GMADA Crore-Rich Auctions Hit a Legal Snag: Bidders Cite Theka, Encroachments; Payments Paused
GMADA Auctions: The Punjab government’s premium e-auctions at SAS Nagar drew bids running into hundreds of crores. Now bidders are in the High Court saying the sites they won still have trees, a liquor vend, structures or other occupants. The courts have since paused or relaxed the payment schedules.
North Desk Correspondent
Chandigarh, November 1
The Punjab government’s premium e-auction of sites at SAS Nagar, run by the Greater Mohali Area Development Authority (GMADA), is facing legal trouble. Successful bidders have gone to the Punjab and Haryana High Court saying they cannot be asked to pay up because GMADA cannot hand over clear possession. Across at least four petitions, the court has paused or relaxed the payment schedule.
GMADA Auctions: The latest is Homeland Realty’s challenge to its ₹555.33-crore purchase of Mixed-Use Chunk Site No. 11 in Sector 62. On Saturday a Division Bench issued notice of motion. It passed an interim order in the same terms as in the Aggarwal Plaza case, where on 28 October it recorded that GMADA “would not insist on the time schedule of the remaining payment”. It also said no prejudice would be caused if the bidder did not pay within that schedule. Both cases are listed together on 7 January 2027.
GMADA Auctions: The pattern of cases
- Homeland Realty (Site 11, Sector 62):
GMADA Auctions: Homeland says the site still has standing trees, a liquor vend, temporary structures, hutments and other occupants. It has paid ₹66.64 crore, which is 10 per cent of the bid plus 2 per cent Cancer Cess. The 6 October allotment letter asks for a further 15 per cent, ₹83.30 crore, within 90 days, which expires around 4 January 2027. The letter also says deposits can be forfeited on default.
- Aggarwal Plaza:
Its counsel told the court that the company has already deposited about ₹189 crore, and that a large number of trees on its land block possession and construction. On 28 October the bench issued notice and relaxed the schedule.
- Homeland Realty and HLP Realty:
GMADA Auctions: On 1 July the court recorded it as “an admitted position”, stated by GMADA’s own counsel, that possession of both properties could not be given. It stayed the payment schedule until the next date, and the order was extended on 13 and 23 July. The petitioners had pointed to a liquor shop, a builder’s site office and encroachments.
- Harmony Infra Ventures:
Here the bench took up the Ram Kishan directions of 2016, which ask Punjab and Haryana not to offer any government site for auction unless it is litigation-free and encumbrance-free. It recorded a prima facie view that the directions “should have been complied with”. It asked the Chief Secretary for data on allotments made without complete possession, and the State has repeatedly sought more time.
The Site 11 specifics
The records show that the liquor vend operator, Amarjeet Singh Sidhu, was told on 1 June to shift to Site 11 from Site 10. On 14 September GMADA asked the Excise department to shift the vend to a marked site in Sector 51 so possession could be given. The High Court ordered status quo on possession of the site in Sidhu’s petition in September. It continued that order in its October hearing and listed the case for December.
On trees, a GMADA memo of 30 July says 796 trees across the auctioned sites need five-fold compensatory plantation, or 3,980 saplings. It adds that some heritage trees stand on the site and that GMADA’s application for court permission to fell them was “under progress”. The Punjab Protection of Trees Act, 2026, notified on 24 September, now requires permission to fell trees in urban areas including SAS Nagar.
The legal question
GMADA Auctions: Homeland and the other bidders rely on the Housing department’s clarification of 21 July 2026. It says the deemed-possession clause applies only where the authority can deliver “actual and effective physical possession”, and that payment liability arises only on “a valid and effective offer of possession”.
GMADA’s position
GMADA’s disclaimer of 11 August tells bidders that trees on a site do not entitle them to withdraw, seek a reduction or compensation, or extend the payment schedule. It also says bidders should inspect the sites and bid at their own risk. In the Harmony Infra case GMADA’s counsel argued that the Supreme Court’s Raghu Nath Gupta ruling bars an “as is where is” buyer from complaining later, and that Ram Kishan is per incuriam.
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