Court Vitiates Tender Award for Reliance on Ineligible Partner Experience of Blacklisted Firm while Arbitrarily Disqualifying Bidder.

The Porbandar Municipal Corporation invited bids for the design and construction of a Sewage Treatment Plant (estimated value ₹122.97 crores)

Petitioner R&B’s bid was rejected thrice: first for incomplete online uploading, second because their MoU was on a ₹100 stamp paper instead of ₹300, and third for alleged suppression of litigation history

Petitioner Yogi Construction’s bid was rejected for failing to submit a site visit certificate with geo-tagged photos and a non-compliant MoU regarding an asphalt plant

The contract was awarded to Respondent No. 4 (SNL & Co.), a proprietary concern that relied on the work experience of N.P. Patel & Co. (a blacklisted firm where the proprietor held a 90% stake)

1. Whether the Corporation’s rejection of R&B’s bid based on stamp paper value and non-disclosure of litigation was arbitrary and mala fide

2. Whether SNL & Co. was eligible to bid by relying on the work experience of a separate partnership firm under the PWD Manual

3. Whether the rejection of Yogi Construction’s bid for lack of geo-tagged site visit photos was legally sustainable

The court applied the principle that while judicial interference in contractual matters is limited, it is mandatory where the process is "manifestly arbitrary" or "vitiated by wanton acts of mala fides"

It interpreted Clause 4.5.3 of the tender regarding "General Experience," requiring the applicant to have executed similar works as a prime contractor or JV member

The court further scrutinized the Gujarat Provincial Municipal Corporation Act (Section 493) regarding the applicability of the PWD Manual, concluding that manual provisions for "registration" cannot override specific "eligibility" criteria in a tender

Regarding site visits, the court upheld the principle that mandatory technical conditions (geo-tagged photos) must be strictly followed

The court found the Corporation’s conduct toward R&B predatory, noting they "searched for reasons" to disqualify them after being forced to consider their bid by a prior court order

The litigation history clause only required disclosure of disputes arising from "delay in work"; since R&B’s prior litigations related to technicalities and not delay, there was no material suppression

Conversely, the court found the acceptance of SNL & Co.’s bid "perverse" and "fraudulent"

SNL & Co., a proprietary concern, had zero experience and sought to "glean" the experience of N.P. Patel & Co. (a blacklisted firm) by misapplying PWD registration rules to tender eligibility. This was viewed as a maneuver to bypass the blacklisting of the parent firm

Regarding Yogi Construction, the court held the requirement for geo-tagged site photos was a "mandatory" technical condition within the "exclusive domain" of the inviter; its absence rendered the bid invalid

The Corporation was directed to reconsider all eligible bids, including R&B’s, on merits

The court dismissed Yogi Construction’s petition (SCA 4647/2026), holding their rejection proper due to non-compliance with the mandatory site-visit and MoU format requirements

The holding emphasizes that while authorities have leeway, they cannot skew eligibility criteria to favor a firm with no independent experience or allow the "corporate veil" of a blacklisted firm to be used via a proprietary concern