Fresh tender for Dharavi redevelopment was not tailor made for Adani: Bombay High Court

The Bombay High Court on Friday observed that the fresh tender for the redevelopment of Dharavi slums in Mumbai was not tailor-made specifically for Adani Group as claimed by a UAE-based company Seclink. [SecLink Technologies Corporation v State of Maharashtra].The Court made the observation while dismissing Seclink’s petition challenging the Maharashtra government's decision to cancel its 2019 bid for the project and to issue a new tender in 2022, which ultimately led to the award of the contract to Adani Properties.A Bench of Chief Justice DK Upadhyaya and Justice Amit Borkar observed 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."As far as the submissions made on behalf of the petitioner that tender conditions were tailor-made to suit a particular tenderer, we may observe that in response to the fresh tender three bidders had participated out of which two bids were found to be technically qualified. Meaning thereby, at least two bidders fulfilled the technical conditions and therefore, since there were more than two bidders in the field who participated out of which two technically qualified, it cannot be said that the tender conditions were tailor-made so as to suit only a particular bidder," the Bench stated..The judgment was passed in a plea by Seclink to reverse the Maharashtra government’s decision, which annulled Seclink's successful ₹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 Pvt. Ltd. with a bid of ₹5,069 crore.Initially, Seclink had won the bid for the Dharavi redevelopment project in 2019, surpassing Adani's ₹4,539 crore offer. However, in 2022, 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 and 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 ₹8,424 crore due to the cancellation.In its defense, 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..In its order, the Court held that the decision to cancel the tender so as to include railway land was not "cannot be said to be non-existent or unjustified or based on any perversity." It pointed out that 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 Court also noted 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. "Merely on account of declaration by the DRP/SPA vide its letter dated 8th March 2019 that the petitioner was the highest bidder, no right can be said to have vested in the petitioner; neither would it amount to concluded contract," the Court ruled.Furthermore, the Court emphasized 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. "Merely because certain expenditure might have been incurred by the petitioner, in our opinion, will not vitiate the impugned action on the part of the respondent authorities to cancel the earlier tender process," the bench stated.Finally, the court pointed out that Seclink could not challenge the fresh tender process as it had not participated in the new bidding or the pre-bid meeting. "Admittedly, the petitioner chose not to participate in the fresh tender process. It is a settled position of law that 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 Court concluded..Senior Advocate Virendra Tulzapurkar with advocates Mandar Soman, Suraj Iyer, Jenil Shah, Devendra Ailawadi, Mani Thevar, Anuj Singhand Abhishek Karnik instructed by Ganesh and Co appeared for Seclink.Senior Advocate Milind Sathe with Additional Government Pleaders Jyoti Chavan, Atul Vanarse and advocates Bhushan Deshmukh, Aditya Mhase appeared for the State.Senior Advocate Ravindra Kadam with Senior Advocates Vikram Nankani, Zal Andhyarujina and advocates Rohan Kadam, Karan Bhide, Rati Patni, Kathleen Lobo, Vikrant Dere instructed by Wadia Ghandy & Co appeared for Adani..[Read Judgment]