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State of Punjab & Others vs. Mehar Din

Civil Appeal · 2022 INSC 249Decided 2 Mar 2022
Civil Appeal No. 5861 of 2009
Ajay Rastogi · Abhay S. Oka

Background

In 1993 the Punjab government's Tehsildar (Sales) at Malerkotla put a piece of sub-urban "package deal" land up for public auction. Only three bidders showed up, and Mehar Din's bid of Rs. 3,90,000 was the highest; he deposited one-fifth of the bid amount as required. The Sales Commissioner, however, refused to confirm the sale, finding the auction hadn't been properly publicised and the price was too low, and ordered a re-auction with wider publicity.

Decision Breakdown

Mehar Din's challenges succeeded all the way up through the Chief Sales Commissioner's reversal, then failed again before the Financial Commissioner (who restored the cancellation), before the High Court finally sided with him and ordered the sale confirmed. The Supreme Court reversed the High Court, holding that under the auction rules a highest bid is only "provisional" until the competent authority confirms it: no vested right accrues to a bidder merely by winning the bidding. Courts reviewing such auctions must show restraint and can only intervene for arbitrariness, bias, or mala fide conduct, not merely because they might have valued the land differently; here the Sales Commissioner's concern about inadequate publicity and price was a legitimate exercise of discretion, and the High Court had wrongly acted like an appellate authority over that discretion. The Court did direct that Mehar Din's earnest deposit be refunded with 12% interest.

Lesson Learnt

Winning a government auction does not create an automatic legal right to the property: the sale still needs official confirmation, and authorities may cancel and re-auction if they reasonably believe a better price is achievable or publicity was inadequate.

Official source (sci.gov.in)View Judgment (PDF)

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