French firm accuses MMRDA officials of graft HC quashes termination of contract of its Indian arm

Mumbai, Feb 25 (PTI) French firm Systra which provides consultancy services to metro projects has accused officials of the Mumbai Metropolitan Region Development Authority of corruption, even as the Bombay High Court on Tuesday quashed MMRDA's notice terminating the contract of its Indian subsidiary.
On November 12, 2024, the French Embassy wrote a letter to Rupinder Singh, Resident Commissioner of Maharashtra in Delhi, requesting the government to study the issue "in depth" and "resolve the situation", while citing Systra's complaint to the embassy about "severe harassment/challenges being faced while working as a general consultant on projects with MMRDA."
While senior officials of MMRDA, the planning and development agency of the state government, were not available for commenting on the issue, Shiv Sena (UBT) leader Aaditya Thackeray demanded that Chief Minister Devendra Fadnavis order an inquiry.

The multinational engineering firm accused MMRDA officials of seeking "undue favours," as well as delaying payments, pressuring the firm to inflate orders to contractors, stalling approvals for key staff, and imposing arbitrary penalties.

On Tuesday, a bench of Chief Justice Alok Aradhe and Justice Arif Doctor of the high court noted that the MMRDA did not give reasons while discontining the services of Systra MVA Consulting (India) Pvt Ltd on January 3, 2025.
As per Systra's complaint that the Embassy sent to the Maharashtra government, "major harassment began in August 2023 after the change of some senior MMRDA officials, who summoned the company and asked for undue favours in the form of monetary benefits on the pretext that MMRDA is demanding it."
Systra "politely informed" them that it would not comply, the letter said.
Systra is working as a general consultant for various metro projects executed by MMRDA in Mumbai's metropolitan region including Metro Lines 5, 6, 7A, 9, 10, and 12, in addition to providing detailed design consultancy services for Metro Lines 2A and 7, Mandale Depot, Kasheli Depot, and branding guidelines for all Metro Lines of MMRDA.

The MMRDA issued a notice of suspension of payments in January 2024, alleging various deficiencies related to old issues that had already been resolved concerning general consultancy services for Metro Lines 5, 6, 7A, and 9, the letter said.
"Furthermore, Systra has been put under pressure to recommend an inflated variation order for one of the major contractors working on Line 9 of the project. Since we are not complying with this, we believe MMRDA is continuing the suspension of payments for General Consultancy Services for Lines 5, 9, and 7A (civil) projects," the letter alleged.
MMRDA had "stopped making payments," with the pending payments accumulating to Rs 30 crore, the complaint said, alleging pressure to certify payments for petty contractors appointed directly by MMRDA.
Despite repeated attempts, the MMRDA spokesperson did not provide any comment on the issue.
As per the petition filed by Systra MVA Consulting (India) Pvt Ltd in the Bombay High Court challenging the termination of its contract, it was appointed a general consultant for design, assistance in procurement, construction, management and supervision of three routes of Mumbai Metro -- Thane-Bhiwandi-Kalyan, Andheri -CSIA and Mira Bhayander -- in 2021.
While the initial contract was to expire on November 2024, it was extended till December 2026.
But on January 3, 2025, the MMRDA issued the company a notice, stating it had decided to discontinue its services. The firm then moved the HC.

"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 in the order on Tuesday.
"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," the court said, asking the MMRDA to take a fresh decision after hearing the company.
Sena (UBT) leader and former minister Aaditya Thackeray targeted deputy Chief Minister Eknath Shinde -- who heads the rival Shiv Sena -- over the issue. The MMRDA comes under Shinde's Urban Development department.
"The mindhe regime scams are coming out. We have been raising many since 2022 mid. While India and France get closer diplomatically, the @MMRDAOfficial run by Eknath Shinde's Urban Development department, rubbishes concerns of corruption raised by the French consultant," he said.
"I urge @CMOMaharashtra to launch an open, free and fair inquiry into this issue. Find out the source of corruption- which character close to corrupt mantri indulged in this?" Thackeray added.

(This story has not been edited by THE WEEK and is auto-generated from PTI)