Bombay High Court
Larsen And Toubro Limited vs Mumbai Metropolitan Region ... on 20 May, 2025
2025:BHC-OS:8210-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO. 15215 OF 2025
Larsen & Toubro Limited, a company ]
incorporated in India, and having its ]
registered office at L&T House, Ballard ]
Estate, Mumbai 400 001. ] ... Petitioner.
V/s.
1. Mumbai Metropolitan Region Development ]
Authority (MMRDA), a statutory body under ]
the Mumbai Metropolitan Development Act, ]
1974, having its office at Plot No.14 & 15, ]
MMRDA New Building, BKC, Bandra (E). ]
2. Executive Engineer, Mumbai Metropolitan ]
Region Development Authority (MMRDA), ]
having his office at Engineering Division, ]
5th Floor, New Administrative Building, ]
Bandra Kurla Complex, Bandra (E), ]
Mumbai - 400 051. ]
Email Id: etendersupport@mailmmrda. ]
maharashtra.gov.in ] ... Respondents
______________________________________
Dr. Abhishek Manu Singhvi, Senior Counsel, a/w Mr. S.U. Kamdar, Senior
Counsel, Mr. Zal Andhyarujina, Senior Counsel, Mr. Chirag Kamdar,
Ms. Priyanka Sharma, Adv. Ativ Patel, Adv. Viloma Shah, Mr. Harshad Vyas,
Mr. Pawan Kulkarni and Mr. Viraj Raiyani, i/by M/s AVP Partners for the
Petitioner.
Mr. Tushar Mehta, Solicitor General of India, a/w Mr. Mukul Rohatgi,
Senior Counsel, Mr. Chirag Mody, Adv. Anjan Dasgupta, Adv. Rimali Batra,
Adv. Prachi Garg, Adv. Prerna Verma, Adv. Abhishek Lalwani, and Adv.
Sayalee Dolas, i/by DSK Legal for the Respondents in both Petitions.
Mr. Yatin Sakhalkar, representative of MMRDA.
_____________________________________________
CORAM:
KAMAL KHATA, AND
Digitally ARIF DOCTOR JJ.
signed by
ASHWINI
ASHWINI
GAJAKOSH
RESERVED ON: 15th May 2025.
GAJAKOSH Date:
2025.05.20
17:38:59
PRONOUNCED ON: 20th May 2025.
+0530
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P.C.:-
1) The Petitioner has preferred the present Writ Petition seeking urgent
restraining Orders against Respondents-MMRDA to prevent opening of
Cover-II which contains the financial bids for the Elevated Road Project,
without first notifying the Petitioner of the fate of the Petitioner's Technical
bid.
2) Respondent No. 1 (MMRDA) had on 27th July 2024 issued a notice
inviting Tender for a the public infrastructure project namely, the Elevated
Road Project with tender reference no. MMRDA/Elevated/Fountain Hotel
Thane to Bhayander/2024 (Tender ID 2024_MMRDA_1061522_1) (" said
project"). The said project envisages a 9.80 km bridge passing along the
Vasai Creek and having an estimated value of approximately INR 6,000
crores, which is part of an extension of the Mumbai Coastal Road project
and a part of the MMRDA's larger road expansion project involving the
construction of approximately a 15 km stretch of road from Gaimukh in
Thane to Bhayander.
3) The Petition avers that Petitioner is a reputed Indian multinational
conglomerate and one of the foremost multinational construction
companies in India and abroad who has successfully executed many
projects of national and international significance. MMRDA is a statutory
body under the Government of Maharashtra and a 'State' within the
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meaning of Article 12 of Constitution of India.
4) The Petitioner is one of the bidders for the said project and had on
13th December 2024 submitted its technical bid, which was opened on 1st
January 2025. Since then, the Petitioner has been awaiting the outcome of
the evaluation of the technical bid. Recently, the Petitioner learnt that
MMRDA had addressed letters to some bidders to remain present for the
opening of the financial bid on 13th May 2025. Since the Petitioner had
not received any intimation from MMRDA either by an email
communication or on its portal they addressed a letter dated 12th May,
2025 and requested MMRDA to confirm whether the financial bid was
indeed being opened on 13th May, 2025 at 11.30 am. The letter also
clarified that the Petitioner would be constrained to proceed on the basis
that MMRDA would open the bid on 13th May 2025 contrary to the terms
of the Instruction to Bidders ("ITB") and in violation of the principles of
natural justice.
5) The Petitioner did not however receive any intimation from MMRDA
calling upon the Petitioner to either remain present for the opening of
Cover-II of the bid or to the effect that the Petitioner's technical bid had
been found to be non-responsive. The Petitioner however learnt that some
of the bidders had received intimation from MMRDA that financial bids
would be opened on 13th May, 2025 at 11:30 am and at which time the
said bidders were to be present. The Petitioner apprehends that MMRDA
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will proceed to open the financial bids of other bidders to its exclusion,
contrary to fair and transparent tender process that MMRDA must follow.
Since they did not receive any response, they were compelled to file the
present Petition on 13th May 2025.
6) The Petition avers that MMRDA being a public authority, is bound to
act in a non-discriminatory, fair, and transparent manner. It is bound to
intimate the Petitioner about the outcome of the evaluation of its technical
bid before the financial bids are opened. The decision to open the financial
bids in the absence of the Petitioner without intimating them of the
outcome of the evaluation of its technical bid is discriminatory and arbitrary
and in violation of principle of natural justice. It has serious consequences
of depriving Petitioner of its valuable constitutional rights including to carry
on trade and business and to protect and safeguard its legal entitlements
under the tender process. Under these circumstances, it is requested that
MMRDA be restrained from opening the financial bids scheduled for 13th
May 2025 at 11:30 am, as it is just, necessary, and convenient to do so.
7) Dr. Singhvi Learned Senior Counsel appearing on behalf of the
Petitioner,emphasised the necessity for MMRDA, a public authority, to
follow principles of good governance, namely, to ensure that the tendering
process is fair, non-discriminatory, transparent, and reasonable and presents
a level playing field to all bidders. He contended that it was precisely for
this purpose that guidelines had been issued by the PWD and CVC. He
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submitted that absent explicit exclusion of these guidelines, their inclusion
was implicit. He pointed out that in the present case, MMRDA had not
explicitly excluded the said guidelines, and thus it was incumbent upon
MMRDA to follow the same.
8) He then further pointed out that even the standard practice followed
by the public authorities, such as MMRDA, for tender process, makes clear
that for a fair, transparent and unbiased tender process, the fact of
disqualification along with reasons thereof ought to be communicated prior
to the opening of the financial bid thereby allowing sufficient time to a
disqualified bidder to seek recourse as maybe available to it. He submitted
that even if the PWD guidelines are found to be directory in nature, cogent
reasons for deviating from them must be provided by MMRDA.
9) He then pointed out that Clause 4.1 of the PWD guidelines clearly sets
out the procedure to be adopted by the tendering authority while opening
the e-tenders. The clause is extracted herein for ready reference:-
"4.1 To avoid the unnecessary suspicion and to maintain
the transparency, tenders/bids shall be opened in front of
maximum possible bidders. Due to same reason if it is not
possible for maximum number of bidders to attend the
tender/bid opening process then the bid opening may be
avoided. After opening of Envelop No.1 (Technical Bid) and
after scrutiny of the document submitted by the bidder, list of
qualification/ disqualification be communicated to the bidders
and same shall be published on the web/portal on which e-
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tender process is happening. The contractors who are
disqualified, shall be intimated regarding the same along with
the reasons for their disqualification.
In case, the disqualified bidder has any queries/objections,
the same shall be attended by the tender opening authority by
taking personal hearing and the same shall be taken on record.
In case, the contractor has expressed his grievances to the
Secretary (Roads/Buildings) & Principal Secretary (P.W.D.),
then after resolving the grievances, revised result (about the
qualification/disqualification) shall be published on website.
Also, the same shall be communicated to the contractor and
only after that, Envelope 2 (Financial Bid) shall be opened.
Mention regarding this event shall be included in the Tender
Document.
After completing the procedure as mentioned above,
Executive Engineer shall take on record that the tender process
happened so far is done in transparent manner and there is no
complaint about the tendering process. After this, Envelop
No.2 (Price Bid of the Bidder) may be opened. If the bidders
do not remain present while opening the financial bids, then
they shall be contacted again and bid shall be opened in
presence of maximum number of bidders. If the bids received
are less than 05, then the financial bid shall be opened in
presence of minimum 02 bidders. If the number of bids
received are more than 05, then the financial bid shall be
opened in presence of minimum 03 bidders, so that the bid
offer of each other will be known or disclosed to other bidders.
Such kind of procedure will avoid creating any kind of
doubt/suspicion against the officers of Public Works
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Department. If the bidders, even after informing them to
remain present for financial bid opening does not remain
present, the bids may be opened in front of 03 witness".
10) Dr. Singhvi pointed out that the aforesaid clause explicitly enumerates
six procedural steps, which are required to be followed by the tendering
authority, none of which have been complied with by MMRDA in the present
case. He then also relied upon Clause 2 of the CVC guidelines dated 24th
March 2005 to assert that the public authority was under an obligation to
record specific and logical reasons on file for inter alia rejecting a bid. He
further relied on the judgement of the Hon'ble Supreme Court in the case of
Haffkine Bio-Pharmaceutical Corporation Limited V/s. NIRLAC Chemicals
and Ors. case to submit that violation of CVC guidelines is sufficient to
vitiate the entire tender process.
11) Dr. Singhvi then placed reliance upon clause 42.4 of ITB and pointed
out that the same merely provided that MMRDA would notify each
unsuccessful bidder of the decision concerning the award of the tender. He
thus submitted that MMRDA could therefore simply award the contract
without even informing the unsuccessful bidders of the reasons/basis on
which they had been disqualified. This he submitted smacked of
arbitrariness of the highest order and would infact permit MMRDA to act in
a manner which was directly contrary to the PWD and CVC guidelines.
(2018) 12 SCC 790
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12) He then pointed out that since the technical bid was opened on 1st
January 2025, it was not open to MMRDA to take a stand that informing the
disqualified bidders of the reasons for their disqualification in writing would
occasion delay to the project.
13) Mr. Tushar Mehta the Learned Solicitor General representing MMRDA
submitted that the Petition was entirely misconceived and devoid of merit.
He submitted that the Petitioner had deliberately did not to point out clause
11.3 of the ITB which specifically provided as follows :
"11.3 The Employer will not disclose information relating to the
evaluation of e-tender submissions and recommendation of Contract
Award to Bidders or any other persons not officially concerned with
the Tender Process until the Employer communicates information on
Contract award to all bidders"
14) He pointed out that the aforesaid clause made explicitly clear that
MMRDA would not disclose information relating to evaluation of e-tender to
bidders until such time that MMRDA communicates the information about
the award of the contract to all the bidders. He thus submitted that it was
not therefore presently open to the Petitioner to oppose the opening of the
financial bid. He also took pains to point out that the Petitioner had
accepted the terms of the tender unequivocally. He also submitted that
though clause 42.4 of the ITB provided that MMRDA would notify regarding
award of contract to unsuccessful bidders, MMRDA would furnish to the
Petitioner the reasons for rejection of its technical bid and specifically
clarified that it would be open for the Petitioner to impugn the same,
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including by filing a Writ Petition. He further clarified that even after the
declaration of the successful bidder, all rights and contentions of the
Petitioner, including the challenge to the award of the contract, would be
kept open and that MMRDA would not take a defense that the Petitioner
would only be relegated to a Suit for damages.
15) He then submitted that the project in question was a mega
infrastructure project of vital public importance and thus relied on the
judgement of the Hon'ble Supreme Court in the case of National High Speed
Rail Corporation V/s. Montecarlo Ltd. & Anr. would squarely apply. He
argued that the State's objective was to ensure that Mega Infrastructure
projects, being of critical importance and bearing significant public interest,
are completed expeditiously and with minimal interference to maintain cost
efficiency.
16) In response Dr. Singhvi contended that the reliance placed on
Montecarlo Ltd. (supra) to allege that MMRDA was contractually not
obliged to intimate disqualification and reasons thereof till the award of the
tender is not only arbitrary but also reeks of mala fides. He submitted that
the clauses of the ITB are diametrically opposite to those in the case of
Montecarlo Ltd. According to him, MMRDA'S attempt to draw a parallel
between the present matter and Montecarlo Ltd. is wholly misplaced for the
following reasons:
(2022) 6 SCC 401
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(i) The project was fully funded through foreign investment.
(ii) The fact of disqualification and reasons thereof were
communicated; the judgement was delivered in the context of the
project funded through foreign investment. Such clauses were
sustained, as the logic for the same was that the project was funded
through foreign investment, and it was necessary to avoid undue
delays in the tender process, as the same may have a cascading
effect, and thus, midway interference was necessarily to be avoided.
17) In the context of the above submissions, the short question which falls
for our consideration is whether the Petitioner is justified in contending that
the conduct of MMRDA in proceeding to open the financial bids without
first declaring the Petitioner's technical bid as unresponsive is contrary to
the terms of the tender.
18) After having heard Learned Senior Counsel for the Parties, and having
perused the terms of the tender, we find we are unable to agree with the
submissions of the Petitioner for the following reasons :
A. Clause 11.3 of the ITB specifically provides as follows viz.
"11.3 The Employer will not disclose information relating to
the evaluation of e-Tender Submissions and recommendation of
Contract award to bidders or any other persons not officially
concerned with the Tender process until the Employer
communicates information on the Contract award to all
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Bidders."
The above clause clearly states that MMRDA will not communicate
information relating to the evaluation of the tender until the Employer
communicates information on the Contract award to all Bidders. Thus, given
that presently there is no final notification of the award, the stage to seek
such information, in our view, has not arisen.
B. The Petitioner has omitted to set out and/or deal with clause 11.3 of
the ITB in the Petition. In our view it was incumbent upon the Petitioner to
have set out the said clause and explained why the same was not applicable.
The Petitioner has admittedly not done so, and thus we find much merit in
the submission of Mr. Mehta, that the Petitioner is guilty of suppression of a
material fact.
C. It is well settled that the party who invokes the extraordinary
jurisdiction of this Court is supposed to be truthful, frank and open and
must necessarily disclose all the material facts without any reservation, even
if they are against such a party. It is not open to a Party who seeks equity to
play "hide and seek" or to "pick and choose" certain facts and to suppress
and/or conceal other facts. Also, clauses 36 & 38 clearly indicate that the
Employer shall evaluate and consider only those packets which are
responsive. The technical bids of all other bidders are therefore deemed to
be non-responsive and thus excluded from consideration. The Petitioner has
accepted these clauses as well as clause 11.3 and participated in the tender.
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Thus, in our view, it would now not be open to the Petitioner to agitate to
the contrary. Furthermore, it is also the contention of MMRDA that the
terms of the tender contemplate that reasons shall be communicated to the
unsuccessful bidder only after the award of the contract. It is well settled
that the author of the tender document is the best person to interpret such a
document and the requirements under it. Thus, at this stage, we find that it
is not open to the Petitioner to interpret the tender conditions in a manner
which is contrary to the interpretation of MMRDA.
D. Prima facie, we find much merit in the submissions of Dr. Singhvi that the
ITB is contrary to the PWD and CVC guidelines. Having perused the terms of
the tender, we are of the prima facie view that the same are opaque and
such that could give rise to the tendering authority acting in an arbitrary
and non-transparent manner. However, as noted above, the Petitioner has
accepted the terms of the tender by participating in the tendering process
and has not challenged the same. In our view, it was incumbent on the
Petitioner to have challenged the terms of the tender before participating in
the same. The Learned Solicitor General has, however, made it explicitly
clear that the Petitioner shall (i) be furnished with the reasons for rejection
of its technical bid and (ii) all rights and contentions of the Petitioner shall
be kept open, including challenging the rejection of its technical bid and the
award of the tender by way of Writ Petition. He further clarified that on the
award of the contract, the State shall not take the defence of fait accompli to
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relegate the Petitioner only to a claim for damages. Thus, in the facts of the
present case, the Petitioner's reliance upon the judgement in the case of
Haffkine Bio-Pharmaceutical (supra) would not be of any assistance to the
Petitioner.
E. Another factor which we must be mindful of is that the said project is a
mega-infrastructure project of significant public importance. Thus any delay
of the same would adversely impact the execution of the project which is
admittedly of public importance. Conversely, no prejudice whatsoever would
be caused to the Petitioner if all rights and contentions of the Petitioner are
kept open to challenge the rejection of the Petitioner technical bid as well as
the award of the contract. The rights of the Petitioner would remain intact,
as opposed to the grave prejudice that would be caused in the case of any
delay to the project. We find no merit in the Petitioner's contention that
there has been delay on the part of MMRDA, since the technical bids were
submitted in January 2025 and have only been evaluated now. Given the
magnitude of the project, such evaluation would take time. Also, even
assuming there has been a delay on the part of MMRDA, that itself does not
mean that the project can be further delayed pending consideration of a
challenge, which it is made expressly clear can be raised after the award of
the contract.
19) Hence for the aforesaid reasons and given the express clarification of
the Learned Solicitor General that all the rights and contentions of the
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Petitioner are kept open as noted in para 14 above, we are not inclined to at
this stage to interfere in said tender process.
20) Accordingly, the interim stay on the opening of the financial bids is
discontinued forthwith.
21) The Petition is thus dismissed. There shall be no orders as to costs.
(ARIF DOCTOR, J.) (KAMAL KHATA, J.)
22) After pronouncement of Judgment, Dr. Singhvi submits that price bids
submitted electronically should be preserved till the communication of the
Award as per the ITB clauses.
23) This being a fair request is granted and not being opposed by learned
Solicitor General. The MMRDA is directed to preserve the price bids for two
weeks from the date of communication to the Petitioner.
(ARIF DOCTOR, J.) (KAMAL KHATA, J.)
