Rai Sher Muhammad Vs POP etc

Stereo. H C J D A 38.

JUDGMENT SHEET

LAHORE HIGH COURT LAHORE

JUDICIAL DEPARTMENT

Case No. W.P. No.18836/2021

Rai Sher Muhammad Versus Province of Punjab through Chief Secretary Additional District Judge, etc.

JUDGMENT

Date of Hearing: 09.03.2026

Petitioner by: Mr. Muhammad Mumtaz Faridi, Advocate.

Respondents by: Ch. Muhammad Jawad Yaqoob, Additional Advocate General, Punjab with Muhammad Wajahat Patwari Halqa.

Hassan Nawaz Makhdoom, J. Through this consolidated order, Writ Petition No.18836 of 2021 and Writ Petition No.43476 of 2021 are being decided together as both petitions arise out of the same auction proceedings conducted by the District Privatization Committee, Sargodha for disposal of certain State land situated in Chak No.91/SB, Tehsil and District Sargodha and involve common questions of law and fact.

2.Briefly the facts are that in Writ Petition No.18836 of 2021, the petitioner Rai Sher Muhammad participated in auction proceedings held on 20.11.2017 pursuant to advertisement dated 29.10.2017 issued by the respondent No.5/the District Privatization Committee, Sargodha under the Punjab Privatization Board Act, 2010 and the Punjab Privatization Board (Process/Procedure for Auction of Government Properties) Regulations, 2013. The auction

related to land measuring 04 kanals 07 marlas comprised in Square No.1, Killa No.18/1 min Sharq and Killa No.23 min Sharq situated in Chak No.91/SB, Tehsil and District Sargodha. The petitioner was declared the highest bidder after offering a bid of Rs.10,11,00,000/- and depositing the prescribed earnest money. The auction proceedings were thereafter forwarded by the District Privatization Committee to the Punjab Privatization Board for approval. The Board in its 109th meeting held on 19.03.2018 approved the proceedings and recommended the matter for consideration of the Cabinet Committee on Privatization (CCoP) and final approval by the competent authority. According to the petitioner, despite such recommendations and his readiness to deposit the remaining amount, the auction proceedings were not confirmed.

3.In Writ Petition No.43476 of 2021 the petitioner Raja Khan also participated in the same auction proceedings conducted on 20.11.2017 relating to land measuring 04 kanals 05 marlas comprised in Square No.1, Killa No.18/1/1 min Gharb and Killa No.23 min Gharb situated in Chak No.91/SB, Tehsil and District Sargodha. The petitioner was declared the highest bidder among nine participants after offering a bid of Rs.10,01,00,000/-. The auction proceedings were similarly forwarded to the Punjab Privatization Board, which placed the matter before the Cabinet Committee on Privatization for final approval by the competent authority. The grievance of the petitioner is that despite such recommendations the auction proceedings were not confirmed and the respondents are contemplating disposal of the property through fresh auction.

4.Learned counsel for the petitioners contends that the auction proceedings were conducted in a transparent manner pursuant to advertisement dated 29.10.2017 and the petitioners

were duly declared as the highest bidders. It is argued that the Punjab Privatization Board had approved the auction proceedings and recommended the same to the Cabinet Committee on Privatization for final approval. According to learned counsel, once the auction had been conducted and the bids of the petitioners had been accepted by the competent forum, the respondents were under a legal obligation to finalize and confirm the auction proceedings. Learned counsel further submits that the petitioners had deposited the requisite earnest money and remained ready and willing to deposit the balance sale consideration. It is contended that the petitioners developed legitimate expectancy viz confirmation of the auction in their favour. The refusal or delay in confirmation of auction proceedings is, therefore, alleged to be arbitrary, unreasonable and contrary to principles governing disposal of public property. It is argued that any attempt to dispose of the properties through a fresh auction shall unjustly deprive the petitioners of the benefit of their successful bids.

5.Conversely, learned Law Officer appearing on behalf of the respondents opposes the petitions and submits that the claim of the petitioners is misconceived. According to him, the auction proceedings conducted by the District Privatization Committee were expressly subject to approval of the competent authority and, therefore, mere declaration of the petitioners as highest bidders did not create any vested or enforceable right in their favour. It is further contended that under the Punjab Privatization Board Act, 2010 and the relevant regulations, the final authority to approve or decline auction of State property vests with the Provincial Government. Until such approval is granted the highest bidder cannot claim entitlement to the property. The learned Law Officer further argues that the Government, being custodian of public

property, retains discretion to accept or reject any bid in public interest and the constitutional jurisdiction of this Court cannot be invoked to compel the Government to confirm an auction.

6.I have heard learned counsel for the parties at length and have carefully examined the record with their assistance.

7.It is not disputed that pursuant to advertisement dated 29.10.2017 issued by the District Privatization Committee, Sargodha, auction proceedings were conducted on 20.11.2017 for disposal of certain State land situated in Chak No.91/SB, Tehsil and District Sargodha. It is also not disputed that the petitioners participated in the auction proceedings and were declared the highest bidders for the subject properties after offering bids of Rs.10,11,00,000/- and Rs.10,01,00,000/- respectively.

8.The record further reveals that after conclusion of the auction proceedings the matter was forwarded to the Punjab Privatization Board for consideration in accordance with the procedure prescribed under the Punjab Privatization Board Act, 2010 and the Punjab Privatization Board (Process/Procedure for Auction of Government Properties) Regulations, 2013. The Board considered the matter and recommended it for further consideration by the Cabinet Committee on Privatization.

9.The impugned order dated 03.02.2021 passed by the Chairman, Punjab Privatization Board indicates that the case was placed before the Cabinet Committee on Privatization which, after examining the matter in its meeting held on 11.09.2020, recommended that the properties in question be referred to the concerned Commissioners for fresh assessment and auction in accordance with the prevailing law and policy governing disposal of Government property. The said recommendations were

subsequently placed before the Provincial Cabinet in its 38 th meeting held on 08.12.2020 which confirmed and ratified the recommendations of the Cabinet Committee on Privatization.

10.The impugned order also refers to the relevant provisions of the Punjab Privatization Board (Process/Procedure for Auction of Government Properties) Regulations, 2013. Under Rule 9(1.b) the auction proceedings conducted by the District Privatization Committee are required to be placed before the Punjab Privatization Board for consideration and decision, whereafter the recommendations of the Board are submitted to the Cabinet Committee on Privatization, whose decision is further placed before the Government for approval under the Punjab Privatization Board Act, 2010. The regulatory framework, therefore, clearly shows that the auction process does not attain finality merely upon conclusion of the bidding proceedings.

11.Rule 9(1.f) of the Regulations further provides that participation in the auction proceedings does not confer upon any bidder a vested right or claim in respect of the property for which a bid has been offered. The rule authorizes the Punjab Privatization Board to reject or disapprove any bid before transfer of the property in favour of the bidder. The regulatory scheme thus, makes it abundantly clear that even the highest bid remains subject to approval by the competent authority before any right in favour of the bidder can crystallize or accrue.

12.In the present case the record shows that the competent authorities, upon consideration of the matter at the highest administrative level, decided to subject the properties to fresh assessment and auction in accordance with the prevailing policy

governing disposal of Government property. The impugned order reflects that the petitioner’s request for confirmation of auction was declined in view of the recommendations made by the Cabinet Committee on Privatization and their subsequent approval by the Provincial Cabinet.

13.The entire case of the petitioners is raised upon the premise that since they were declared the highest bidders and the matter had been recommended by the Punjab Privatization Board, the respondents were under a legal obligation to confirm the auction in their favour. However, the statutory framework governing the auction proceedings clearly demonstrates that the declaration of a participant as highest bidder does not confer any enforceable right unless the auction is approved by the competent authority and the transaction attains finality in accordance with law.

14.The decision whether the auction proceedings ought to be confirmed or declined falls within the exclusive domain of the competent authority, which is vested with discretion to consider the matter in accordance with the law and policy relating to disposal of public property. The constitutional jurisdiction of this Court cannot be invoked to compel the Government to confirm an auction where the process admittedly remained subject to approval and had not culminated into a final and binding transaction.

15.It may also be observed that if the petitioners claim to have made any investment or incurred expenditure in anticipation of confirmation of the auction, the same was undertaken at their own cost and risk and cannot create any vested or enforceable right in their favour. Mere participation in the auction proceedings and deposit of earnest money did not confer upon the petitioners any

indefeasible entitlement unless the auction was finally approved by the competent authority in accordance with the governing statutory framework. In the absence of such approval, any financial commitment or preparatory arrangement allegedly made by the petitioners remains contingent upon completion of the statutory process and cannot override the discretion vested in the Government with respect to disposal of public property. The petitioners have also failed to demonstrate any illegality, mala fide, jurisdictional defect or violation of law in the actions of the respondents warranting interference by this Court in exercise of constitutional jurisdiction under Article 199 of the Constitution, as mere expectation of confirmation of auction does not constitute a legally enforceable entitlement. See Munshi Muhammad v. Faizanul Haq (1971 SCMR 533), wherein the Honourable Supreme Court held that:- “The view formed by the High Court is unexceptionable. Since the auctions in favour of the petitioners were not finally approved, they did not acquire any right in the properties, and had, therefore, no locus standi to ask for their transfer. According to the terms and conditions of the auction itself, the highest bids offered in the auctions were subject to the approval of the Additional Settlement Commissioner concerned, who may or may not accept the bids, without assigning any reasons for his action.”

The aforementioned principle was reiterated in Babu Pervaiz Qureshi v. Settlement Commissioner Multan and Bahawalpur Divisions, Multan (1974 SCMR 337), wherein it was held as under:- “A mere bid at an auction if the bid is subject to confirmation, does not create any contractual right until the bid is confirmed. It is in the discretion of the auctioneer to confirm or not to confirm it.........”

Moreover, the petitioners did not acquire any legal title to the property in question merely by submitting the highest bid. The fact that the auction in their favor was not confirmed does not

grant them a right to approach this Court under Article 199 of the Constitution of Islamic Republic of Pakistan. This principle was settled by the Hon’ble Supreme Court in Meraj Din v. Noor Muhammad (1970 SCMR 542). The relevant portion of the judgment is as follows:- “It is conceded by the learned counsel at the Bar that the auction in favour of the petitioner was never confirmed. He was no doubt the highest bidder at the second auction and had also deposited a substantial amount of the auction money, but until the confirmation of the auction was made in his favour by the relevant authority, he did not acquire any right in the property whatsoever. Paragraph 9 of the terms and conditions of the auction of 'building sites' under which the auction in question had been held, provided that the highest bid given by a person could be rejected without assigning any reason for it.”

Reliance is also placed upon Director Military Lands and Cantonment Quetta Cantt. Quetta v. Aziz Ahmed (2023 SCMR 860), wherein it has been held as under:- “7 ...we are clear in our mind that through a declaration in civil matters claimed under section 42 of the Specific Relief Act a pre-existing right can be declared and a new right cannot be created by grant of a decree by the civil court. Same is the position here, the learned High court under the Constitutional Jurisdiction vested in it under Article 199 can declare a pre-existing right and no new right can be created through a declaration issued under Article 199.....” (Emphasis supplied).

Further reliance is made on Asdullah Mangi and others v. Pakistan International Airlines Corporation and others (2005 SCMR 445), Muhammad Ramzan and others v. Member (Judicial-

II)Board of Revenue, Punjab, Lahore and others (2025 SCMR 174) and Muhammad Hayat v. Director General, Lahore Development Authority and others (2016 MLD 1287).

16.The ratio emerging from the above discussion is that where the auction of public property is expressly made subject to approval of the competent authority, the mere declaration of a participant as the highest bidder does not confer any vested or

enforceable right unless such approval is granted and the transaction attains finality in accordance with law.

17.For the foregoing reasons, this Court finds no illegality or jurisdictional defect in the impugned order dated 03.02.2021 or in the actions of the respondents warranting interference in exercise of jurisdiction under Article 199 of the Constitution of the Islamic Republic of Pakistan.

18.Consequently, both Writ Petitions being devoid of merits are dismissed.

(Hassan Nawaz Makhdoom) Judge

(Announced on 9.3.2026/ dictated, corrected and signed on 18.3.2026.)

APPROVED FOR REPORTING

JUDGE

*Riaz.