While an authority exercises discretion to cancel an auction process in the interest of revenue, such a decision must be grounded in a valid, demonstrable rationale. Arbitrary cancellation of a compliant, high-value bid without evidence-based justification is subject to judicial review and quashing.

JUDGMENT :

Arindam Sinha, J.

1. Petitioner has challenged order dated 19th March, 2026 made by respondent no.2 (the District Magistrate) under rule 28(3) in Uttar Pradesh Minor Minerals (Concession) Rules, 2021 as well as subsequent notification for e-tender-cum-auction dated 20th March, 2026. Petitioner says, she was highest bidder in the auction for mining lease in respect of area under serial no. 15 in e-auction notice dated 17th February, 2026. Reserved price was Rs. 140/- per cubic meter. She had made bid of Rs. 361/- per cubic meter. The entire process was cancelled, purportedly based on opinion formed by the authority. Arbitrariness is contended. Mr. Ashok Khare, learned senior advocate assisted by Mr. Vijay Kumar Srivastava, learned advocate appear on behalf of petitioner. Dr. Rajeshwar Tripathi, learned advocate, Chief Standing Counsel appears on behalf of State.

2. The writ petition was moved on 1st April, 2026. Paragraphs 2 to 4 from order made that day are reproduced below.

"2. Dr. Rajeshwar Tripathi, learned advocate, Chief Standing Counsel appears on behalf of State and submits, petitioner can put in her bid against the fresh tender. He opposes interference.

3. There are requisites for putting in bids. Petitioner has already complied with the requisitions in putting her earlier bid against the cancelled tender. Furthermore, on query we have ascertained that reserved price was fixed. After fixation of reserved price and getting petitioner's bid declared highest at more than double of it, State needs to explain basis of its opinion.

4. The fresh tender process will remain stayed till next date of hearing. State will be heard on adjourned date."

Today, Dr. Tripathi submits, contention of his client is supported by declaration of law made by the Supreme Court. On query regarding counter he submits, he will proceed to argue on basis of instructions received. He hands them up. He submits, clear declaration of law was that a highest bidder does not have vested right to have the lease granted in her favour. There was no arbitrariness in the decision taken in interest of public revenue.

3. Dr. Tripathi relies on judgment of the Supreme Court in Indore Vikas Praadhikaran (IDA) Vs. Shri Humud Jain Samaj Trust reported in AIR 2025 SC 322, paragraphs 12 to 15. He submits, there is clear declaration of law that a highest bidder does not have a vested right for her bid to be accepted nor to restrain the authority from cancelling the process in interest of public revenue. This was done upon evaluation of the bids received in the auction held pursuant to said notification dated 17th February, 2026. It came to notice of the authority that similar areas had yielded bids for mining lease at excess of Rs. 400/- per cubic meter. It was good basis for cancelling the auction process, on opinion duly formed. On query he hands up his instructions dated 7th April, 2026 with copy to Mr. Khare and submits, pages 3 to 5, in the instructions brief, contain a chart of leases granted for minor minerals. 20 leases have been tabulated. Revenue generated on premium for the leases is in excess of Rs. 400/- per cubic meter for every lease granted. In fact, some leases were granted for premium calculated at excess of Rs. 700/- per cubic meter. Thus, there was tangible basis for cancelling the process and issuing fresh notice for auction.

4. Mr. Khare in reply draws attention to paragraph 17 in the writ petition. The paragraph is reproduced below.

"17. That earlier in