Authority: Supreme Court of India

Order Date: 16 October 2026

Case Overview

  • Parties: Appellant Satinder Pal Singh & Ors. versus Respondent M/s Bedi Hospital & Ors., with the Chandigarh Administration as a key public authority.
  • Background: The Chandigarh Administration issued an e‑auction notice on 31‑08‑2022 for 12 residential, 1 commercial, and 2 nursing‑home sites. Site No. 4 (Sector 33C, Chandigarh, 744.44 sq yds) had a reserve price of Rs 6.91 crore.
  • Initial Auction (20‑10‑2022): Bedi Hospital’s bid of Rs 12.58 crore was accepted as the highest for Site 4; the appellant’s bid of Rs 18.25 crore won Site 3.
  • Bedi Hospital deposited 25 % on 21‑10‑2022 and the balance 75 % on 16‑11‑2022, and an Agreement to Sell was issued on 28‑10‑2022.
  • Cancellation: On 27‑01‑2023 the Administration cancelled the bid contract, citing a Rs 6 crore price disparity with the adjacent site, and refunded the full amount. A second cancellation letter dated 09‑02‑2023 reiterated the rescission.
  • Writ Petition: Bedi Hospital filed a writ petition (CWP No. 2811 of 2023) before the Punjab & Haryana High Court on 06‑02‑2023. The High Court, while granting the Administration liberty to re‑auction, stayed finalisation pending further hearing.
  • Fresh Re‑Auction: After technical non‑compliance of earlier bids, a fresh notice was issued on 05‑08‑2023 with a reserve price of Rs 18.25 crore. The appellant participated, qualified, and on 06‑09‑2023 offered Rs 18.30 crore, becoming the highest bidder. Bedi Hospital did not participate.
  • High Court Decision (01‑04‑2025): The High Court set aside and quashed the cancellation letters of 27‑01‑2023 and 09‑02‑2023, effectively restoring Bedi Hospital’s rights.
  • Appeal: The appellant and the Chandigarh Administration appealed the High Court’s judgment, leading to the present Supreme Court civil appeals.
  • Legal Framework: The Court examined the Chandigarh Estate Rules, 2007 (Rule 5) and the General Terms & Conditions for Sale of Nursing Home Sites (dated 31‑08‑2022). Key provisions allow the Estate Officer to withdraw a site or reject a bid without assigning a reason, and stipulate deposit percentages, timelines, and forfeiture clauses.
  • Contractual Analysis: The Court held that an Agreement to Sell is not a binding contract until the conveyance deed is executed; therefore, the Administration retained the power to cancel before allotment.
  • Public Interest Consideration: Citing Chairman & Managing Director, SIPCOT v. Contromix, the Court affirmed that maximizing price for public property is a legitimate public purpose, and revisiting the auction before final allotment is permissible.
  • The Court distinguished the present case from Vice‑Chairman & MD, CIDCO v. Shishir Realty and Golden Food Products India v. State of Uttar Pradesh, noting no violation of natural justice or arbitrariness in the cancellation.

Final Outcome

  • The Supreme Court set aside the High Court judgment dated 01‑04‑2025.
  • It directed the Chandigarh Administration to conduct a fresh e‑auction for Site 4 in Sector 33C, Chandigarh, adhering to the Chandigarh Estate Rules, 2007.
  • The fresh auction process must commence and conclude within three months from the date of this order (i.e., by 16‑January‑2027).
  • No order as to costs was made; any pending applications stand disposed of.

Topics: Auction Dispute, Public Property Sale