Court Affirms Principles of Natural Justice and Constitutional Fairness in Auction Sale Dispute
In a significant ruling, the Punjab and Haryana High Court, presided by Justice Virinder Aggarwal, has dismissed the second appeal filed by the State of Punjab against Rajwinder Singh, affirming the decisions of the lower courts that upheld the legality of a confirmed auction sale. The judgment, delivered on January 22, 2026, emphasized the importance of adhering to principles of natural justice and constitutional ethos in administrative actions.
The case revolved around a public auction conducted on March 6, 1987, in which Rajwinder Singh emerged as the highest bidder for a property measuring 621 square yards situated at Mohalla Water Works, Muktsar. Singh's bid was confirmed by the competent authority, but later cancelled in May 1988 through a cryptic one-word order "Rejected," without any notice or opportunity for Singh to be heard.
The High Court upheld the trial court's decision, which granted Singh's suit for declaration and permanent injunction, asserting that the cancellation was arbitrary and violated Articles 14 and 21 of the Constitution of India. Justice Aggarwal underscored that any administrative order affecting civil rights must be reasoned and conform to the principles of natural justice. The judgment stressed that the retrospective application of policy changes could not invalidate confirmed transactions unless explicitly provided by statute.
The ruling reiterated the jurisdiction of civil courts in matters where statutory authority actions are arbitrary or violate natural justice principles, rejecting the State's arguments regarding the mandatory notice under Section 80 of the Civil Procedure Code and jurisdictional bar under the Punjab Package Deal Properties (Disposal) Act, 1976.
The court's decision reinforces the constitutional mandate for transparency, fairness, and accountability in public administration, setting a precedent for future cases involving administrative discretion and auction sales.
Bottom Line:
Cancellation of a confirmed auction sale without notice or opportunity of hearing is arbitrary, violative of principles of natural justice, and legally unsustainable.
Statutory provision(s): Section 80 of the Civil Procedure Code, 1908; Section 16 of the Punjab Package Deal Properties (Disposal) Act, 1976; Articles 14 and 21 of the Constitution of India.
State of Punjab v. Rajwinder Singh, (Punjab And Haryana) : Law Finder Doc id # 2848989
