THE PUNJAB
LOCAL GOVERNMENT (AUCTIONING OF COLLECTION RIGHTS) RULES, 2003
[3rd May, 2003 [ SOV (LG)5-23/2003]
CHAPTER – I
1.
Short title
and commencement. (1) These rules may be called the Punjab Local Government
(Auctioning of Collection Rights) Rules, 2003.
(2)
These shall come into force at once.
2.
Definitions.
(1) In these rules, unless the subject or context otherwise requires -
(i)
“contractor”
means a person, firm or a company eligible to make contract with local
government;
(ii)
“income”
means income from taxes, fees, tolls and other levies of local government but
shall not include grants, contributions and deposits;
(iii)
“negotiation”
means a processes deal with the person, eligible to make a contract, to fetch
maximum income out of contract; and
(iv)
“Ordinance”
means the Punjab Local Government Ordinance, 2001 (XIII of 2001)
(2)
Words and expressions used herein but not defined in
these rules shall have the same meanings as are assigned to them in the
Ordinance.
3[1]. Auction of collection rights.- (1)
Subject to sub-rule (2), a local government may collect an income through a
contractor by awarding contract for collection rights for a period not
exceeding one financial[2]
year.
(2) A local
government shall not award contract for collection of an income including water
rate, building fee, commercialization charges, sanitation fee, licence fee and
lighting rate or arrears of the income, demand for which can be raised against
a specific person and its arrears can be carried forward.”
4.
Prohibition:-
No contract of collection rights of an income of local government shall be
awarded to contractor except in the manner hereinafter prescribed. CHAPTER – II
5. Auction procedure:- (1) For the
contract of awarding of collection rights of an income the following auction
procedure shall be adopted.
(i)
a public notice for conduct of an auction of an
auction, in not less than two national daily newspapers, shall be published by
the local government through the office of the Director General, Public Relations, Punjab at least
seven days before the date of auction;
(ii)
a copy of the notice shall be placed on the
notice board of the office of the local government concerned and at other
conspicuous places. Announcement of auction may also be made by beat of drum
and other local means;
(iii)
the notice shall contain the date and time of
auction specifying the major terms and conditions for participating in the
auction;
(iv)
for each time the publication of auction notice
shall be compulsory; and
(v)
the public notice shall contain the minimum
reserve price for auction and period of contract with rates and details.
6.
Statement of
participants:- (1) On given date and time of auction a statement of
participants, who are eligible to participate in the auction and have deposited
the earnest money, shall be prepared and signed by the Nazim of local concerned
or a person authorized by him and at least two participants of the auction.
(2) The name,
address and identity card number of each participant shall be written, and
attested copy of the participant’s identity card shall be collected and kept,
in the record.
“6-A[3]. Auction Committee:- (1) The auction
committee in a City District Government or a District Government shall consist
of the following:
(i)
Executive District Officer (F&P) Convener / Chairman
(iii)
an officer nominated by the
(2). The Auction committee in a Tehsil /
Town Municipal Administration shall consist of the following:
i) Tehsil / Town
Municipal Officer Convener / Chairman
(ii)
Tehsil / Town Officer Finance Member
(iii)
a representative of the District Government, not being
below the rank of District Officer,
nominated by the DCO Member
7.
Statement of
bid or offer:- The auction shall be started after announcing and delivering
the copy of terms and conditions of the contract. A statement of bids/ offers
shall be prepared in the presence of the participants of auction and it shall
be signed by the Nazim or the person authorized by him and signatures or three
highest bidders shall also be obtained in a column against the amount or their
bids.
CHAPTER-III
8.
Manner of
awarding contracts:- The contract of collection rights of an income of a
local government shall be awarded to a highest bidder through an open bid by
adopting the procedure of auction as laid down in Chapter-II.
9.
Reserve
price:- The reserve price for an income shall be the average of last
preceding three years income of the respective local government.
Provided that
in case of an income introduced by a local government for the first time, the
assessed and expected income as provided in the budget from that source shall
be the reserve price for that income.
10.
Attempts to
award the contract.- At least three attempts shall be made to award the
contract of collection rights of an income through open bid by the
administration of local government concerned before the commencement of
financial year if the first and second attempt of auction have failed to fetch
bid equal to the reserve price or more[6].
11.
Acceptance
of bid.- (1) The bid received in open auction, if less than the reserve
price, shall be rejected by the Nazim concerned or the person authorized by him
in all cases and the contract shall be re-auctioned in the prescribed manner.
(2)
The highest bid, equal to reserve price or above,
received in open auction shall be accepted by the respective Nazim and placed
before the Council concerned within ten days of receipt of bid for
confirmation; provided that bid so received was reasonable and there was no
scope of its further enhancement in view of the concerned local government
administration.
(3)
The Council concerned shall have full powers to accept
or reject the bid duly recommended by the local government administration for
the reasons to be recorded in writing.
(5)
Subject to sub-rule if the Council accepts an officer
or bid of a contract and enters into an agreement with the contractor, it shall
to repudiate the agreement.”[8]
(6)
If the Government is satisfied that the auction has not
been conducted in accordance with the rules or in a transparent manner, it may
repudiate the agreement and the responsible officer may be proceeded against
under the law.”[9]
13.
Intimation
of acceptance of bid:-(1) As soon as the confirmation from the Council
about the acceptance of bid or offer is received, the local government
administration shall communicate the acceptance of bid or offer to the
contractor immediately by a letter though special messenger at his address
provided by him at the time of participation in auction and direct him to enter
into written agreement and fulfill his obligations in accordance with the terms
and conditions of contact.
(2)
The cost of written agreement shall be borne by the
contractor.
(3)
In case the contractor does not turn up to deposit dues
recoverable from him in the light of terms and conditions of auction or does
not enter into written agreement within the specified period mentioned in the
communication, it shall be presumed that the contractor is no more interested
in the contract. As such the contract shall automatically stand cancelled and
the deposits made by the contractor shall stand forfeited. The income shall
also be put to re-auction in such a case.
CHAPTER – IV
14.
Terms and
conditions of contract.- Among other conditions as a local government may
decide, the conditions laid down in this Chapter shall invariably be part of
the terms and conditions of the contract.
15.
Eligibility
of contractor.- Any person who –
(i)
is defaulter in respect of any dues to a local
government; or
(ii)
has been blacklisted by a local government or any other
department ; or
(iii)
has been declared insolvent: or
(iv)
is not competent to enter into agreement under the
law,shall not be eligible to be a contractor.
“15-A[11]. Enlistment of contractors.– (1) Every
contractor who participates in the auction proceedings of collection rights of
different taxes and fee shall first be enlisted according to the categories
mentioned in sub rule (3).
(2)
The contractor who is not enlisted shall not be
eligible to participate in the auction proceeding of collection rights of
different taxes and fee.
(3)
Following shall be the classification of contractors
for the purposes of these rules:-
Class Limit of Contract Amount
(i)
Category A Contractor No
limit.
(ii)
Category B Contractor Up
to Rs. 2.00 Million
(iii)
Category C Contractor Up
to Rs. 1.00 Million
(iv)
Category D Contractor Up
to Rs. 0.5 Million
(4) Contractors
shall be enlisted by any[12]
District Government in accordance with instructions issued by the Local
Government and Rural Development Department from time to time.”
16.
Earnest
money.- “(1) A contractor shall deposit an amount equivalent to five
percent of the reserved price as an earnest money in the funds of the local
government before taking part in an auction.”[13]
“(2) (i)The
earnest money deposited by a successful bidder may, to the maximum limit of sixty
percent, be adjusted against the amount payable by him as; (a) a first monthly
installment; and (b) the amount payable under sub-rule (1) of rule 17 below.
(ii) The balance
earnest money shall be retained by the local government as a security for successful
completion of contract and payment of dues under the agreement.”[14]
(3)
The earnest money of un-successful bidders shall be
returned immediately after completion of auction.
(4)
The earnest money retained as security shall be
refunded to the contractor after successful completion of contract and
production of a certificate from the head of Revenue Department of respective
local government that nothing is due from the contractor and contract has been
completed successfully.
17.
Dues and
deposits.- (1) After receipt of communication of acceptance of bid or offer
from the local government the contractor shall immediately deposit (deleted)[15] one tenth of the
amount of offer or bid in the funds of respective local government and enter
into written agreement with the respective local government within three days.
(2)
The remaining amount of offer or bid shall be paid by
the contractor to the local government in such equal monthly installments that
the whole amount be recovered at least one moth earlier of the completion of contract.
(3)
The installments shall be paid by the contractor in
advance by the fifth day of each month.
18.
Other
deposits.- (1) The contractor shall
deposit other charges such as rent of buildings under his possession, cost of
books, stationery, furniture and fixtures or any other asset or property
provided by the local government for use of collection of income, in the funds
of local government in advance by the fifth day of each month.
(2)
The contractor shall be responsible for deposit of
salaries, pension contribution, premium of group insurance, leave salary, all
allowances and other fringe benefits permissible to the employees of a local
government handed over to him for administration and collection of respective
income.
(3)
Income tax, sales tax, professional tax or any other
levies enforced by law/instructions from time to time shall also be recovered
from the contractor.
(4)
Any other deposit agreed upon between the local
government and the contractor shall be recovered accordingly.
19.
Maintenance
of accounts and official record:- (1) A contractor shall keep the record
relating to accounts of the income as well as other documents in proper order
as provided in the respective rules, byelaws and procedures.
(2)
All such record shall be the property of respective
local government. The contractor may have an attested copy thereof from the
respective local government.
(3)
The Nazim or any other person authorized by him and
officers/officials of Revenue Department of respective local government may
inspect such record.
20.
Properties and
assets.- (1) The contractor shall keep the properties and assets of local
government, given to him at the beginning of contract, in the same condition as
those were received by him and he shall be responsible for any material loss
caused to such properties andassets due to his negligence during the contract.
(2) The
contractor shall deliver all assets and properties received by him back to the
local government after completion of contract and get certificate from the
local government of such delivery.
21.
Implementation'
of collection procedure and byelaws.- (1) The complete set of procedures of
collection of tax, fee toll or and other levy of local government alongwith
respective rules, notifications and byelaws of a local government shall be the
part of terms and conditions of the contract and contractor shall be bound by
the said procedures, rules and byelaws of respective local government in
collection of taxes.
(2) The
contractor shall have no right to interpret any law or byelaws: provided that
in case a need arises for interpretation he shall refer the matter to the local
government concerned for interpretation.
22.
Overcharging.-
(1) The contractor shall not be involved in overcharging either by himself or
through any person.
(2) In case of
violation of sub-rule (1), action shall be taken against the contractor or his
agent or any other person, involved in overcharging, under Chapter XVI of the
Ordinance and his contract shall be cancelled and all deposits made by him
shall be forfeited forthwith.
23.
Rights and
responsibilities of the contractor.- (1) The contractor shall be
responsible to abide by the terms and conditions of the contract.
(2)
The contractor shall be responsible to collect income
in accordance with the provisions of law, rules, byelaws and notifications,
etc.
(3)
The contractor shall be entitled to receive all amount
collected as income related to the contract after making proper entry into the
relevant books of accounts as a token that he has received such amount.
(4)
The contractor shall be entitled to supervise, monitor
and control the collection staff entrusted to him for purpose of collection of
relevant income.
(5)
The contractor shall not be authorized to appoint his
personal staff for collection of income. All collections shall be carried out
by him through the staff of local government concerned assigned to him for this
purpose.
24.
Disputes.- (1)
In case of any dispute arising between the contractor and local government
regarding contract or any other matter arising out of contract, the contractor
and the local government shall have a right to resolve the dispute through
arbitration under the Arbitration Act, 1940.
(2)
The arbitrator shall decide the dispute within one
month.
(3)
The decision of the arbitrator shall be final and
binding on the parties concerned.
(4)
The disputes between public and the contractor shall be
settled by the head or Revenue Department of local government concerned within
a week.
(5)
The arbitrators shall be appointed by Government
through notification in the official Gazette.
25.
Sureties and
guarantees.- “(1) The successful bidder shall furnish to the satisfaction
of the local government concerned, a surety for the due performance of the
contract.
(2)
The surety shall be a person who has a valid National
Tax Number (N.T.N)
(3)
The surety shall furnish a bank statement for the
proceeding six months also showing a bank balance equivalent to the amount of
the surety.
(4)
In case of default of contractor to discharge his
obligations under the contract for any reason, then, without prejudice to the
claims of local government against the contractor, the local government shall
be entitled to recover from the surety, not only the amount including charges,
dues and fees which may have become due under the contract, but also the costs
of a proceeding initiated in this regard.”[16]
26.
Cancellation
of contract.- (1) The contract shall stand automatically cancelled if a
contractor-
(i)
fails to abide by any term and condition of the
contract; or
(ii)
fails to pay any due on proper date and time; or
(iii)
involves in overcharging and circumventing rules,
byelaws and notifications related to collection of respective income; or
(iv)
violates any other condition which the local government
administration may deem fit to impose in the public interest;[17] “Provided that the
contract shall not be cancelled without providing an opportunity of being heard
to the contractor by the concerned Local Government”[18]
(2) After
cancellation of contract the local government may choose to re-auction the income for the
remaining period of contract or may make departmental collection and in any
case if the income so received is found less than the contractual amount the
difference shall be recovered from the contractor as arrears of land revenue.
27.
Rebates.- The
contractor shall not be entitled to rebate on any ground what so ever.
27-A[19] Extension of Contract:- No extension in
a contract shall be granted beyond one year on any ground what so ever.
28.
Saving and
repeal.- On promulgation of these rules the Punjab Local Council Lease
Rules, 1990 shall stand repealed; provided that the contacts awarded under the
Punjab Local Council Lease Rules, 1990 shall continue till the completion of
contract under those rules.
( NAGUIBULLAH MALIK )
SECRETARY TO GOVERNMENT OF THE PUNJAB
LG & RD DEPARTMENT
No. &
Date Even.
A copy is forwarded for information to:
1.
The Secretary, National Reconstruction Bureau,
Prime Minister’s Secretariat, Islamabad.
2.
The Chief Secretary/Additional Chief Secretary,
Government of the Punjab.
3.
The Principal Secretary to Governor, Punjab.
4.
The Principal Secretary to Chief Minister,
Punjab.
5.
All the Administrative Secretaries in the
Punjab.
6.
All the Nazims/Tehsil Nazims/Town Nazims/ in the
Punjab.
7.
All the District Coordination Officers in the
Punjab.
8.
The Director General, Public Relations Punjab,
Lahore with the request for vide publicity in the media.
9.
The Superintendent, Printing Press Punjab for
publication in the extra ordinary issue of the Punjab Government Gazette with
the request to supply two hundred copies of this notification for official use.
( MUHAMMAD RASHID )
SECTION OFFICER (V)
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