2026 Supreme(SC) 28

SUPREME COURT OF INDIA
B.V. NAGARATHNA, R. MAHADEVAN, JJ.
Golden Food Products India – Appellant
Versus
State of Uttar Pradesh and Others – Respondents
Civil Appeal Nos. 56-57 of 2026 [Arising Out of Special Leave Petition (Civil) Nos. 18095-18096 of 2024]
Decided On : 06-01-2026

IMPORTANT POINTS
(1) Allotment of Industrial Plot – Ordinarily, when large areas of industrial land are auctioned, overall price would be separately assessed as compared to smaller plots – Merely because selling price or financial bids made by parties vis-à-vis smaller plots were concerned was higher per square metre cannot be a reason to also expect a very high price or a similar price insofar as subject plot is concerned.
(2) Public interest cannot be used as a pretext to arbitrarily terminate contracts – An auction process has a sanctity attached to it – Decision to discard highest bid must have nexus to rationale or reason.

Headnote:

(A) Industrial Law – Allotment of Industrial Plot – Cancellation of bid – Ordinarily, when large areas of industrial land are auctioned, overall price would be separately assessed as compared to smaller plots – Merely because selling price or financial bids made by parties vis-à-vis smaller plots were concerned was higher per square metre cannot be a reason to also expect a very high price or a similar price insofar as subject plot is concerned – Reserve price in respect of smaller plot as well as subject plot was fixed at same rate – Appellant was declared to be highest bidder – This is in fact a crystallization of future rights and obligation of parties – Appellant had right to receive allotment letter and GDA had duty to issue the same, particularly in absence of fraud, collusion or any other reason which could have led to cancellation of auction – GDA could not have compared selling price of smaller plots with financial bid made by appellant so as to cancel auction itself – Same was done on an irrelevant consideration – It was arbitrary, whimsical and irrational and appellant was justified in seeking reliefs before High Court – High Court ought to have granted relief to appellant by directing GDA to pass order of allotment to appellant. (Paras 25, 26 and 27)

(B) Industrial Law – Allotment of Industrial Plot – Cancellation of bid – There cannot be any imprimatur of Court to such arbitrary cancellation of auction by an instrumentality or agency of State in absence of there being any fraud, collusion, suppression etc. – Expectation of a higher bid in a subsequent auction cannot be a reason to cancel an auction held in accordance with law – Appellant had legitimate expectation to receive allotment letter vis-à-vis subject plot as it was highest bidder – Public interest cannot be used as a pretext to arbitrarily terminate contracts – Merely because financial terms of a contract are less favourable over a period of time does not justify its termination – An auction process has a sanctity attached to it and only for valid reasons that highest bid can be discarded in an auction which is otherwise held in accordance with law – If a valid bid has been made which is above reserve price, there should be a rationale or reason for not accepting it – Decision to discard highest bid must have nexus to rationale or reason – Merely because authority conducting auction expected a higher bid than what highest bidder had bid cannot be a reason to discard highest bid – GDA directed to allot subject plot in favour of appellant. (Paras 28, 29, 31, 32 and 33)

Facts of the case:

Facts of the case are that Ghaziabad Development Authority (“GDA”) – respondent No.2 herein had advertised allotment of various plots through an auction dated 25.08.2023, including an industrial plot bearing Plot No.26, Madhuban Bapudham Yojana, Ghaziabad, measuring an area of 3150 square metres. The auction was conducted through a two-bid system – a ‘technical bid’ and a ‘financial bid’. Appellant submitted a bid of Rs.29,500/- per square metre, which was highest, and was thus declared highest bidder. By Impugned Order No.2 dated 15.07.2024, High Court held that in absence of a challenge to its order dated 24.05.2024, same had attained finality as appellant had not preferred any modification or review of the same.

Findings of Court:

The appellant is directed to re-deposit earnest money preferably within four weeks from today. Within two weeks from the date of the re-deposit of earnest money, the GDA - respondent No.2 shall make an order of allotment of subject plot in favour of appellant herein and take all consequential steps for concluding the auction process in favour of the appellant herein.

Result : Appeals allowed.