Shaikh JAVED KHALID AKHTER vs DEPUTY COMMISSIONER, KHANEWAL And 4
This writ petition challenged an order by the Deputy Commissioner, Khanewal, cancelling a lease agreement for entry fee collection awarded to the petitioner following a public auction. The core legal question was whether a concluded lease agreement, finalized after a valid auction process, could be cancelled solely because a third party subsequently offered a higher bid. The Court held that the cancellation was unlawful. It reasoned that under the Punjab Local Council (Lease Rules), 1990, once a lease agreement is executed, it becomes operative, and cancellation is only permissible on specific grounds enumerated in Rule 8. The Court found no such grounds existed and that the subsequent offer by the respondent was motivated by mala fide intentions to dislodge the successful bidder. The Court set aside the cancellation order, confirmed the original auction in favour of the petitioner, and directed the petitioner to pay the difference in the bid amount. The key principle laid down is that a concluded auction and subsequent lease agreement cannot be arbitrarily cancelled merely to entertain higher post-bid offers, as this would undermine the sanctity of the auction process.
- Can a lease agreement finalized after a public auction be cancelled solely because a higher bid is received subsequently?
- Under what circumstances can a lease granted by a local council be cancelled under the Punjab Local Council (Lease Rules) 1990?
- Does the execution of a lease agreement render the auction process final and binding?
- Rule 7(5), Punjab Local Council (Lease Rules) 1990
- Rule 8, Punjab Local Council (Lease Rules) 1990
ORDER
Instant writ petition has been directed against the order dated 15-6-2000 whereby the Administrator, Town Committee Tolamba has informed the petitioner that lease agreement executed in his favour has been cancelled by the order of Deputy Commissioner, Khanewal/respondent No. l and fresh auction shall be held on 26-6-2000.
2. Briefly stated the facts are that on the basis of proclamation in daily Nawa-i-Waqt, Multan dated 13-5-2000 auction took place on 23-5-2000 regarding the entry fee. Various persons participated in the said auction including Sh. Shahnawaz son of Shahbuddin/respondent No.5. However, the auction was finally ended in favour of the present petitioner in the sum of Rs.8,80,000. The petitioner thereafter entered into an agreement with the Town Committee on 30-5-2000 and on the same day also deposited requisite amount of Rs.14,400. Respondent No.5 moved an application that he was ready to acquire the said lease rights for a sum of Rs.930,000 and on that said application the Deputy Commissioner, Khanewal/respondent No. 1 directed that earlier auction dated 23-5-2000 be cancelled and fresh auction be held with a reserve price of Rs.9,30,000.
3. Learned counsel for the petitioner, at this stage has offered that his client is ready to pay a sum of Rs.960,000 and the order of auction be maintained.
4. It is evident from the perusal of Punjab Local Council (Lease Rules), 1990 that a procedure for conducting auction and thereafter its cancellation has been provided therein. It is evident from sub-rule (5) of Rule 7 of the said Rules that a lease become operative only when an agreement is executed with the local council. In the instant case the said agreement has been entered into between the petitioner and local council, as is evident from agreement dated 30-5-2000. There is no doubt that lease can be cancelled but the grounds of cancellation as enumerated in Rule 8 of Punjab Local Council (Lease Rules), 1990 are to be present. In the instant case no such ground is available and only re-auction has been ordered simply, as respondent No.5 has offered a higher sum than the one for which it has already been auctioned in favour of the petitioner. If this state of affairs is allowed to continue there would be no end of offer and acceptance and every prospective bidder shall come with a fresh offer to dislodge the previous person who has succeeded in the auction.
5. In the instant case it is noteworthy that son of respondent No.5 participated in the auction and offered a sum of Rs.875,000 and could not succeed in getting the lease as the present petitioner offered a sum of Rs.8,80,000 and as such was declared a successful bidder. Now just to dislodge the present petitioner he has come up with a new offer of Rs.9,30,000 on 29-5-2000 whereas auction proceedings concluded on 23-5-2000. Thus, application of respondent No.5 has been moved with mala fide intention just to dislodge the present petitioner.
6. Be that as it .May, since the present petitioner has shown his willingness to pay even Rs.5,000 more which has been offered by respondent No.5 order of cancellation of auction in favour of the petitioner is set aside and original order of auction in favour of petitioner is now confirmed. The petitioner shall, however, pay the difference of Rs.,60,000 with the respondents in accordance with the rules.
7. With this observation, the writ petition stands disposed of
Cited by 3 cases
- FAISAL RAZZAQ vs TEHSIL MUNICIPAL ADMINISTRATION, KHAIRPUR TAMEWALI 2007 YLR 2887
- REHMAT ALI and another vs FAQIR MUHAMMAD and others 2005 YLR 301
- Rehmat Ali And Other vs Faqir Muhammad And Other (K.L.R. 2005 Revenue Cases 54)