Recently, in a pointed intervention on transparency in public auctions, the Supreme Court has stepped in to examine whether a statutory authority can lawfully auction public property without disclosing that the land is already embroiled in litigation, raising serious questions about fairness, bidder protection, and the integrity of state-run sale processes.
The controversy began when an auction purchaser bid for and paid over Rs. 1.57 crore for a plot auctioned by the Ludhiana Improvement Trust in May 2021, only to be told later that the sale could not be completed because a civil suit concerning the same property had been pending since 2020. The purchaser argued that the Trust never revealed this crucial fact in the auction notice, placing him in a precarious position despite acting in good faith. After the Punjab and Haryana High Court declined to grant relief, the dispute reached the Apex Court, centring on whether suppression of such information strikes at the legality of the auction itself.
The Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan expressed clear disapproval of the Trust’s conduct, holding that disclosure of litigation is not optional but a legal obligation. In a sharp observation, the Court said, “Authorities conducting public auctions are legally required to disclose all known encumbrances and litigation relating to the property, as failure to do so invalidates the sale.” Emphasising that public auctions must remain free from suspicion or hidden defects, the Bench set aside the High Court’s order and directed the Trust to refund Rs. 1.57 crore with 9% interest within six weeks.
Case Title: Viney Kumar Sharma v. The Improvement Trust & Anr.
Case No.: SLP (C) No. 24811 of 2025
Coram: Hon'ble Mr. Justice J.B. Pardiwala, Hon'ble Mr. Justice K.V. Viswanathan
Advocate for the Petitioner: AOR Aabhas Kshetarpal, Advs. Dhiliban Varadarajan and Harsh N. Dudhe
Advocate for the Respondent: AOR Apoorva Singhal, Advs. Sanchar Anand, Rajat Rathee, Aman Kumar Thakur, Pratimesh, Aman Bhardwaj
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