The Bombay High Court on Tuesday set aside a notice issued by the Mumbai Metropolitan Region Development Authority (MMRDA) terminating its contract with a private consultancy firm for Mumbai Metro.
A bench of Chief Justice Alok Aradhe and Justice Arif Doctor ruled that a state agency cannot take arbitrary decisions even in a “contractual field.” The court noted that MMRDA failed to provide reasons for discontinuing the services of Systra MVA Consulting (India) Pvt Ltd.
The company was appointed in 2021 as a general consultant for design, procurement assistance, construction, management, and supervision of three Mumbai Metro routes—Thane-Bhiwandi-Kalyan, Andheri-CSIA, and Mira Bhayander.
The contract was initially set to expire in November 2024 but was extended till December 2026. However, on January 3, 2025, MMRDA issued a notice terminating the agreement. The company challenged the decision in the high court.
MMRDA argued that the contract’s general conditions allowed termination without providing reasons.
The court rejected this stance. “We find that the action of the MMRDA in discontinuation of the terms of the contract, which was extended up to December 2026, without assigning any reasons, is arbitrary, unfair and unreasonable,” the HC said.
The bench emphasized that even in contractual matters, state authorities must act fairly. “The general conditions of the contract cannot be read to mean that the MMRDA has a license to act unfairly, arbitrarily or unreasonably in the contractual field without assigning reasons,” it said.
The court quashed the notice and directed MMRDA to take a fresh decision after hearing the company.
(With PTI inputs)
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