Bombay High Court Upholds State Govt's Cancellation Of Earlier Dharavi Redevelopment Tender And Award Of Fresh Tender To Adani Properties

In doing so, a division bench of Chief Justice Devendra Kumar Upadhyay and Justice Amit Borkar found that the cancellation of an earlier tender and award of a new tender to Adani Propertied was not arbitrary or irrational.

The earlier tender process was issued by the Maharashtra Government in 2018. However, it cancelled the tender and issued a fresh tender process in 2022 with modified conditions for the redevelopment project.

SecLink Technologies Corporation (petitioner), a company incorporated in the Seychelles, was the highest bidder in the first tender process. In the financial bids of the first tender, the SecLink quoted bid price of Rs.7200 crores whereas Adani Properties quoted Rs.4529 crores.

SecLink challenged the decision taken by the Committee of Secretaries (CoS) of the Government of Maharashtra (GoM) on 27 August 2020, where the tender process initiated on 28 November 2018 for redevelopment of Dharavi area was cancelled.

The CoS made a decision to take recourse to the process of re-tendering for the project so as to include 45 acres of railway land in the redevelopment project. The Government Resolution dated 5 November 2020 issued by Housing Department of GoM, opened fresh tender with modified terms and conditions.

In the fresh tender process, Adani Properties was awarded the tender with price bid of Rs.5069 crores. SecLink argued that the fresh tender was issued with a view to defeat its and other prospective bidders rights and to favour a particular bidder. It contended that the fresh tender was tailor-made to to suit a particular tenderer.

Cancelling earlier tender

The High Court opined that the reasons given by the CoS for cancelling the earlier tender process was justified.

It observed that the CoS discussed that the inclusion of railway land makes the project more viable and that such inclusion was in public interest. It stated that the fresh tender was issued keeping such inclusion in mind.

It stated, “As already observed above, in a tender for certain work floated by a public authority, the terms and conditions and, requirement and scope of work should be certain and definite and not uncertain and indefinite. In absence of definite and certain scope of work, it would be highly improper to proceed with the tender process for the reason that such a situation may pose uncertainty and difficulty in the mind of the tenderers while submitting their bid. The CoS, in its meeting held on 27th August 2020 considered all these aspects of the matter and decided to cancel the earlier tender process. The reasons, thus, given by the respondents for cancelling the earlier tender process, in our opinion, cannot be said to be non-existent or unjustified or based on any perversity.”

The Court thus found that the reasons given by the CoS for cancelling the earlier tender was not arbitrary, unreasonable or perverse.

The Court also did not accept SecLink's contention that the fresh tender conditions were tailor made as two out of three bidders were found to be technically qualified.

“As far as the submissions made on behalf of the petitioner that tender conditions were tailor-made to suit a particular tenderer, we may observe that in response to the fresh tender three bidders had participated out of which two bids were found to be technically qualified. Meaning thereby, at least two bidders fulfilled the technical conditions and therefore, since there were more than two bidders in the field who participated out of which two technically qualified, it cannot be said that the tender conditions were tailor-made so as to suit only a particular bidder.”

Furthermore, the Court noted that though the CoS took note of the fact that the petitioner was the highest bidder, however, it did not take any decision on the selected of the successful bidder as no letter of award or agreement was signed.

It also noted that the letter issued by the Chief Executive Officer and Officer on Special Duty, Dharavi Redevelopment Project/Special Planning Authority, Mumbai (DRP/SPA) only informed the petitioner that its consortium bid the highest amount for the project. It stated that the letter did not amount to acceptance as it nowhere stated that the petitioner was declared as a successful bidder.

The Court also noted that the petitioner did not participate in the fresh tender process. It remarked that “It is settled position of law that one who has not participated in the tender and has also not participated even in the pre-bid meeting, cannot be permitted to challenge the terms and conditions of the tender.”

The Court thus held that the decision of the State Government in cancelling the earlier tender and issuing fresh tender was justified.

Case title: SecLink Technologies Corporation vs. The State of Maharashtra & Ors. (WRIT PETITION NO.4823 OF 2022)

Citation: 2024 LiveLaw (Bom) 648