Russia-Ukraine War Has Materially Affected Economy, Adani Won Dharavi Redevelopment Tender Fairly: Maharashtra Govt To Bombay High Court

Sunil Baburao Tumbare, Deputy Secretary, Housing Department in response to Dubai-based Seclink Technologies's petition challenging the award of contract to Adani group said:

“The old Tender, which is cancelled, and the new Tender are different and cannot be compared. This is because of the several factors such as the financial and economic state of affairs in January, 2019 and in 2022 are materially different. The present economic state of affairs is materially affected by the impact of COVID-19 pandemic, Russia-Ukraine war, uncertainty over Rupee-USD rate, interest rate volatility and overall high-risk perception of common investor.”

A division bench of Acting Chief Justice SV Gangapurwala and Justice Sandeep V. Marne on Friday kept the matter for further consideration on March 14.

The state government in 2018 had floated a tender for the Dharavi Redevelopment Project. The petitioner Seclink Technologies Corporation was the highest bidder and Adani Properties Pvt Ltd was the second highest bidder. However, the State cancelled the tender process claiming that an additional 45 acres of Railway land has become available due to an MoU in 2019. State said this constitutes a "material change" and a new tender to incorporate it is required.

In 2022, a new global tender was floated and Adani Properties Pvt Ltd emerged as the highest bidder. The petitioner had challenged the cancellation of the earlier tender. However, it later amended its petition alleging that the new tender conditions were deliberately meant to exclude the petitioner from participating in the bid.

The State denied these allegations and said that Adani Properties won the tender fairly. Seclink could have complied with the tender conditions and participated in the bid but it chose not to, the government said, adding that Seclink didn’t participate in the pre-bid meetings or gave any suggestions.

According to the affidavit, the petitioner was intimated that it was the highest bidder in the 2018 tender but the same didn’t constitute a contract. Seclink had no legal right, it said.

“The Seclink has no vested right to get an award in a tender process. Any person who submits a bid can only legitimately expect that his bid is considered in a non- arbitrary and transparent manner. No person has a right to do business with the government as a matter of right,” the affidavit read.

It has been further argued that the new tender conditions had been decided according to public interest. The tendering authority has to formulate the requirements and Seclink cannot force it to invite tender in a favourable manner, the government said.

The State said that the 2018 tender and the 2022 tender cannot be compared as they are two different tenders. 

The 2022 tender capped the number of members in a consortium to two as compared to eight members in the 2018 tender. According to the government, this was done to ensure that the consortium members bringing actual finance or technical eligibility don't only have low or zero stakes and are actually part of important decisions about the implementation of the project.

The petitioner has contended that in the 2018 tender, its bid of Rs. 7200 crores was higher than Adani group’s 2022 winning bid of Rs. 5069 crores. Therefore, there is a loss of Rs. 2131 crores to the public exchequer in the 2022 tender process, according to the petition.

To this, the State explained that the 2018 bid amount included Rs. 1683 crores funds towards the Railway Land that is not required now due to confirmed availability of railway land.

The petitioner in its rejoinder denied that its bid was inclusive of the money to be paid towards railway land. It stated that it had to pay that amount over the Rs. 7200 crores bid amount. It also said that the State has not acquired the Railway land even after three years of the MoU by not entering into a definitive agreement towards its acquisition.

Senior Advocate Dr. Abhinav Chandrachud with Advocates Suraj Iyer and Jenil Shah appeared for the Petitioner while Senior Advocate Dr. Milind Sathe appeared for the State.

Case no. – WP/4823/2022 [Original]

Case Title – Seclink Technologies Corporation v. State of Maharashtra and Anr.