Turnover and experience of a proprietorship cannot be clubbed with its successor company for tender eligibility.

The Petitioner, a Joint Venture between SBEIPL and Hindustan Projects, challenged a communication dated 20.09.2025 declaring it "Not Eligible" in a tender process for Multi-Village Drinking Water Supply Schemes.

Although initially declared technically qualified on 08.09.2025, Respondent No. 1 later disqualified the Petitioner after seeking clarifications on financial credentials.

The Petitioner argued that SBEIPL had taken over a proprietorship firm, "SB Enterprises," in 2023, and therefore the prior experience and turnover of the proprietorship should be clubbed with the company for eligibility.

The Respondents contended that since the two were separate legal entities prior to the takeover agreement, their turnovers could not be combined to meet the threshold.

1. Whether the High Court can interfere with the technical evaluation and commercial wisdom of a tendering authority under Article 226 of the Constitution.

2. Whether the turnover and experience of a predecessor proprietorship concern can be mandatorily clubbed with a successor private limited company for tender eligibility in the absence of specific tender stipulations.

The Court primarily applied the principles of judicial restraint in contractual matters as established in Tata Cellular v. Union of India, which limits review to the decision-making process rather than the merits.

It relied on Jagdish Mandal v. State of Orissa, holding that judicial review is intended only to prevent arbitrariness and not to substitute administrative discretion.

The court also considered New Horizon Limited v. Union of India regarding the consideration of constituent experience in joint ventures, but distinguished it based on the specific legal entity status of the bidding company.

The Court reasoned that the evaluation of eligibility criteria and technical qualifications falls within the exclusive domain of expert committees.

The Court found that the Respondent's decision—based on the separate legal existence of the proprietorship and the company prior to 2023—was a "plausible conclusion".

The Court noted that Respondent No. 1 acted bona fide by obtaining independent expert opinions from Chartered Accountants before disqualifying the Petitioner.

Since the tender did not expressly allow for clubbing of turnovers of different legal entities that had later merged, the Respondent’s interpretation was not perverse or irrational.

The holding affirmed that the tendering authority’s decision to treat the proprietorship and the company as distinct entities for turnover computation was a valid exercise of commercial discretion.

The Court dismissed the writ petition, holding that there was no manifest arbitrariness, mala fides, or procedural illegality warranting interference.