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The administrative headquarters of Madhubani is set to go under the hammer after the Supreme Court dismissed the Bihar government’s special leave petition seeking a stay on the auction proceedings. The auction has been scheduled for November 26, 2026, following directives from the Madhubani Principal District and Sessions Judge Pawan Kumar Pandey. The enforcement action stems from the state government’s failure to settle outstanding dues amounting to Rs 4.17 crore owed to Radha Krishna Exporters Private Limited, a firm that supplied raw materials to the Pandaul spinning mill decades ago. The court Nazarat has formally published and pasted the auction proclamation notices across the collectorate premises and other key locations.
Supreme Court Rejects Plea Following High Court Denial
The state government had approached the apex court after failing to secure a stay order from the Patna High Court on September 30, 2026. A Supreme Court division bench comprising Justice Arvind Kumar and Justice Vipul M. Pancholi heard the special leave petition filed in the matter of State of Bihar versus Others. The bench dismissed the state’s plea with the observation that there was no substantive ground to interfere with the lower court’s ruling.
According to Court Manager Sarfaraz Alam, the district court had earlier slated the auction for November 5, 2026. However, the process was temporarily deferred while the state government pursued legal recourse before the Supreme Court. Following the apex court’s refusal to intervene, the district judiciary moved promptly to initiate the execution process, locking in November 26, 2026, as the confirmed date for the public auction.
Long-Standing Commercial Dispute Over Pandaul Mill Dues
The root of the conflict traces back to 1998, when Radha Krishna Exporters Private Limited invested capital and supplied raw materials to the Pandaul spinning mill, as stated by the company’s counsel, Varun Kumar Jha. Under the agreement, the mill management was supposed to supply finished yarn to the firm in exchange for input costs and raw materials. The arrangement collapsed when the mill ceased the yarn supply, leaving the investor’s funds stranded. When the mill closed in 1999, the Bihar government took over its control but failed to resolve the pending liabilities.
The dispute subsequently moved into arbitration before retired Patna High Court judge Justice Ghanshyam Prasad, appointed as arbitrator in request case number 7 of 2012. An arbitral award was delivered in favor of the private enterprise, establishing total outstanding liabilities, including accumulated interest, at Rs 4,17,24,459. Despite the legally binding award, successive administrations failed to release the settlement. On June 17, 2025, former Principal District Judge Anamika T. had issued orders to auction portions of the collectorate if the dues remained unpaid.
Collectorate Land and Building Earmarked for Auction
Established in 1972, the Madhubani collectorate serves as the nerve center for district administration, spanning a total area of two bighas, five katthas, and 67 dhoors. The complex houses senior administrative offices across a three-storeyed structure. The impending enforcement action will not impact the entire campus; court orders specify that 10 katthas of land situated in the southern portion, along with a two-storeyed building erected on it, will be put up for bidding to recover the debt.
According to Dilip Kumar, a senior civil advocate practicing in Muzaffarpur, the Bihar government now faces limited legal maneuvers after the Supreme Court dismissal. The state can file a review petition before the High Court, offering to deposit the equivalent monetary valuation in lieu of the land, or request permission to liquidate the unpaid amount through structured installments.
