A bidder relying on its parent’s credentials is subject to the parent’s debarment.

South Bihar Power Distribution Company Ltd. issued NIT No. 92/PR/SBPDCL/2025 for selection of Solar Power Developers under the PM Surya Ghar–Muft Bijli Yojana, divided into 18 packages.

The petitioner submitted bids for Packages 2, 7, 13 and 18.

After seeking clarifications, the respondents declared the petitioner’s technical bids non-responsive by emails dated 29 April 2026, principally on the ground that the petitioner had been debarred under BREDA Office Order No. 79 dated 21 April 2025.

The petitioner contended that it was a separate legal entity from M/s Naw Dharam Energy Pvt. Ltd., against which the debarment order had been issued.

The respondents stated that the petitioner had been incorporated on 23 December 2025, that its two directors were also directors of the debarred company, and that it relied upon the parent company’s experience and financial credentials.

The relevant tender conditions required bidders to satisfy financial and technical eligibility criteria, including specified turnover, net worth and financial-year requirements under Clause 1.2.2(a)(ii).

During the pendency of the proceedings, the work was allotted to M/s Sunfeed Ecosolutions India Pvt. Ltd. under a letter of award dated 13 June 2026.

1. Whether the respondents were justified in declaring the petitioner’s technical bids non-responsive by applying the debarment of M/s Naw Dharam Energy Pvt. Ltd. to the petitioner, a newly incorporated company having common directors and relying on the parent company’s credentials.

2. Whether the petitioner satisfied the financial and technical eligibility requirements under Clause 1.2.2(a)(ii) of the tender, despite having been incorporated only on 23 December 2025 and lacking the requisite financial history and experience.

3. Whether the High Court, exercising judicial review in contractual and tender matters, could interfere with the respondents’ evaluation of the petitioner’s bids.

The Court applied the principles governing judicial review of tender decisions stated in Tata Cellular v. Union of India, (1994) 6 SCC 651, as reiterated in New Horizons Ltd. v. Union of India, (1995) 1 SCC 478: the Court reviews the decision-making process rather than acting as an appellate authority; tender conditions ordinarily are not subject to judicial scrutiny; the State has freedom of contract; and interference is warranted only where the decision is arbitrary, mala fide, biased or unreasonable in the Wednesbury sense.

The Court also relied on New Horizons for the principle that, in assessing the credentials of a bidder, authorities may consider the experience, resources and controlling persons behind a new or reorganised entity, and are not required to examine the bidder merely by its corporate name.

The Court further applied the express eligibility requirements in Clause 1.2.2(a)(ii), including the prescribed net worth and financial-year criteria.

The Court found that the petitioner was incorporated only one day before issuance of the NIT and therefore did not itself possess the required financial history or prior experience contemplated by Clause 1.2.2(a)(ii).

Since the petitioner sought to qualify by relying upon the technical and financial credentials of its parent company, M/s Naw Dharam Energy Pvt. Ltd., it could not selectively claim the parent’s experience while avoiding the consequences of that company’s debarment.

The common directorship of Mr. Anand Prakash and Mr. Neel Kamal reinforced the respondents’ conclusion that the newly incorporated petitioner was controlled by the same persons associated with the debarred entity.

Applying New Horizons, the Court held that the respondents were entitled to examine the persons and entities behind the bidder, rather than treating the petitioner’s separate corporate identity as determinative.

The Court also held that the tender condition itself was neither shown to be arbitrary nor illegal and that no ground for interference under the limited scope of judicial review was established.

It held that the petitioner was ineligible under Clause 1.2.2(a)(ii), lacked the requisite financial history and experience, and could not rely on the credentials of its debarred parent company without also attracting the effect of that debarment.

Finding no merit in the writ petition, the Division Bench dismissed it and disposed of any pending applications.