Full Judgment Text
2025 INSC 1456
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 14859 OF 2025
(ARISING OUT OF SLP (CIVIL) NO. 10039 OF 2025)
M/S. SURGUJA BRICKS INDUSTRIES
COMPANY APPELLANT(S)
VERSUS
STATE OF CHHATTISGARH & ORS. RESPONDENT(S)
J U D G M E N T
UJJAL BHUYAN, J.
Leave granted.
2. This appeal by special leave is directed against the
judgment and order dated 04.04.2025 passed by a Division
Bench of the High Court of Chhattisgarh at Bilaspur (briefly,
‘the High Court’ hereinafter) in Writ Petition (Civil) No. 1745
of 2025 ( M/s. Surguja Bricks Industries Company Vs. State
Signature Not Verified
Digitally signed by
KAVITA PAHUJA
Date: 2025.12.18
16:36:17 IST
Reason:
of Chhattisgarh).
2.1. Be it stated that respondent No. 3 had issued a
notice inviting tender dated 08.01.2025 for construction of a
road pursuant to which the appellant had submitted its
tender. After exchanging correspondences, respondent No. 3
vide letter dated 19.03.2025 disqualified the appellant at the
stage of technical evaluation on the ground that one
experience certificate of the appellant was of lesser value
than 50 percent of the contract value while the other
experience certificate was that of joint venture of which
appellant was a partner; thus appellant failed to meet the
eligibility criterion. Appellant challenged rejection of its
tender on the aforesaid ground before the High Court by
filing a petition under Article 226 of the Constitution of
India. By the impugned judgment and order dated
04.04.2025, High Court did not find any merit in the writ
petition and accordingly dismissed the same.
3. Aggrieved thereby, appellant preferred the
related special leave petition before this Court. On
08.04.2025, this Court recorded the contention of the
appellant as under:
The learned senior counsel for the petitioner invited
our attention to the qualification criteria in the Notice
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Inviting Tender document, which uses the expression
“each prime contractor in the same name and style, in
its name must have in the last five years …”. It has
been, inter alia, argued that the use of the phrase
“each prime contractor” would mean that if the past
experience is in the form of a Joint Venture, each
participant of that Joint Venture, if a bidder under this
tender notice, would be eligible if he qualifies the
financial criteria. It has been submitted that if the
qualification criteria is interpreted in the manner as
suggested above, the petitioner meets the financial
and experience criteria and, therefore, would be
technically eligible.
3.1. This Court after observing that the matter
requires consideration, issued notice and passed an interim
order to the effect that if the financial bids had not been
opened, the same shall not be opened till the next date.
4. Relevant facts may be briefly noted.
5. On 08.01.2025, the Chief Engineer (Central
Tender Cell), Office of the Engineer-in-Chief, Public Works
Department, Naya Raipur (‘respondent No. 3’ hereinafter)
issued a tender notice being first call NIT No. 246/TC/24-25
for the work: construction of road from gram Ramgarh to gram
Kotadal length 27.20 kilometers, District Korea, Chhattisgarh
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work code W25598, the probable amount of contract being Rs.
4521.56 lakhs, to be completed within a period of 12 months
(referred to hereinafter as the NIT). As per the eligibility
criteria (1) of the pre-qualification document, it is stated that
to qualify for award of the contract, each prime contractor in
the same name and style (tenderer) in its name must have
in the last five years (a) achieved in any one financial year a
financial turnover (in all classes of civil engineering
construction works) of construction work of atleast 60
percent of the probable amount of contract for which the bid
has been invited and (b) (i) satisfactorily completed atleast
one similar work equal in value to the extent of 50 percent
of the probable amount of contract as on the date of
submission of the financial offer or (ii) satisfactorily
completed atleast two similar works each costing minimum
40 percent of the probable amount of the contract work for
which the tender is invited as on the date of submission of
the financial offer or (iii) satisfactorily executed atleast one
similar work having received payment of value not less than
60 percent of the value of probable amount of contract as on
the date of submission of financial offer.
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6. Pursuant to the aforesaid NIT, appellant
submitted its tender in the online portal of the Public Works
Department, Chhattisgarh (PWD) within the stipulated
period. Alongwith the tender, it had submitted all the
relevant documents as per the NIT.
7. Respondent No. 3 issued letter dated 03.03.2025
to the appellant stating that upon evaluation of the
documents submitted online by it pursuant to the NIT, the
Technical Evaluation Committee found certain deficiencies
in the tender of the appellant. It was stated that one
experience certificate given for similar nature of work was
executed through a joint venture and in so far the other work
is concerned, the financial turnover was less than the
amount sought for in the NIT. Therefore, Clause 1(b)(i), (ii)
and (iii) of the eligibility (qualification) criteria of the NIT was
not fulfilled. Appellant was called upon to submit its views
and documents.
8. Vide letter dated 05.03.2025 addressed to the
third respondent, appellant explained that work order of
similar nature of work was issued by the Chhattisgarh Rural
Road Development Agency in the name of a joint venture viz,
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MPSBI-JV comprising of two partners: (i) Mohan Poddar 51
percent and (ii) M/s. Surguja Bricks Industries i.e. the
appellant 49 percent. In the experience certificate issued by
the Executive Engineer of Chhattisgarh Rural Road
Development Agency, it has been specifically mentioned in
Column 16 of Sr. No. 2 that the total value of work completed
was 4904.09 lakhs and 49 percent experience of M/s
Surguja Bricks Industries is Rs. 2404.00 lakhs. Appellant
pointed out that constituent of a joint venture is entitled to
proportionate experience of the joint venture and in this
connection placed reliance on a decision of this Court in New
1
Horizons Limited Vs. Union of India . Appellant clarified that
it was relying upon the work completion certificate of the
joint venture only to the extent of Rs. 2404.00 lakhs.
9. After exchange of correspondences, the third
respondent wrote to the appellant vide letter dated
17.03.2025 stating that the Technical Evaluation Committee
was of the opinion that its tender was not submitted in the
prescribed format. Appellant was given time till 19.03.2025
to submit the relevant documents either in-person or
1
(1995) 1 SCC 478
6
through departmental email address. Appellant was put on
notice that in the event of default, it would be disqualified
from the tender.
10. Responding to the aforesaid letter, appellant
wrote back to the third respondent vide letter dated
19.03.2025 reiterating that it had filed the tender online
alongwith the relevant documents and that the eligibility
criteria was fully complied with. It was pointed out that the
experience certificate attached with the tender has been
signed by the competent officer of the Pradhan Mantri Gram
Sadak Yojana i.e. the Executive Engineer. Appellant pointed
out that in case of any doubt in respect of the experience
certificate, it could be verified from the concerned
department. Appellant requested the third respondent to
accept the experience certificate attached with the online
tender and thereafter to open the tender of the appellant.
11. On the same day, the third respondent informed
the appellant vide letter dated 19.03.2025 that as per the
experience certificates filed by the appellant, one work was
executed by forming a joint venture and the amount covered
by the second contract work was less than the amount
7
required as per the NIT. Though the appellant had presented
its case, the Technical Evaluation Committee disagreed with
the same and decided to disqualify the appellant.
12. Aggrieved by the aforesaid action of the
respondents, appellant filed the related writ petition before
the High Court under Article 226 of the Constitution of India
assailing the legality and validity of the letter dated
19.03.2025 disqualifying the appellant from the tender;
further seeking a direction to the respondents to consider
the appellant as an eligible tenderer and thereafter to
proceed with the opening of the financial bid of the appellant.
The writ petition was registered as W.P. (C) No. 1745 of 2025.
13. The High Court vide the impugned judgment and
order dated 04.04.2025 recorded the facts as under:
7. From perusal of the prayers and pleadings made in the
writ petition, further taking into consideration, the rival
submissions advanced by learned counsel for the parties
and the qualification criteria of the NIT in question, it
transpires that to qualify for award of the contract, each
prime contractor in the same name and style (tenderer), in
its name must have in the last five years achieved in "any
one financial year" a financial turnover of construction work
of at least 60% of the probable amount of contract for which
bid has been invited, but the petitioner has submitted his
8
tender in the name of M/s Surguja Bricks Industries
Company, whereas he has submitted the experience
certificate of joint venture having its 1st partner as M/s
nd
Poddar (MP) 51 % and 2 partner as M/s Surguja Bricks
Industries SBI 49%, therefore, the petitioner was issued
show-cause vide letter dated 03.03.2025, but, when
satisfactory reply was not submitted by the petitioner, vide
impugned letter dated 19.03.2025, he was declared
disqualified.
13.1. After referring to various decisions of this Court,
the High Court was of the view that it could not enter into an
examination of the conditions stipulated by the authority
while issuing the NIT. Holding that the decision making
process did not suffer from any malice or unreasonableness,
the High Court dismissed the writ petition in the following
manner:
11. This Court cannot go into the niceties of the
conditions stipulated by the authority issuing the NIT,
but can only examine whether the process adopted by
the said authority is malafide or intended to favour
someone or whether the process adopted or decision
made is so arbitrary or irrational that the Court may
arrive at a finding that the decision is such that no
responsible authority acting reasonable (sic) and in
accordance with the relevant law could have reached and
further whether the public interest is affected by such
action. In the present case, we do not find any such
9
situation in existence and as such, this Court does not
find any merit in this petition and the petitioner is not
entitled to any relief as claimed.
14. Ms. Pooja Mehra Saigal, learned senior counsel
for the appellant, at the outset has taken us to the conditions
of the NIT. Referring to clause (1)(b)(i) of the NIT which lays
down the qualification criteria, she submits that as per this
criterion, to qualify for the award of the contract, each prime
contractor in the same name and style (tenderer) in its name
must have in the last five years satisfactorily completed
atleast one similar work equal in value to the extent of 50
percent of the probable amount of the contract as on the date
of submission of the tender. The probable amount of contract
is mentioned as Rs. 4521.56 lakhs. 50 percent of the
aforesaid amount would be 2261.00 lakhs. She submits that
appellant submitted its bid within the stipulated period
alongwith an experience certificate, amongst others, which
was in relation to similar work undertaken by the joint
venture MPSBI-JV for a work having contract value of Rs.
4904.09 lakhs (construction of 70 kilometres road in the
district of Surajpur). The constituents of the joint venture
alongwith their partnership contribution were as under: (i)
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appellant 49 percent and (ii) M/s. Mohan Poddar 51 percent.
Therefore, appellant’s experience share of the work
undertaken by the joint venture would work out to Rs.
2452.00 lakhs, which was way above the 50 percent mark.
14.1. Rejection letter of respondent No. 3 mentioned
that the appellant was disqualified from the bidding process
on the ground that the main work experience certificate
furnished by the appellant pertained to work done by a joint
venture which was not acceptable. The other experience
certificate pertained to individual work undertaken by the
appellant which was below the requisite amount.
14.2. Learned senior counsel submits that refusal by
the respondents to consider the experience of the appellant
as part of a joint venture is wholly arbitrary and contrary to
its own conduct. She submits that tenders were invited for
contractors registered in ‘A class’ as per the unified
registration system with Chhattisgarh PWD. In case the
tenderer was not registered in ‘A class’, the tenderer could
participate in the auction process but had to register itself
with the Chhattisgarh PWD within 15 days from the date of
acceptance of its bid. Therefore, the conditions stipulated
11
under the unified registration system rules are mandatory
and binding on all tenderers. She submits that as per clause
5.2.3, if any partner of a firm wishes to separate from the
firm or register under a different name, his experience shall
be valid in proportion to his percentage of partnership in the
previous registered firm. Since the NIT mandates application
of unified registration system on all the tenderers, partners
of joint venture are allowed to use their weighted experience
as a partner of a joint venture to register themselves as a
contractor in ‘class A’. Having previously accepted the
experience of a joint venture partner at the time of
registration, action of the respondents in refusing to permit
the appellant to rely on its previous experience as a joint
venture partner, therefore, would lead to a contradictory
approach which would be arbitrary and unjust.
14.3. Otherwise also the reason given by the
respondents for disqualifying the appellant does not stand to
reason at all.
14.4. Learned senior counsel specifically points out
that as far back as on 05.01.2016, the third respondent had
informed the Principal Secretary to the Government of
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Chhattisgarh, PWD that work experience certificates relating
to joint ventures in the name of the prime contractor under
which the contractor is registered should be accepted. This
was followed by another correspondence dated 10.02.2017
whereby and whereunder the third respondent informed the
State Government in the PWD that because of some
confusion qua the definition of prime contractor, it was
clarified that for any sub-contracted work done in the State
of Chhattisgarh with the prior approval of the competent
authority, such sub-contractor would also get the credit for
the work executed towards his experience. Such a sub-
contractor would be construed to be the prime contractor for
the sub-let part of the contract. Therefore, the third
respondent proposed that the contract works sub-let after
permission of the competent authority and that part of the
work done as joint venture which is done by a tenderer as a
partner of the joint venture should be treated as work done by
the prime contractor. She submits that such understanding of
the department is completely in sync with the legal position
and therefore there could not have been any reason for the
13
respondents to deviate therefrom and disqualify the appellant
by adopting a different standard.
14.5. When tenders are invited, the terms and
conditions must indicate with legal certainty, the norms and
benchmarks. In other words, the conditions provided in the
tender documents must be (i) clear and unambiguous, and
(ii) must conform to legal certainty. In this connection,
learned senior counsel has placed reliance on the following
decisions:
(i) Reliance Energy Limited Vs. Maharashtra State Road
2
Development Corporation Ltd. ;
(ii) Indian Railways Catering and Tourism Corporation
3
Ltd. Vs. Doshion Veolia Water Solutions Pvt. Ltd. ;
and
(iii) Maha Mineral Mining & Benefaction Pvt. Ltd. Vs.
4
Madhya Pradesh Power Generating Co. Ltd.
14.6. It is submitted that weighted experience of the
appellant as a partner in a joint venture ought to have been
considered towards the experience of the appellant in its own
2
(2007) 8 SCC 1
3
(2010) 13 SCC 364
4
2025 SCC Online SC 1942
14
name and style. Referring to New Horizons, learned senior
counsel submits that purpose of creating a joint venture is
to ensure that the contractor is able to obtain the relevant
work experience in the requisite field. As such, a contractor
is allowed to utilize such an experience as a partner of a joint
venture. The instant NIT does not state or stipulate that the
experience of a tenderer while being a part of a joint venture
would not be considered. Learned senior counsel submits
that New Horizons holds the field even today and has been
followed in subsequent decisions including in Ganpati PV –
5
Talleres Alegria Track Pvt. Ltd Vs. Union of India .
14.7. Thus, learned senior counsel would submit that
appellant has fulfilled the criteria of prior work experience
requirement as it was a partner in the joint venture MPSBI-
JV comprising of M/s. Mohan Poddar (51 percent share) and
the appellant (49 percent share). Appellant would thus be
entitled towards the 49 percent of the experience of the total
work executed by the joint venture.
14.8. Learned senior counsel submits that the High
Court misconstrued the challenge of the appellant and
5
(2009) 1 SCC 589
15
proceeded on the sole premise that interpretation of tender
conditions by the employer should be accepted; since
appellant was not able to satisfy the financial turnover
requirement as per interpretation of the respondents, its
technical bid has been rightly rejected. She submits that this
view of the High Court is wholly erroneous and requires
interference.
14.9. Finally, learned senior counsel submits that
respondent No. 3 was wholly unjustified in rejecting the
tender of the appellant on the aforesaid ground. The High
Court also fell in error in rejecting the challenge of the
appellant. The impugned judgment and order of the High
Court dated 04.04.2025 and the impugned decision of the
respondent dated 19.03.2025 are thus liable to be set aside
and quashed.
15. Mr. Bishwajit Dubey, learned Additional
Advocate General, State of Chhattisgarh appearing for the
respondents at the outset submits that the impugned
judgment and order has rightly upheld the decision of the
respondents declaring the appellant as ineligible as per the
NIT. He submits that there is no ambiguity in the expression
16
‘each prime contractor in the same name and style (tenderer)’
which finds place in the eligibility criteria in the NIT. It clearly
means that a tenderer needs to have the requisite experience
in its own name, meaning thereby that it cannot rely on its
prior experience gathered as member of a joint venture.
15.1. Learned counsel for the respondents sought to
highlight the meaning of the expression ‘prime contractor’.
Referring to Black’s Law Dictionary, he submits that a prime
contractor is one who contracts for and completes an entire
project, coordinating all work and sub-contractors. Appellant
acting merely as a joint venture member does not satisfy the
definition of ‘prime contractor’ as the experience has not
been gained in its name and style.
15.2. In any case, the joint venture was a distinct legal
entity. That apart, clauses 3 and 4 of the joint venture
memorandum of understanding dated 18.02.2020 clearly
shows that M/s. Mohan Poddar was the lead member of the
joint venture. Appellant cannot rely on the joint venture’s
credentials when bidding independently. Any inter
departmental correspondence suggesting that joint venture
17
experience may be considered are merely advisory and non-
binding.
15.3. Appellant’s registration under the unified
registration system alone does not prove its ‘A-class’
contractor status. Registration requirement is a separate
requirement and the tendering authority can always come up
with additional conditions and qualifications.
15.4. In any view of the matter, even if it is assumed
that there is ambiguity in the aforesaid tender condition,
then it is settled law that the interpretation given by the
tendering authority should be accepted. Admittedly there is
no allegation of any malafides or perversity or
discrimination. In such a situation, the court may not
substitute its views over the interpretation of the tendering
authority. He submits that the tendering authority is the best
judge while interpreting tender conditions. Judicial
interference would arise only if a case of arbitrariness or
malafides or perversity is demonstrated. In this connection,
learned Additional Advocate General has placed reliance on
the following decisions, amongst others:
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(i) Afcons Infrastructure Ltd. Vs. Nagpur Metro Rail
6
Corp. Ltd . ; and
7
(ii) Bharat Coking Coal Ltd. Vs. AMR Dev Prabha .
15.5. Learned Additional Advocate General submits
that the experience certificate and the execution experience
in the joint venture must be demonstrably in the name of the
tenderer. Joint venture work is indivisible and cannot be
apportioned to members. Therefore, respondents’ refusal to
accept the experience of the appellant as a member of the
joint venture is rational and rooted in administrative
prudence.
15.6. He also submits that as per the NIT, the
tenderers are required to complete atleast one similar work
equal to 50 percent of the probable contract value. In so far
the appellant’s other experience certificate is concerned,
(which is as an individual contractor in its own name), the
work value was Rs. 1675.86 lakhs only which did not meet
the qualification criteria. Thus, appellant failed to meet the
mandatory qualification criteria. Appellant’s attempt to
6
(2016) 16 SCC 818
7
(2020) SCC Online SC 335
19
maintain the prior joint venture experience is misplaced and
untenable.
15.7. In the above conspectus, learned Additional
Advocate General submits that the impugned judgment and
order of the High Court is sound in law as well as on facts.
Therefore, no interference is warranted. Consequently, the
appeal should be dismissed.
16. Submissions made by learned counsel for the
parties have received the due consideration of the court.
17. The controversy in the present case arises from
the interpretation of the expression in each prime contractor
in the same name and style (tenderer) appearing in the
qualification criteria and whether rejection of the appellant’s
tender on the ground that it had failed to meet the
qualification criteria is legally tenable or not?
18. Clause (1) of the pre-qualification document lays
down the qualification criteria. It has got two parts: clause
(1)(a) and clause (1)(b). It says that to qualify for the award of
the contract, each prime contractor in the same name and
style (tenderer) must have achieved in any one financial year
in the last 5 years a financial turnover of construction work
20
of atleast 60 percent of the probable amount of contract and
must have satisfactorily completed atleast one similar work
equal in value to 50 percent of the probable amount of the
contract value as on the date of submission of the financial
offer or must have satisfactorily completed atleast two similar
works each costing minimum 40 percent of the probable
amount of the contract value or must have satisfactorily
executed atleast one similar work having received payment
of value not less than 60 percent of the value of the probable
amount of contract.
19. Therefore, as per the aforesaid qualification
criteria, each prime contractor in its own name and style
should be able to fulfill the criteria mentioned in clause
(1)(b)(i), (ii) and (iii).
20. The bone of contention centers around the
meaning of the expression ‘prime contractor’. We find that
the phrase ‘prime contractor’ is not a defined expression
either in the pre-qualification document or in the NIT. If that
be the position, the common parlance test has to be applied.
The expression ‘prime contractor’ in the context of the NIT
would mean the tenderer who has submitted the tender in
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terms of the instant NIT. If there is more than one contractor
bidding together then it would mean the contractor who is
primarily responsible for the contract offer. The eligibility
requirement is that such a prime contractor should have in
its own name and style satisfactorily completed atleast one
similar work equal in value to 50 percent of the probable
amount of the contract value as on the date of submission of
financial offer. In the instant case, appellant is relying on his
share of 49 percent in the joint venture MPSBI-JV which works
out to Rs. 2403.00 lakhs which is well above the 50 percent
probable amount of the contract value but respondents are of
the view that appellant cannot claim the benefit of such an
experience because such experience was gained as a member
of the joint venture and not in its individual name. Therefore,
it becomes important to understand the concept of a joint
venture.
21. In New Horizons, this Court was examining a
challenge to the contract for printing, binding and supply of
telephone directories for three annual issues commencing
from 1993 in terms of an advertisement published in various
newspapers by the Department of Telecommunications,
22
Telecom District, Hyderabad. Tender of New Horizons was
not considered whereas tender of M & N Publications Ltd.
was accepted. In the writ proceedings instituted by New
Horizons where it challenged its rejection and consequential
award of contract to M & N Publications Ltd., official
respondents filed counter affidavit. The reason for non-
consideration of the offer of New Horizons was disclosed. It was
stated that the offer of New Horizons did not disclose any
evidence to show that it had in its name undertaken compiling,
printing, binding and supply of telephone directories for large
telephone systems with the capacity of more than 50 thousand
lines.
21.1. It may be mentioned that in its tender, New
Horizons had mentioned that it was a joint venture company
established by Thomson Press (India) Limited, Living Media
(India) Limited, World Media Limited and Integrated
Information Private Limited, a wholly owned subsidiary of
Singapore Telecom. It is in the above context that this Court
examined the contours of a joint venture. However, at the
outset, this Court declared that in the matter of entering into
a contract, the State does not stand on the same footing as
23
a private person who is free to enter into a contract with any
person he likes. The State is governed by the mandate of
Article 14 of the Constitution of India which excludes
arbitrariness in State action and requires the State to act
fairly and reasonably. The action of the State in the matter
of award of a contract has to satisfy this criterion. Moreover,
a contract would either involve expenditure from the State
exchequer or augmentation of public revenue and
consequently the discretion in the matter of selection of the
person for award of the contract has to be exercised keeping
in view the public interest involved in such selection.
21.2. This Court thereafter observed that it is possible
to visualize a situation where a person having past
experience has entered into a partnership and the tender has
been submitted in the name of the partnership firm which
may not have any past experience in its own name. That does
not mean that the earlier experience of one of the partners of
the firm cannot be taken into consideration. Similarly, a
company having past experience may undergo
reorganization as a result of merger or amalgamation with
another company which may not have such past experience
24
and the tender is submitted in the name of the reorganized
company. It could not be the purport of the requirement
about experience that the experience of the company which
has merged into the reorganized company cannot be taken
into consideration because the tender has not been
submitted in its name and has been submitted in the name
of the reorganized company which does not have experience
in its name.
21.3. This Court explained further that while considering
the requirement regarding experience, it has to be borne in
mind that the said requirement is contained in a document
inviting offers for a commercial transaction. In that context,
this Court held thus:
23.
The terms and conditions of such a document have to be
construed from the standpoint of a prudent businessman.
When a businessman enters into a contract whereunder
some work is to be performed he seeks to assure himself
about the credentials of the person who is to be entrusted
with the performance of the work. Such credentials are to be
examined from a commercial point of view which means that
if the contract is to be entered with a company he will look
into the background of the company and the persons who
are in control of the same and their capacity to execute the
work. He would go not by the name of the company but by
25
the persons behind the company. While keeping in view the
past experience he would also take note of the present state
of affairs and the equipment and resources at the disposal of
the company. The same has to be the approach of the
authorities while considering a tender received in response
to the advertisement issued on 22.04.1993.
21.4. As to the expression ‘joint venture’, this Court
observed that the expression ‘joint venture’ connotes a legal
entity in the nature of a partnership engaged in the joint
undertaking of a particular transaction for mutual profit or
an association of persons or companies jointly undertaking
some commercial enterprise wherein all contribute assets
and share risks. It requires a community of interest in the
performance of the subject matter and to share both in profit
and losses.
21.5. In the facts of that case, this Court held that New
Horizons was constituted as a joint venture by the
aforementioned companies. Once it was held that New
Horizons was a joint venture, the experience of its various
constituencies had to be taken into consideration if the
Tender Evaluation Committee had adopted the approach of
a prudent businessman. In respect of a joint venture, its
experience can only mean the experience of the constituents
26
of the joint venture. For the purpose of considering whether
New Horizons had the experience as contemplated by the
advertisement, the experience of the constituents of New
Horizons had to be taken into consideration by the Tender
Evaluation Committee. Failure to consider the same had
rendered the decision arbitrary and irrational, leading to
interference by this Court.
22. In Ganpati, the commercial bid of the appellant
was not considered on the ground that it had failed to meet
the eligibility criteria. Appellant highlighted that it had the
requisite experience as a joint venture partner. Relying upon
the decision of this Court in New Horizons, the Bench in
Ganpati held that view taken by the High Court that the
appellant did not fulfill the eligibility criteria was not correct.
The Bench accordingly directed the Tender Evaluation
Committee to reconsider the bid of the appellant.
23. From a perusal of the NIT or the conditions in the
pre-qualification document, we do not find any criteria or
condition therein stating that past experience as member of
a joint venture would not be considered. There is, thus, no
specific or explicit exclusion of the work experience gained
27
by a contractor in a joint venture or partnership. As a matter
of fact, appellant has relied on a previous letter of the third
respondent dated 10.02.2017 which had clarified that work
done by a member of joint venture would be counted as the
work experience of the bidding contractor who would be
construed to be the prime contractor for that portion of the
contract work which it had executed as a member of the joint
venture. Though the learned Additional Advocate General for
the State of Chhattisgarh has argued that such past
departmental communications would not have a bearing on
the eligibility conditions of the present NIT, that does not
take away from the fact that there is no specific or explicit
exclusion of work experience gained as a member of joint
venture while considering eligibility as per the present NIT.
24. We are of the unhesitant view that an eligibility
criteria should be clear and unambiguous. Otherwise, it may
lead to arbitrary exercise of power by the State disqualifying
a tenderer who would otherwise meet the eligibility criteria.
8
In West Bengal State Electricity Board Vs. Patel Engineering ,
this Court declared that to hold that a State or its agencies
8
(2001) 2 SCC 451
28
can reject a tender for breach of a term or condition in the
tender document which is not explicit in the tender
documents is to give room to the State or its agencies to
arbitrarily reject tenders even when clear terms or conditions
of tender documents are complied with. Therefore, it is the
responsibility of the tendering authority to issue clear and
unambiguous instructions in a NIT. As pointed out by this
Court in Patel Engineering (supra), when there is vagueness
or subjectivity in the norms, it may result in an unequal and
discriminatory treatment and provide room for manipulation
to suit the whims of the State agencies in picking and
choosing a bidder for awarding contracts.
25. In Reliance Energy Ltd. , this Court was
examining the conditions in the global tender floated by the
State of Maharashtra through the Maharashtra State Road
Development Corporation Limited for completing the
Mumbai Trans Harbour Link between Mumbai and Navi
Mumbai on a BOT basis. In the aforesaid tender process, the
tendering authority decided to exclude the appellants .
Without entering into the details of the judgment in
Reliance
29
Energy Ltd., we can gainfully extract the below mentioned
portion from the said decision:
38. When tenders are invited, the terms and conditions must
indicate with legal certainty, norms and benchmarks. This
“legal certainty” is an important aspect of the rule of law. If
there is vagueness or subjectivity in the said norms it may
result in unequal and discriminatory treatment. It may
violate doctrine of “level playing field”.
26. In Indian Railways Catering and Tourism
Corporation Ltd. , the issue pertains to a tender notice issued
by the Indian Railway Catering and Tourism Corporation Ltd.
for setting up of a packaged drinking water bottling plant to
produce drinking water under the brand name ‘Rail Neer’ for
railway passengers. Again, without entering into the details
of the case, we may mention that this Court referred to Patel
Engineering and observed that the very purpose of issuing
rules or instructions is to ensure their enforcement lest the
rule of law should be a casualty and relaxation or waiver of
a rule or condition, unless so provided under the instructions
to bidders by the State or its agencies in favour of one bidder
would create justifiable doubts in the minds of other bidders
and would impair the rule of transparency and fairness and
provide room for manipulation to suit the whims of the State
30
agencies in picking and choosing bidders for awarding
contracts. This Court reiterated that to hold that the State or
its agencies can reject a tender for breach of a term or
condition in the tender document which is not explicit in the
tender documents is to give room to the State or its agencies
to arbitrarily reject tenders even where the clear terms or
conditions of the tender documents are complied with.
26.1. This Court also referred to its earlier decision in
the case of Dutta Associates (P) Ltd. Vs. Indo Merchantiles (P)
9
Ltd. , where this Court found that the offer of the lowest
tenderer for wholesale supply of rectified spirit (Grade 1) to
the Excise Department, Government of Assam, was not
accepted on the ground that the price offered did not come
within the ‘viability range’ and this Court held that the tender
process was vitiated for the reason that the tender notice did
not specify the ‘viability range’ nor did it say that only the
tenders coming within the ‘viability range’ will be considered.
In Dutta Associates (P) Ltd. , this Court observed that
whatever procedure the Government proposes to follow in
accepting the tender must be clearly stated in the tender
9
(1997) 1 SCC 53
31
notice; the consideration of tenders received and the
procedure to be followed in the matter of acceptance of a
tender should be transparent, fair and open.
27. There is no dispute to the proposition that the
tender inviting authority is the best judge to understand and
appreciate its requirements and interpret its documents. In
Afcons Infrastructure Ltd. and in Bharat Coking Coal Ltd. as
well as in subsequent decisions, this Court has upheld this
principle observing that ordinarily constitutional courts
should defer to the understanding of the tender inviting
authority of the tender documents. However, this principle
has its own limitations. If the interpretation of the tender
inviting authority or its understanding of the tender
conditions is vitiated by mala fides or perversity, there is no
question of a constitutional court showing deference to such
understanding. Likewise, if the interpretation of the tender
inviting authority of a particular condition of tender, such as,
an eligibility criteria as in the present case is irrational or
absurd leading to arbitrary consequences, it would be the
duty of a constitutional court to interdict such a decision
32
making process. To hold otherwise would render the very
object of judicial review otiose.
28. Applying the principles as discussed supra to the
facts of the present case, we find that there was no
justification at all on the part of the respondents in not
considering the proportionate experience certificate of the
appellant as a member of the joint venture. Such decision of
the respondents is arbitrary and unreasonable rendering the
decision making process in breach of the mandate of Article
14 of the Constitution of India.
29. For all the aforesaid reasons, we hold that the
decision making process of the respondents in disqualifying
the appellant from the tender by not taking into account its
past proportionate experience in the joint venture is vitiated
by irrationality leading to the arbitrary decision of declaring
the appellant as disqualified. The said decision of respondent
No. 3 dated 19.03.2025 cannot be sustained and is
accordingly set aside. Since the High Court failed to notice
such irrationality leading to arbitrary consequences, the
impugned judgment and order dated 04.04.2025 is wholly
untenable and is accordingly set aside and quashed.
33
30. In consequence thereof, respondents are directed
to reconsider the case of the appellant by accepting its
experience certificate as member of the joint venture MPSBI-
JV.
31. The appeal is accordingly allowed. However,
there shall be no order as to cost.
……………………………J.
[MANOJ MISRA]
……………………………J.
[UJJAL BHUYAN]
NEW DELHI;
DECEMBER 18, 2025.
34