Path cleared for Adani Group's Dharavi slums project; HC upholds tender award

Bombay High Court on Friday cleared the decks for the redevelopment of the Dharavi slums as it upheld the tender awarded to the Adani Group for the project by the Maharashtra government, ruling that there was no "arbitrariness, unreasonableness or perversity" in the decision.

A division bench of chief justice D.K. Upadhyaya and justice Amit Borkar dismissed a petition filed by UAE-based Seclink Technologies Corp challenging the state government's decision to award the mega redevelopment project in Mumbai to Adani Properties Pvt. Ltd, which had made a Rs 5,069-crore offer.

The bench rejected the contention made by the petitioner that the tender was "tailor made" to suit a particular firm of the private conglomerate, noting that three bidders had participated in the process.

Seclink Technologies had emerged as the highest bidder for the project in 2018, but the tender issued in that year was later scrapped by the government. The bench noted that Seclink Technologies' petition lacks force and hence stands dismissed.

"The grounds urged in support of the petition lack force and accordingly, the challenge to the impugned action on the part of the authorities, whereby the earlier tender process was cancelled and fresh tender process has been resorted to, fails," the HC observed.

The Adani Group had emerged as the highest bidder for the 259-hectare Dharavi Redevelopment Project in the heart of Mumbai, and bagged it with its Rs 5,069-crore offer in the 2022 tender process. In the first tender issued in 2018, the petitioner company had emerged as the highest bidder with its Rs 7,200-crore offer. The government had, however, cancelled the 2018 tender and issued a fresh one in 2022 with additional conditions.

Seclink Technologies first challenged the cancellation of the 2018 tender and subsequently the 2022 tender award to the Adani Group. It had alleged that the fresh tender was "tailor made" for the ports-to-energy conglomerate.

The court, in its judgment, noted that except for noticing that the petitioner company was the highest qualified bidder in the 2018 tender process, no final decision was taken by the government. "Though the petitioner's bid was declared to be the highest, however, no decision was taken on selection of the successful bidder, neither any letter of award was issued nor any agreement was signed," the HC maintained.

The court further held that it is a well settled principle that a bidder participating in a tender process cannot insist that its tender should be accepted only because it is the highest or the lowest.

The bench noted that the reasons given by the state government for cancelling the 2018 tender process, in its opinion, cannot be said to be "non-existent or unjustified or based on any perversity". The decision taken by the government does not suffer from the "vice of arbitrariness, unreasonableness or perversity", it emphasised.

The court also refused to accept the petitioner's contention that the 2022 tender conditions were tailor made to suit a particular company and noted at that time, three bidders had participated of which two were found to be technically qualified.

The state government had submitted to the HC that the tender was awarded in a transparent manner and no undue favour was shown to the highest bidder, Adani Group.

The government had said the 2018 tender was cancelled and a fresh one issued four years later owing to several factors like the Covid-19 pandemic and the Russia-Ukraine war, which affected the financial and economic state of affairs.

The first tender for the mega redevelopment project was issued in November 2018. In March 2019, bids were opened and it was found the petitioner company (Seclink Technologies) was the highest bidder.

The same month, an additional 45 acres of land was made available to the government by the Indian Railways for the redevelopment project, as per the state government.

The government claimed there was "no formation of contract" between the state and the petitioner company and hence it has no legal right in the matter.

In November 2020, a government resolution was issued cancelling the first tender claiming that there was a material change in the tender condition after 'bid due date'. The government further claimed in the new tender, the bids were to be submitted afresh and the petitioner could have submitted a fresh bid complying with its terms and conditions.

Dharavi is a sprawling slum colony with a mix of residential and small industrial units. Opposition parties in Maharashtra, including the Shiv Sena (UBT) and the Congress, had vehemently opposed the award of the tender to the Adani Group, alleging irregularities in the entire process, a charge rejected by the BJP-led Mahayuti government.

The redevelopment of Dharavi, one of the world’s densest urban sprawls, figured prominently in the campaign for the 20 November 2024 assembly polls. Shiv Sena (UBT) chief Uddhav Thackeray had said the Dharavi slum redevelopment tender awarded to the Adani Group would be scrapped if his party came to power in Maharashtra.

“We will scrap the Dharavi slum redevelopment project tender after coming to power. We will not allow Mumbai to be turned into Adani city,” the former chief minister said. Additional concessions that are not specified in the contract have been given to the Adani Group, Thackeray also alleged.

Mumbai Congress president Varsha Gaikwad had termed the project as the “world’s biggest land scam” and said the Maha Vikas Aghadi (MVA) would scrap it if it returned to power. The Shiv Sena (UBT) and Congress are part of the MVA opposition bloc.