M/S Surguja Bricks Industries Company vs State Of Chhattisgarh

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)

JUDGMENT

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 of Chhattisgarh).

Reason: 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

2 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

3 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.

4

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,

5 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

Horizons Limited Vs. Union of India1. 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 Poddar (MP) 51 % and 2nd 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)

10 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

12 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

Development Corporation Ltd.2;

(ii) Indian Railways Catering and Tourism Corporation

Ltd. Vs. Doshion Veolia Water Solutions Pvt. Ltd.3;

and

(iii) Maha Mineral Mining & Benefaction Pvt. Ltd. Vs.

Madhya Pradesh Power Generating Co. Ltd.4

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 –

Talleres Alegria Track Pvt. Ltd Vs. Union of India5.

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:

18

(i) Afcons Infrastructure Ltd. Vs. Nagpur Metro Rail

Corp. Ltd.6; and

(ii) Bharat Coking Coal Ltd. Vs. AMR Dev Prabha7.

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

21 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.

In West Bengal State Electricity Board Vs. Patel Engineering8,

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)

Ltd.9, 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