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State of Punjab v. M/S. Bandeep Singh & Ors.

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 629 of 2006)Decided 25 Aug 2015
Civil Appeal No. 629 of 2006
Justice Vikramajit Sen · Justice Shiva Kirti Singh

Background

The Punjab State Leather Development Corporation auctioned two properties, and Bandeep Singh and others deposited earnest money and emerged as the highest bidders, with their bids above the reserve price. Based on an unsubstantiated oral complaint by a disgruntled third party, and without giving the bidders any reasons, the authorities decided to re-auction the properties instead of confirming the sale. The bidders challenged this before the High Court and won, prompting the State's appeal to the Supreme Court.

Decision Breakdown

The Supreme Court held that a public authority's decision must be self-sustaining and supported by reasons recorded at the time it is made: reasons cannot be supplemented later through affidavits, citing the landmark ruling in Mohinder Singh Gill vs. Chief Election Commissioner. Since the actual official noting showed no genuine justification (such as proven cartelization or an inadequate price) for ordering a re-auction of only these two properties while accepting similarly-priced bids elsewhere, the re-auction decision was arbitrary. The Court upheld the High Court's judgment, but, balancing the decade-long delay, directed the bidders to pay the land's price at prevailing circle rates (adjusted for amounts already paid) within 90 days, after which the State was to convey the land to them within 60 days.

Lesson Learnt

Government authorities cannot cancel or re-do a public auction on vague, unrecorded, or after-the-fact reasoning: any decision affecting a citizen's rights in a public process must be backed by reasons actually recorded and conveyed at the time, not invented later to justify the outcome.

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

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