Saubhag Singh Yadav was unanimously "elected"at anopen auctionheld at a temple.
At a village in Madhya Pradesh, the post of Sarpanch or village head was given to the highest bidder. Villagers were unanimous - an auction, instead of an election, would do away with any "tension among aspirants".
Saubhag Singh Yadav, who was named Sarpanch, won the bid at Rs 44 lakh, defeating four other contenders for the post.
The local administration, however, says it won't accept the decision and an election will be held.
The villagers of Bhatauli Gram Panchayat in Ashoknagar district, around four hours drive from state capital Bhopal, say they have found a fool-proof and progressive system that will ensure that candidates do not distribute liquor and money to win votes.
The open auction was held at a temple. It started with a base price of Rs 21 lakh and shot up to Rs 43 lakh before Mr Yadav piped up with the winning bid.
The villagers declared him the winner and wished their "new" Sarpanch with garlands. They also decided that no one would contest against him in the upcoming panchayat election in the state.
If Mr Yadav fails to deposit Rs 44 lakh then his nearest rival - the next highest bidder -- can step in, those who were part of the village committee said.
The local officials have refused to acknowledge this unusual "election".
"Whoever contests the election will have to fill the form. If only form comes to the post for Sarpanch and it is found valid, then that Sarpanch will be elected. It can be anyone, even the bidder," an official said.
Voting for the Madhya Pradesh panchayat elections will be held in three phases between January and February.
The Congress has filed a petition in the Supreme Court alleging that the Shivraj Singh Chouhan-led BJP government violated quota rotation rules.
The state government used an ordinance or special order to cancel changes in delimitation and reservation status notification of 2019 made by the previous Congress government. The Congress claims this violates the Constitution as rotation of reservation for local body elections has to take place every five years.