Supreme Court Allows Bidder To Rely On Proportionate Joint‑Venture Experience; Sets Aside Disqualification

A bench of Justices Manoj Misra and Ujjal Bhuyan heard an appeal by M/s. Surguja Bricks Industries challenging its disqualification from a state PWD tender for construction of a 27.20 km road in Korea district, Chhattisgarh. The core question was whether a tenderer could rely on its proportionate share of experience gained as a partner in a joint venture to meet the NIT’s eligibility criteria requiring prior completion of works equal to at least 50% of the probable contract value.

The Court allowed the appeal, set aside the respondents’ decision dated 19.03.2025 and the High Court’s dismissal dated 04.04.2025, and directed the tendering authority to reconsider the appellant’s bid by accepting its proportionate experience as a member of the joint venture. The bench held that eligibility conditions in a notice inviting tender must be “clear and unambiguous” and that administrative interpretation must yield to constitutional guarantees where it produced arbitrary results. The Court, in its reasoning, observed: "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." The judgment relied on earlier precedents including New Horizons Ltd. v. Union of India and reiterated that tender documents must be construed “from the standpoint of a prudent businessman,” and that vagueness or subjectivity may violate the rule of law.

Background The Chief Engineer (Central Tender Cell), PWD Chhattisgarh issued NIT No. 246/TC/24‑25 on 08.01.2025 for a road contract with a probable amount of Rs. 4,521.56 lakhs. Clause (1)(b)(i) of the pre‑qualification required each prime contractor “in the same name and style” to have completed, in the last five years, at least one similar work equal to 50% of the probable amount (Rs. 2,261.00 lakhs). The appellant submitted an online bid with documents including an experience certificate showing participation as a 49% partner in MPSBI‑JV for a contract valued at Rs. 4,904.09 lakhs; the appellant’s share worked out to about Rs. 2,404 lakhs, above the 50% threshold. The Technical Evaluation Committee, however, disqualified the appellant on 19.03.2025 on two grounds: (i) one experience certificate pertained to a joint venture and was not in the tenderer’s individual name; and (ii) the other work submitted in the appellant’s own name fell short of the required amount.

The appellant challenged the disqualification under Article 226 before the High Court, which dismissed the writ petition observing that the court should not intrude into the tendering authority’s interpretation unless there was malafide or irrationality. The Supreme Court issued notice, recorded an interim direction that financial bids not be opened if they remained unopened, and heard the appeal. Relying on New Horizons and subsequent decisions, the Court found no explicit exclusion in the NIT of proportionate joint‑venture experience and noted prior departmental communications that accepted proportionate experience. The Court concluded that respondents’ refusal to count proportionate JV experience was arbitrary and in breach of Article 14, set aside the disqualification and the High Court order, and directed reconsideration of the appellant’s technical eligibility by accepting its JV experience. The appeal was allowed with no order as to costs.

Case Details: Case No.: CIVIL APPEAL NO. 14859 OF 2025 (ARISING OUT OF SLP (CIVIL) NO. 10039 OF 2025) Case Title: M/s. Surguja Bricks Industries Company v. State of Chhattisgarh & Ors. Appearances: For the Petitioner(s): Ms. Pooja Mehra Saigal, Senior Counsel For the Respondent(s): Mr. Bishwajit Dubey, Additional Advocate General, State of Chhattisgarh