SC – Public Auction for Better Value of Assets Can Be Cancelled
Judgment dated 16.10.2026 of the Supreme Court in SLP (Civil) No.33791 of 2025 of Satinder Pal Singh and others Vs. Bedi Hospital and others with connected matter.
The Chandigarh Administration issued an e auction notice on 31.08.2022 calling for the e-auction of 12 residential sites, 1 commercial site, and 2 nursing home sites on a freehold basis. In these appeals, we are only concerned with the two nursing home sites, namely Site No. 3 and Site No. 4, located at Sector 33C, Chandigarh, admeasuring 744.44 sq. yards each
M/s Bedi Hospital and the appellant submitted their respective bids for both sites, and on 20.10.2022 after conclusion of the auction process, the Appellant’s bid for Site No.3 was accepted and approved as its bid of Rs. 18.25 Crores was the highest. As regards Site No. 4 is concerned, M/s Bedi Hospital’s bid of Rs. 12.58 Crores was accepted and approved. For consideration of the present set of appeals, we are concerned only with Site No. 4 and the controversy that ensued as regards Site No. 4.
After 35% deposit was made for Site No.4, the agreement to sell in favour of Bedi Hospital was issued on 28.10.2022. On 18.11.2022, it had deposited the balance amount.
On 11.1.2023, the letter was issued that the offer for site no.4 was not reflective of the market trend. On 27.1.2023, the letter of cancelling the bid contract was issued.
In the writ petition of Bedi Hospital, the High Court permitted fresh E-auction
In the fresh auction, the appellant was the highest bidder for Rs.18.30 crores.
In the meanwhile, the writ petition of Bedi Hospital was allowed and cancellation of its allotment was set-aside.
A significant ruling underscoring that public authorities may revisit an auction before a concluded contract emerges, provided the decision is transparent, non-arbitrary, and aimed at protecting public interest.
The Court upheld the Chandigarh Administration’s decision to cancel an auction where the winning bid for a nursing home site was substantially lower than that fetched by an identical adjoining site, holding that maximising value for public assets is a legitimate public purpose. At the same time, to ensure fairness after years of litigation and multiple auction rounds, the Court directed a fresh e-auction.
The Court acknowledged that public auctions carry a degree of sanctity and certainty. However, Sanctity of auction cannot override the larger public interest of obtaining fair value for public assets where no concluded contract has yet emerged.
Price maximization of public assets is a legitimate public purpose, and a public authority may revisit an auction before conclusion of a binding contract if doing so serves the larger public interest and is free from arbitrarines
