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Discontinuation of Contract abruptly before expiry of period & without giving any reason

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Writ Petition challenging the action of MMRDA inspite of arbitration in agreement is maintainable

MMRDA appointed the petitioner as General Consultant for Mumbai Metro as per the agreement dated 28.12.2021 for 42 months which was extended upto 31.12.2026.   The agreement provided for arbitration dispute resolution.

On 3.1.2025, the MMRDA issued notice and discontinued the petitioner’s service without giving any reasons.

This was challenged in writ petition under Article 226 of the Constitution of India.

HELD  Clause 2.8.1(f) of the General Conditions of Contract cannot be read to mean that the MMRDA has a licence to act unfairly, arbitrarily or unreasonably in the contractual field without assigning any reasons. 

The power has to be exercised in consonance with the principles of fairness, reasonableness and non-arbitrariness.

Judgment dated 25.2.2025 of the High Court of Bombay in Writ Petition [L} No.2889 of 2025 (OS) in Systra MVA Consulting (India) Pvt Ltd   Vs.   Mumbai Metropolitan Region Development Authority

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