil action for recovery of any amount to which it may have become entitled on account of the grant of this Constitutional Petition.

The petitioner is granted costs of this petition against all respondents.

A.A./A‑1131/K ?????????????????????????????????????????????????????????????????????????????????? Petition accepted.