Authority: Supreme Court of India, Civil Appellate Jurisdiction

Order Date: 14 October 2026

Case Overview

  • Appeals: Civil Appeal No. 13749 of 2026 (SLP (C) No. 11388 of 2026) filed by M/s Sahakar Global Ltd and Civil Appeal No. 13750 of 2026 (SLP (C) No. 11160 of 2026) filed by M/s Dhanlaxmi Merchandise Pvt. Ltd, both against the State of Madhya Pradesh & others.
  • Origin: Both appeals arise from a common High Court judgment dated 18 March 2026, which upheld the cancellation of an e‑tender‑cum‑auction (Notice No. Sand/Tender/2025‑26/406 dated 18 Sept 2025) conducted by Madhya Pradesh State Mining Corporation Ltd (the Corporation) for the Shahdol and Katni sand‑mining groups.
  • Background: Under the Madhya Pradesh Sand (Mining, Transportation, Storage and Trading) Rules, 2019 (amended 26 May 2023), quarry leases are held by the Corporation and operated by Mine Developer‑cum‑Operators (MDOs). Both appellants had previously obtained contracts for the respective groups, surrendered them under Rule 16 (three‑month notice, payment of dues, State approval), and re‑bid in the fresh September 2025 auction.
  • Shahdol (34 mines, 1,760,000 cubic metres annually): Earlier annual bid ₹68,84,25,999 (≈₹391.151 / m³) on 12 Jan 2024; fresh auction highest bid ₹48,20,40,000 (≈₹273.886 / m³) on 10 Oct 2025, exceeding reserve price ₹44 crore by ₹4,20,40,000.
  • Katni (49 mines, 2,000,000 cubic metres annually): Earlier annual bid ₹64,77,66,000 (≈₹323.883 / m³) on 1 Nov 2023; fresh auction highest bid ₹54,07,41,111 (≈₹270.371 / m³) on 10 Oct 2025, exceeding reserve price ₹50 crore by ₹4,07,41,111.
  • Board Decision: On 19 Nov 2025 the Corporation’s Board compared the fresh bids with the earlier bids (differences: Shahdol – ₹20,63,85,999 (≈29.98 %); Katni – ₹10,70,24,889 (≈16.52 %)) and, deeming the fresh rates “non‑competitive”, cancelled the auction on 5 Dec 2025.
  • Subsequent Developments: While the appeals were pending, Rule 16 was amended on 30 Jan 2026 to disqualify surrendering MDOs (and their directors/partners) from re‑participating in the same group for three years and to provide a loss‑recovery mechanism. A new NIT was issued on 10 Feb 2026 with higher reserve prices (Shahdol ₹52.80 crore, Katni ₹60 crore).
  • High Court (18 Mar 2026) dismissed both writ petitions, accepting the Board’s view that the substantial drop in bids justified cancellation.
  • Supreme Court: Heard both appeals together, considered statutory framework, the Board’s discretion, the relevance of earlier bids, and the prospective nature of the 30 Jan 2026 amendment.

Final Outcome

  • The Supreme Court set aside the High Court’s common judgment and quashed the Board’s cancellation dated 19 Nov 2025 and the communication of 5 Dec 2025, insofar as they reject the bids of Sahakar and Dhanlaxmi for Shahdol and Katni.
  • The e‑tender‑cum‑auction dated 18 Sept 2025 is restored for both districts.
  • Within two weeks, Sahakar and Dhanlaxmi must communicate unconditional willingness to stand by their final bids of ₹48,20,40,000 (Shahdol) and ₹54,07,41,111 (Katni) and comply with remaining tender requirements.
  • Upon receipt, the Corporation shall, within a further two weeks, inform the appellants of any outstanding deposits, bank guarantees, performance securities, and other formalities.
  • After compliance, the Corporation must complete approval, issue the Letter of Intent (or equivalent), and execute the agreement within six weeks.
  • The subsequent tender process dated 10 Feb 2026 shall not proceed for Shahdol and Katni; deposits and guarantees of participants in that later process shall be returned within four weeks, subject to any independent liabilities.
  • The Court clarified that the amendment to Rule 16 is prospective and cannot be applied retroactively to disqualify the appellants for the 2025 auction.
  • All other pending applications, including interventions by later bidders, are disposed of; no order as to costs.

Topics: Sand Mining Tender, Judicial Review of Public Procurement