Government Property cannot be Sold without Public Auction and held that Private Negotiations for Public Asset Sales are Illegal --- Lahore High Court, Lahore

Islamabad 22-03-2025: The Lahore High Court (LHC) has dismissed [Writ Petition No. 14800/2010], filed by Ms. Jahanara & Others, challenging the Punjab Cooperative Board for Liquidation (PCBL)’s refusal to transfer three shops in Liberty Market, Lahore, through a private transaction. The Court ruled that government property cannot be sold without public auction and held that private negotiations for public asset sales are illegal.  

The case arose when PCBL advertised an auction for the sale of shops No. 12, 14 & 15 in Liberty Market, Lahore. As no bids were received, the petitioners attempted to acquire the shops through a private treaty with the PCBL Chairman. However, the PCBL Board rejected their request, leading to multiple rounds of litigation spanning over two decades.  

The Court noted that the petitioners failed to participate in the original auction but later sought to claim ownership through private negotiations, which it deemed an attempt to bypass due process.  

Key Legal Findings  

1. No legal provision under the Punjab Undesirable Cooperative Societies (Dissolution) Act, 1993 authorizes PCBL’s Chairman to unilaterally sell property through a private agreement.  
2. Government-owned property must be auctioned, ensuring transparency and public interest.  
3. The petitioners deposited money without an enforceable contract, which did not create a legal right to ownership.  
4. The attempt to acquire shops through private settlement was deemed fraudulent and against public policy.  
5. The Court imposed a Rs. 10,00,000 fine on the petitioners for dragging a state institution into frivolous litigation since 2002.  

The judgment relied on three Supreme Court precedents:  

1. Capital Development Authority (CDA) Vs. Ahmed Murtaza (2023 SCMR 61): Public property cannot be transferred without legal formalities.  
2. Province of Punjab Vs. Zulfiqar Ali (2024 SCMR 22): Government land must be sold transparently.  
3. Javed Hameed Vs. Aman Ullah (2024 SCMR 89): Fraudulent transactions and violations of public policy are unenforceable.  

The Lahore High Court dismissed the petition, ruling that private sales of public property are unlawful, and ordered the petitioners to pay Rs. 10,00,000 as a penalty to be recovered as arrears of land revenue. The decision reinforces the principle that government assets cannot be sold without due process and protects public interest from collusive transactions.

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