RAMCHANDRA MURARILAL BHATTAD AND ORS. versus STATE OF MAHARASHTRA AND ORS.

Citation: [2006] SUPP. 10 S.C.R. 106 · Decided: 05-12-2006 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

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Judgment (excerpt)

A 
RAMCHANDRA MURA RI LAL BHA TI AD AND ORS. 
v. 
STATE OF MAHARASHTRA AND ORS. 
DECEMBER 5, 2006 
B 
[S.B. SINHA AND DAL VEER BHANDARI, JJ.] 
Mumbai Metropolitan Region Development Authority Act, I974 
Bids invited by Authority for development of Convention and Exhibition 
C Centre-A II bids in response thereto, including the highest, rejected by 
Authority, project rendered and granted to highest bidder therein-Correctness 
of -Held-Only because there was change in computation of total price 
under new tender, it could not be said to be invalid in law-It was a case 
where the highest offer was not rejected, but a new policy decision was taken-
D The Authority in law could alter its policy in regard to disposal of its 
properties-It exercised its power in canceling tenders to have a re-look at 
entire project-Entire policy decision could not be said to be vitiated in law 
merely because Authority at one point of time took a stand in Court that it had 
thought of setting up Convention Centre of their own without any private 
participation-Reasons for rejecting bids were not required to be given as it 
E was a ca,.se of decision involving policy change. 
Section 7-Executive Committee-Power of approval or rejection of 
tenders for projects and schemes of Authority-Scope of-Held-Jurisdiction 
of Committee was lif1Jited-It could not (i) cancel entire tender (ii) change 
F entire scheme or policy (iii) make alterations in methodology of tender (iv) go 
into working of project (v) go into question as to whether project would be 
financially v_iable if method of calculation was changed (vi) exercise any 
special power. 
Power of Authority-Scope of-Held-Authority was a statutory 
G authority, consisting of politicians and other responsible officers-While 
exercising its power under the Act, it must necessarily take policy decisions-
Though its power was larger and different from that of Executive Committee, 
it could not usurp functions of latter. 
Statutory authority-Power to deal with contractual matter-Scope of-
H 
IM 
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RAMCHANDRA MURARILAL BHA TI AD v. STATE OF MAHARASHTRA 
} 07 
~ Held-It is distinct and different from its power in determining rights and A 
liabilities of parties-Whereas reasons are required to be assigned in a case 
where civil or evil consequences may ensue, same may not be necessary where 
it is contractual in nature, save and except in some cases. 
Judicial review-Policy decision-Held-It may be changed from time 
to time-Only because a change is effected, decision cannot be termed as B 
illegal or otherwise vitiated in law-It is more so where ex facie, policy 
decision was not contrary to any statute or against a public policy, or Court 
was not called upon to exercise its equity jurisdiction. 
MMRDA is an authority created under the Mumbai Metropolitan C . 
Region Development Authority Act, 1974. Section 7 therefore provided 
for constitution and powers of Executive Committee, inter alia, for approval 
or rejection of tenders for projects and schemes of the Authority. The 
Authority invited bids for development of a Convention and Exhibition Centre. 
Appellant was one of the several entitles who put in their bids in response. 
Their bid wasfound to be the highest. The Authority, however rejected all the D 
bids, r~tendered and granted contract to the highest bidder therein. Appellant 
filed a writ petition before High Court questioning the right and power of the 
Authority to reject at any stage all or any of the bids without assigning any 
reason. In response, the Authority conteuded that (i) its decision was in 
pursuance of power conferred by the terms of the contract (ii) in view of E 
sections 12(1)(b)(d) and (h) and the power to issue directions under S.14 of 
the Act, it could, at any stage, review any decision including the decision of 
the executive committee and direct either rejection of all bids or issuance of 
fresh bids ( c) it had decided to set up the convention Centre on its own without 
any private participation. The High Court dismissed the Writ Petition holding 
that (i) under various provisions of the Act, the authority was entitled to F 
acquire, hold and dispose of the property, so it could not be said that its power 
in such matters did not include the power to reject a bid invited for projects 
and schemes framed by it (ii) the Executive Committee was not sole judge in 
matters of approval or rejection of tenders for projects and schemes of the 
authorities. Aggrieved 

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