Bombay High Court
Jcc Engineers vs The Municipal Corporation Of Greater ... on 17 April, 2025
Author: M. S. Karnik
Bench: M. S. Karnik
2025:BHC-OS:7031-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO. 5723 OF 2025
M/s. JCC Engineers,
A partnership firm through its partner,
Mr. Ranjeet Kumar, registered under the
Provisions of Indian Partnership Act, 1932
Having its registered office at room No.1,
Kasturba Wadi Chawl, Road No.3,
Opp. Kanal Industrial Estate,
Daulat Nagar, Borivali (East),
Mumbai - 400 066 ... Petitioner
Versus
1. The Municipal Corporation of
Greater Mumbai,
A statutory body incorporated in
accordance with provisions of Mumbai
Municipal Corporation Act, 1888 and
Having their offices at Mahapalika
Bhavan, Mahapalika Marg, Fort,
Mumbai - 400 001.
2. The Municipal Commissioner
Having his offices at Mahapalika
Bhavan, Mahapalika Marg, Fort,
Mumbai - 400 001.
3. The Assistant Municipal
Commissioner, R South Ward,
Municipal Corporation of Greater
Mumbai, 2nd floor, Near SVP Swimming
Pool, M. G. Cross Road, No.092,
Kandivali (W), Mumbai - 400 058.
4. Hitansh Construction
4/C/15, 3rd Floor, Baj Geejay CHS Ltd,
Sai Baba Nagar,
Mumbai - 400092.
PMB 1
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5. Magan Construction Co.
SV Road, Kora Kendra, Mumbai - 400092.
6. Deepesh Construction
Opp. Monica Jewellers, Thakur Complex,
Shop No.10, Gokul Heaven CHS Ltd,
Opp. MO, Kandivali (E), Mumbai - 400101.
7. H and H Associates
Mangal Aarambh Commercial Co-operative
Housing Society Limited, R M Bhatted Road,
Kora Kendra, Mumbai - 400092.
8. Aryan Enterprises
MIDC Road, Shop No.2, Ganga Chawl,
MIDC Road, Andheri East,
Mumbai - 400093.
9. DKS Construction
A Wing, Ground floor, Satyam CHS Ltd,
Western Express Highway,
Kandivali East, Mumbai - 400101. ... Respondents
****
Ms. Armin Wandrewala a/w Mr. Ranjeev Carvalho, Mr. Rishab
Murali, Ms. Sakshi Agarwal, Mr. Eknath Pagam, Ms. Saloni
Doshi i/b. Mr. Bipin Joshi, for the Petitioner.
Mr. S. U. Kamdar, Senior Advocate a/w Ms. Chaitalee
Deochake i/b. Ms. Komal Punjabi, for Respondent Nos.1 to 3-
MCGM.
Mr. Viraj Kadam, for Respondent Nos.4 and 5.
Mr. Laxman R. Shahapur, for Respondent Nos.6 to 8.
****
CORAM : ALOK ARADHE, CJ &
M. S. KARNIK, J.
DATE : 17th APRIL, 2025
PMB 2
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JUDGMENT (PER M. S. KARNIK, J.) :
1. The challenge in this Petition is to the
communication/direction dated 18th February 2025 allotting
work which is subject matter of the Petition by a lottery
system, a decision by the Municipal Corporation of Greater
Mumbai ('MCGM' for short) which according to the petitioner -
M/s. JCC Engineers is arbitrary and irrational.
2. The facts need to be briefly stated. The petitioner is a
qualified civil contractor registered with MCGM for carrying out
civil works of MCGM. On 8 th November 2012, MCGM issued a
Circular for implementation of e-quotation/unstar tendering
for civil works contract in respect of petty civil works having
maximum cost of Rs.20,00,000/-. The tender document
stipulated various terms and conditions. Relevant to the facts
of the present case is that on 29 th January 2025 MCGM
cancelled the earlier single consolidated tender and instead
issued 80 seperate unstar tenders having value of upto
Rs.25,00,000/-, which were to be opened on 5 th February
2025.
3. The bidders received email dated 16th February 2025
from MCGM in respect of Bid No.27 informing that similar
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percentage of -15% has been quoted by all bidders.
Therefore, the bidders were asked to participate in lottery to
be conducted in offline mode on 18 th February 2025 at 3:00
p.m. On 17th February 2025 MCGM informed all the bidders
through email that in respect of Bid Nos.24 and 28, similar
percentage of -15% has been quoted by all bidders. The
bidders were asked to participate in lottery in offline mode on
18th February 2025 at 3:00 p.m.
4. By a letter dated 17th February 2025 the petitioner
objected to the MCGM's conducting of offline lottery without
publication of result of the e-tender. Ms. Wandrewala, learned
counsel for the petitioner submitted that only 24 hours' prior
notice was given for the lottery. It is submitted that result of
e-tender was not disclosed to the bidders. Further, MCGM
unilaterally took a decision that in case of absence of any
bidders, lottery was to be proceeded with in the presence of
remaining bidders. Learned counsel submitted that on 18 th
February 2025, despite the absence of petitioner, MCGM
proceeded to conduct lottery and awarded works to bidders
arbitrarily. Learned counsel for the petitioner objected to
MCGM conducting offline lottery and allotment of works
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pursuant to lottery in absence of the petitioner by the
communication dated 20th February 2025. This Petition was
filed on 21st February 2025.
5. The work orders were issued to all successful bidders on
25th February 2025. Ms. Wandrewala submitted that the
procedure adopted by MCGM is arbitrary, irrational and
capricious. It is submitted that the tender procedures specify
that in the event of multiple L-1 bidders being received, MCGM
is first required to conduct re-bidding by inviting bids from the
L-1 bidders, and only if there is more than one L-1 bidder on
re-bidding, that the MCGM is to conduct lottery for allotment
of the works. Learned counsel submits that in the present
case, the MCGM proceeded to conduct lottery amongst
bidders immediately upon opening of the e-tender by giving
only 24 hours' notice and without giving opportunity for re-
bidding. In her submission, even the result of e-tender
(commercial report) was not disclosed on the online portal.
Learned counsel submitted that it is not open for the MCGM to
contend at this juncture that merely because the work orders
have been issued and the works have been carried out in
pursuance thereof that this petition should not be entertained.
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The allotment of the works is illegal as the same are contrary
to the provisions of the Mumbai Municipal Corporation Act,
Rules and the Standard Operating Procedure. Learned counsel
submitted that the manner and haste in which the tenders are
awarded contrary to all known procedures is a serious matter
which requires an in-depth investigation by the competent
authorities. In support of her submissions Ms. Wandrewala
relied upon the following decisions :-
1. Mahabir Auto Stores v. Indian Oil Corporation1.
2. Union of India v. Hindustan Development
Corporation2.
3. CIDCO v. Shishir Realty Pvt. Ltd.3
4. Shree Nathji International v. Bharat Aluminium Co.
Ltd.4
5. Banshidhar Construction Pvt. Ltd. v. Bharat Coking
Coal Ltd.5
6. On the other hand, Mr. Kamdar, learned Senior
Advocate for the MCGM submitted that the decision to allot
the works was in consonance with the principles of fair play
1 (1990) 3 SCC 752
2 (1993) 3 SCC 499
3 (2022) 16 SCC 527
4 1994 SCC OnLine Cal 293
5 (2024) 10 SCC 273
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and in line with the established procedure concerning award
of tenders. Our attention is invited to the affidavit-in-reply
filed on behalf of the MCGM. Learned counsel appearing for
respondent Nos.4 to 8 argued in support of the submissions
made by Mr. Kamdar.
7. Heard learned counsel. We have perused the memo of
the Petition, the pleadings on record and the relevant
materials. Pursuant to the publication of the tender
documents on the Mahatender portal, the petitioner
participated in e-tender (unstar) system for 10 sites in Bid
No.27, 15 sites in Bid No.24 and 17 sites in Bid No.28. The
MCGM informed the petitioner on 16th February 2025 at 10:45
p.m. that bidders for the aforesaid work have quoted -15% or
similar percentage and therefore the respondent No.3
scheduled lottery in offline mode on 18 th February 2025 at
3:00 p.m. in the Conference Hall office of MCGM in Kandivali
(West), to decide successful bidders. It is mentioned that only
bidders who quoted -15% are invited for lottery. It was
further informed that the bidders are requested to attend the
same in person or through representative along with authority
letter. It was further mentioned that if any bidder or his
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representative remains absent, in that case, lottery will be
conducted in presence of remaining bidders and no claim will
be entertained.
8. A reply was received from the petitioner regarding non-
availability for the lottery system and therefore the petitioner
was called on 18th February 2025. The petitioner failed to
attend the manual lottery. The stand of the MCGM is that it
followed standard operating procedure prescribed by the
order/direction dated 21st December 2023, since all the
bidders have quoted same percentage and there are no clear
guidelines available on Mahatender portal regarding
conducting lottery. The same was done at ward level in the
presence of all participating bidders and MCGM staff. At the
time of lottery, attendance sheet was prepared. The petitioner
was absent at the time of lottery. It is the stand of the MCGM
that all the bidders whether present for lottery or absent for
lottery, were taken into consideration while carrying out
lottery. The MCGM has sent a letter to Mahatender portal to
add a feature for conducting online lottery and to allot the
work to the winner directly.
9. The MCGM uploaded on Mahatender portal the result
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after scrutiny of documents submitted by the bidders. It is
thus the stand of the MCGM that all bidders who have quoted
equal percentage were considered for the lottery irrespective
of whether they were present or absent for the lottery on 18 th
February 2025. Accordingly, work orders have been issued to
all eligible bidders on 25th February 2025.
10. Mr. Kamdar, learned Senior Advocate submitted that
each and every tender works are allotted only after doing
technical and financial scrutiny of the tender. As per relevant
clause 'o' of the SOP dated 21 st December 2023, the rates
quoted above -15% are required to submit rate analysis of
major items and the bids which could not satisfy the rate
analysis criteria are treated as 'not admitted' for further
evaluations in many of the cases. It is further pointed out that
in the earlier SRM tendering system of MCGM, in case of equal
percentage bidding, the lowest bidder (L-1) was short-listed
automatically through the system at the time of opening of
tender. However, in Mahatender portal such provision is not
yet available, due to which for each such tender as per
condition Standard Bid Document vide "Important Directions",
manual lottery is to be conducted. Mr. Kamdar pointed out
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that the MCGM is corresponding with Director IT of MCGM to
initiate the process of making necessary changes in
Mahatender portal for selecting the lowest bidder
automatically by lottery in case equal percentage is quoted by
all the bidders as in the case of previous SRM system.
11. We do not find any arbitrariness, irrationality or
unreasonableness in the procedure adopted by the MCGM.
The petitioner was given an opportunity to remain present for
the manual lottery to be conducted on 18th February 2025. All
the bidders including the petitioner's bid who had quoted
equal percentage were considered for the lottery. The manual
lottery was conducted in the presence of L-1 bidders who have
quoted equal percentage and have remained present for the
meeting. Despite being informed, the petitioner did not
remain present or raise any objection during the meeting for
conducting the lottery system. In the Circular dated 8 th
November 2012 as regards the implementation of e-
quotation/unstar tendering for civil works contract bidding,
Clause (j) provides that "If more than one L1 is received,
restricted re-bidding by way of inviting closed bids only from
the L1 vendors to be processed within 24 hours and if more
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than one L1 is received again, the L1 will be decided through
manual lottery system." As indicated earlier the petitioner did
not remain present at the time of lottery though he was duly
informed. At the petitioner's request once the lottery was
postponed earlier. The petitioner did not raise objections. Even
otherwise we find that the procedure adopted in the facts of
the present case cannot be said to be arbitrary or irrational or
completely contrary to the standard operating procedure for
tenders which warrant interference in the writ jurisdiction of
this Court.
12. The aforesaid discussion apart, the work orders have
already been issued and the work which is subject matter of
the tender has already commenced. The decisions relied upon
by learned counsel for the petitioner are distinguishable on
facts. There is nothing on record to indicate that the decision
of MCGM is malafide or arbitrary. The decision of the Supreme
Court in Tata Motors Limited vs. The Brihan Mumbai Electric
Supply & Transport Undertaking (BEST) and others in Civil
Appeal No.3897 of 2023 needs to be cited to support of our
observations.
"53. The law relating to award of contract by the State
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and public sector corporations was reviewed in Air India
Ltd. v. Cochin International Airport Ltd., reported in
(2000) 2 SCC 617 and it was held that the award of a
contract, whether by a private party or by a State, is
essentially a commercial transaction. It can choose its
own method to arrive at a decision and it is free to grant
any relaxation for bona fide reasons, if the tender
conditions permit such a relaxation. It was further held
that the State, its corporations, instrumentalities and
agencies have the public duty to be fair to all concerned.
Even when some defect is found in the decision-making
process, the court must exercise its discretionary powers
under Article 226 with great caution and should exercise it
only in furtherance of public interest and not merely on
the making out of a legal point. The court should always
keep the larger public interest in mind in order to decide
whether its intervention is called for or not. Only when it
comes to a conclusion that overwhelming public interest
requires interference, the court should interfere.
54. As observed by this Court in Jagdish Mandal v.
State of Orissa and Others, reported in (2007) 14 SCC
517, that while invoking power of judicial review in
matters as to tenders or award of contracts, certain
special features should be borne in mind that evaluations
of tenders and awarding of contracts are essentially
commercial functions and principles of equity and natural
justice stay at a distance in such matters. If the decision
relating to award of contract is bona fide and is in public
interest, courts will not interfere by exercising powers of
judicial review even if a procedural aberration or error in
assessment or prejudice to a tenderer, is made out. Power
of judicial review will not be invoked to protect private
interest at the cost of public interest, or to decide
contractual disputes."
13. We therefore do not find any merit in this Writ
Petition. The Writ Petition is dismissed with no order as to
cost.
(M. S. KARNIK, J.) (CHIEF JUSTICE)
Signed by: Pradnya Bhogale
Designation: PA To Honourable Judge
