The Bombay High Court on Friday dismissed a petition challenging the Maharashtra government’s decision to cancel its 2019 bid for the redevelopment of Dharavi slums in Mumbai and issue a new tender in 2022, which was awarded to Adani Properties.
The Bench of Chief Justice DK Upadhyaya and Justice Amit Borkar passed the order on a petition filed by UAE-based company SecLink Technologies Corporation.
The High Court noted that since at least two bidders had qualified under the new tender process, it could not be argued that the conditions were tailored to benefit a single bidder.
The High Court noted that in response to the fresh tender, three bidders had participated out of which two bids were found to be technically qualified. Since more than two bidders participated in the tender process, out of which two were declared technically qualified for the process, it cannot be said that the tender conditions were tailor-made to suit only a particular bidder.
The petitioner sought to reverse the Maharashtra government’s decision, which annulled Seclink’s successful Rs 7,200-crore bid from 2019 and introduced a new bidding process in 2022.
The new tender led to the award of the project to Adani Infrastructure and Developers Private Limited with a bid of Rs 5,069 crore.
Seclink had initially won the bid for the Dharavi redevelopment project in 2019, surpassing Adani’s Rs 4,539 crore offer.
In 2022, however, the Eknath Shinde-led government included 45 acres of railway land in the redevelopment plan for slum rehabilitation, a change not part of the original proposal.
To accommodate the cost of acquiring this land, the government sought legal advice. The then Advocate General Ashutosh Kumbhakoni recommended a new tender reflecting these changes.
Seclink argued that the inclusion of railway land had already been factored into the original 2019 bid, as the bid map included nearly 90 acres of railway land.
The company claimed that the government’s decision to cancel the 2019 bid was unjustified and that the new tender terms were designed to exclude them and benefit Adani. Seclink also stated that it suffered a financial loss of Rs 8,424 crore due to the cancellation.
The Counsel appearing for the Maharashtra government argued that the revised tender conditions were necessary due to significant changes in the economic landscape between 2019 and 2022.
These included factors like the Covid-19 pandemic, the Russia-Ukraine war, fluctuations in the Rupee-USD exchange rate, and interest rate volatility, all of which affected the financial environment and investor confidence.
The Bench ruled that the decision to cancel the tender to include railway land cannot be said to be ‘non-existent,’ ‘unjustified’ or based on any ‘perversity’.
The High Court noted that the railway land was not part of the initial proposal and that Seclink was aware of this fact.
The MoU between the Rail Land Development Authority (RLDA) and the Dharavi Redevelopment Project (DRP)/Slum Rehabilitation Authority (SPA) was signed only in March 2019, after the tender was floated and bids were submitted.
The Bench further observed that Seclink did not have any ‘vested right’ to win the contract based on the declaration in the March 8, 2019 letter, which merely stated that Seclink was the highest bidder.
It said merely on account of the declaration by the DRP/SPA vide its letter dated March 8, 2019 that the petitioner was the highest bidder, no right could be said to have vested in the petitioner; neither would it amount to the concluded contract.
The Bench further said that the financial loss Seclink incurred due to the cancellation of its bid could not invalidate the government’s decision to cancel the tender process.
It noted that merely because certain expenditure might have been incurred by the petitioner would not vitiate the impugned action on part of the respondent authorities to cancel the earlier tender process.
Seclink could not challenge the fresh tender process as it had not participated in the new bidding or the pre-bid meeting, it added.
The Bench ruled that the petitioner chose not to participate in the fresh tender process. It was a settled position of law that the 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 post Dharavi redevelopment project: Bombay High Court rejects plea challenging award of contract to Adani properties appeared first on India Legal.