The Bombay High Court on Tuesday quashed a notice that the Mumbai Metropolitan Region Development Authority had issued in January, terminating a contract awarded to Systra MVA Consulting (India) Private Limited, The Indian Express reported.

The company was providing general and design consultancy services for three metro rail corridors in Mumbai.

The Indian subsidiary of the French consulting and engineering company was providing general and design consultancy services for three under-construction lines of the Mumbai Metro.

A bench of Chief Justice Alok Aradhe and Justice Arif S Doctor directed the MMRDA to decide afresh on whether the contract needs to be scrapped and pass a reasoned order after hearing the firm.

The MMRDA is responsible for the development of public infrastructure in Mumbai and the metropolitan region.

In February 2020, the MMRDA invited bids for consultancy related to the design, assistance in procurement, construction and management supervision for the three metro routes.

The Systra-led consortium had submitted a bid of Rs 90.7 crore in June 2020 and was awarded the contract in May 2021. While the initial term of appointment was till November 2024, it was subsequently extended till December 2026.

However, the MMRDA issued a notice to Systra on January 3 informing the firm that the contract was being discontinued.

Systra argued in court that the notice had not been issued as per the terms of the agreement signed in 2021 and that the authority had not provided the reasons for scrapping the contract.

Maharashtra’s Advocate General Birendra Saraf argued that the notice issued to Systra was in line with the general conditions of the contract, which allowed the MMRDA to cancel it without providing any reason.

However, the bench said on Tuesday that the contract’s general conditions cannot be viewed as allowing the authority to act arbitrarily or unreasonably.

Corruption allegations

While the case was in the court, the French firm accused officials of the MMRDA of corruption.

Systra alleged that the officials had sought “undue favours”, delayed payments, pressured the firm to inflate orders to contractors, stalled approval of staff and imposed penalties arbitrarily, The Hindu reported.

In November, the French embassy wrote a letter to Rupinder Singh, Maharashtra’s resident commissioner in Delhi, urging the state government to examine the allegations.

The letter cited the complaint by Systra to the diplomatic mission about “severe harassment/challenges being faced while working as a general consultant on projects with MMRDA”, the newspaper reported.

Shiv Sena (Uddhav Balasaheb Thackeray) leader Aaditya Thackeray demanded that Chief Minister Devendra Fadnavis order an inquiry into the matter.

The MMRDA is chaired by the state’s Urban Development Minister Eknath Shinde, who is also the deputy chief minister.