The incident was caught on cameras and aired by television news channels.
However, Technical Education Minister Charanjit Singh Channi maintained that he did 'nothing wrong', while claiming that the postings of lecturers were done 'on merit' and in a 'transparent' manner.
The incident took place on Monday when the minister had called 37 lecturers, who were recently recruited through the Punjab Public Service Commission examination, for giving them their posting orders.
Two lecturers -- one from Nabha and another from Patiala -- wanted to be posted to a government polytechnic institute at Patiala.
In order to resolve the issue, Channi decided to toss a coin.
An official spokesman of the department said both the candidates were vying for the same post and while one of them said his scores were better than the other, the other one said he was more experienced.
"Both of them wanted to be posted at the same place and their merit was also equal. They proposed tossing a coin to decide the matter. Nothing wrong has happened and no illegality has taken place. Everything was done on merit and in a transparent manner," Channi told reporters in Chandigarh on Tuesday.
He added that the postings were given to the candidates as per their choice of places.
"During the previous (SAD-BJP) regime, the postings used to be sold and corruption was rampant. I broke that nexus," the minister claimed.
The spokesman claimed that the minister's intention was to allot the postings in a 'transparent' manner and blamed the media for creating an unnecessary controversy.
Meanwhile, opposition parties Shiromani Akali Dal and Bharatiya Janata Party lashed out Channi.
"A minister has to maintain the decorum of the ministerial berth which Channi has failed to do by deciding an official matter through tossing a coin. He has brought embarrassment to the government and he should be dropped from the ministry before he indulges in more such acts," said state BJP secretary Vineet Joshi.
SAD spokesman and former minister Daljit Singh Cheema said flipping a coin by the minister showed how serious the Amarinder Singh-led Congress government was regarding governance in Punjab.
"It seems that the ministers are just passing time and enjoying their ministerial berths," he added.
Photograph: Kind courtesy Charanjit Singh Channi/Facebook
'There's an atmosphere of fear across the nation'
PM: Passing off WhatsApp forwards as facts
Quiz: How well do you know Modi's acronyms?
What the Rest of India can teach politicians