What do SC's Stern Words to MMRDA on Tendering Have to Do With Electoral Bonds?

New Delhi: The Supreme Court has issued a stern directive to the Mumbai Metropolitan Region Development Authority (MMRDA), suggesting it re-tender two major infrastructure projects collectively worth approximately Rs 14,000 crore, or face a stay on the current process.

The warning on May 26 came during a hearing on appeals by Larsen & Toubro (L&T) Ltd, which contested its technical disqualification from the bidding for the Mumbai Elevated Road Project and the Road Tunnel Project, where Hyderabad-based Megha Engineering & Infrastructure Ltd (MEIL) emerged as the lowest (L1) bidder.

Chief Justice of India B.R. Gavai, presiding over a two-judge bench also comprising Justice A.G. Masih, expressed surprise at L&T's exclusion. "The very name of the bidder, it’s difficult to believe, he has been chosen to construct the Central Vista by the Central government," CJI Gavai remarked, highlighting L&T's established credentials.

He instructed Solicitor General Tushar Mehta and Senior Advocate Mukul Rohatgi, representing MMRDA, to "take instructions on whether you are willing to re-tender. Otherwise we will stay."

L&T has challenged two Bombay high court orders from May 20, which upheld MMRDA’s decision not to communicate the reasons for technical disqualification before awarding the projects. L&T argued this was an arbitrary and non-transparent process, leading to MEIL being declared L1 at a substantially higher cost. L&T claimed its bid was approximately Rs 2,521 crore lower for the Road Tunnel Project (estimated at Rs 8,000 crore) and Rs 609 crore lower for the Elevated Road Project (estimated at Rs 6,000 crore) compared to MEIL.

During the hearing, CJI Gavai emphasised the public interest involved. When Rohatgi argued that "question of money doesn’t arise if you are disqualified," the CJI countered, "question of money also arises if it’s a public interest matter…you better take instructions. The public money would be saved."

He further stressed, "We are in an era of transparency…if it’s arbitrary, the person should have an opportunity to challenge."

MMRDA’s counsel maintained there were "good reasons" for L&T's disqualification and that tender clauses allowed for reasons to be shared post-award to prevent delays from "unnecessary challenges." Rohatgi added, "We will show the reasons for disqualification."

Senior Advocate A.M. Singhvi, appearing for L&T, highlighted the significant cost difference and hinted at the profiles of other bidders, stating, "Names of the other two left are more important than my name…Their names are very interesting."

The controversy is amplified by the profile of MEIL.

The Hyderabad-based firm, valued at Rs 67,500 crore, has been a prominent purchaser of electoral bonds. Data released by the Election Commission of India revealed MEIL bought bonds worth Rs 966 crore, with around 60% (approximately Rs 584 crore) going to the Bharatiya Janata Party (BJP). The Megha group's total donations via electoral bonds, including through associated companies like Western UP Power Transmission Company Limited, SEPC Power, and Evey Trans Private Limited, amount to Rs 1,232 crore, making it one of the largest political donors in the country.

This extensive political funding, particularly to the party leading the Union government and in Maharashtra (where MMRDA operates), has cast a shadow on the tender process. 

MEIL, founded by Pamireddy Pitchi Reddy in 1989 and now run by his nephew P.V. Krishna Reddy, has executed major projects, including the $14 billion Kaleshwaram Lift Irrigation Project in Telangana, which itself faced scrutiny from the Comptroller and Auditor General (CAG) for alleged irregularities. The company also secured the Zojila Tunnel project.

The Mumbai Elevated Road Project involves a 9.80 km bridge along Vasai Creek, while the Road Tunnel Project is for a 5-km twin tunnel system on Thane Ghodbunder Road. Both are extensions of the Mumbai Coastal Road project.

The Supreme Court has scheduled the next hearing for May 29, where MMRDA is expected to respond to the court's suggestion for a re-tender. 

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