Safiya Malik

The High Court of Judicature at Bombay, Division Bench of Justice Kamal Khata and Justice Arif Doctor dismissed a writ petition challenging the Mumbai Metropolitan Region Development Authority's (MMRDA) decision to open financial bids for a major infrastructure project without first notifying a bidder of the status of its technical bid. The Court held that the tender conditions did not require such disclosure prior to the award of the contract and directed that the interim stay on the opening of financial bids be vacated. The Bench further recorded the Solicitor General's assurance that the reasons for the bid’s rejection would be furnished and that the petitioner’s right to challenge the rejection or award would remain unaffected.

The petitioner, a reputed Indian multinational conglomerate engaged in large-scale construction projects, filed a writ petition seeking urgent restraint against the MMRDA from opening financial bids under a public infrastructure tender without notifying it of the outcome of its technical bid. The tender, issued on 27th July 2024, pertained to the construction of a 9.80 km elevated road bridge from Fountain Hotel, Thane to Bhayander, valued at approximately INR 6,000 crores. This project was part of the MMRDA’s broader road expansion initiative extending from Gaimukh in Thane to Bhayander.

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The petitioner submitted its technical bid on 13th December 2024, which was opened on 1st January 2025. However, by May 2025, it had received no communication regarding its qualification status. Learning that MMRDA had issued intimation to some bidders about the opening of financial bids on 13th May 2025, the petitioner sent a letter on 12th May 2025 seeking clarification. The petitioner asserted that any such action by MMRDA without notifying it of the evaluation result would violate principles of natural justice and the instructions to bidders ("ITB").

Claiming exclusion from the process, the petitioner contended that MMRDA, being a public authority, was bound to act in a fair, transparent, and non-discriminatory manner. It relied on the Public Works Department (PWD) and Central Vigilance Commission (CVC) guidelines, which prescribed that disqualified bidders must be informed along with reasons prior to the opening of financial bids. The petitioner contended that MMRDA's failure to communicate its status violated these procedural norms and impaired its constitutional rights.

Senior Counsel Dr. Abhishek Manu Singhvi, appearing for the petitioner, argued that MMRDA's actions breached established norms of good governance. He pointed to Clause 4.1 of the PWD guidelines which mandate public authorities to inform disqualified bidders along with reasons before opening financial bids. Dr. Singhvi asserted 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."

He further contended that even if PWD guidelines were directory, deviations required cogent justification. Referring to CVC guidelines dated 24th March 2005, he argued that a public authority must record logical reasons for rejecting bids. He relied on the Supreme Court’s judgment in Haffkine Bio-Pharmaceutical Corporation Ltd. v. Nirlac Chemicals & Ors., stating that violation of such guidelines could vitiate the tender process.

Dr. Singhvi submitted that Clause 42.4 of the ITB only provided for post-award intimation of unsuccessful bidders, which could allow the authority to act arbitrarily. He stressed that this undermined procedural fairness and left bidders without effective recourse. He added that the Petitioner had not been informed of its disqualification for over four months after the technical bid was opened.

In response, Solicitor General Mr. Tushar Mehta, representing MMRDA, countered that the petition lacked merit and failed to disclose a key provision, Clause 11.3 of the ITB. This clause, he said, categorically stated that "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."

Mr. Mehta argued that this clause explicitly prohibited MMRDA from disclosing evaluation results before final award. He stated that the petitioner had accepted all tender terms, including Clause 11.3, and could not now seek a contrary interpretation. He further submitted that Clause 42.4 obligated MMRDA to notify unsuccessful bidders of the award outcome and offered to furnish reasons for disqualification thereafter, ensuring the right to legal challenge remained open.

Citing National High Speed Rail Corporation v. Montecarlo Ltd., Mr. Mehta argued that in large-scale public infrastructure projects, the need to avoid delay justified minimal interference during the tender process. He noted that the Court in that case permitted deferred disclosure due to the project's foreign investment context.

Dr. Singhvi distinguished the Montecarlo case, stating that in the present case, disqualification was not communicated and the project was not foreign-funded. He argued that the clauses in the present tender process were not analogous and that MMRDA's reliance on Montecarlo was misplaced.

The Bench noted that the main issue was whether MMRDA could open financial bids without first declaring the petitioner's technical bid as non-responsive. Referring to Clause 11.3, the Court recorded in italics: "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." It concluded that since no final notification of award had been issued, the stage to seek such information had not arisen.

The Court observed that the petitioner had omitted Clause 11.3 from its pleadings, stating: "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."

On the question of equity, the Bench stated: "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." The Court found that the tender clauses contemplated that only responsive bids would be considered, and others were deemed non-responsive without specific intimation.

The Court noted the petitioner had accepted the tender terms, including Clause 11.3, and stated: "It is not open to the Petitioner to interpret the tender conditions in a manner which is contrary to the interpretation of MMRDA."

While acknowledging that the ITB terms could be seen as opaque and potentially arbitrary, the Court recorded: "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, the Petitioner has accepted the terms... and has not challenged the same."

The Court found reassurance in the Solicitor General's assurance that the reasons for disqualification would be provided and that the Petitioner’s rights to challenge the award would remain unaffected. It stated: "In our view, it was incumbent on the Petitioner to have challenged the terms of the tender before participating in the same."

On the issue of public interest, the Bench held: "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." The Court found that no prejudice would be caused to the petitioner since its rights remained open.

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The Court directed that "the interim stay on the opening of the financial bids is discontinued forthwith." It further held: "The Petition is thus dismissed. There shall be no orders as to costs."

Following the pronouncement, the petitioner sought preservation of electronically submitted price bids. The Court recorded: "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."

Advocates Representing the Parties:
For the Petitioners: Dr. Abhishek Manu Singhvi, Senior Counsel, with 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, instructed by M/s AVP Partners

For the Respondents: Mr. Tushar Mehta, Solicitor General of India, with 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, instructed by DSK Legal

Case Title: Larsen & Toubro Ltd. v. Mumbai Metropolitan Region Development Authority & Ors.

Neutral Citation: 2025:BHC-OS:8210-DB

Case Number: Writ Petition (L) No. 15215 of 2025

Bench: Justice Kamal Khata and Justice Arif Doctor

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