Dharavi Decorators PVT LTD vs. Mira Bhayander Municipal Corporation And Ors

Facts

The Petitioner, M/s. Dharavi Decorators Pvt. Ltd., challenged a tender floated by Mira Bhayander Municipal Corporation (MBMC) on December 31, 2024. The Petitioner, an existing contractor for arranging events and functions since 2002, was awarded a work order on June 4, 2021, valid until June 7, 2026. This contract involved providing services like pandal, lights, stage, and speaker sets, for which the Petitioner had furnished a security deposit of Rs. 90,28,133/- and made significant investments. The Petitioner alleged the new tender was arbitrary and illegal, issued while their existing contract was still in force. Previous tenders floated by MBMC for similar work had been cancelled. The Petitioner apprehended that the new tender aimed to curtail the work allotted to them under the existing contract.

Held

The Court held that the issuance of Tender Notice No.124 dated 31/12/2024 by the Mira Bhayander Municipal Corporation was not arbitrary or illegal, given the clarifications provided by the respondents. The Court accepted the statement made by the counsel for MBMC and the affidavit filed by the Executive Engineer, which confirmed that the Petitioner's contract, awarded under Tender No.61 dated 28/12/2020, was not cancelled and would continue until its validity on June 7, 2026. The Court noted the Respondent's explanation that the new tender was for empanelment of contractors to ensure availability of services in the future and to avoid monopoly, as the Petitioner's contractual period and amount might be exhausted. The Court directed that the Corporation shall allot work to the Petitioner in terms of the Work Order issued on June 8, 2021, which is valid until June 7, 2026. The Court also clarified that if the Petitioner was successful in the new tender (Tender No.124), the statement that their work awarded under the earlier tender would not be impacted would be abided by. No issue was expressly left undecided.

Key Issues

1. Whether the issuance of Tender Notice No.124 dated 31/12/2024 by the Mira Bhayander Municipal Corporation is arbitrary, unilateral, and illegal, especially when an existing contract with the Petitioner, M/s. Dharavi Decorators Pvt. Ltd., is subsisting and valid until June 7, 2026. Petitioner's Contention: The Petitioner argued that the new tender, issued while their valid contract was in effect, was arbitrary and illegal. They had invested heavily based on the existing contract and apprehended that the new tender would curtail their work. They relied on the fact that the new tender was floated despite the subsistence of their contract. Respondents' Contention: The Respondent Corporation stated that the new tender was for empanelment of contractors on a rate contract basis to avoid monopoly and gain from competition, which would lower rates. They clarified that the new tender would not affect the Petitioner's existing contract, which was not cancelled and would continue until its expiry unless there was a breach. The Corporation stated that the new tender was floated because the Petitioner's contractual period and amount would be exhausted in the near future, and to ensure services were available if needed. They also mentioned that the Petitioner had participated in the new tender.