In a significant ruling regarding Mumbai Metro projects, the Bombay High Court on Tuesday nullified MMRDA's decision to terminate the contract with the French firm SYSTRA MVA Consulting (India) Pvt Ltd. The bench led by Chief Justice Alok Arade and Justice Arif Doctor deemed the decision arbitrary, directing MMRDA to reassess the contract after a fresh hearing.
In February 2020, MMRDA called for bids for a general consultant to handle the design, procurement, construction, and management supervision for Mumbai Metro lines 5 (Thane-Bhiwandi-Kalyan), 7A [Andheri (East)-CSIA], and 9 (Mira-Bhayander). SYSTRA Consortium bid Rs 90.76 crores in June 2020 and was appointed as the general consultant for system works in May 2021.
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What's the Complete Story?
Issues arose when MMRDA issued a termination notice to SYSTRA MVA Consulting on January 3, despite the contract being award for 42 months starting May 2021. The bench noted that the termination lacked justification and violated public law principles.
Senior Advocate Venkatesh Dhond, representing the SYSTRA Consortium, argued that the court could reassess despite the arbitration clause in the agreement. On MMRDA's behalf, Advocate General Birendra Saraf cited contract provisions that allowed MMRDA to terminate at its discretion, referencing prior rulings endorsing agency discretion.
What Did the Court Direct MMRDA?
The court's judgment stated that while MMRDA holds a contractual right to terminate, it cannot execute this arbitrarily. It instructed MMRDA to reassess the contract in a fair and decisive manner after a new hearing.
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Following this ruling, MMRDA is now required to reevaluate its contract with SYSTRA MVA Consulting in accordance with transparency and justice principles. The court instructed MMRDA to listen to the company's stance and make a fresh, informed decision based on it.
