20 May 2025 Civil Writ Petition >> Civil & Consumer Law  

The High Court of Bombay recently dismissed a writ petition filed by a multinational construction company (the Petitioner) seeking to immediately restrain the Mumbai Metropolitan Region Development Authority (MMRDA) from opening the financial bids for a significant Road Tunnel Project. The Petitioner sought to prevent the opening of Cover-II (financial bids) until it was informed of the outcome of its technical bid.

The project, valued at approximately INR 8,000 Crores, involves the design and construction of twin underground road tunnels from Gaimukh to Fountain Hotel Junction on Thane Ghodbunder Road. The Petitioner, a bidder for this project, submitted its technical bid in December 2024, which was opened in January 2025. The Petitioner learned that financial bids were scheduled to open on May 13, 2025, but it had not received any communication from MMRDA regarding the status of its own technical bid. Fearing exclusion from a fair and transparent tender process, the Petitioner filed the writ petition.

The Petitioner argued that MMRDA, as a public authority, is bound by principles of natural justice and must inform bidders about the status of their technical bids before opening financial bids. They cited Clauses 27.7 and 27.8 of the Instructions to Bidders (ITB), which state that only bidders with "substantially responsive Technical Bids" would be invited to the financial bid opening, and those rejected would be notified in writing with their bid security and price bids returned unopened. The Petitioner also referenced Public Works Department (PWD) Guidelines and Central Vigilance Commission (CVC) Guidelines, emphasizing the need for communication of technical bid evaluations and reasons for disqualification to ensure a "level playing field" and prevent arbitrary actions.

Conversely, MMRDA, represented by Senior Counsel Mr. Mukul Rohatgi and the Learned Solicitor General, contended that the petition should be dismissed due to the Petitioner's "wilful and deliberate suppression" of material facts. They highlighted Clauses 28.1 and 42.5 of the ITB, which explicitly state that information related to bid evaluation "shall not be disclosed to Bidders... until information on Contract award is communicated to all Bidders." They argued that the Petitioner, having accepted these clauses, could not now demand information prior to the contract award. MMRDA further cited a Supreme Court judgment in National High Speed Rail Corporation v. Montecarlo Ltd. & Anr., which interpreted similar clauses to mean that the stage for knowing reasons for rejection is deferred until the final contract award.

The Learned Solicitor General provided an assurance to the court that MMRDA would, after the contract award, notify unsuccessful bidders, including the Petitioner, of the reasons for their technical bid rejection. He also clarified that the Petitioner would retain all rights to challenge the rejection and the contract award, and MMRDA would not solely relegate the Petitioner to a suit for damages.

The High Court, after reviewing the arguments and documents, found that the Petitioner had indeed suppressed Clauses 28.1 and 42.5 of the ITB, which were material facts. The court reiterated that parties invoking its extraordinary jurisdiction must disclose all relevant facts, even if they are unfavorable. While acknowledging the Petitioner's arguments regarding the PWD and CVC guidelines, the court noted that the Petitioner had accepted the express terms of the ITB. Given the assurances from MMRDA regarding the future disclosure of reasons for rejection and the right to challenge, the court found no prejudice to the Petitioner that would warrant delaying such a significant public infrastructure project. The court also observed that the time taken for technical bid evaluation, given the project's magnitude, was not unreasonable.

Consequently, the interim stay on the opening of the financial bids was discontinued, and the petition was dismissed. However, as a fair request, the court directed MMRDA to preserve the electronically submitted price bids for two weeks from the date of communication of the contract award to the Petitioner.